Here’s today’s AdExchanger.com news round-up… Want it by email? Sign up here.
A Living Wage
Brands are changing how they work with agencies. Which is to say, they want to pay less for agency services.
One option is output or outcomes-based pricing, Ad Age reports. That’s becoming increasingly popular with major ad platforms, retail media and streaming TV services that charge per engagement or conversion-based metrics.
But for agencies, which are essentially services businesses, there is also a painful trend toward automation and AI. Advertisers no longer want to pay agency accounts based on the number of people or by billable hours, which is how things have worked forever.
We’re now seeing agencies go down the same unfortunate path as many SaaS tech businesses. Imagine this: A brand plays around with a generative AI coding product like ChatGPT and prompts something like “create a review software plugin that works with Shopify.” Then, poof, their need for a SaaS vendor disappears.
There is one silver lining, though: This trend is good for M&A. Many ad tech and mar tech businesses have consolidated over the past year or so – BlueConic and Jebbit, Zeta and LiveIntent, Outbrain and Teads, to name a few. And we’ve seen agencies snap up new SaaS and services businesses. Omnicom bought Flywheel last year, and Publicis recently acquired influencer marketing platform Influential.
The Long And Short Of It
Ad tech short seller Culper Research is putting marketing cloud company Zeta Global on blast for its ties to embattled ad tech vendor Kubient.
The Department of Justice charged Kubient CEO Paul Roberts in September with defrauding investors by including $1.3 million in fraudulent revenue in financial statements during Kubient’s IPO. The DOJ says Roberts conspired with an unnamed ad tech company to create a fraudulent revenue exchange whereby each company paid the other $1.3 million for services that were not actually rendered.
In a report released Wednesday, Culper claims Zeta Global is the unnamed company.
Culper alleges Zeta has “two-way contracts” with multiple “third-party consent farms,” including Kubient and recently-bankrupt Digital Media Solutions, as a way to “flatter reported revenue growth.” Culper also claims Zeta runs its own network of consent farms that drove Zeta’s growth over the past two years.
Culper says these practices are similar to those that put Fluent and MediaAlpha under scrutiny by the Federal Trade Commission, and Zeta faces “potentially devastating regulatory action.”
Zeta responded on Thursday, claiming the Culper report is “riddled with misrepresentations” and failed to even name the correct company responsible for auditing Zeta.
Shares of Zeta Global dropped 8.5% on Wednesday, and law firm Block & Leviton is launching a securities fraud investigation into Zeta.
X Marks The … Something
November 6 saw the biggest exodus from X since Elon Musk’s takeover in 2022 – roughly 115,000 users that day alone.
Yet, that same day, X saw more web traffic than it had all year. And so some advertisers are hopping back aboard.
Per Adweek, top advertisers, including Comcast, IBM and Disney, have resumed ad spending on X. To be fair, they’re spending at lower rates than before, but that’s certainly up from the zero number of dollars they’ve spent since pausing campaigns in 2023.
But why is this really happening? To get in good with the “First Buddy” (for real, Elon is calling himself that now) of President Elect Donald Trump, according to Max Willens, a senior analyst at Emarketer.
Willens also suggests that advertisers might want to reach the audience responsible for that record traffic that X has been getting post-election. Although it should be noted that at least 100,000 of the people who logged in on November 6 did so to deactivate their accounts and aren’t coming back, remember?
Either way, all those brand safety concerns that advertisers fled from in the first place aren’t getting any better. Unless brands are fine with appearing against the recent surge in anti-woman comments, that is.
But Wait! There’s More!
In what is probably the funniest thing to ever happen to online media, The Onion has acquired the full rights to Infowars in a bankruptcy auction. [NBC News]
The FTC is preparing to investigate Microsoft’s cloud computing platform. [Business Insider]
ChatGPT can now read some of your Mac’s desktop apps. [TechCrunch]
Meet the new Google AdSense collapsible anchor ads. [Search Engine Roundtable]
Amazon’s new Temu competitor, Haul, is full of shoddy AI images. [Modern Retail]
Google will stop serving political ads in the EU. [The Verge]
