RBC analyst Ross Sandler hosted an investor dinner last night featuring a dozen ad executives. Ross’s summary suggests that the current consensus–overall advertising spending is weakening but online remains strong–is wrong.
Ad agencies are seeing pockets of weakness across some specific advertiser categories (finance and domestic auto), but the weakness is isolated and not broad-based. [so far]
Search: Google’s recent algorithm changes may actually improve revenue growth, but the current environment is showing some signs of demand-related softness.
Display: Some ad networks are seeing flat y/y growth in the US [awful], while international territories are much stronger. Domestic growth is incrementally worse than expected and international incrementally better.
TV: Cautious optimism remains for strong upfront buying in network TV.
Print: The environment remains very challenging.
Ad Networks/Ad Exchanges: Advertisers/publishers are starting to question the value of ad networks as they weigh the benefits of brand value versus sheer reach. [About time. Glam Media investors, are you listening? Still comfortable with that $500 million valuation?] Ad exchanges should facilitate more transparency and efficiency in the buying and selling of display ads, and potentially disrupt the legacy blind ad-network business model.
Social Media Monetization: The monetization of social media is difficult (a structural issue), and will remain challenging in the near future.
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