Where's the Apple Ad Takeoff?
And, the Messenger kills the Messenger
A few quick housekeeping items:
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In addition to my weekly Next In Media podcast, which typically features exec interviews, I’ve been experimenting with a second “week in review”- type show with my Marketecture colleague Ari Paparo. Here’s last week’s. Let me if you think this is a good idea, what else you’d maybe like to see, and maybe you’d even want to sponsor something along these lines?
Nielsen released an eye-opening stat the other day - in 2023, Ted Lasso was the top streaming show in terms of minutes viewed (thanks Bloomberg’s Lucas Shaw).
Which made me ask the question - is Apple+ actually bigger than a lot of us realized? Or, is it that everyone who signs up for Apple TV+ watches Ted Lasso?
Because Apple TV has perhaps the smallest library in streaming, and isn’t known for having that many other buzzy hits, if at all.
Which is interesting in that every other streamer, including now Amazon Prime Video, is adding an ad-supported offering as its default. Wouldn’t brands have loved to have run alongside the feel good Lasso? Isn’t Apple supposed to be making a ‘big push’ into advertising?
This conversation with myself reminded me of last year’s IAB Annual Meeting in Florida, when CEO David Cohen called out Apple for refusing to join hands with the ad community. The IAB just wrapped this years event -and while I’wasn’t there, Apple doesn’t seem to have appeared on stage or made a whole lot of noise.
That’s in spite of the articles that pop up every so often where:
Apple is building a DSP, or a full tech stack
Apple is pushing into video
Apple hired a video sales head
To be sure, Apple has pushed its services businesses in the past few years, and its revenue reached new heights of late. But in terms of selling ads, Apple is still really just a search ads company, aside from selling some space in random MLB and MLS games.
As Netflix has found out, to be a real ad player, you need to actually have a lot of ad space to sell.
When is Apple actually going to go for it? Consider that right now
The cookie really going away, and Apple would seem to be able to use its data and tech to build out some sort of very smart identifier or contextual product of its own (I’m making this up)
Retail Media is booming, and Apple has boatloads of data on what people buy, which could conceivably be used all over the Web
CTV advertising is booming, and Apple could seemingly turn on monetization fairly quickly (Amazon is predicted to gin up an extra billion this year by doing so)
So what’s the holdup? After all, many have speculated that Apple might be in line to bid on the next NBA deal, which is coming up this year. That could be a game changer.
But if I’m the league, do I turn to a platform that is seemingly sub-scale, and so far has been unable or unwilling to demonstrate its prowess in selling advertising?
The Messenger is dead. Good.
Not that I’m happy that anyone is losing their jobs, especially at a time when digital journalism is getting decimated. But The Messenger was the worst example of dumb idea meets mogul hubris since maybe Rupert Murdoch launched an iPad only newspaper back in 2011 (The Daily, not to be confused with The Daily.
It’s been well-chronicled by others (including Semafor), but The Messenger’s business model was to hire high priced journalists, have them flood search engines with aggregated crap, and somehow pull in $100 million in revenue. Talk about not understanding the market you are entering.
Contrast that with 1440, the daily newsletter that recently passed 3 million subscribers, while it scaling up its ads business. Instead of hoping that traffic will somehow just equal revenue, the email-centric publisher treats building its business a a math problem, employing tactics that are not disimilar to the launch of a mobile game.
“We focus on this very, very early on like the unit economics,” 1440 founder Tim Huelscamp told me on my podcast.
Tim said that 1400 has a 60% open rate, and generates $1 million in revenue per employee by fixating on “the lifetime value of the customer. So very early on, we were able to figure out our retention curves… and then it's all about like just getting your customer acquisition costs down.”
This is - so not The Messenger. Of course, it helps that 1440 doesn’t have to maintain a staff of hundreds of pricey journalists, since it primarily aggregates headlines.
“We take majority of our revenues and then reinvest them back into growth via like a flywheel business model….we’re spending seven figures now on, on growth each month.”
At this moment, it’s encouraging to see some fresh, maybe non media orthodoxy thinking. My question is, can it be replicated anywhere else?
“We try to keep the team really lean and mean,” Tim said. We're currently only focusing on our one product at the moment, we are thinking about other things, but we try not to chase like, you know, small revenue and small opportunities. We think like we've seen a lot of people do that, especially in the media space where they chase a bunch of things, raise a bunch of money, and then that doesn't end well.”