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August 18 2023 - Summer Sizzle Fizzles

August 18 2023 - Summer Sizzle Fizzles

👋Happy Friday friends. Well, it's the dog days of summer and today's newsletter is giving me those mid-august vibes. Mixed sentiment across the industry, layoffs still rolling in, China's economy continues to face headwinds, where we've seen recent investments in beauty, luxury and fashion– and a heap of news across AI and adland. Let's get into it–

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The marketing department at Max, the streaming unit of Warner Bros Discovery has undergone layoffs, resulting in a double-digit number of employees being let go. These layoffs are related to the integration of HBO Max and Discovery+ into the combined Max service, following the $43 billion WarnerMedia-Discovery deal. The company is striving for cost savings exceeding $4 billion, after originally targeting $3 billion.

Ford has appointed former Apple executive Peter Stern to lead a new business unit focused on enhancing customer experiences across its software, hardware, and online products. Stern's role involves overseeing services marketing, managing the Ford Next venture studio, and handling "out-of-vehicle" customer experiences, such as using car cameras for unique purposes. This move mirrors a trend among automakers to become technology service providers in the electric era. Ford has gained over 550,000 paying subscribers for its software and services.

Hollywood Studios and striking writers have resumed negotiations, with mixed results reported from Tuesday's meeting. The AMPTP submitted a new proposal addressing staffing for TV shows and AI use in film and TV production.

In July, traditional TV usage, including broadcast and cable, dropped below 50% of total TV usage in the U.S., a first-time occurrence, as per Nielsen's survey. The absence of significant sports events contributed to this decline, affecting networks holding major sports broadcast rights. Despite this, the Women's World Cup recorded high viewership. Both broadcast and cable hit all-time lows in usage, with cable dropping below 30%. Meanwhile, streaming reached a new high of 38.7% of total TV usage.

Home Depot reported better-than-expected earnings despite a slight decrease in sales, which still surpassed analyst predictions. CEO Ted Decker indicated that the company expects inflation pressures to ease in the latter part of the year due to improvements in costs. The company's growth strategy has shifted to fewer high-dollar transactions. Home Depot posted a profit of $4.66 billion for the quarter, with earnings per share exceeding analyst expectations

PayPal  has appointed Alex Chriss, an executive from Intuit, as its next CEO. Chriss will take over from the current CEO, Dan Schulman, who announced his retirement in February. PayPal, traditionally known for online payments, is facing challenges with slowing growth in its key services like the checkout button and Venmo, while facing competition from Apple Pay. Under Schulman's guidance, PayPal aimed to become a comprehensive platform for e-commerce and financial services. Despite thriving during the pandemic-driven e-commerce surge, PayPal's market cap dropped significantly afterward.

Walmart has reported robust Q2 sales growth of nearly 6%, attracting budget-conscious consumers. The retailer's performance stands out in contrast to peers who are struggling due to inflation. The combination of a strong job market, rising wages, and some easing inflation has fueled spending at Walmart, especially in its grocery section.

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Rundown
  • YouTube Music has introduced a new feature called "Samples," which resembles TikTok's scrolling feed of vertical videos. Located in a new tab at the bottom of the app, Samples offers short vertical video clips of songs that are tailored to users' taste profiles. These clips, lasting 30 seconds, provide users with a glimpse of the song and allow them to quickly sample and discover new music. Users can swipe up to move to another song and save their liked songs to playlists. The Samples feature aims to enhance music discovery and engagement on the platform. It is available for both Android and iOS users.
YouTube Music Samples
  • Marvel Studios VFX Artists have taken steps to unionize with the International Alliance of Theatrical Stage Employees (IATSE). An election agreement has been reached with Disney, allowing in-house VFX workers at Marvel Studios to vote on unionizing. The election is scheduled for August 21, with ballots due by September 11. The group of 52 employees seeking unionization includes data wranglers, production managers, witness camera operators, and assistants working on projects like MCU series "Loki" and "Daredevil: Born Again." The move comes after allegations of unrealistic deadlines and abusive practices in the VFX industry, with workers demanding better protections and benefits.
  • The financial details revealed about ByteDance's performance offer insights into some previously unanswered questions about the company. Despite being financially strong, with $15 billion in net profit in the previous year, ByteDance is seeking new avenues of growth as its revenue growth in China slows down from 68% to 25%. This underscores the importance of TikTok, especially in the U.S. market, where it has access to advertising and commerce opportunities. TikTok's CEO's focus on building an e-commerce business and strengthening the ad business highlights the company's need for new growth drivers. The financial data also highlights the significance of the ongoing political debate over TikTok's future in the U.S.
  • The era of cheap streaming is coming to an end as major Hollywood studios, including Disney, Paramount, and Warner Bros Discovery, raise their subscription prices for streaming services. The average cost of a bundle of top US streaming services will be $87 in the upcoming autumn, up from $73 a year ago, approaching the average cost of a cable TV package at $83 per month. This shift comes in response to pressure from Wall Street to address the losses incurred during the streaming boom. As interest rates have risen, media stocks have faced a correction, prompting studios to raise prices and cut costs. Disney has increased its subscription fees for its ad-free service, and Hulu's ad-free subscription will also see a price increase. This shift marks a transition in the streaming industry, which had initially enticed customers with low prices as an alternative to traditional cable television.
  • Brands that initially embraced Meta's Threads platform are reportedly scaling back their activity due to a decline in daily active users and limited features. Data from Similarweb shows Threads experienced a global dip of nearly 79% in its daily active users, and the amount of time spent on the platform has dropped significantly. Brands like Anthropologie, Wendy's, and Rare Beauty have slowed their posting cadence, and some have even postponed Threads content strategy meetings. The lack of performance data, discoverability tools, and paid advertising options on Threads have led to fatigue among brands, and many are waiting for the platform to offer more robust features before investing further. Despite recent updates, the platform's unique value proposition remains unclear to both brands and users.
  • CAA has completed a round of layoffs affecting approximately 60 people across multiple departments. The impacted departments include TV Lit, music, and IT. The layoffs included both junior and senior-level executives, with notable departures in the TV lit department. The ongoing work stoppages by writers and actors have had a significant impact on talent agencies and management companies like CAA.
  • Lamborghini is set to unveil its first electric supercar concept on August 18th during Monterey Car Week. The Italian automaker has posted a teaser image of the vehicle on social media, hinting at its classic Lamborghini design. This concept car marks the beginning of Lamborghini's electrification plans, which will roll out in two phases over the next decade. By the end of 2024, the company plans to introduce hybrid versions of its entire lineup, followed by its first all-electric model before the end of the decade.
  • OpenAI has acquired Global Illumination, a startup founded by former Facebook and Instagram employees, for an undisclosed sum. The startup is known for leveraging AI to build creative tools and digital experiences – as it's previous work was focused on visual-facing products. OpenAI stated that the talent from Global Illumination will contribute to its core products.
  • Adobe Express has introduced AI features powered by Adobe's Firefly model. These features are aimed at simplifying content creation for individuals without design experience. Similar to platforms like Canva and Microsoft Designer, Adobe Express offers templates for social graphics, posters, video editing, PDF decoration & more. The new features allow users to generate custom images and text effects using text prompts in over 100 languages. The platform is available for free on desktop web, with a premium plan for additional features and assets.
  • Estée Lauder is facing challenges in its key markets of China and the US, with its CEO, Fabrizio Freda, under pressure to turnaround the beauty company's performance. The company's shares have fallen by about a third this year, and it has missed out on the stock market rally that has boosted the S&P 500 index. Estée Lauder is losing market share in the US and is facing rising competition from indie beauty brands. In China, the company is struggling to recover in the travel retail business and is dealing with excess inventory. Freda has outlined plans to overhaul the company's supply chain in Asia and refresh its brand image to respond to changing trends and distribution channels.
  • Kraft Heinz has announced that Carlos Abrams-Rivera, currently in charge of its North American operations, will take over from Miguel Patricio as the company's CEO starting January 1. Abrams-Rivera, who has been with the company since February 2020 and serving as the president of its North America zone since December 2021, will also become president of the company immediately.
  • Celsius has entered into a partnership with Major League Soccer to become the official energy drink of the league through the 2026 season. This marks Celsius' first national sports partnership and will allow the brand to tap into MLS' young and diverse fan base. Celsius' CEO, John Fieldly, highlighted that the partnership aligns well with the brand's focus on health and fitness and comes as soccer's popularity grows in the US. Celsius will also become the presenting partner of extra time in MLS matches, with its branding featured on field-level LED boards during those moments.
  • Flintstones Vitamins has launched a new brand platform called 'Made for Real Growth,' partnering with AnalogFolk. The platform aims to redefine parenting ideals by countering the pressure for perfect parenting and instead focusing on the genuine messiness, challenges, and joys of growing up. The brand's visual identity and tone of voice have been refreshed & the creative platform includes new digital spaces and social films.
  • McKinsey and Company has launched its own generative AI tool called Lilli. This new chat application, developed by McKinsey's "ClienTech" team, offers information, insights, data, and recommendations for consulting projects based on a vast database of more than 100,000 documents and interview transcripts. Lilli, named after the first woman McKinsey hired in 1945, has been in beta since June 2023 and is set to be fully rolled out across McKinsey this fall. The tool has already been used by approximately 7,000 employees. McKinsey is considering white-labeling or externalizing Lilli in the future.
  • Amazon is expanding its sponsored product ads beyond its own platform and onto third-party websites such as Pinterest, BuzzFeed, and Hearst Newspapers. This move marks an extension of Amazon's demand-side platform (DSP), allowing advertisers to buy sponsored product ads through the Amazon Ads console. These cost-per-click campaigns display product details and are triggered when Amazon believes a customer might be interested in a product. The expansion aims to bring more "shoppable content" to partner sites and apps, enabling Amazon's advertisers to reach a wider audience and track their campaign performance.
  • Fisker has announced its decision to incorporate Tesla's North American Charging Standard (NACS) port into its future vehicles starting in 2025. This move will allow Fisker vehicles to use Tesla's Supercharger network. Fisker's Ocean SUV, which has already been delivered to 22 customers, will receive an adapter in the first quarter of 2025 to enable access to Tesla's Superchargers. The decision was made following a deal between Fisker and Tesla, similar to agreements signed by other automakers like Ford, GM, Rivian, Volvo, and more.
  • Tech companies are not increasing hiring efforts, but job cuts in the tech industry slowed in June and July, and on track to decrease further this month, according to an analysis by research firm Jefferies. This year, there have been 342,671 layoffs in the tech industry, surpassing the 243,075 layoffs in the previous year.
  • Dentsu Q2 results show a 4.7% decline in organic revenue year-on-year. The company's underlying operating profit also declined by 37.6%, partly due to continued conservatism from technology and finance clients. However, Dentsu expects a pickup in the second half of the year due to factors like the completed acquisition of digital production company Tag and one-off events such as the Rugby World Cup and Tokyo Mobility Show. The company is focusing on growth in its Customer Transformation & Technology (CT&T) business and remains confident in its positioning at the convergence of marketing, technology, and consulting.
  • Microsoft has sent out invitations for a "special event" in NYC on September 21st, sparking speculation about hardware and software announcements. The event could unveil upgrades to Surface laptops and new AI products, developed in collaboration with OpenAI for integration into Windows 11. The event marks Microsoft's return since earlier layoffs and strategic portfolio changes.
  • The Paris 2024 Olympic Games will feature 14 diverse posters by 7 artists, capturing a broad range of subjects, styles, and media. The posters aim to showcase the diversity of French art and approaches, emphasizing joy and hope for all viewers. Reflecting on France's rich art heritage, the posters are part of the "Cultural Olympiad," uniting sport and art through various events across the nation.
  • Instagram users can now add licensed music to photo carousels, similar to TikTok's Photo Mode. Instagram also launched Collabs, which enables users to invite up to three co-authors to collaborate on feed posts, carousels, or reels. Each collaborator's audience will see the content, potentially benefiting influencers with shared followings.
  • Stagwell-owned media agency Assembly has launched a European retail media division. The division will provide an "end-to-end connected commerce solution" to help brands improve margins across the consumer journey. The team will be split between London and Warsaw and will work with international clients, focusing on FMCG clients initially. Assembly currently works with brands like Amazon, Sephora, and Douglas.
  • Netflix is introducing the ability for users to stream some of its mobile game catalog directly from the main Netflix app on different devices. This includes accessing games on TVs through the Netflix platform and playing games through the app on PCs and Macs for users in Canada and the UK. The initial beta games available include Oxenfree and Molehew’s Mining Adventure. For TV gameplay, users need to scan a QR code shown on their TV, which leads to a separate Game Controller App. The Game Controller App is the current method for playing Netflix games on TV, with the interface resembling traditional controller buttons.
  • Amazon is quietly ramping up its investment in generative AI technology, using it for various applications across its platform. The company has introduced generative AI to help customers surface product reviews by summarizing common themes into short paragraphs on product detail pages. Amazon is also testing generative AI for sellers to automate crafting titles and descriptions for product listings. Amazon's AI ventures also extend to its AWS services and the development of its own chips.
  • Cash App has collaborated with Field Unit and PUSH agency to unveil a dynamic campaign for its custom apparel line, Cash by Cash App. Directed by artist Sam Cannon, the campaign seamlessly blends current and future branding. Utilizing an LED Volume stage at XR Studios, the team captured the models against dynamic backdrops, achieving a surreal and cinematic feel without heavy post.
  • Uncommon Creative Studio has created an immersive "clubhouse" experience in Amsterdam to celebrate the upcoming launch of EA Sports' gaming title, EA Sports FC 24. The event welcomed 500 attendees from the football, gaming, and culture industries and was produced in partnership with agency Inca. The venue, designed to resemble a football stadium, featured stadium stand seats, pitch screens, and a physical fixture of EA Sports FC's new logo on the ceiling. Guests experienced a lit tunnel with pre-match atmospheric sounds and the scent of freshly-cut grass, leading to a triangular stage with gaming pods for trying out the new game.
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Published by:

Joe Nash

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