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Ad prices declined in the second quarter as new formats like Reels and Shorts rolled out. After some rough quarters, Google's and Meta's ad businesses are on the rebound , and they're creating so much short-form video ad inventory that the surge in supply is driving ad prices down. "Anytime you've got an influx of newer ad inventory, typically that inventory does come with lower ad pricing," he said. And Instagram Reels ad inventory is both plentiful and 39% cheaper than Instagram Feed ads, according to Tinuiti. Meta also added more ads to its Marketplace on Facebook, which dropped Facebook ad prices by 25%, Taylor said.
Persons: Shawndu Stackhouse, Tom Williams, Andy Taylor, Pacvue, Taylor, Tinuiti's Taylor, Mike Ryan, Meta, TikTok TikTok Organizations: Inc, Getty, Tinuiti, Brands, Google, Anadolu Agency, Meta, Facebook, CPM Locations: Google's, Northeast Washington, lockstep
Retail firm Pacvue is expanding beyond advertising. The firm made its name in e-commerce advertising but will now pitch advertisers on retail tech used to manage sales. Retail adtech firm Pacvue is moving beyond retail advertising, an industry that will be worth $45 billion in the US this year, according to Insider Intelligence, Insider's sister companyFour-year-old Pacvue is one of the biggest players in this space, handling $150 billion in gross merchandise value for retailers. At the same time, traditional adtech firms like Pubmatic, Magnite, and The Trade Desk are rolling out retail media products, creating even more retail media tools that brands must navigate. Pacvue is also expanding beyond retail media because it recognizes that there is a ceiling on how much brands will spend on retail advertising.
Meta, Google, and Snap reported declines in ad sales, or flat ad revenue, during the fourth quarter. Out of the four big ad-supported tech companies — Google, Meta, Amazon, and Snap — only Amazon reported that its ad business grew year-over-year in the fourth quarter. Meta's ad prices have declined as the company rebuilds its ad business with artificial intelligence after getting hit by Apple's app-tracking privacy crackdown. While CPMs fell year-over-year during the fourth quarter, ad prices were 7.2% higher in the fourth quarter compared to the third quarter, according to Northbeam. The average return on Meta ad spend during the fourth quarter was $1.96, up from $1.30 in the first quarter of 2022.
Amazon's digital ad business is only behind Google's and Meta's — and it's already stolen budget from Meta. Today, that advertising business is no longer simply a way to drive product sales on Amazon. Amazon's ad business, which generated $9.5 billion during the third quarter of 2022, dwarfed Microsoft and Snap and ranked third behind Google and Facebook parent, Meta. There are now nearly 600 advertising partners in Amazon's advertising ecosystem, according to Amazon's directory of companies in the space. As part of its ambitions to grow advertising, Amazon also pitches a data clean room called Amazon Marketing Cloud.
Retailers will face more competition for ad dollars with smaller ad budgets from marketers in 2023. WPP's media buying unit GroupM said that retail media brought in $110 billion this year and is on track to generate $160 billion by 2027. But 2023 will be the year that determines which retail ad businesses will win and which will lose. But some retailers are trying to grow their retail media businesses by separating those two, so retail ads are no longer part of the distribution deal. Retailers are coming for TV budgetsIf retail media budgets increase, other types of ad budgets must get cut.
Ad prices on Meta, Amazon, and Google skyrocketed during the pandemic but are now declining. Digital ad prices are declining due to a number of factors:Advertisers are pulling back on spend on Meta and Google. Ad prices are typically low during the third quarter as marketers prepare to spend during the fourth quarter. Ad buyers usually anticipate a 15% to 20% increase in ad prices during the fourth quarter, said Vic Drabicky, founder and CEO of ad agency January Digital. As TikTok continues to build out its technology and relationships with advertisers, ad prices continue to rise.
Ad prices on Meta, Amazon, and Google skyrocketed during the pandemic but are now declining. Digital ad prices are declining due to a number of factors:Advertisers are pulling back on spend on Meta and Google. Ad prices are typically low during the third quarter as marketers prepare to spend during the fourth quarter. For ads designed to get people to take more immediate action, like Amazon's and Google's shopping and search ads, we looked at cost per click (CPC). As TikTok continues to build out its technology and relationships with advertisers, ad prices continue to rise.
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