Articles by: "Todd Krizelman, CEO – MediaRadar"

TikTok’s troubles are an opportunity for media companies

May 13, 2024 Todd Krizelman, CEO – MediaRadar

As the digital landscape faces the potential U.S. ban of TikTok, media companies are presented with a unique opportunity. TikTok has rapidly emerged as a dominant player in the advertising market, even rivaling giants like Meta, Amazon, and Google. Needless to say, open web publishers have felt the competition as well. However, TikTok’s uncertain future offers an opening for media companies to attract brands that are currently spending on TikTok and are seeking more stable alternatives.

With that in mind, my company, MediaRadar, conducted a comprehensive analysis of ad trends on TikTok to better understand patterns that could help media companies strategically position themselves during this transitional period. We found some useful openings in the ad market as well as some tactical tips for publishers positioning themselves to offer digital advertising alternatives.

Overview of the digital ad spend

Before we get into TikTok, let’s table set the digital advertising marketplace: since January 2023, total media spending overall in the U.S. has reached $184 billion, with $150 billion spent in 2023 and an additional $33.5 billion in the first quarter of 2024. The primary sectors driving this investment are Retail, Technology, Media & Entertainment, Medical & Pharma, and Finance. They accounted for 49% of the total, contributing over $55.8 billion. This represents 56% of the $100 billion invested during this period.

Advertising expenditure on TikTok

On TikTok, advertising expenditure reached $3.8 billion in 2023, with nearly $909 million added in the first quarter of 2024. This brings TikTok’s total ad spend since January 2023 to $4.7 billion, which makes up just under 3% of all U.S. media ad revenue during this period.

Yes, TikTok’s market share is modest. However, its impact is significant, especially in engaging dynamic and visually-oriented industries such as Media & Entertainment, Retail, Technology, Beauty, and Professional Services. Brands in these sectors alone have spent over $2.4 billion on the platform, representing 51% of TikTok’s total ad buys.

Growth and digital ad trends

TikTok experienced significant growth in the first quarter of 2024, with spending increasing 13% from $805 million in the same quarter of 2023. Monthly increases were 18% in January, 4% in February, and 19% in March.

The top 1,000 advertisers in 2023 significantly increased their investment, spending $340 million on TikTok—up 47% year-over-year. These advertisers accounted for 37% of the $909 million spent on TikTok in the quarter. For comparison, the top 1,000 brands in digital media overall spent nearly $6.4 billion in Q1 2024, marking a 20% decrease from the previous year.

Advertising opportunity for digital media companies

In April 2024, President Joe Biden signed a law that put restrictions on TikTok in the U.S. Even though it may take a while to play out, the uncertainty alone is likely to create opportunity for digital publishers to woo advertisers seeking alternatives to the platform. The challenge is not just to capture ad dollars but also to prevent them from flowing into platforms like Meta (Instagram and Facebook) and Snapchat, which are poised to benefit from any shifts in the digital landscape.

Here are three key takeaways for publishers to help win those migrating dollars.

1. Embrace and promote snackable, short-form video content

TikTok’s success is largely built on its short, engaging video formats that appeal to younger audiences. Publishers should develop and showcase their own versions of these video formats that are optimized for quick consumption and designed to keep the audience coming back for more. By demonstrating the ability to produce compelling short-form content, publishers can attract brands interested in engaging the digitally native audience that thrives on quick, impactful visuals and storytelling.

2. Emphasize the advantage of brand safety

In a digital advertising landscape where brand safety continues to be a major concern, publishers have a distinct advantage over platforms like TikTok, known for their UGC which can often veer into controversial territory. Publishers should highlight their controlled environments and rigorous content standards, presenting themselves as a safer alternative for brands that want to ensure their ads are displayed in a reputable context. This is particularly persuasive for TikTok’s largest advertisers, who are likely larger brands who deeply care about their brand and its equity.

3. Highlight the direct link between content and consumer action

TikTok has proven effective at driving sales and conversions through innovative ad formats and integrated shopping features, like TikTok Shop. Media companies should also capitalize on this trend by promoting how their content can drive consumer action. This involves showcasing success stories and case studies where advertising with them has led to measurable increases in sales or conversions. By articulating how their platforms facilitate a seamless journey from content engagement to purchase, publishers can appeal to advertisers looking for clear ROI on their ad spend.

By focusing on these strategies—leveraging formats that appeal to the TikTok audience, ensuring brand safety, and demonstrating a direct path to consumer action—publishers can effectively redirect advertising dollars to their platforms as they become available.

Advertising | Industry-Research | Supporter Spotlight

3 Advertising trends that can’t be ignored

February 7, 2024 Todd Krizelman, CEO – MediaRadar

This year, I’m optimistic about advertising opportunities for nimble media companies despite likely shifts in market conditions. Although budgets tightened considerably in 2023, recovery signs point to an acceleration in ad spend. As media companies think about achieving 2024 advertising goals, consider investing resources in high-potential spaces like political advertising, pockets of opportunity in local markets, and key market segments or advertisers.

Economic conditions can shift quickly, so close monitoring of market signals allows smart firms to pivot toward expanding revenue by adjusting strategy. Here are some trends that media companies should not ignore along with insights to help capitalize on the potential increase in ad revenue associated with each.

The digital ad market is starting to recover and advertisers will be spending

We entered 2023 with rapidly rising interest rates and inflation, which seemed to point to a terrible recession. Advertisers began tightening budgets back in September 2022 anticipating tough times ahead. That defensive posture continued until late 2023 when the purse strings finally began to loosen.

In December, MediaRadar observed a promising 10% year-over-year increase in ad sales, but total advertisers still lagged by 13% YoY. This was likely due to both precautionary pullbacks and mounting bankruptcies. Last year saw bankruptcy filings surge by over 18%, its highest rate since 2009.

Despite these and other economic and marketplace challenges, we expect things to continue to open in 2024. However, the rebound will not be even, so sales leaders must monitor segments closely. Categories like Electronics, Financial Services, Housewares, Pharma, Sports, and Software stand out as pockets of growth. Given limited resources, ad teams need to invest them wisely.

Political advertising will be up and distributed across the country

The political advertising spend is primed to reach unprecedented heights during the 2024 election cycle, far exceeding the $1b during the 2020 presidential election. With abortion rights, healthcare, and other issues central to voter engagement, both sides appear ready to invest in advertising.

Historically, election advertising was concentrated in swing states. However, current trends point toward more national allocation this cycle. We already see political ads penetrating every state.

Abortion-centered messaging currently comprises 6% of the total Democratic spend. Immediately following the Dobbs verdict (May 2022), ad spend with abortion messaging across political parties jumped to 19% of federal political ads on broadcast TV. This will remain a hot button during the election cycle and we are likely to see ad spend surrounding this topic skyrocket in both national and regional markets.

For media firms, partisan advertising represents an unparalleled revenue opportunity for firms with a solid strategy.

Local advertising suffered in 2023, but will recover in 2024

Last year was especially challenging for regional media. Local ad spend was down 11% YoY dropping to just 16% of all media spend in 2023. But 2024 should see recovery gain steam in select markets.

For instance, Phoenix looks ripe for rebound thanks to the 2022 CHIPS Act’s $53 billion investment in the manufacturing of semiconductors in the U.S. As infrastructure starts to develop, there will be advertising in the local market to support education, employment, and construction among others.

This is just one key area in which we expect an uptick in local ad spend. It is important for media companies to understand how local advertising will impact overall ad spend in 2024. Government spending, newsworthy events, and businesses expanding can all impact ad spend in the local markets. Media companies should keep up with trends in the local markets. It may be necessary to adjust the narrative and offerings to key advertisers as budgets shift.

Apple is making big bets on vision pro

While a $3,500 virtual reality headset may seem an unlikely hit, the iPhone once faced skepticism around its $1,000 price. Now, Apple is betting big on breaking new ground again with their upcoming “Vision Pro” launch.

This marks Apple’s biggest product release since the Apple Watch in 2015. Historically, Apple spends over $35 million in advertising for key launches across their product lines each year. We expect Vision Pro to earn substantial marketing backing given the effort Apple has poured into this brand-new product push into VR.

The official unveiling comes on February 2nd, 2024. The Vision Pro represents an opportunity to pitch Apple on driving customer excitement and awareness in a new tech frontier.

Media companies should be prepared with compelling pitches for Apple. They are one of many brands launching products this year. It is vital to know when RFPs are being issued and to have strong relationships with key media buying teams.

Opportunities in a challenging digital advertising market

In 2024, the advertising market, and media industry as a whole, will face many challenges. However, there is a real opportunity for savvy media companies to capitalize, while cautious competitors will stall. In this article, I shared a few of my advertising predictions for the year ahead.

Advertising | Supporter Spotlight

Inside the surprising AI Advertising opportunity

October 16, 2023 Todd Krizelman, CEO – MediaRadar

Generative AI, the latest evolution of Artificial intelligence (AI), is captivating the public imagination, and new products and applications are emerging in just about every industry. This revolutionary technology holds the promise of automating routine tasks, surfacing insights from mountains of data, and advancing entire fields through innovation.

As AI becomes more advanced, there is a growing need to advertise this new technology to the marketplace. This creates a new and robust advertising segment for media companies. Below are three key insights MediaRadar is observing among the recent burst of ad campaigns for AI offerings.

1. AI ad spending skyrockets in 2023

Our latest advertising intelligence reveals that AI advertising has expanded tremendously in 2023. In the first eight months of this year alone, over $9 million was invested toward digital, print, and TV ads surrounding AR promotion. This marks a noteworthy 9% increase from the $8.3 million spent during the same period in 2022.

Clearly, AI has solidified its place as an integral part of marketing strategies and budgets. The data shows that out of 192 AI advertisers analyzed, 93% invested less than $100k each in AI ads. While these smaller investments contributed $2 million cumulatively, the real acceleration is being propelled by a select group of brands making massive spends.

The remaining 7% of advertisers put over $100k each into their AI-powered campaigns, accounting for a substantial $7 million in AI ad spending. This indicates that the brands leading the adoption have fully embraced the capabilities of AI to transform their marketing efforts.

2. AI ads surged from June to August 2023

The period from June to August 2023 is when AI advertising began to take off, skyrocketing to nearly $6.8 million in spend. This staggering 60% surge compared to the $4.2 million spent in the same period in 2022 signifies that AI is rapidly transitioning from an emerging technology to a core component of digital strategies.

Dialpad, IBM Watson, Salesforce Slack, and YourHana.AI were among the brands making substantial investments during this period, which led to the overall increase. The number of active AI advertisers also expanded by over 1.5x, jumping from 70 in June-August 2022 up to 120 in 2023.

July 2023 represented the peak, witnessing a momentous 200% month-over-month increase in spend to reach $2.9 million. While August cooled off slightly with 2% year-over-year growth, the pace is clearly accelerating.

3. Most AI advertising is placed via digital channels

Digital advertising in this segment has received the most investment thus far in 2023. Digital comprised 58% of the total $10.7 million AI ad spend, while TV, print, events, and other channels split the remaining budget.

Within digital, paid social and digital display stood out as the top placements for AI advertising investment. Together, these two high-performing formats accounted for 42% of all digital AI investments made in 2023.

What does the future hold for AI advertising Investment?

While current AI ad spend may seem modest, make no mistake – enormous growth is on the horizon. In the last year alone, we tracked over 270 distinct AI advertisers. There were more than double the number of AI advertisers this summer versus last year.

The surge in AI advertising presents a significant opportunity to capitalize on a fast-growing ad category. As investment in AI promotions ramps up, proactive steps should be taken to capture this spend:

Identify AI advertisers and brands in your pipeline to actively pitch. Look for companies launching new AI products or touting AI capabilities. Offer tailored AI-focused packages, partnerships, and placements.
Make sure sales teams are educated on the AI advertising landscape and key players. Equip them to have informed conversations with AI brands.
Develop premium advertising products to showcase AI campaigns. For example, interactive displays, augmented reality, and connected TV integrations: provide immersive environments to demonstrate AI tech.
Analyze viewer data and inventory to identify audience segments highly engaged with AI content. Craft high-value AI-specific audience targets for buyers.
Promote your audience reach, contextual alignments, and first-party data to AI brands. Position your properties as ideal platforms for AI product marketing.

By taking a proactive stance, you can become the go-to AI advertising destination before this category gets oversaturated. Seize the growing ad dollars from AI promotions now before competitors beat you to it. The AI advertising wave is here, and publishers should ride it to success.

While average monthly budgets are around $25k now, this will soon look minuscule as AI capabilities advance. Keep this growing segment on your radar, as we expect to see continued growth–and opportunity–from advertising AI technology throughout 2024.

Advertising | Revenue | Supporter Spotlight | Video

5 ways the writers’ and actors’ strike will impact advertising

August 2, 2023 Todd Krizelman, CEO – MediaRadar

On May 2nd, the Writers Guild of America (WGA), an alliance of over 11k film, TV, news, radio, and online writers went on strike demanding fair contracts and pay stability. They also stated numerous concerns surrounding artificial intelligence. In June 2023, 65k actors from the Screen Actors Guild (SAG) cast their votes to join the strike in support of their colleagues and to protest how technology has affected their wages as well.

There is much talk about the impact the current entertainment industry strike will affect advertising. The truth is, we are just starting to see its influence. This is mostly due to the timing of the strike. Many scripted shows are on hiatus during the summer and typically advertising is purchased well in advance of their run dates. As the strike drags on, the impact will be keenly felt across much of the media industry.

Here are five ways we will likely see the strike impact advertising’s bottom line.

A short strike may be a win for broadcasters and streamers

In the short term, broadcasters and streamers are likely to see a boost in their profits. While that may seem surprising on the surface, if the strike lasts under four months it’s a real possibility.

Broadcasters and streaming companies have already sold the advertising that will air during these months. Additionally, contractor and personnel costs declined sharply during the early months of the strike. Hopefully, these early profits are reinvested to buy up the rights to movies and content available for sale – as a way to shore up their audiences regardless of the strikes’ duration.

However, broadcasters and streamers should be prepared with new inventory, so they don’t lose out to social media if the strike continues until early 2024, as many predict it will. They will want to avoid airing reruns instead of new content, since that will affect viewership and in turn advertising revenue will be lower.

Broadcasters will be hit hardest if the strike goes beyond six months

If the strike lasts only a few months, changes in ad spend may be limited. In the short term, we haven’t seen much of an impact on ad sales. However, if the strike goes beyond a few months, the largest TV broadcasters could be hit hardest. Relative to streaming channels, TV broadcasters have more content that’s prepared “just in time.”

Unscripted television, like variety shows, reality shows, and game shows have not been impacted by the strike too much. However, we do see a hit to lucrative late-night talk shows, which have already been off the air for a couple of months. This programming relies on writers who have been on strike since early May.

Prime time advertising is estimated at $13.1 billion during the first half of 2023, which makes up 50% of all national TV ad spend. If the strike is prolonged, we could easily see some weekly prime-time TV shows off the air after a few months of their Fall debuts, as a result of new episodes not being completed.

Media & entertainment advertising will suffer across media

Movies, streaming services, and TV shows (along with others that support the industry) invested over $3.9 billion from January through June 2023. This represents 39% of the total ad spend from media and entertainment advertisers ($10 billion). This estimated advertising investment reaches beyond just TV, to over a dozen media formats. Since the start of the strike, we saw a dip in May YoY (4%). However, in June this segment was already down 26% YoY. As the strike continues, advertising to promote movies, shows, and streaming services will likely continue to decrease and shift in investment.

A prolonged strike may even prompt the largest U.S. firms to move more English-language production outside the U.S., to work around the problem entirely. Many countries have none of the protections offered to SAG members in the U.S., offering a viable alternative to production companies.

Streaming and social platforms may experience a resurgence due to the strike

Streaming channels have significant material pre-recorded, “in the can.” This gives them the ability to release movies, mini-series, and documentaries. If they have new content while broadcasters are struggling to recreate fall lineups, streamers will benefit. Netflix’s CEO has already said they’ve been preparing for the strike for some time and will stretch out their new releases.

In the event of a longer strike, streaming channels can easily dub content from outside the U.S. and show it here. We saw this during the pandemic. For example, Netflix saw great success airing the South Korean survival drama, Squid Game in the US. Another example, and a personal favorite of mine, was the HBO produced sci-fi flick, Beforeigners. This show was originally produced in Norway and was dubbed and placed in their U.S. lineup.

We are also likely to see social video platforms like YouTube, TikTok, and Instagram benefit from a prolonged strike. Their content producers are independent and non-unionized so these platforms will not see a pause in content creation. Viewing hours could easily surge as they did during the pandemic, which will drive more advertising dollars away from traditional broadcasters and toward streaming and social platforms.

Sports and news content will be sold at even more of a premium

Broadcasters with sports rights could do well in this environment because sports content is likely to be one area that isn’t negatively affected by the strike. Broadcasters will likely lean into more active coverage of sports. And they can use the strike as ammunition to defend the high price of sports licensing fees.

We also predict that news broadcasters will sell advertising at a premium as well. News broadcasters are covered by SAG, but they have their own separate contract. As a result, news programming and advertising supporting it will continue and may even expand. Media like CNBC, NPR, Bloomberg, etc. will be mostly unaffected.

While the full impact of the writers’ and actors’ strike is still very much uncertain, it is expected to result in notable alterations and realignments of advertising investment in the upcoming months. While some may experience short-term advantages due to reduced costs and pre-sold advertising, the long-term impact could profoundly impact advertising investment across media.

Advertising | Research | Supporter Spotlight | Video

5 Ad trends to know for Upfront and Newfront season

April 25, 2023 Todd Krizelman, CEO – MediaRadar

The largest TV networks and media companies are busy presenting their upcoming programming and ad inventory for the year ahead. A large portion of advertising budgets are typically allocated to TV advertising, so advertising shifts among top brands will impact the whole marketplace. In this article, we’ll explore some of the latest advertising trends and insights to keep in mind during the Upfronts, NewFronts, and beyond.

1. Digital takes the top spot

In 2022, nearly $144 billion was invested in digital, print and TV advertising. While TV still makes up 41% of total ad spend, digital was the top ranking format making up 47% of all buys. Over $68 billion was allocated to digital formats. These formats include display, online video, native, and paid social among other formats. This marks an opportunity for continued growth in digital media sales.

2. Top categories investing in TV are also top buyers of digital

Four out of the top five categories buying TV ads are top digital buyers as well. Not surprisingly big spenders from finance, media & entertainment, retail, and tech brands drive digital ad sales. TV investment for these, with the exception of media and entertainment, is down YoY.

However, each of these categories are up YoY in digital ad sales. Their combined digital investment still exceeds $36.6 billion and made up 53% of all digital spend. This represents a shift in the market towards digital advertising among top segments.

3. Few advertisers entering the market bought national TV spots

Only 1% of advertisers entering the market bought national TV spots. Despite looming recession concerns, MediaRadar observed 52k new advertisers (nearly 80k brands) entered the market in the second half of 2022. Not all of these advertisers purchased TV spots (530), but over 36k invested in digital display, video advertising and other digital formats.

4. Online video advertising is up

Online video advertising is increasingly more important to advertisers as it rose 86% YoY. A study by Hubspot says, “91% of marketers surveyed say they find video important to their advertising mix and 92% of them say online video produces a high ROI.” These feelings are likely contributing to the continued growth of video ad sales across media formats.

MediaRadar observed 31.1k advertisers spend an estimated $28.2b in video advertising during 2022. Top three categories advertised via online video during 2022: software ($1.9 billion), pharma ($1.4 billion), and film promotion ($1.4 billion). Combined spend nearly reached $4.8 billion, this is only 17% of total online video spend.

5. OTT investments increased despite concerns

Just a few years ago, new OTT streaming platforms were being launched regularly and consumers were anxious to embrace them. Now, platforms struggle to match growth of 2021 and prior. To overcome challenges groups, like Disney+ and Netflix, have introduced ad supported versions at a reduced cost to mixed reviews. Despite the challenges, 5.7k brands increased their investment in streaming platforms YoY. Together their buys were nearly $1.3 billion. Most notably LinkedIn, eHarmony, Kohl’s, and Febreeze contributed to this YoY increase.

While the Upfronts and Newfronts are an increasingly important time for large networks and media conglomerates, it is also an important time for all media sellers to understand the shifting marketplace and carve their niche into the new year. There is much opportunity to capitalize on the changing advertising landscape and continued digital growth.

Advertising | Perspectives | Supporter Spotlight

6 unexpected advertising predictions for 2023 and beyond

January 23, 2023 Todd Krizelman, CEO – MediaRadar

Recent history has been filled with challenges within our marketplace and we can expect 2023 to bring its own set of hurdles. At MediaRadar, we are constantly monitoring the marketplace to provide key insights and advice to our clients to help them navigate this ever-changing media landscape. We see numerous new advertising opportunities emerging within the market. However, it is critical for media companies to be ready to capitalize on them at the right time.

Here are six of our predictions for 2023:

1. Rising interest rates will cause accelerated asset sales

Normally in a recession, we can expect to see consolidation of media companies, typically weaker firms looking for scale by pairing. And we will see this. But with rising interest rates and the cost of borrowing up significantly, some well-known companies are going to be pressured to spin-off assets to raise cash and pay down their debt. This may create unexpected industry fragmentation and what may seem like new competition in the marketplace since currently many buys are bundled.

Disney may sell Hulu, or possibly ESPN. Just this week there are rumors Disney might dispatch ABC. Discovery is rumored to be renaming HBO MAX to only MAX. This may signal a desire to spin-off all or some of HBO.
The Dolan family might sell AMC. The economics for small channels has changed. The family paid debt down in the past, when they sold Cablevision (now Altice).
Over the last few years, we have seen SPACs created to acquire well-known media companies like Vice or Buzzfeed. However, some of these investments have registered lower-than-expected valuations and so investors are looking to get out.

2. Retail Media hype is cooling, but it’s also maturing

Last year the IAB Leadership Summit included a presentation with an executive from The GAP. This presentation outlined their plans for a bright ad supported business. The idea was right, but that business is already shut down. We’ve observed dozens of retailers who’ve made big announcements, but have not been able to scale their commerce media businesses.

However, retail advertising isn’t on the decline for everyone. Some retailers continue to make major investments, which are growing. Supermarkets perhaps have the most to gain. They have many ingredients for a successful business model – a captive audience, a strong presence in the local community, their consumers make frequent visits to their websites, and their core business performs at a much higher margin.

Grocery Companies have much to gain by adding a high-margin ad-supported retail advertising to their business model. This is why companies ranging from Walmart to Kroger’s are seeing success through retail media. Traditional media companies can capitalize on the return of ad dollars from failed retail media excursions. However, it is important to note that in certain areas, like CPG and grocery, that retail media is easily here to stay.

3. The Metaverse is not dead

The sense of schadenfreude for Meta (formerly just Facebook) is palpable, but this does not make the idea wrong. I read Neil Stephenson’s revolutionary thriller Snowcrash in university (the book was published 30 years ago), which foretells the metaverse, and more recently Ready Player One. I’m a believer. When the technology is in place, and affordable, it will be the next big thing. There will be an enormous ad business when the metaverse is realized. While I don’t think this will come to complete fruition in 2023, I do think media companies should be keeping an eye on this technology. It will open numerous advertising opportunities as it matures. We can’t let it sneak up on us.

4. ChatGPT will change the business of selling ads

At MediaRadar we observe more than 4.8m brands advertising in the United States. But to prepare thoughtful outreach for so many brands is far too time consuming for any individual ad sales team – at almost any ad-supported media company today. Sales teams don’t have the resources to canvas more than a small segment of the total market. However, ChatGPT will allow mass customization of outreach. We feel this will improve (that is, dramatically multiply) the number of advertisers a sales team could contact. It will collapse the time required by ad sellers to do their prep for marketers and agencies. You can expect more on this topic coming soon from our innovation lab.

5. Government spending is good for advertising

The war in Ukraine is driving advertising spend in key areas like, energy, agriculture, and defense. These will continue to flourish in 2023.

The U.S. government passed two key bills that will significantly impact the media industry. Both are going to drive unprecedented ad spending in the industries and local communities supporting these initiatives. The CHIPS and Science Act is a $250 billion bill that is dedicated to ensuring we no longer face computer chip shortages again. The Infrastructure Investment and Jobs Act. There will be $1 trillion dollars invested to update roads, bridges and tunnels across the U.S. These updates will create employment, travel and business opportunities for Americans – all which will require advertising to spread the word.

6. Sponsorship and exhibitor revenue from live events will be big, despite a looming recession

Our early analysis in Q1 suggests an especially robust market for live events. Pricing of sponsorship is up – often 20-30% above YR 2019 levels. Smart media companies will be creating and selling unique experiences, like NBCU’s BravoCon. Brands are eager to interact with customers in-person and these fun events will bring new advertising opportunities for media companies.

In 2023, we will face numerous challenges. However, there will also be meaningful opportunities for media companies to do well through the recession. When the competition hesitates, there’s room for some to move ahead even faster,

Advertising | Supporter Spotlight

The back-to-office push is driving ad sales opportunities

October 3, 2022 Todd Krizelman, CEO – MediaRadar

Many companies are now requiring their employees to be in the office at least a few times each week. While this mandate has been met with much pushback on the part of employees, it also brings opportunities for ad sales teams.

As Americans settle into their “new normal” work life, whether that be hybrid or full-time in the office, there are many areas in which an agile ad sales team can capitalize. Recently, at MediaRadar, we reviewed the advertising landscape to see which advertisers are actively increasing their ad investments in preparation for the latest “return to office mandates.”

Here are some of the segments that are shifting as we head to the office. Here’s our advice regarding which categories should be on your “radar.”

Back-to-office means these categories are back to advertising

Here are some segments that are actively advertising right now and would make great prospects for your business. These products are currently in high demand. However, these brands are also often in highly competitive segments, so they need to advertise.

Beauty and grooming products saw a 15% jump YoY from January – August. This category reached over $3.6B through August of 2022. As Americans are venturing out of their homes and going places, like back to the office, they are investing in cosmetics (up 130% YoY), men’s skincare (up 91% YoY), and fragrances (up 86% YoY).
Apparel advertising is up 49% YoY to $3.7B through August of this year. In August we saw the largest jump in this category, it was up 49% YoY. Major fashion houses and designer brands are investing in ads to entice Americans to invest in a new wardrobe as they spend their workdays outside the home.
As Americans are commuting again, audiobook publishers, like Audible and Penguin Random House have increased their advertising. This category is up 530% YoY from January – August 2022. Interestingly, podcasting, a pre-pandemic favorite of commuters, hasn’t seen a dramatic jump yet. Advertising for podcasts has reached $62.5mm through August 2022 and is only up 5% YoY.
Mommy/Daddy guilt is real and children’s advertisers are ready to capitalize. We see advertising for baby and children’s products up 70% YoY to over $695mm through August 2022. Eighty-five percent of the advertisers in this category increased their ad spend YoY. Top drivers include toys/games ($272mm, up 39% YoY), diapers ($139mm, up 20% YoY), and dolls ($77mm, up 11%YoY)

Getting out of the house could be a turning point for these segments

These segments and advertisers have struggled this year, but with the return to the office, we could be seeing an increase in advertising investment. These are advertisers your team should reach out to now, as they may be turning the corner.

While the auto market is fairly flat to date, electric vehicles’ advertising was up ~175% to nearly $218mm invested through August of 2022. EV’s biggest jump was in July with over 430% YoY increase from July of 2021.
While restaurants are down 13% YoY, still an impressive $2.6b has been invested through August. June and July were down 26% and 27% YoY respectively. However, August shows an increase of 12% YoY. Will office parties, team building events and client dinners be exactly what this segment needs to get over the hump? Only time will tell.
While Dunkin’s ad investment is down 27% YoY through August of 2022, the return to office announcements could be the cause of the increase in July (up 230% YoY) and August (up 780% YoY). Total ad investment for this company was $60.5mm from January – August of 2022. We will soon see if other commuter favorites follow suit.

Added bonuses

Not all recent increases in ad sales can be attributed to a return to the office. Here are some notable categories that are investing in ads now, but it isn’t likely attributable to shifting working conditions. However, that doesn’t mean you shouldn’t target them!

Supply chain struggles were at their peak for home furnishing advertisers last year, so it isn’t a surprise to see this category up 7% YoY with over $4.2B invested in advertising through August of this year. Mattresses and furniture advertising increased 18% YoY and 74% YoY respectively. The combined investment of these two topped $512m through August.
The technology category increased advertising by 25% YoY. Through August we saw over $9b invested in advertising. Not surprisingly, cell phone advertising was a primary driver of this YoY growth. It was 12% of the total technology spend in 2022. Through August cell phone advertising was up 193% YoY. Alphabet, Apple, Samsung, and T-Mobile were top drivers in cell phone advertising. Combined spending through August from these names exceeded $1B.

To capitalize on an ever-changing advertising climate, it is important to regularly review which segments are spending on advertising and what is driving that ad investment. This will likely lead your team to uncover some hidden gems. Just because an advertiser or product category was down, you can never count them out because the ad landscape is always shifting.

Advertising | Research | Supporter Spotlight

Target future-focused companies to make your business “recession proof”

August 10, 2022 Todd Krizelman, CEO – MediaRadar

Rising interest rates and elevated inflation are signals that typically lead to an economic slowdown, and sometimes a recession. Based on numerous client conversations, the concern is certainly on everyone’s mind.

However, despite these concerns, at MediaRadar, we observe a more textured landscape. Much like the early days of the pandemic in 2020, we don’t see the market moving in unison at all. There are distinct categories of advertising that are sharply up. The key to navigating these times will be remaining agile, tracking and pursuing the healthiest categories of advertising.

We’ve shared some advice and insight on what ad segments are healthiest.

A rising tide in advertising

One conclusion: Advertising is healthiest where there is very high demand. This sounds obvious, but it’s quite profound to see the results.

Higher education. The business of for-pay private colleges and universities is highly competitive. Schools are trying in earnest to lure students back in-person. University ad spend was up 79% YoY during the first half of 2022. Online education was up 264% YoY with a first half 2022 investment of $199mm.

Career training. Advertising for construction and trucking training is up 13X and 11X, respectively YTD 2022. There is massive demand for anyone in both logistics (The Truck Driver Shortage) and construction too (Response Needed to Housing Supply Crisis). For example, there is demand for more than 5.5 million homes to be built and demand for 60,000 truckers immediately.

Skill tune-ups. The Great Resignation meant droves left the workforce. Many are tuning their skills for the future. Some examples of where advertising is up dramatically: Executive education ($37mm, +651% YoY), business schools ($52mm, +33% YoY), and culinary schools ($17mm, +1545% YoY).

Streaming channels. This is a hyper-competitive segment in-part because so much new programming is being released. Netflix isn’t just marketing for big tent pole names like The Gray Man, but for hundreds of shows each year. Each show typically has marketing to a specific audience profile. Q2 2022 total ad spend for subscription streaming services was $414mm.

New movie promotion. Ad placement to support in-theater releases is growing. Dramatically (Massive Film Marketing Spends Are Back). In MediaRadar we found over $1.2B was invested to promote new releases through June 30, 2022. This is up over 325% YoY from 2021. Spend in 2022 is on pace to rival or exceed 2019. Conclusion: With audiences returning to theaters, studios are investing much to support releases.

Travel. Surging fuel prices and angry crowds stuck at airports haven’t slowed airlines and others in the travel market from aggressively marketing. We’re surprised how broad-based the rise is in travel; airlines are just a part of the total travel pie. Ad placement in the first half of 2022 is up 83% YoY to nearly $2.1B.
- Cruise lines invested over $363mm in advertising through June of 2022 (up 250% YoY).
- Local tourism bureaus are busier than ever. Florida, California, South Carolina, Virginia and Michigan have a combined spend of over $140mm during the first half of 2022. In total 149 destinations ranging from Arguilla to Wyoming around the world are marketing in the U.S. International tourism groups – Brazil Tourism has invested over $1.3mm so far this year encouraging people to visit; last year there was no investment.
- Airline ad investment is up nearly 140% YoY to $190m in the first half of 2022. While more than 120 airlines market in the US, there’s significant concentration of spend from Delta, Southwest and United.

Tech advertising is on the rise. From Jan to Jun 2022, we see ad spend in this category up 34% YoY to over $6.7B. Some of the increase is due to chip shortages gradually improving. While not out-of-the-woods, many tech companies will be able to see more inventory in the second half of 2022. Some of the surge however is coming from a dramatic rise in marketing for B2B software.
- Financial software ($196mm, +128% YoY),
- Advertising/marketing software ($127mm, +274% YoY),
- HR software ($95mm, 417% YoY)

Rollercoaster categories

With the pandemic abating some and consumers shifting their spending trends, it would be easy to write-off home furnishings and real estate. But the two categories have different kinds of headwinds, which means they may need the support of advertising.

Home furnishings. Ad investment supporting home furnishings was $3.2B in the first half, up 17%. June ad spend however was down 1% YoY. While demand ebbs, furniture inventories are building-up. Firms ranging from Target to Williams Sonoma will need to market in order to off-load product. This may yet drive advertising.

Finance & real estate. Ad spend was up 15% YoY in the first half of 2022. With mortgage interest rates rising and falling prices, ad spend however was down 15% YoY in June. We’ve heard from several sources that local real estate agents will need to work harder to market themselves and their properties, to get them sold. The days of homes “selling by themselves” is coming to an end.

Post-pandemic headwinds

The fear of recession is not always the reason for declines in ad spend. Instead, society is evolving post-pandemic and this is shifting marketing investment. Here are some specific conclusions:

Alcohol sales. Alcohol (beer, wine & spirits) are down 21% YoY in the first half of 2022. Subscription alcohol services have collapsed their ad spend by more than 90% YoY. Large firms like AB InBev too are spending less on marketing. Big picture: There are numerous studies documenting (ie. Pandemic Drinking) the rise of drinking during the pandemic’s onset. As we’re exiting the pandemic, sales of alcohol are declining.

Restaurants & Bars. As the world opened-up after vaccines were introduced, local restaurants & bars actively spent to welcome back patrons. But today the market is back into a steady-state. Although ad spending is down 25% in the first half YoY from 2021 it’s more consistent with ad placement in 2019.

Sweet treats. Dessert & sweets brands decreased their ad investment by 81% YoY. The Milk Bar, for example, is down 99% YoY and Krispy Kreme’s ad spend decreased 76% YoY. With people out of their home, we instead see a rise in ad spend for fitness activities.

Pet supplies. Pet ownership surged in the pandemic. With the initial costs of pet ownership complete (think shots, crates,etc) behind, advertising from pet advertisers is down 8% YoY through June 2022. June is down 7% YoY compared to June 2021.

Lean In

At a time when there is considerable worry about the economy, it is the right decision to study the current ad market. This is a good time to course-correct. What’s important however, and encouraging, is that there are many parts of the economy running strong. Our recommendation is to proactively lean into these segments to best navigate the months ahead.

Perspectives | Supporter Spotlight | Video

YouTube’s success is a great sign for CTV

April 27, 2022 Todd Krizelman, CEO – MediaRadar

Lately, there has been much investor handwringing over CTV investments. With Netflix’s latest results, some worry that if Netflix’s growth has stalled, the prospects for everyone else may be diminished as well. This is why the same day that Netflix stock came down 35+%, there were also (albeit much smaller) declines in other broadcast stocks too.

But the concerns may be misplaced. If YouTube can build a $28.8B annual revenue advertising business, without subscriptions, surely there’s hope that Netflix and other media brands with strong content catalogs can build and sustain ad-supported offerings.

The YouTube business

To better understand the YouTube business, MediaRadar took a look at the mix of YouTube’s current advertising. For this analysis we reviewed pre-roll, mid-roll and post-roll ads from the largest 3,000 YouTube channels across 33 content categories through a panel of over 2 million users.

What we found was a robust, growing business, with significant lift in advertising revenue the trailing year, but also the number of advertisers, across most product categories, was up. Alphabet Inc, which owns YouTube, recently released FY 2021 numbers. The economics look strong. The company grew revenue 47% in 2021, up to $28.8B. Almost all of this was from ad revenue, with very little from subscriptions. The implications for all broadcasters and publishers is meaningful.

Some view YouTube as a platform only, not as content creator. But this is not quite right. YouTube is a platform of course. But they also invest aggressively in their influencers and third-party content creators. While they don’t finance scripted shows, they don’t leave content creation to chance. They do this by providing physical space, the latest tech, upfront grants, and even assign a manager to advise creators once they hit a certain number of followers. As reported by the WSJ in October 2021 they note YouTube employs 1,000 full-time managers assigned to the top 12,000 creators. With this in mind, there are takeaways for others on how to build a hybrid approach to content creation.

YouTube advertising findings

The industry verticals with the most concentration of ad spend include entertainment, technology, retail, finance, and pharma. Altogether, these categories accounted for 60% of ad placement, and each segment increased > 30% YoY from 2020 to 2021.

Retail and ecommerce advertising are up significantly year-over-year. We observed an increase in ad spend within this category of 109% from 2020. Unlike in certain categories, in retail we continued to see steady growth throughout the year. The Retail Category increased advertising on YouTube by 60% in Q3 2021 and 91% during the Q4 2021 holiday rush.

YouTube’s music content was the most popular in both 2020 and 2021 with advertisers. YouTube benefits from strong renewal rates, but also from new clients. 52% of advertisers in music YouTube channels were new in 2021.

Everyone knows Travel advertising would be up. YouTube did not disappoint. Advertising investment in the Travel vertical grew by 270% YoY from 2020. Some of the ad spend was from kid-friendly vacation destinations and theme parks like Disney World and Discovery Cove. Ad spend increased 8x year-over-year.

Content is key to advertising growth

Next, we looked into YouTube’s programming channels to see what content categories are helping to drive growth of the platform. Interestingly, the most popular among advertisers were the same in 2020 as 2021 – music, kids, society and culture, and gaming.

YouTube’s music content was the most popular both years among advertisers. Furthermore, 52% of the companies investing among YouTube’s music content were newcomers to the category.

Another trend we uncovered was within “kids” content. Advertising investment among travel vertical grew by 270% YoY from 2020. Most of the ad spend was from kid friendly vacation destinations and theme parks like Disney World and Discovery Cove. Ad spend increased 8x among this group.

What’s next?

As we move through 2022 and into 2023, we expect retail ad spend to continue growing on YouTube. YouTube will continue to be a hot-spot for advertising among retail brands.

While ecommerce has had an increasing presence for years, the pandemic likely accelerated this possess by uncovering new technology to help making digital buying easy. YouTube has had success with shoppable experiences, and we expect to see more of them.

Publishers have long understood the value of affiliate revenue and shoppable content. The opportunity here – as demonstrated through YouTube’s success – is to evolve this into video and CTV offerings as well.

It will be interesting to see how the “new normal” plays out post-pandemic. Obviously, the industry and buying behavior has been forever changed. The online video market is also becoming cluttered with numerous CTV and OTT options. Even Disney+ and Netflix are launching advertising-based models. The constantly evolving market will impact the way video is consumed and the methods advertisers need to use to promote their products.

The combination of content and commerce is a strong one. And, as we are seeing throughout the streaming space, content drives audience interest. And audience interest drives ad sales success. YouTube’s success illustrates the opportunity for ad-supported streaming success.

Advertising | Perspectives | Supporter Spotlight

What 2021’s CPG ad trends tell us about the 2022 forecast

January 24, 2022 Todd Krizelman, CEO – MediaRadar

The last two years have been unpredictable for consumer packaged goods (CPG) brands. In 2020, Covid-19 and pandemic-induced shortages realigned consumer shopping behavior and caused marketers to pull or pause campaigns. These unprecedented changes had a cascading impact on publishers with millions of ad dollars lost and considerable resources exhausted to cater to the shifts. 

Unfortunately, the coronavirus continued to wreak havoc on CPG well into 2021. The second half of the year — and the holiday period, in particular — was hurt by supply chain challenges. Long, unpredictable delivery times, and low inventory left brands and consumers scrambling. To complicate the situation even further, all of this occurred while overall consumer spending was on the rise, widening the gap between supply and demand. 

As we embark on what is sure to be another challenging year, MediaRadar wants to understand market headwinds for publishers who rely on ad dollars from CPG brands. So, we looked at our U.S. data, and here’s what we found. 

How did the CPG market shift in 2021?

As a result of the pandemic, online shopping for groceries and toiletries — staples of brick-and-mortar convenience stores and drug chains — has normalized. Significantly, an impressive 45% of consumers report shopping online for groceries. That trend will only continue, driven by convenience and safety on the consumer side.

“Ecommerce will be the key battleground for CPG brand growth over the coming years,” says Jonathan Barnard, head of forecasting at Zenith, and the numbers are bearing this prediction out. Another driver of increased online shopping is CPG brands getting into more direct online sales. Clorox, Nestle, Ocean Spray, and others are launching or investing in web-based DTC offerings amid the pandemic. These same CPGs are also increasing their social activations with live streaming and live shopping options in the U.S., to build direct relationships with a growing cohort of online shoppers. 

Where are the ad dollars going? 

With more CPG brands shifting focus to ecommerce sales versus brick-and-mortar channels, our analysis reveals that ad spend is following. Comparing media spend in 2019 to 2021 through November, here is what we saw: 

Print spending is down by over half (53%), totaling $970 million in 2021 versus 2.08 billion in 2019. TV is also down by 16%. Spend totals topped $3.1 billion in 2021 compared to roughly $3.7 billion in 2019. 

Digital, however, grew like gangbusters and is up an eye-popping 742% over the last two years. Spending last year approached $1.6 billion ($1.59 billion) while 2019 saw investments sit at just $189 million. The growth speaks to changing strategies for CPGs, who are investing more and more in online sales. 

CPG ad spend has fallen

Even with the exploding online spend, CPG ad spend has steadily decreased since 2019, and is now down 6%. Digging deeper, we see that 2021 CPG ad spend is down ~1% from 2020 to $5.7 billion, while 2020 dropped 5% from the previous, pre-COVID year. Pandemic-driven sensitivities and supply chain challenges are likely the causes of this downshift, as advertising adjusts to stay in line with available supply — or adapts to mitigate shortages.

Unsurprisingly, TV stays on top

Overall, spendings on TV ads still tops other media and remains hugely popular among CPGs for brand lift. Even as consumers spent more time with entertainment apps, TV still owned 55% of all ad spend in 2021 at $3.1 billion. However, digital overtook print as the second most popular medium, with spend at $1.6 billion. 

Changes in monthly ad spending

Note the month-to-month changes as there were decreases with ad spend in February (-16%) and November (-18%) and increases in April (+16%) and May (+13%) as a result of CPG companies reacting to supply chain challenges and leveraging data to react to consumers’ needs.

The top CPG advertisers

According to our analysis over the last three years, the number of CPG advertisers grew annually: 9,329 in 2019; 9,666 in 2020; 12,300 in 2021. This rise was due, in part, to companies who didn’t advertise previously starting to advertising in 2021. (Such as Beautcella offering DERM iNSTITUTE and The Naked Bee.)

Top spenders remained unchanged from pre-pandemic all the way through 2021: L’Oreal, The Hershey Co, Johnson & Johnson, Procter & Gamble, and Unilever. These companies account for more than a quarter (28%) of the overall 2021 category spend. While each brand’s total spend is down YoY, they all experienced growth in digital. L’Oreal, Hershey and Unilever saw increased digital advertising more than 100% YoY. With each, we witnessed large video and Facebook buys adjusting to consumer buying patterns. 

What’s next for CPG in 2022?

We believe that CPG companies will continue to reshape portfolios with DTC offerings and investment. They’ll also continue to zero in on health-conscious lines to support changing consumer demands. Ad spend distribution will likely shift in tandem, with more budget allocated to digital and social media. To win those open web dollars and compete with the walled gardens of Meta, Google, Snapchat, Pinterest, and TikTok, publishers should emphasize in-demand formats like video and OTT.  As livestreaming continues to grow, advertisers are reconsidering how they can approach their marketing efforts through this medium to help create brand awareness and increase sales.

Overall, there have been many changes within the CPG advertising space. These include navigating external factors like supply chain issues as well as a changing marketplace. Ecommerce and digital advertising are a necessity within this space as consumers shop online more than ever before. While top CPG advertisers remain the same as in previous years, their tactics are shifting. Publishers need to keep a close eye on these trends to understand how to best serve the changing needs of these potential advertisers.

Advertising | Perspectives | Revenue | Supporter Spotlight

What publishers need to know about the crypto ad market

September 27, 2021 Todd Krizelman, CEO – MediaRadar

While the cryptocurrency market has been growing at a steady rate over the past few years, it has recently exploded – and shows no signs of slowing down. Estimates show the industry will hit $4.94 billion globally by 2030. That’s more than triple its size of $1.49 billion in 2020.

With such a large market, it’s a no-brainer for advertisers whether they be crypto platforms, providers or innovative merchants – to take advantage. There may be no bigger sign that the door is wide open than the fact that Google, just this summer, loosened restrictions on crypto ads after banning them in 2018. As money flows into the category and advertising becomes more accepted and possible, it presents a big opportunity for publishers to capitalize on a growing and lucrative ad market.

Meet the crypto advertisers

According to our own data at MediaRadar, we’re seeing that bear out. In 2020, there were just 27 digital currency companies who purchased ad digital display or print ad space. In 2021 that number increased 159%. New companies include BitYard, Anatha, BitTrust IRA, Phemex Limited, and Gemini. Existing advertisers, like Coin Mobile App, Hex.com, Bakkt Marketplace, Nexo, and Celsius Network, continue to spend. This growth will only continue and to the benefit of the overall ad ecosystem.

Supporting the industry is the increased credibility it has seen in recent years. We know Google has shifted its view on it, but it’s not the only major company.

Tesla invested $1.5 billion in Bitcoin back in February, and that caused the cryptocurrency market cap to surpass Google’s stock. Tesla founder Elon Musk has always been a crypto advocate – despite brief moments of doubt. In fact, his backing of certain currencies has caused them to skyrocket.

Breakthrough business

Beyond bleeding edge players like Tesla and Musk, legacy businesses like McDonald’s are now accepting crypto for payment. So, there’s a more accepting audience for crypto ads. And, with all the different cryptocurrency formats out there, it’s easy for advertisers to try and market one people haven’t tried yet. The same goes for crypto platforms.

However, in such a crowded market, how do crypto brands break through? What are advertisers doing to market crypto to the public, especially when there are plenty of people who still don’t know what crypto is or how it works? And what types of publishers are benefitting?

This year, crypto companies advertised across digital and print formats, with most spent on digital (86%). However, 14% of spend has been in print. In 2020, there was no investment in print, which marks a substantial year-to-year change.

This indicates that the industry is growing and is striving to reach a broader demographic by advertising in The Economist, Bloomberg Businessweek, Car and Driver, and The Globe and Mail. Note, of course, the audiences of these publications. They’re often more business and tech-savvy. Also, they likely follow the crypto category or are more receptive to trading crypto than the average person. Publishers that feature these audiences can win ad dollars from the growing number of crypto brands eager to invest.

Follow the money

Still, while crypto is beginning to mainstream and broaden its outreach, crypto advertisers haven’t shifted to the ultimate mass marketing channel – linear TV. There has been some experimentation, of course. However, according to our research, TV was the least popular channel for cryptocurrency companies. In comparison, the majority of advertising spend from traditional banking services in 2020 and 2021 – think Capital One, Chase Freedom, Chime Bank, and CitiBank – has been on TV ads.

Beyond the channel, the format in which crypto brands deliver their message is similarly important. One way to engage their audience effectively is with contextualized messaging. According to BuySellAds, “those in the cryptocurrency industry are more likely to engage with advertising from contextual advertising networks that display contextualized messaging and is relevant to what they’re viewing, is honest, and doesn’t utilize forms of tracking.” The best crypto ads are native and tightly aligned to the format and content. For publishers seeking to partner with cryptocurrency brands, this is critical intelligence when pitching formats and capabilities.

Moving forward, enterprising publishers can take advantage of the crypto ad explosion. With a growing number of competitors, platforms and players, there is a massive opportunity here to build business and grow revenue.

Advertising | Perspectives | Supporter Spotlight

Will iOS and cookie privacy updates affect Facebook?

June 30, 2021 Todd Krizelman, CEO – MediaRadar

Facebook is a peculiarity, even among its fellow ad-supported media giants. Their ability to collect data from their two billion plus users, and package that data for advertisers, is second to none. Facebook’s business model is inherently more insulated from many market fluctuations that affect other advertising platforms because of Facebook’s network effect. Every new Facebook user adds new data to the system. That gives Facebook even more advertising data to sell to advertisers.

Yes, Apple’s iOS14’s App Tracking Transparency (ATT) changes, and Google’s plan to phase out third-party cookies, now delayed until 2023, will have an impact. However, the amount of user data being collected within Facebook and the value of that data is gold. And that’s even without tracking users across third-party apps and websites.

With Facebook’s vast internal network and collective data, Facebook ads aren’t going away. Instead, Facebook is adopting new privacy standards and will continue to play a significant role in the growth of small and niche businesses. Chief Executive Mark Zuckerberg stated that as a business, he believes Facebook can manage through the changes. He thinks it may emerge even stronger if it becomes harder for small businesses to navigate data targeting without Facebook. Here at MediaRadar, we decided to take a closer look.

Niche industries and ad targeting

Facebook reported revenue of $26.17 billion for the quarter, which was up 48% compared with a year prior. Facebook attributed the significant increase in revenue to a 30% year-over-year increase in the average price per ad and a 12% increase in the number of ads delivered.

The biggest spenders, accounting for 7% of ad spend, were entertainment brands, more specifically streaming brands such as HBO Max, Disney+ and Amazon Prime. One could assume, based on these numbers, that ad spend from large companies like these services accounts for Facebook’s success. Instead, what truly sets Facebook apart is how it caters to very niche audiences.

When looking at our data, of the percentage of retail industries that advertise on Facebook, a startling 62% fits into the “other” category which is made up of hyper-focused retail categories. Mind you, MediaRadar tracks over 7,500 product categories, and over half of them are incredibly specific.

Niches such as leather goods, herbs, telescopes, or cheese shops are not relevant to a majority of users. However, Facebook pinpoints who needs to see these types of advertisements the most. In addition, Facebook targets people with ads from industries that other platforms don’t. And, since they target users ads from plenty of market subsets, Facebook’s reach and revenue adds up.

Facebook is quite aware of its niche marketing prowess, and takes pride in it. In prepared remarks for the Q1 earnings release, COO Sheryl Sandberg chose to highlight someone who runs a yoga studio, and how Facebook helped her get the word out, as opposed to highlighting a major brand. It shows the value of their marketing strategy, and how appealing to the everyday consumer is what attracts advertisers to the platform.

Similarities to other platforms – and differences

Facebook’s reliance on niche marketing is strengthened by the fact that they are quite similar to other platforms in areas such as retention and campaign length. We found Facebook had a 34% retention rate between 2020 and 2021, similar to the overall industry average. As for campaign length, 44% of campaigns lasted one month or less, while 38% of campaigns lasted from two to four months.

The advertiser overlap rates between Facebook and other major forms of media is also a reason to point to niche markets as its success. In reviewing the data, we saw there was a 34% rate of overlap between Facebook and major broadcasters such as NBC and Fox, and those numbers are slightly lower when looking at podcasts and Snapchat.

The key stat for Facebook here is that nearly half of their advertisers are exclusive to their site, including nearly 60% of retail advertisers. While advertisers have the same buying patterns as everyone else, Facebook also attracts a lot of brands that aren’t selling on other platforms, and that makes them even more valuable.

What can we learn

Facebook’s success with niche markets provides a valuable lesson for us all: know your audience. No matter how big or how small, it’s important to make sure you market to your customers in ways that your competition cannot. With their vast network effect and their ability to package granular advertising data, Facebook’s dominance will only continue to grow regardless of whether they are able to track users across third-party apps and websites. But of course, they’ll need to ensure that they get privacy buy-in from their users, particularly as policy and user preference around this topic evolve .