How the Hollywood Strikes Are Disrupting the Ad Market

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In This Issue:

🎬 Hollywood strike pushes advertisers to reconsider video spending, as streaming services struggle with content drought.

🤖 Buzzfeed leverages AI to boost engagement, reducing reliance on major tech platforms and driving direct traffic.

🛍️ Google Ads phases out Enhanced CPC for Shopping campaigns, suggesting advertisers adopt newer strategies.

How the Hollywood Strikes Could Disrupt the Ad Market

Beyond the silver screen, Hollywood's current standstill is poised to do more than delay TV and film releases — it's also coming for the ad industry.

📺 Challenges for Ad-Supported Streaming

With a shortage of new material to promote, Insider Intelligence reported today that newcomers to the ad-supported streaming space could struggle to attract media buyers.

The strike has already impacted advertising decisions, driving rerun spending up to 80%, while spend on new content plummeted to 20% - its lowest since the pandemic, according to recent data from Guideline.

Though reruns benefit both streaming platforms and traditional TV networks during the strike, the report notes that the content drought could cause advertisers to shift their budgets to alternative formats, potentially leading to a redirection of video spend.

Comparatively, CPMs on streaming services are strikingly high. Netflix, for instance, has charged as much as $55-$65 for its ad tier—nearly five times the rate for some linear TV slots priced at $10-$15.

🛍️ Rise of Cost-Effective Formats

Meanwhile, more cost-effective formats are getting advertisers' attention, like retail media, which is one of the fastest-growing digital advertising channels, generating $45 billion this year.

Recent research also found that audio ads produced much higher brand recall and sentiment despite having CPMs up to 10 times lower than premium streaming services.

In response, streaming services are adjusting strategies to maintain advertiser interest. Netflix reduced CPMs to $45-$55, a move aimed at enticing new advertisers who may see the content drought as an opportunity to explore other, cheaper formats.

Image: Insider Intelligence

Buzzfeed's AI-Generated Content Trumps Humans

Buzzfeed reports that AI content on its site outperforms content created entirely by humans.

With major tech platforms like Facebook increasingly redirecting traffic to digital publishers, the publisher is adapting its strategy to rely less on social media virality. Instead, it is directing traffic to its own platforms through new AI-powered content formats, including:

• AI-driven quizzes

• Interactive chat games

• AI-assisted imagery

An AI-inspired image post that used Midjourney to imagine what Barbie’s dreamhouse would look like in each U.S. state saw more than one million views and went viral on TikTok and Instagram Reels.

The company doubled its output of AI-assisted content from Q1 to Q2 and expects a similar growth rate in Q3, and it's paying off. Buzzfeed reported that between Q1 and Q2, both views and time spent with AI content increased threefold, driven by higher content output, and the new content boosting engagement quarter-over-quarter.

Image: Canva / Buzzfeed

Say Bye-Bye to Shopping Campaigns using Enhanced CPC

Pour one out for Shopping Campaigns using Enhanced CPC. Google Ads has started notifying users that it is phasing out Enhanced Cost-Per-Click for Standard Shopping campaigns this October. Once deprecated, Shopping campaigns using the feature will function as if they are using Manual CPC bidding. The company says it's being retired after nine years since it has launched more advanced bid strategies.

For those currently employing Enhanced CPC in their Shopping Campaigns, Google suggests exploring the one-click Target ROAS experiments accessible in campaign settings within Standard Shopping campaigns. Alternatively, users can experiment with Performance Max campaigns.

Failure to make any changes by October 2023 will result in campaigns operating under the Manual CPC bidding system.

Image: Google

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