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WPP woe advertises scope for shiny buyout

28 Feb 2025

The $9 bln UK group’s shares fell 16% after it warned sales may flatline in 2025. A shaky backdrop for deals means industry rivals are unlikely to pounce on their discount rival. But if a private equity shop can copy the success of rival Publicis it can make a neat return.

Super Bowl mania: media’s defensive line versus AI

10 Feb 2025

Over 100 mln fans may have watched the Philadelphia Eagles beat the Kansas City Chiefs in American football’s big game. Commanding so many eyeballs, broadcasters have jacked up ad prices by 56% in a decade. Even ChatGPT maker OpenAI paid up. This live event is hard to disrupt.

Amazon superstore becomes harder to justify

6 Feb 2025

The $2.5 trln e-commerce company competes with Microsoft in the cloud, Walmart in retail and Meta and Alphabet for ads. With AI, it’s even harder to be great at everything against such strong rivals. An eroding premium suggests that keeping it all under one roof makes less sense.

Alphabet exhibits some worrisome signs of age

4 Feb 2025

Google’s parent increased quarterly revenue 12%, slower than digital-ads rival Meta, despite also owning a surging cloud business. Moreover, the $2.5 trln search company has squandered a head start in AI. Regaining lost steps in tech is both difficult and costly.

AI will become a Madison Avenue sensation in 2025

2 Jan 2025

Google and Facebook leveraged hefty brand-building budgets. Netflix and Amazon are also now running more commercials. Machine-learning business models will be similarly built. The cutthroat battle for a $900 bln bonanza, per Breakingviews calculations, is about to kick off.

Adland’s main post-M&A tussle is for second place

19 Dec 2024

Omnicom and IPG are creating the world’s largest agency, but Publicis’ superior growth profile should keep it in pole position. UK group WPP risks winding up in third place. Yet that hinges on whether advertising’s big merger fast-tracks AI investment, or impedes it.

Madison Avenue’s $13 bln deal lacks creative spark

9 Dec 2024

Omnicom is buying rival Interpublic to create the largest ad network, with agencies including BBDO and McCann. Chunky savings worth nearly $6 bln help the merger stack up financially. As AI threatens to upend the industry, however, it’s hard to spin it as anything but defensive.

Vivendi activist’s critique falls on deaf ears

1 Nov 2024

Pushy fund CIAM reckons a planned carveup of the 10-bln-euro media empire favours the controlling Bolloré clan. That’s true. Yet the split at least eases a conglomerate discount. And since voting it down would be a leap into the unknown, investors will probably just stay in line.

Netflix valuation is a goal stretched too far

18 Oct 2024

The $300 bln streaming giant’s share price has hit new highs. Yet ad dollars are not meaningful and a crackdown on passwords will run out of steam. To keep its lofty stock price climb, Netflix will have to double its revenue in three years - a reality hard to script.

KKR’s corporate PR deal hangs on more bad news

7 Aug 2024

The buyout group is taking control of financial communications company FGS from WPP. At 15 times 2024 EBITDA, the $1.7 bln valuation is rich but below peer FTI Consulting. For the bet to pay off, CEOs will have to face more major crises that require the PR firm’s pricey counsel.

Meta AI strategy: give something to get something

25 Jul 2024

As tech firms invest hand over fist in artificial intelligence, the Facebook owner’s plan to let developers tweak and freely use its models sounds like a giveaway. CEO Mark Zuckerberg hopes Meta will be long-term richer for it. Google’s Android success suggests he might be right.

Vivendi only half-solves its valuation discount

22 Jul 2024

The 11 bln euro French media group is spinning off and listing pay-TV arm Canal+ in London and ad group Havas in Amsterdam. It should unleash value. Yet the remaining listed bits, holding media assets and a ragtag of investments, may just suffer from an even more acute markdown.

Snap’s AI push makes for a poor man’s Meta

20 May 2024

Boss Evan Spiegel is following the lead of his arch-rival, chasing the same advertisers that flock to Facebook and plowing money into machine learning. Meta stole Snap’s thunder on AI-powered glasses and more. Problem is, Spiegel doesn’t have the resources to turn the tables.

Warner Bros Discovery makes case against media M&A

23 Feb 2024

The HBO owner’s first full year since the merger of Warner and Discovery was a grim one. Boss David Zaslav lived up to cost-cut goals but missed nearly everywhere else. Even well-run deals can’t stem industry woes, making future tie-ups - with, say, Paramount - look ill-advised.

Capital Calls: Temu’s spending

12 Feb 2024

Concise views on global finance: The Chinese shopping app’s Super Bowl commercial is part of a broader effort to win market share. It’ll help companies like Meta, but Temu now has a chance to muscle in on Amazon’s turf and force the e-commerce giant to compete.

Publicis lead over WPP looks hard to overturn

8 Feb 2024

The $25 bln French ad giant is growing faster than its $11 bln UK rival. Publicis’s relative lack of exposure to the tech sector is one key advantage, but it’s also run more efficiently and has made better strategic choices. WPP’s plan to stop the rot looks unlikely to do so.

Google antitrust trial crystallizes Apple’s risk

15 Nov 2023

Court testimony revealed that Alphabet’s search giant gives the iPhone maker 36% of ad revenue generated through its devices. The cost allows Google to argue it’s in a pay-to-play market. It also suggests that Apple and its shareholders have more to lose from the deal unwinding.

Netflix’s future is gaming, not streaming

19 Oct 2023

The $155 bln company’s jump in subscribers helped revenue growth pick up pace. But tweaks to its business model will only get tougher with cash-rich rivals Apple and Amazon. Netflix’s shift to gaming is a better bet. Warner Bros Discovery shows it can be a golden goose.

Elon Musk could use X to settle old PayPal spat

18 Oct 2023

The site formerly known as Twitter is testing a $1 fee for users. Its billionaire owner says it’s to fight spam, but customer credit card information also could help turn it into a super-app. Adding payments would challenge a company that unceremoniously dismissed him long ago.