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Specialist
Global COO at multinational advertising and public relations company
Agenda
- Global digital advertising spending recap for Q2 2023 and Q3 2023 and outlook for Q4 2023 and full-year 2024, given an uncertain, but perhaps improving, economic backdrop, focusing on Europe and noting linear television
- Major themes – "top of the funnel" vs "bottom of the funnel" advertising and e-commerce
- Key volume, revenue and ROI considerations and specifics across geographies and properties, highlighting Google and YouTube (NADSAQ: GOOGL), Meta (NASDAQ: META), Amazon (NASDAQ: AMZN), TikTok, Snap (NYSE: SNAP), X/Twitter and Pinterest (NYSE: PINS)
Questions
1.
What has happened recently in the market, what do you think is going to happen in Q4 2023 and what’s your outlook for 2024? What’s your sense of key industry metrics, notable growth and the underlying drivers, thinking back to Q2 and Q3 2023?
2.
You noted the change from October 2022 to Q1 and Q2 2023 – it seems as if there has been a steady improvement, but you implied that Q3 2023 hasn’t gotten much better vs Q2 for digital advertising. Can you expand on this progression? Has there been gradual improvement, or has it plateaued, perhaps because there still are uncertainties that you suggested are having an impact on Q4?
3.
You’ve been highlighting the notion of resumed growth, with double-digit growth in some cases. This is an industry where people understandably are focusing on a handful of key metrics, whether volumes, ad loads, pricing or ROI metrics. What can you tell us about Q2 and Q3 2023 that is particularly noteworthy in terms of the metrics you find particularly important?
4.
You noted price inflation, highlighting Google and Meta with increases of around 5-6%. Even though prices still are increasing, this is vs prior increases that might have been close to double that amount – you said close to 10%. Are others in the industry seeing pricing increases of similar scale? Are prices increasing more or less? How would you characterise the rest of the industry?
5.
You highlighted a trend of retailers shifting from marketplaces to D2C. Where do Amazon and Walmart fit into this construct? It seems as if these players not quite big enough in this context to have an impact, but do you see them continuing to take share? Can you talk us through the place in the market where you’re noting captive e-commerce, where these companies are diversifying their solutions? Are they still gaining share?
6.
You reference this trend of retail media, making the point that this is not just in the US or Europe, but rather is more of a global trend that you think is going to continue. You seem to be essentially saying that the price for advertising with a player such as Netflix is double that of what you might find for non-skippable YouTube ads, which might be double that of television. Is that the way to think about the marketplace, potentially as consistent across the UK, Europe in general or globally?
7.
This is a theme I’ve heard over and over again when it comes to digital industries and businesses, which is it seems there’s opportunity on the high and low ends, whether you’re talking about Netflix or traditional television. It seems as if you’re suggesting there should be not just a pricing lift for linear television, but that it’s an opportunity to gain share, which is something we haven’t heard probably for a long time. Can you expand on your perspective on the persistent relevance of linear TV?
8.
As we look forward to Q4 2023, many wonder about the broader global economy, given inflation and interest rates, and they think about the holiday shopping season, which is critical for this particular category. What are your expectations for Q4? You talked about 5-6% pricing increases that you’ve seen from players such as Google and Meta. I’m assuming you expect those to continue.
9.
When you’re talking about okay vs okay-plus from a revenue or budget perspective for Q4, what does that mean? What are the ranges that you’re contemplating for each of those categories?
10.
You’ve been talking about the construct of lower- vs upper-funnel, direct response or performance vs branded advertising. Over 2023 so far, how would you describe the budget mix between those two?
11.
You seem to be saying that okay-plus in part can and maybe will be driven by more of that upper-funnel branded advertising. It would seem to me that people would already know if that’s going to happen – we’re a week into September, and it would seem to me that the swing factor is probably somewhat accounted for. I’m guessing you have a sense for which of these options is more likely. Given what you talked about in terms of mid-2023, it would seem that the okay-plus scenario seems more likely than the okay scenario. Is that fair? Is there any other swing factor you would highlight other than the resumption of branding? I would imagine more economic certainty and strength has something to do with it. You talked about the continuing strength of the consumer and consumption. What are the other things we should be thinking about?
12.
You referenced Pinterest and e-commerce, and it is critical to discuss the impact of company partnerships in the context of the holiday shopping season and e-commerce in Q4. Pinterest, for one, has partnered with Amazon to enhance its e-commerce experience. Are there any early indications? We’re only a week into September and people haven’t started really working on the holiday shopping season from a digital perspective. What are your expectations and how do you see your clients and others thinking about that opportunity?
13.
You’ve talked fairly positively about e-commerce. If an okay-plus scenario for digital advertising is around 10% growth, what does that number look like for e-commerce in Q4 2023?
14.
I think a lot of people would say that lower-funnel dominance from an ad budget perspective emerged as a necessity during the pandemic, but clearly, it has persisted. Do you think that’s a structural change? If we had this same Interview in two years, do you think we would be saying similar things about the prevalence and even dominance of lower-funnel advertising, or is this more of a pendulum swing one way to the other, and now we’re just waiting for the pendulum to swing back to upper funnel?
15.
In terms of digital advertising, what are the 1-2 biggest impacts you have seen or expect to see from AI over the next 1-2 years?
16.
We talked about the construct of okay vs okay-plus. What are your expectations for 2024 in terms of what we’ve talked regarding increase in budgets, pricing and ROI?
17.
While you mentioned paid search, you didn’t mention Google and YouTube. There are a lot of questions about these players, simply because of what we’ve seen from Microsoft and AI. You highlighted that YouTube sits between premium Netflix and linear TV. What do you see in terms of growth from Google and YouTube in 2024?
18.
One company that you didn’t provide specifics on is Amazon. The company just grew its advertising business 22% in Q2 2023. What are your expectations for its advertising business in 2024?
19.
You’ve talked a lot, pretty glowingly, about TikTok. What are your expectations for the company in 2024?
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