Keep on Keeping On
Momentum is important. You don’t realize how important it is until you lose it. In this business, we like to talk about momentum using expressions like “tailwinds”, “flywheel effects”, and the crown jewel of them all – “growth”. In a world where flat felt like progress, forward movement feels like a symphony with all the various parts of your business harmonizing, perfectly sequenced, crescending, and elevating in a soothing pitch.
The good news is that things continue to improve on the Ad Spend frontier, and the momentum that took the better part of the quarter to build carried us nicely into Q3. We saw normal seasonal dips as the quarter started, but the last week in particular has seen many lines of business reboot and pick up spend. I’ll admit to a bit of a cognitive disconnect watching case counts explode in parts of the US, but Ad Spend continues its upward trajectory. Unlike when the pandemic first hit, there doesn’t seem to be as tight of a correlation between what is happening outside our walls and the pixels we are firing on screens.
Hope you are Staying Safe, Healthy, and Happy.
EVP, Global Marketplace Development
Q3 Power Rankings
I gave myself a blank slate for this newsletter now that we have retired our Tom Hanks Index. I have been in the ads game long enough to know power rankings drive engagement. It’s how we built the internet into the behemoth you know today. Listicles and power rankings are pure page view gasoline. However, there is nothing subjective about this list, my friends. This is built on cold, hard, empirical data that only the kind folks at Index Exchange can bring you.
Throughout the course of this newsletter, we’ve received many requests for more global market data. Here, we’ve compared the first two weeks of April to the first two weeks of July. Both were the starting line for a new quarter, but the reality of the circumstance is obviously entirely different. Since then, we have seen a really strong rebound in key markets. We have also seen traffic start to reverse to the mean a bit (that is until my power rankings drive an unprecedented surge).
Hot Take Time Machine
- Things are better north of the wall. Canada is having a moment based on these rankings. Perhaps you might be thinking because IX is a Canadian company we may over-index in this market. To that I say How dare you, sir. This is a Tim Horton’s.
- All the places we would like to be this summer – Italy, France, and Spain – are doing really well despite telling Americans to stay home. Or because they are? Jury is out.
- I’m not sure what to make of the decrease in traffic other than we seem to have accepted our current circumstances to some degree, i.e. less panic. Or perhaps we are becoming more balanced in our consumption habits as we spend more time inside. This is just speculation on my part, and I recognize this isn’t exactly a hot take. I have failed you.
- CPMs pulling up in major markets is a great sign.
- Total number of Advertisers is up, but not by a big amount. This generally aligns to what we observed in Q2. The big Brands, the big Marketers, are going harder and making up for some Marketers that are still largely absent. For many – this is an opportunity to take share, and grow, and they’re doing that.
The best way to contextualize how big tech makes its moves is to understand how it makes its money.
Almost 18% (46B) of Apple’s astronomical 260B in revenue comes from subscription services. None of it from advertising. They will continue to be hostile to advertising, not because they have a hero complex. It’s just extremely lucrative to take a battering ram to it.
Q3 will be a much different experience than Q2. Thankfully. The shift from here is no longer about returning to pre-COVID levels, which we achieved and exceeded toward the end of the second quarter. Now, the shift is more toward year on year comparatives, hopefully seeing our return to normal eventually intersect with last year’s normal. And then normal starts to turn to growth. And growth turns to stability. And a virtuous cycle is reborn. Remember when Flat was good? It’s not anymore. We want more.