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16 companies that ad buyers say are benefitting the most as advertisers start spending again

Published by Business Insider on Fri, 27 Nov 2020

<p><img src="https://static2.businessinsider.com/image/5fc148b650e71a0011557b64-1818/happiest season hulu.jpeg" border="0" alt="happiest season hulu" data-mce-source="Hulu"></p><p></p><bi-shortcode id="summary-shortcode" data-type="summary-shortcode" class="mceNonEditable" contenteditable="false">Summary List Placement</bi-shortcode><p>After the pandemic halted ad spending, <a href="https://www.businessinsider.com/brands-review-ad-business-holding-companies-at-risk-2020-10">advertisers are starting to spend again</a>and tried-and-tested platforms and media companies that can show a return on ad spending are reaping the benefits.</p><p>Social media platforms like Facebook and <a href="https://www.businessinsider.com/how-facebook-boycott-helps-snaps-long-building-comeback-2020-7">Snap have benefitted</a> because they let advertisers quickly turn ad spending on and off and test different messages.</p><p>Other companies like <a href="https://www.businessinsider.com/walmart-target-instacart-ad-platforms-challenge-the-amazon-monopoly-pandemic-2020-9">Amazon and Instacart have capitalized</a> on the growth of e-commerce in recent months. And the rise of ad-supported streaming TV has buoyed Hulu and Roku's advertising.</p><p>Still, ad spending levels are not where it normally would be during the fourth quarter of the year when advertisers spend more to target holiday shoppers.&nbsp;</p><p>"Clients are trying to be optimistically cautious," said Barry Lowenthal, CEO of Media Kitchen. "Flexibility and agility is still the name of the game. People want to invest into channels where they have a lot of visibility into something that is working or not."</p><p>And advertisers are still avoiding news, especially with the coronavirus, unemployment, and the presidential election dominating the headlines.</p><p>"I think all brands recognize that without news we don't have a democracy. A lot of brands are having a hard time finding fair and balanced places to be," Lowenthal said.</p><p>Business Insider talked to 14 ad buyers of traditional and digital media at advertising agencies who identified which media companies and platforms are benefitting the most. Here are 16 they identified:</p><h3>Amazon</h3><img src="https://static4.businessinsider.com/image/5ddd1bd4fd9db211db5ff7ba-400-300/amazon.jpg" alt="" /><p><p>The coronavirus sped up the growth of e-commerce, and Amazon is at the center of the boom. Amazon leads the pack when it comes to retail media, the practice of retailers selling ad space on their websites and apps that sellers use to promote their products.</p><p>Amazon made $5.4 billion from ads during the third-quarter of 2020, a 51% year-over-year increase &mdash; mostly from search ads that pop up when people search for specific items but also from its connected TV business that sells ads in Fire TV apps.</p><p>Amazon's challenge is convincing brands that aren't big sellers on Amazon to advertise there, said Jay Friedman, president of Goodway Group.</p><p>"If e-commerce wins, Amazon is going to get a halo over that entire category," he said.</p></p><br/><br/><h3>Cond Nast</h3><img src="https://static4.businessinsider.com/image/5faadf0f1df1d50018219f30-400-300/cond-nast.jpg" alt="" /><p><p>Traditional publishers are fighting for scraps as tech giants control most digital ad budgets.&nbsp;</p><p>But this year, more advertisers are spending more in direct deals with publishers, and big media companies like Cond&eacute; Nast stand to benefit, said Danny Weisman, media director at Noble People.</p><p>The luxury publisher of Vogue, Wired, and others reaches a big array of audiences that lend themselves to contextual targeting, while tried and true ad formats like sponsored gift guides in general are also in demand with advertisers.</p><p>Other media buyers instead spending with publishers, but through programmatic ads.</p><p>Publishers can also benefit when advertisers promote gift guides when they get mentioned on them, said Carrie Dino, head of media at Mekanism.</p></p><br/><br/><h3>Facebook</h3><img src="https://static6.businessinsider.com/image/5f3134674dca6873311d7a22-400-300/facebook.jpg" alt="" /><p><p>Hundreds of advertisers <a href="https://www.businessinsider.com/companies-no-longer-advertising-on-facebook-after-poor-speech-moderation-2020-6">boycotted Facebook in July</a> over its treatment of hate speech and misinformation.</p><p>But the boycott took place during the summer when ad spend is seasonably small, and now that the holidays are coming, advertisers are heavily spending again with Facebook and Facebook-owned Instagram &mdash; especially advertisers that use them to drive sales.</p><p>"I'm seeing the majority of ad dollars go into social &mdash; particularly Facebook and Instagram," said Mekanism's Dino.</p><p>Already dominant Facebook, which eMarketer estimates will make $95 billion in global ad revenue next year, stands to get bigger with advertisers, said Goodway Group's Friedman. He's also seen ad rates decrease after the presidential election, suggesting that it may be easier for advertisers to cut through the clutter on Facebook in the coming months.</p><p>"There's at least the sense that there will be somewhat more normalcy going forward on Facebook without the election, the potential for foreign interference, and everything else &mdash; there's some strong tailwinds that benefit Facebook going forward forward," he said.</p></p><br/><br/><h3>Fox</h3><img src="https://static2.businessinsider.com/image/5f8499a391aa9e001880b074-400-300/fox.jpg" alt="" /><p><p>With the pandemic grinding production to a halt, networks were challenged airing new shows this year. At the same time, ratings on linear TV have decreased as people are watching more digital video.</p><p>Fox is one of the networks that has been able to work around production challenges during the pandemic. Its breakout hit this year, reality singing competition "The Masked Singer," repeatedly put Fox at the top of nightly ratings.</p></p><br/><br/><h3>Google</h3><img src="https://static4.businessinsider.com/image/5f80359bea74820019ca61ad-400-300/google.jpg" alt="" /><p><p>Like Facebook, Google dominates digital advertising, and its clout has grown during the pandemic because its performance marketing can be easily tracked and measured. EMarketer estimates that Google will make $40 billion in US ad revenue this year.</p><p>As a result, advertisers are spending more in Google search, with its ability to drive traffic to their sites; YouTube; and programmatic advertising.</p><p>Emily Anthony, director of media services at Merkle, said her clients are spending more on YouTube because of its measurement features that appeal to both TV and direct-response advertisers.</p></p><br/><br/><h3>Hulu</h3><img src="https://static4.businessinsider.com/image/5f217dda5af6cc1e420e8828-400-300/hulu.jpg" alt="" /><p><p>Hulu is among connected TV players benefitting from this year's decline in linear TV ratings and the shift towards ad-supported streaming TV, with one ad buyer saying Hulu is practically sold out for the fourth-quarter.</p><p>Parent company Disney has <a href="https://www.businessinsider.com/hulu-ceo-randy-freer-stepping-down-during-disney-reorg-2020-1">taken a larger control of Hulu</a> this year as it pushes into direct-to-consumer streaming, and Catherine Warburton, EVP and chief investment officer at 360i, said that Hulu's ties with TV networks with high-quality and expertise in programming makes clients feel comfortable about advertising there.</p><p>"When the clients are looking at connected TV, they start with the trusted partners and expand from there," she said. "Hulu in particular has been benefitting from the recent surge in viewership and dollars shifting into CTV."</p><p>Hulu has long been solving issues in streaming TV advertising like frequency capping and measurement.&nbsp;</p></p><br/><br/><h3>Instacart</h3><img src="https://static3.businessinsider.com/image/5f86105491aa9e001880b6ef-400-300/instacart.jpg" alt="" /><p><p>Instacart is one of several companies that has launched ad businesses to compete with Amzaon, and it's winning with grocery clients that like how Instacart is building it from scatch &mdash; unlike Target and Walmart that have long run advertising businesses that they have rebranded and rebuilt internally, said John Lods, CEO at ad tech and media-buying agency Arm Candy.</p><p>Instacart is pitching brands <a href="https://www.businessinsider.com/inside-instacarts-advertising-business-2020-2020-10">advertising as a percentage of sales </a>as a way to show how advertising drives sales, which is important to performance-focused advertisers. The company also offers rich data about shoppers' buying habits like what brands someone adds to orders.</p><p>"Every dollar you spend with them you get in return &mdash; not everyone can do that," Lods said.</p></p><br/><br/><h3>NBCUniversal</h3><img src="https://static1.businessinsider.com/image/5e21c4bfb6d52d31314dd276-400-300/nbcuniversal.jpg" alt="" /><p><p>NBCUniversal has taken advantage of spikes in viewership to give advertisers compelling ways to target specific audiences and flexibility in how they buy, said Jessica Brown, director of digital investment at media-buying agency GroupM.&nbsp;</p><p>NBC aggregates all its linear and digital video across all of its properties so an advertiser can, say, target a stream of NFL games on Saturdays and Thursdays in real-time without planning ahead.</p><p>"There's a large audience that is engaged," she said. "These partners have premium, quality video at scale that our clients know they want to invest in."</p></p><br/><br/><h3>Pinterest</h3><img src="https://static2.businessinsider.com/image/5f9b322069331a0011bc6316-400-300/pinterest.jpg" alt="" /><p><p>With people spending more time at home, Pinterest's usage and ad revenue has grown. During the third-quarter of this year, Pinterest's ad revenue grew 58% to $443 million year-over-year.</p><p>While other social platforms have been criticized for hateful content, Pinterest offers advertisers a platform that seems brand-safe and also has troves of data about how people use it.</p><p>However, not all advertisers are convinced by Pinterest's effort to pitch its ad platform using e-commerce features.</p><p>"I'm seeing e-commerce as an aspiration," said an ad buyer who spoke on background. "It's a good strategy during the pandemic, but Pinterest has never come to us with a clear story."</p></p><br/><br/><h3>Roku</h3><img src="https://static5.businessinsider.com/image/5d5ffef62e22af604a2909da-400-300/roku.jpg" alt="" /><p><p>With more consumers dropping their cable packages, streaming services have benefitted in the pandemic &mdash; particularly Roku.</p><p>Roku's platform business, which includes advertising and content distribution &mdash; grew 78% to $319 million year-over-year in the third-quarter . Roku users also streamed 14.8 billion hours during the third quarter, up 54% year-over-year.</p><p>Media Kitchen's Lowenthal said that Roku and other OTT advertising doesn't require advertisers to get locked into long, non-negotiable contracts like linear TV traditionally does, a major plus in a year when advertisers need to quickly turn ad spending on and off.</p><p>"This is the year that OTT broke out," he said. "There's better inventory and it's flexible. Even though it's TV, it behaves like digital."</p></p><br/><br/><h3>Shopify</h3><img src="https://static3.businessinsider.com/image/5f6b12b8862a00001153f6d2-400-300/shopify.jpg" alt="" /><p><p>While Amazon dominates e-commerce, flaws in its fullfillment system appeared in the pandemic, when it had to focus solely on essential items like grocery and toilet paper <a href="https://www.businessinsider.com/coronavirus-amazon-suspends-all-non-essential-shipments-to-warehouses-2020-3">early on.</a></p><p>Shopify has tried capitalize on that weaknesses by helping brands build e-commerce sites and pitching them better control over e-commerce logistics and data. Shopify also has tools that let brands buy advertising on Facebook and Google over Amazon.</p><p>"For most brands, Amazon is almost a frenemy because they need to be there but it's more and more a discussion with clients to get [consumers] into their own environment because there's more ownership," said Jess Richards, EVP and managing director of Havas Market &mdash; the e-commerce arm of ad agency Havas Media Group. "The reality is that we're going to a landscape where consumers have a high expectation that they can see commerce anywhere."</p></p><br/><br/><h3>Snap</h3><img src="https://static2.businessinsider.com/image/5bbe4b7498a180433a09bb93-400-300/snap.jpg" alt="" /><p><p>The <a href="https://www.businessinsider.com/how-facebook-boycott-helps-snaps-long-building-comeback-2020-7">Facebook boycott</a> led advertisers to diversify their spend to other platforms, and Snap was one of the big winners.</p><p>Snap&nbsp;stands out among social platforms because of the breadth of its ad formats, high-quality publisher, and a strong foothold with younger users, said Noble People's Weisman.</p><p>"There is experimentation to be done beyond Facebook," he said. "With Snap, the eye has been off the ball because of TikTok, but they have a lot of interesting ad products."</p></p><br/><br/><h3>The Trade Desk</h3><img src="https://static3.businessinsider.com/image/5d9b8d58880f26377560669d-400-300/the-trade-desk.jpg" alt="" /><p><p>As advertisers grapple with losing third-party cookies that help target ads, they're putting more money into The Trade Desk, said Jennifer Eenigenburg, VP of digital media at Rain the Growth Agency.</p><p>The Trade Desk, which helps advertisers buy programmatic advertising, has rolled out an effort called "Unified ID 2.0" to replace cookies. The Trade Desk has big deals in place with Nielsen, Liveramp, and Criteo to back the effort.</p><p>The Trade Desk has also benefitted from a big push into connected TV advertising, which helped it grow revenue 32% to $216 million during the third quarter. It's also helping solve advertisers' problem of getting big enough audiences for high-quality streaming content, Goodway Group's Friedman said.</p><p>"The Trade Desk brings such a strong value proposition that despite the fragmentation, they continue to perform well," he said.</p></p><br/><br/><h3>TikTok</h3><img src="https://static1.businessinsider.com/image/5fab51f5f24e720018a2abeb-400-300/tiktok.jpg" alt="" /><p><p>Uncertainty over a political battle to spin off TikTok's US business scared off some advertisers this year.</p><p>Still, TikTok, with 100 million US users, has gotten more appealing to marketers, with a new self-serve platform and low ad prices. Lods of Arm Candy said that ad prices sit around $2 to $3 cost per thousand impressions (CPM) compared to historical $8 to $15 CPMs on Facebook during the fourth quarter.</p><p>"TikTok is trying to find every way to incentivize advertisers to get in," Lods said.</p><p>Still, being new, TikTok's ad platform is not as proven as others.</p><p>"Everyone wants a little bit more assurance this Q4," said Mekanism's Dino.</p></p><br/><br/><h3>Twitter</h3><img src="https://static2.businessinsider.com/image/5f12fa5af0f41912e054abe5-400-300/twitter.jpg" alt="" /><p><p>Twitter has long been a part of advertisers' social budgets, giving it a leg up over less established platforms like TikTok.</p><p>The risk of controversial content there can be a turnoff to some advertisers, but one ad buyer noted that Twitter's video advertising product is strong, crediting the company's adtech stack that is has built to serve video ads in tweets.</p><p>"Twitter and Snap have benefitted more than I anticipated during the pandemic from a spend perspective," said the buyer.</p></p><br/><br/><h3>Vox Media</h3><img src="https://static2.businessinsider.com/image/5faade7ef7d1cb0019e3ae44-400-300/vox-media.jpg" alt="" /><p><p>Another publisher benefitting from advertisers' move to direct buys is Vox Media, said Noble People's Weisman.</p><p>He said that Vox Media stands out because advertisers can run custom ad programs tailored to a specific publisher like gift guides.</p><p>So-called native advertising that looks like editorial content has gotten increasingly competitive, but Vox Media has a leg up as an experienced seller of these programs. Vox Media also has its newly acquired New York Media as a selling point.</p></p><br/><br/>
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