The Separation of Advertising through TV, Commercial Media and Merchant Media by Benedict Evans.

The New Ways of Targeting Inventory in Advertising

The advertising industry is constantly evolving, with new methods of inventory targeting emerging to keep up with changing trends. The decline of print advertising and the growth of online advertising are the obvious stories, but there is much more to explore in this sector.

Disney’s Cross-Platform Ad Platform and Smart TVs as Gatekeepers

Disney is at the forefront of building a complete cross-platform ad platform, which allows for targetable inventory in new ways. Smart TVs have also undergone a major transformation from “dumb glass” to gatekeepers. With a TV platform that knows what the viewer is watching, it can now insert ads into live or streaming TV based on the viewer’s preferences rather than the context.

Targeting Inventory in New Ways: YouTube’s Take

YouTube takes a different approach to inventory targeting. Instead of selling the same kinds of content and inventory in a different way, they see the potential for different kinds of inventory to be sold to the same customers or new customers. YouTube aims to convert all of the advertising budget allotted for video advertising by exploring what video advertising is, what it looks like, who buys it, and what they hope to achieve. This is also a major concern for TikTok, which currently has better product-market fit with consumers than with advertisers.

The Decline of US Advertising

Despite the growth of online advertising, the US advertising industry has shrunk by a third as a share of GDP. This decline is due to a combination of vastly cheaper and more efficient internet advertising and widespread recategorization. For instance, if a car dealer used to buy a 20-page ad insert in their local paper, they now opt to pay for a single Google search ad for “BMW dealer San Francisco” and spend the rest of their budget running their website with all their inventory.

The Impact of Changing Trends on Advertising

As the landscape of advertising changes, investing in online advertising is becoming increasingly crucial for businesses. With Disney’s cross-platform ad platform, smart TVs as gatekeepers, and YouTube’s approach to inventory targeting, these new strategies for targeting inventory will continue to shape the evolution of advertising.

Rent is the New CAC: The End of the Top Line?

The decline of the advertising industry as a share of GDP has prompted the renewed relevance of the joke in Silicon Valley a few years ago: “rent is the new CAC.” This means that the cost of acquiring new customers has become so high and maintaining a strong online presence is now more important than ever for businesses. The slide above illustrates how recategorization and vastly cheaper and more efficient internet advertising have led to a decline in ad numbers – and a focus on targeting inventory in new ways is essential.

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