Rising online ad prices mean customer acquisition costs have spiked for D2C businesses, which already had a higher marketing spend base than offline equivalents.
At the same time, the data used to target and measure online advertising—the key channel to find and convert customers—is being eroded.
There will be consolidation in the crowded D2C landscape, providing scale benefits. Sellers will also have to refocus their marketing attention on increasing customer lifetime value.
The EU’s GDPR enforcers have ruled that IAB Europe’s framework for collecting user consent, a standard used by about 80% of sites on the continent, is in violation of the regulations
This is one of the clearest signs yet that regulation is starting to catch up with Apple and Google’s privacy push, as support for cookies and mobile ad IDs is due to end over the next few years
Publishers must prepare now by treating privacy as a core part of user experience and adopting a reader-first revenue model that also supports advertising in a trusted environment
Amazon's first reported loss since 2015 is not surprising in a difficult inflationary environment, as ecommerce resets from the pandemic boost. Highly exposed to cost pressures through its logistics business, the situation is not as bad as it looks
The increases to Fulfilled by Amazon fees have been completely lost in the storm, while costs continue to increase on all sides. Amazon's announced increases are unlikely to keep up
Launching Buy with Prime will allow Amazon to increasingly monetise FBA: a further step towards creating a monopoly in the fulfillment space while also boosting the desirability of Prime membership
Meta presented mixed results against low expectations, with its ad business a concern in the age of privacy.
Reels is at the core of the company’s strategy to win users given heightened competition, but its monetisation challenge persists.
Meta spent $3.7 billion on its metaverse gamble in the quarter. A higher-end device will help address strengthening enterprise demand for VR headsets, but the route to profitability remains unclear.
Amazon has capitalised on the pandemic’s boost to ecommerce, reporting 67% global revenue growth from 2019 to 2021. While Shopify’s impressive trebling of B2B revenues was from a lower base, at 44% of Amazon’s Marketplace it is closing the (still huge) gap
Shopify appeals to brands around the world, leveraging the open internet to establish a direct-to-consumer (D2C) business, undermining Amazon’s position as the B2B ecommerce one-stop-shop in 17 markets
Shopify is not a direct platform competitor to Amazon, which boasts a captive audience of Prime members and fulfilment. Shopify’s expansion to fulfilment in North America is the first threat to Amazon’s grip
Sky’s performance across 2021 significantly improved, driven in Q4 by a nice c.5% growth rate in UK consumer revenues and the advertising rebound, but effects of the pandemic are still being felt with EBITDA down 30% on 2019.
The decline in Group revenue accelerated in Q4 due to the severe shock to the Italian operation from its loss of most premium football coverage, although we see upsides in a possible rights reshuffle.
In 2022, Sky can leverage growth vectors including bigger content bundles, Glass, advertising innovations and broadband. Consolidating SVOD and telecoms markets may be more favourable to price increases.
Apple’s record December quarter closed off a huge year for the company, with little sign that supply chain problems affected the core iPhone business. Services, meanwhile, remain strong, and the company’s status as the world’s biggest subscription provider positions the business for a metaverse future.
Apple’s ability to control platforms like the App Store is under regulatory pressure. Apple is ceding ground where it can, while keeping fees high for the mobile gaming cash cow.
China has returned as a meaningful contributor to growth. US sanctions have toppled China’s Huawei, to the benefit of the American firm.
The UK net neutrality rules are up for review; as usual, the operators are pressuring for relaxation, and there are strong arguments that the competitiveness of UK telecoms markets make such rules innovation-quashing with no consumer benefit.
The chances of mainstream video content providers producing a windfall for telcos are slim, but there are a host of more intensely commercial content providers which have far greater potential to pay extra money for higher quality content delivery.
Future services such as virtual and augmented reality will stretch even FTTP/5G networks; allowing the telcos to develop custom business models to facilitate their delivery may well speed up the development and implementation of the metaverse in the UK.
Google has lost its appeal of the European Commission’s antitrust ruling of 2017 that it had abused its position in general search to favour Google Shopping, its Direct-to-Consumer (DTC) channel for merchants, in relation to price comparison aggregators.
Since the case was lodged in 2010, price comparison has receded as the key to consumers’ online purchases, also motivated by influencers, reviews, and browsing. Merchants use YouTube and Instagram to build brands, Facebook to launch products, and Google Shopping as the key alternative to Amazon for direct response.
The EU’s antitrust regime has once more solved yesterday’s problem, but this will shift for Big Tech to an ex-ante regime when the landmark Digital Services Act and Digital Markets Act come on-stream.
Sky has started to reap benefits from its substantial reduction in sports rights costs in Italy and Germany, helping to grow group EBITDA by 76% in Q3, despite a slight drop in revenue
With this change in strategy, the business model in Italy is undergoing an upheaval. Meanwhile, the UK continues to perform well, with further promise on the horizon thanks to the bold launch of Sky Glass
This streaming TV is a future-proofing leap forwards in Sky’s ever-more-central aggregation strategy, starting the business down the long path to retiring satellite, though this is probably still over a decade away