bloomberg shifts to first party ads

While most websites go for programmatic ads, Bloomberg pivoted to first-party ads, and the results look encouraging as its cost per 1,000 impressions (CPMs), which are a key metric to gauge ad performance, skyrocketed 20% after the switch.

For background, in first-party ads, the company itself collects the data from its audience while in third-party programmatic ads, the job is done by a third party.

Six months back, Bloomberg made the switch to first-party ads and launched its own ad platform called Audience Accelerator. Bloomberg chief digital officer Julia Beizer told Adweek that after the switch, advertising load time and visibility respectively improved by 15% and 20% while the clickthrough rates increased four times.

total ad spending
Source: Insider Intelligence

The CPMs have also increased by 20% over the period which looks quite healthy. Meanwhile, the decision to shift from programmatic ads to first-party ads might not have been too complex for Bloomberg as the company gets only about 5% of its revenues from advertising – while subscriptions account for the bulk of its sales.

Most websites globally meanwhile use programmatic ads and according to Insider Intelligence around 90% of digital ad dollars in 2022 were transacted programmatically.

According to Datonics CEO Michael Benedek, “Third-party data remains extremely valuable to brands because of its unique ability to address various factors that other types of data such as zero, first and second-party data can’t due to scale limitations.”

In March, Datonics released the results of its Programmatic Audience Targeting Survey, which gathered input from more than 400 media strategists, planners, and buyers.

According to Benedek, “Our study demonstrates the continued demand for third-party data in the digital marketing and programmatic ecosystems for the special value it brings. It is still the data that marketers are relying on to help them reach new audiences and acquire customers.”

Source: Dataonics

The survey showed that interest/intent and behavior data categories are most important for ad campaigns.

Notably, the programmatic display ad spending is rising faster than the overall market and Insider Intelligence expects it to rise 15.2% in 2023 and reach $141.96 billion.

In contrast, Media investment group GroupM predicts in its new report that global ad spending would rise 5.9% in 2023 while digital ad spending would rise 8.4% – the slowest pace since the 2009 financial crisis.

global ad spending by year
Source: Statista

The Global Advertisement Market has Slowed Down

The report said, “With digital now more than two-thirds of total advertising, digital growth at historic double-digit rates has become difficult to achieve, and we expect digital to decelerate further over the next five years.”

The slowdown in the ad market has taken a toll on companies like Google and Facebook. Notably, Google’s ad revenues have fallen YoY for two consecutive quarters while YouTube’s revenues fell in the last three quarters.

You Tube's ad reveneus have fallen
Source: Statista

Meta Platforms’ revenues also fell YoY in 2022 for the first time ever. Its revenues rose slightly in the first quarter of 2023 though.

Could Bloomberg’s Pivot to First-Party Ads Transform the Industry

Publishers globally have been reeling under what many call the “tyranny of Big Tech” – which to be precise constitutes Meta Platforms and Google in their case.

Beizer told Adweek that one lesson that Bloomberg learned from its pivot is to not treat websites “like a math equation” and instead focus on content quality which makes subscriptions and ads a “second priority.”

Insider Intelligence added that its view is that “Bloomberg’s new advertising model provides some hope for revenue-starved publishers looking for a change.”

Notably, both Google and Facebook have been at loggerheads with news publishers over revenue sharing and have threatened to block news in countries that impose stringent rules.

Insider Intelligence meanwhile believes that legislative support could help digital publishers as regulators globally look to break the duopoly of Google and Facebook. While both these companies dominate the digital ad market, last year their share in US digital ad spending fell below 50% for the first time since 2014.

Partnerships with AI Companies Could Help Advertisers

Insider Intelligence also believes that partnerships with AI companies could help publishers fine-tune their ad strategy.

companies citing AI during Q1 2023 earnings calls
Source: FactSet

AI has incidentally been the buzzword among US companies and according to FactSet, 110 S&P 500 companies used the word “AI” in their Q1 2023 earnings call – which is over thrice the ten-year average and the highest level since 2010.

AI and related stocks have skyrocketed in 2023 with names like and Nvidia tripling this year. Watch out for an increasing number of S&P 500 companies mentioning AI during their earnings calls as the second quarter earnings season gains pace.

The earnings season would also provide insights into the digital ad market as giants like Alphabet, Meta Platforms, and Snap release their quarterly earnings.

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