Hi friends,

Happy Tuesday! In today's issue, I dive into statistics around Meta's ad dominance and what that means in terms of opportunities for advertising. Also, Perplexity launches ads in Q4 2024, which is the beginning of an interesting conversation around what product discovery or recommendation looks like in the age of AI.

Let's get into it!

CHART OF THE WEEK

Meta's Ad Dominance vs. Time Spent

Summary: Despite Meta, YouTube, and Netflix accounting for nearly equal shares of US digital time spent, Meta will capture a disproportionately large 21.3% of US digital ad spend in 2024, compared to YouTube's 5.6% and Netflix's 0.3%. This discrepancy highlights Meta's effectiveness in monetizing user engagement through trackable ROI and easy ad placements. Meanwhile, connected TV platforms lag behind in capitalizing on the shift from linear to digital viewing habits. This data suggests opportunities for advertisers to consider balancing their spending with user engagement across platforms.

My take: Ad spend is usually where a lot of inefficiencies happen. A strong perspective here can make or break a brand that relies on advertising, because in consumer businesses, it’s a variable cost associated with every purchase (or possibly even repeat purchase). A few considerations top of mind:

• Meta's ad dominance is impressive, but over-reliance on any single channel is risky. Prioritize scalable channels.

• View channels holistically, considering their role in the user journey. For example (not always true, depending on industry and strategy):

  • TikTok often excels at top-of-funnel awareness

  • Meta is efficient for retargeting and lower-funnel activities

• Allocate budgets based on performance and funnel position across channels, i.e. not just rebalance budget allocation between different campaigns, but also consider rebalancing between channels when necessary.

• Set aside funds for creative experimentation to uncover new opportunities. Maybe it’s obvious, but campaigns or channels work until they don’t, so you need to be ahead of the next opportunity.

• Don't overlook niche channels like podcasts and newsletters - they can have high ROI given how engaged consumers are compared to social media platforms, and are surprisingly scalable, despite requiring more time and effort to manage + scale.

Read more about this here.