Day: May 7, 2019

Amazon’s video ad push, Jeffrey Katzenberg’s pitch to advertisers, and iHeart’s Apple hack

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Welcome to another edition of the Advertising and Media Insider newsletter, where we recap all the big stories we worked on this past week. If someone forwarded you this newsletter, sign up for your own here. Send me tips or feedback at [email protected]

It’s been a big week for Amazon advertising news. It’s pushing into video search ads with a forthcoming beta that agencies see as competitive with Google. Meanwhile, Lauren Johnson got her hands on a pitch deck Amazon’s been taking around ad agencies to sell OTT.

The key takeaways:

  • Amazon is on a crusade to build a video advertising business to rival Roku, Hulu, and others, by ramping up app advertising in Amazon Fire, its OTT device; and its streaming service FreeDive.
  • Its OTT advertising gives marketers a way to do interest-based targeting, whereas most of Amazon targeting has been based on product adjacency.
  • Amazon is pitching its video viewers as high-income consumers.
  • It’s aiming at YouTube by pushing brand safety and non-skippable ads.
  • Amazon still lags Google’s ad tech, but it could just be a matter of time before it catches up.

Here’s what else we’ve been reporting. (Read most of the articles here by subscribing to BI Prime; use promo code AD2PRIME2018 for a free month.) 

Hulu said 65% of live sports viewers stick around to watch other shows — here’s why that matters
Livestreaming services have tough economics, so this was an interesting data point that Hulu shared on a panel. By getting people to stick around, Hulu collects more ad revenue because they’re more valuable as viewers of library content than of live content.

Some AT&T dealers say the company’s shifting sales approach is squeezing their business
The rise of cord cutting pinches telecoms like AT&T, but the pain is also felt by the door-to-door dealers who historically made a living selling TV packages. Abby Jackson talked to some of those contractors about how they’re getting squeezed to the point of leaving the industry. As Abby reports, the pressure to make sales could also have a knock-on effect of fraudulent sales activities.

Apple dominates podcast listening, but iHeartMedia thinks it’s found a way around it
Podcast listening is exploding, but Apple has a tight grip on how people listen to podcasts and, by extension, discover new ones. Podcasters are starting to go beyond cross-promotion and buy traditional media to get the word out. IHeartMedia, one of the top podcasting companies, is taking an innovative approach by using its radio stations to promote and air its podcasts — raising interesting questions about how big the audience for podcasts can get, and how much crossover there is between radio and podcasting.

Jeffrey Katzenberg’s Quibi is courting big brands like P&G and Anheuser-Busch, seeking up-front ad deals for the streaming platform
The Hollywood exec is courting advertisers like Procter & Gamble and Anheuser-Busch InBev to advertise on his yet-to-be-launched mobile video streaming service, Quibi, and asking for prices one called “outrageous.” While Quibi first asked for an up-front commitment of $25 million, said one source, that figure has now been whittled down to the $15 million range, per another.

Here are other good stories from tech, media, and entertainment:

Netflix viewers who are 50 and older spend more of their time watching originals than their younger counterparts do

Facebook is ramping up its move to manage ad spend from millions of small and mid-size businesses with a new tool

TPG just raised $1.6 billion for a tech-focused fund after bets on Uber, Spotify, and other private companies paid off big — and shows some of the problems with current funding models

Instagram is ramping up its pitch for direct-response ad dollars as its stories ads move into Facebook and Messenger

The investor behind companies like eBay and Allbirds says IPOs give startups the freedom to escape domineering VCs
  

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Many traditional VCs are hesitant to buy into cannabis startups, but these investors are taking the plunge

  • Traditional venture capital firms are starting to show interest in cannabis startups, according to Casa Verde Capital Manager Partner Karan Wadhera.
  • Wadhera spoke on a panel at DCM’s CannTech conference in San Francisco on Tuesday about the hurdles other firms face when making their first cannabis investment.
  • Wadhera said that, in addition to smaller specialized firms, Tiger Global Management has been a key player in funding cannabis startups in California.
  • Visit Business Insider’s homepage for more stories.

Venture capital is upping its tolerance for cannabis investments.

At DCM’s CannTech conference in San Francisco on Tuesday, Casa Verde Capital Manager Partner Karan Wadhera spoke about the hurdles facing venture firms that want to invest in cannabis startups but have partners that are not yet comfortable wading into the murky legal waters.

“Every major firm in San Francisco has looked at the space,” Wadhera told conference attendees Tuesday. “Everyone here has gotten time with some of the top firms in the city. Some [firms] are ready and some are coming in steps.”

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According to Wadhera, federal legalization would help make hesitant investors take the first step in funding a startup in the cannabis industry. He said his firm, which was started by rapper Snoop Dogg, currently focuses on ancillary startups like Eaze, a cannabis marketplace, that “don’t touch the plant,” so the firm has not seen a lot of pushback from investors.

“The space is changing dramatically,” Madhera said. “There are a lot of big bills in front of Congress right now and when they are passed it will give people more comfort with investing.”

In addition to smaller firms that specialize in funding the ancillary companies, Madhera said Tiger Global Management has been one of the larger key players in funding all types of cannabis startups. According to Pitchbook, Tiger Global Management invested in three cannabis companies including vaporizer maker Pax, regulation tracking platform Metrc, and point-of-sale platform Green Bits.

SEE ALSO: Carta, the startup building a stock exchange for startups, says its own valuation increased nearly $1 billion in 5 months

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