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Sunday, July 3, 2022

Disney+ To Add Ads; Will Programmatic Ruin Podcasts?

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Here’s today’s AdExchanger.com news round-up… Want it by email? Sign up here.

Addressable Mouse-holds

Ads are coming to Disney+.

After an unconfirmed report in The Information late last week, Disney said on Friday it does intend to introduce an ad-supported tier for Disney to accompany its ad-free subscription. Ads will roll out in the US later this year and overseas in 2023.

Disney+ is easy on the pocketbook at $8 per month. That’s unsustainably low, but Disney started out cheap on purpose to prioritize market share growth and reduce churn. At such a low price point (on top of abundant free trials and other marketing promos), Disney+ will struggle to turn a profit as a stand-alone business segment by 2024, which is the company’s own stated goal.

Ads, as always, are the low-hanging fruit.

Is your stock dipping like Uber or Zoom? Launch an ad biz. Hey, Instacart and Walmart, need to cover the costs of fulfillment? Consider a scalable, unassailable, hands-free, no-miss-guarantee programmatic platform!

Admittedly, the Zoom and Uber comparisons are a little unfair. Disney has huge preexisting advertising deals with brands. At some point, though, Disney will need to package its streaming audience for advertisers, otherwise its TV campaigns are going to be missing a huge slice of the population – i.e., teens and young adults. Which is why (conspiracy theory) AVOD was the plan all along, no matter what the company initially said about remaining ad-free.

It makes sense that Disney held out as long as possible, though. The lowest-hanging fruit may be easiest to pick, but it’s also most likely to rot the whole bushel if you’re not careful.

Adcasts Have Too Many … Pods

Dynamic ad insertion has become table stakes for all but the most popular or niche podcasts. Media buyers prefer the ease of automation and ability to target ads on a familiar CPM basis, and publishers like being able to increase demand and available inventory.

But audio agencies warn that the more programmatic podcasts become, the likelier they are to lose their unique brand vibe.

One of the most appealing aspects about podcasts for advertisers is having the host read a sponsor’s message, which creates an inherent level of intimacy with the audience.

But if you stuff double-digit minutes of ads into a one-hour podcast, “the magic is gone,” one audio ad agency CEO tells Digiday.

Not to mention the technical difficulty of integrating auction-based, real-time ads, rather than the clean experience of a host segueing to a message. The listener experience is also thrown off, because a dynamically inserted ad introduces different voices and sometimes even different volume levels. It’s why host-read ads are the “gold standard” for podcasts.

There’s also a business incentive to live ads. According to a Nielsen study from 2020, live podcast ads have a 9% better brand recall than ads that win an RTB impression and have no connection to the podcast.

All Systems Go

System1, a customer acquisition platform, has bought the online coupon and affiliate marketing company CouponFollow for $115 million, including incentive-based targets.

System1 is part ad tech and part online bounty hunter. It doesn’t spend client money, but rather buys its own ads and media and uses that to drive leads or conversions for dating apps, insurance packages, financial products and online subscriptions, collecting a preset fee on each conversion.

The company went public via SPAC last year. 

CouponFollow is System1’s first foray into ecommerce, which is a natural next step for an online commission hunter.

“It would be a major expansion for us to move into ecommerce,” System1 CEO and Co-Founder Michael Blend told AdExchanger in September before its public listing. “Today we’re not working with the kind of companies that pack and ship products.”

Blend said ecommerce was one of the two most important growth channels outlined in System1’s investor deck. The second is a mobile app install business.

But Wait, There’s More!

IAB Europe appeals the Belgian data regulator’s ruling that designates the trade org as a data controller for the Transparency and Consent Framework. [release]

How Google is preparing for the end of advertising (as we know it). [The Information]

Google suspends advertising in Russia. [NYT]

The IAB Tech Lab hosted the first meeting of its Privacy Enhancing Technologies working group on Friday. [release]

Google offers podcasters tens or hundreds of thousands of dollars to make podcast videos. [Bloomberg]

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