Netflix Lowers Its Skyrocketing Ad Prices (A Little); X Sues GARM for Lost Ad Revenue

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TV C(stack)

When Netflix introduced ads in 2022, CPM rates were set at a staggering $65.

Some advertisers were willing to spend money in the first year to gain prestige and be among the first advertisers on the platform.

But then the prices dropped from $55 to $45 and then to $35 – and now Netflix is ​​offering some content for $20 to $30, Advertising Week reports.

There’s nothing wrong with a $25 CPM, which is still one of the most expensive spots on the internet. But for broadcasters, it’s a painful sign that advertisers may no longer feel so good about their media.

Meanwhile, there are opportunities to make deals through the back door, so to speak. A year ago, advertisers were surprised to see their ads are running on popular TV shows, including live Women’s World Cup and NFL games, for CPMs as low as $10. It turns out that Google Ads gets some ad inventory from TV networks and other channels served by YouTube TV.

For advertisers, that’s no problem. Online supply bag should include some gems, not just a weird assortment of leftover inventory that no one wants. But overall, there was strong downward pressure on CPMs for inventory that was previously sold at super high upfront rates or reserved for special premium packages.

No GARM, no foul

X is suing advertisers for not spending money on its platform.

On Monday, CEO Linda Yaccarino announced antitrust lawsuit against the Global Alliance for Responsible Media (GARM), the World Federation of Advertisers (WFA), and GARM members CVS Health, Mars, Ørsted, and Unilever.

The lawsuit cited: House of Representatives Judiciary Committee Report accusing GARM of colluding to persuade advertisers to boycott Twitter (now X) after it was bought by Elon Musk.

Advertisers have flocked to Twitter after reports of a rise in hate speech, misinformation, and other brand safety violations. Musk himself mocked the ad, fired his moderation and trust teams, and issued a Last change to allow people to post adult content and explicit pornography.

But the House Judiciary Committee, led by Republican chairman Rep. Jim Jordan, suggests GARM led the boycott for reasons unrelated to brands not wanting to advertise on the platform. The committee accuses GARM and agency buyers, including GroupM, of colluding to demonetize conservative media outlets like Breitbart and The Daily Wire.

X expects to earn $2 billion from advertising this year, according to Axios —less than half the $4.5 billion in ad revenue it earned in 2021. And honestly, does anyone trust those numbers?

Sweet home screen

TV manufacturers have an opportunity to take over the TV advertising market from cable operators and streaming apps, writes Mike Shields in his Next in the media Bulletin.

Cable distribution used to be as simple as turning on the TV. Now, most smart TVs default to the manufacturer’s home screen, which is typically filled with featured apps, featured content, and other forms of advertising.

To access streaming apps, viewers often have to navigate through complicated home screens. When searching for something to watch, 26% of people default to shows promoted on the home screen, while another quarter of viewers use universal search on their TV, according to Hub Entertainment Research.

So TV companies collect valuable data on what viewers are watching, what programs are being promoted, and whether ads are successful. And because manufacturers access this data via TV server integration, they are less dependent on third-party measurement providers.

For now, most smart TV companies seem content to make money from ads by driving brands to their own FAST channels. But, as Shields writes, they’ve also laid the groundwork for selling ad inventory on behalf of streaming apps—and raking in a bigger share of cable ad revenue.

But wait, that’s not all!

Former U.S. Secretary of Labor Robert Reich says Kamala Harris has the potential to do something very funny in response to the Google antitrust case. (Sub-base)

Ziff Davis buys CNET from Red Ventures for $100 million. (New York)

ProRata.ai, a startup building subscription-based AI chatbots trained on content from licensed publishers, raises $25 million. (Axial)

Fubo has filed a petition with the U.S. District Court seeking an injunction blocking Venu, the proposed joint sports streaming service from Fox, Warner Bros. Discovery and Disney. (Bloomberg)

How Peacock plans to retain new subscribers who signed up for the Olympics. (The Age of Advertising)

Brian Morrissey: The end of mass media may mean the end of mass brands. (Restart)

Where does Facebook’s AI mess come from? (404 Media)

Disney plans to raise prices for most of its streaming services in the fall. (Deadline)