From your perspective, how does the advertising tech world currently
function? Is it a competitive space?
Well, it's great to be here and thank you for the question.
We just hosted about 12 hundred folks in Marco Island across the digital
ecosystem, and we had two and a half days of conversation around privacy.
Public policy address stability. The future of streaming
a healthy and open and supportive ecosystem.
I will tell you from where we sit and we we kind of go on to our membership every
year with a survey. There is widespread belief that there is
healthy competition. We have a very, very long tail in the
Internet ad ecosystem. We have millions of small businesses
that rely upon advertising. And yes, we do have some larger players.
But this news, which actually just broke today, I certainly did see it.
We have not dived into Adobe into it in any way.
Just finished our conference about two hours ago.
But obviously, we'll be closely watching.
What was interesting is that many have used the anecdote that this is like Citi
Bank or Goldman owning the New York Stock Exchange.
How is it different? Can you get us under the skin of how the
infrastructure that Alphabet owns and operates is different from, say, a bank
owning the nice? There are there are lots of companies
that own multiple parts of the ed tech ecosystem of the supply chain in the
digital ecosystem, and in the end beneficiary is consumers.
Consumers like convenience. They like lower price.
They like ad supported. They like free Internet.
They like free information, entertainment, communications.
There are lots of examples of this beyond just Google.
So I'm not sure why. It's not just a Google situation, folks.
Do you play on both sides of the equation and the end recipe?
That is a consumer warning. Hey, David, let me come at it this way.
The DOJ states alleges that Alphabet or Google in particular dominates the
market for search, but also dominates the market for advertising technology.
You lead an industry association for advertising.
Does Google dominate the market for advertising technology?
There was a report that recently came out, I believe was in The Wall Street
Journal about a month ago that reported that between Google and Meta, they
represent less than 50 percent of the ad supported ecosystem in the US.
That is a change. That is a decrease over time.
Are there players that have significant influence and significant share?
Yes, in lots of cases in the industry, whether you talk about detergent,
chocolate, autos. There are lots of examples of the
leading players that have significant market share.
I do not think the ad supported ecosystem is any different than other
categories. Of course, David, you're the Interactive
Advertising Bureau CEO, and I know one thing top of your mind right now is
streaming was interesting this weekend, gone, actually.
Lucas Shaw out in L.A., our correspondent covering the industry,
interviewed the new CEO of Netflix and I'm paraphrasing, but they basically
said they got to an ad supported terror and they got to advertising when they
realized they better get moving because the competitive landscape.
Where do we stand with the streamers, those newer players and those longer
legacy players and how they are contributing to that marketplace?
It represented a lot of our conversation over the past two and half days.
In fact, we had Jeremy Gorman from Netflix as a speaker on the stage you
talked about there. They're giving into the ad supported
streaming space. It's still early days.
They have a minimum viable product and they're very excited about growing that
driving innovation and and scale. There is absolutely no doubt that we are
seeing a very, very quick shift from linear television to the streaming space
ad supported streaming is clearly where the action is at.
And there's obviously lots of competition in that area.
We host something every year which is called the new fronts, which is
basically a celebration of what is the opportunity in the streaming space,
which is coming up in May for the general upfront season when advertisers
go to the market and buy for the upcoming year.
And what does the environment seem like? David, everyone's been worrying that
earnings are about to be upon us and we're waiting to hear how these
companies have navigated a slowing advertising environment.
Is that what people are wearing and seeing in that business?
But I think that's exactly the right word is slowing.
What we have seen, we actually do research on this topic.
We go out to the market. We interview buyers.
And we believe that this year will be a growth year for the digital environment,
but it will be a far slower growth year than it has been historically.
Overall, we see that the advertising space will grow about 6 percent in 2023
and there are areas that will decline when you're television as an example.
And there are areas that will grow significantly.
CTV, we have growing 14 percent year on year and once again that is coming off
of a Europe of explosive growth in 2020 and 2022.
So Europe growth, but a Europe slowing growth.