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CMO TLDR: Your Weekly Marketing Brief

Weekly Digest - February 28, 2025

Author

Peter Brendan
February 28, 2025

CMO TLDR: AI Ads & CTV Price Wars

Earnings Updates

WPP

  • WPP shares plunged to a four-year low after the company projected flat to a 2% decline in like-for-like revenue less pass-through costs for 2025, with headline operating profit margin expected to remain around flat.

  • This outlook stemmed from concerns over client spending amid economic uncertainties in major markets like the US and UK, where the company reported a 1% decline in full-year organic revenue for 2024.

  • Despite these headwinds, WPP observed a resurgence of advertisers on X and is pursuing further brand spending on the platform.

  • WPP reported a 2024 Headline operating profit of £1.71B and a 15% margin

Magnite

  • In 2024, Magnite's contribution ex-TAC was $607 million, with $260 million (43%) coming from CTV. The company projects total 2025 contribution ex-TAC to increase by +10%, and it forecasts CTV contribution ex-TAC in Q1 2025 to be between $61 and $63 million.

  • There was a significant increase in CTV demand throughout 2024, continuing into Q4, although the company expects growth to slow somewhat in Q1 2025.

    Magnite will be rolling out several new client-facing, AI-powered tools in 2025.

    Magnite mentioned during the earnings call that most SSP's tech is "undifferentiated and outdated," but that Magnite's CTV offerings are "purpose-built for the space."

PubMatic

  • PubMatic's full-year revenue reached $291.3 million, a 9% increase year-over-year, with adjusted EBITDA climbing 23% to $92.3 million, signaling strong profitability growth.

  • The company's CTV revenue more than doubled in Q4, now representing 20% of total revenue, demonstrating a significant shift toward high-growth, high-engagement channels.

  • Despite overall growth, PubMatic projects a conservative Q1 2025 outlook, anticipating revenue between $61 million and $63 million, due to headwinds from a major DSP buyer, but expects accelerated growth in the underlying business later in 2025.  

Streaming

Amazon's Influence on Streaming TV Ad Costs

Amazon is driving down the cost of streaming television advertising. Ad buyers on Amazon Prime are paying around $40 per thousand viewers, the same as on Netflix, but analysts say the market should expect continued downward pressure on prices.

Artificial Intellignece

Amazon's AI Shopping Tool

Amazon is testing video ads in its generative AI-powered shopping tool, Rufus, which allows customers to ask questions about products and find links to purchase them. The company is also experimenting with other AI-powered ad formats. Amazon has been investing heavily in AI in recent months, and this move represents the latest step in its efforts to integrate the technology into its business.

X Launches AI-Powered Ad Tool

X has launched an AI-powered ad tool that allows marketers to create ads by simply inputting their website URL. The tool, powered by X's Grok AI, can generate ad copy, imagery, and a call to action. X is also planning to launch a marketing campaign to promote its payments service and rebrand.

Retail Media

Retail Media Networks Rebrand

Retail media networks are rebranding themselves as media companies. This move reflects the growing importance of retail media, which is expected to account for $100 billion in advertising spending by 2025. The rebranding also highlights the increasing sophistication of retail media offerings, which now include off-site opportunities like streaming and creator partnerships.

CMOs

Why CMOs Get Fired

A recent Gartner study of 125 CEOs and CFOs found that 69% of them would fire a chief marketing officer (CMO) for failure to deliver promised results. The study also revealed that CEOs and CFOs have low expectations of their CMOs, with only 22% believing their CMO has a clear vision for the marketing department.

Regulators are pushing for data collection to be limited to only what's necessary, posing a challenge to the ad tech industry's current data-hoarding practices.

New firms are offering alternative ways to measure advertising effectiveness as clients want to know if their ads are actually resonating with customers.

Connected commerce, the integration of online and offline shopping, will be a $112 billion market by 2025. Brands are increasingly reorganizing their teams around it, but many are still figuring out how to do it right.

VoxComm, an ad industry group, has called for a ban on "pay-to-play" pitches, in which agencies are asked to pay intermediaries for the privilege of being considered for a pitch. The group argues that these practices undermine fair competition and damage client relationships.

About half of Interpublic's clients have opted in to utilize the company's new principal trading offering in 2025 or subsequent years, according to IPG CEO Philippe Krakowsky.

Article Takeaways - TLDR

  • Increased supply from Amazon Prime Video is driving down CTV ad costs.

  • Test video ads in new and emerging places. With the rise of AI, consumers have shown they are willing to engage with more advanced search functions.

  • Explore alternative measurement firms to track and optimize the impact of your advertising. These firms can help you justify and optimize your media and creative budgets.

  • CMOs need to focus on delivering measurable results and communicating their marketing department's vision and goals.

  • Utilize AI-powered tools for ad generation to streamline the creative process.