Advertising Trends Shaped by Global Events: US Election and Olympics

Advertising Spend during US Election and Olympics

Olympics advertising is set to break records with $1.2 billion in ad sales commitments, while Meta evaluates risks and considers measures to manage political advertising during the US Election.

"With more programming hours on the NBC broadcast network than any previous Olympics and over 5,000 hours of live coverage on Peacock, the Games are on track to generate the most advertising revenue in history with $1.2 billion in ad sales commitments." --- (CMCSA, earning call, 2024/Q1)

"Riley McCann: Good morning. It is my honor to present item number 13, which urges us to evaluate the risks of political advertising and consider reinstating measures taken in 2020 to combat election misinformation." --- (META, event transcript, 2024/05/29)

Consumer Behavior Changes during Global Events

Consumer behavior shifts significantly during global events, with companies like Coca-Cola and Amazon noting changes in needs and spending habits. Target highlights a return to services and entertainment post-pandemic, while consumers seek value amid high prices. These trends underscore the impact of events like the US Election and Olympics on consumer behavior.

"We also closely follow consumer trends globally, so we're able to address changing needs and habits." --- (KO, event transcript, 2024/05/01)

"Our results are inherently unpredictable and may be materially affected by many factors, including fluctuations in foreign exchange rates, changes in global economic and geopolitical conditions and customer demand and spending, including the impact of recessionary fears, inflation, interest rates, regional labor market constraints, world events, the rate of growth of the Internet, online commerce, cloud services and new and emerging technologies, and the various factors detailed in our filings with the SEC." --- (AMZN, earning call, 2024/Q1)

"In addition, business trends continue to reflect a normalization in spending patterns that first emerged more than 2 years ago, a pattern where consumers are remixing their spending back into services and entertainment outside of their homes after curtailing those activities during the pandemic." --- (TGT, earning call, 2025/Q1)

"Moreover, these events provide tremendous value to our system as they enable a scaled approach across impactful moments that resonate with millions of consumers around the world." --- (KO, event transcript, 2024/05/01)

"While our team is always committed to value, it's particularly important in today's environment as consumers look for ways they can stretch their budgets in the face of suddenly high prices." --- (TGT, earning call, 2025/Q1)

Shift from Traditional to Digital Media

Companies are increasingly transitioning from traditional to digital media, leveraging advanced targeting and measurement tools (META), managing both traditional and streaming platforms (DIS), and optimizing digital performance (GOOG). This shift is driven by the need to monetize growing digital inventories (NFLX) and embrace new technologies (CMCSA).

"And so I would say very excited about Peacock, very excited about creatively where we're going to go the next several years and also very excited that many businesses, not just in our business, have made this transition from analog to digital, from one technology to the next technology." --- (CMCSA, conference, 2024/05/14)

"Invest in some, but then manage the traditional platforms networks and the streaming platforms seamlessly." --- (DIS, conference, 2024/05/15)

"We rely on targeting and measurement tools that incorporate data signals from user activity on websites and services that we do not control, as well as signals generated within our products, in order to deliver relevant and effective ads to our users." --- (META, sec filing, 2024/Q1)

"Clearly, we expect further growth beyond that, but that represents a great threshold to get to and then to build more scale and more attractiveness from there. So that allows us to shift more of our energy now on more effectively monetizing that rapidly-growing inventory." --- (NFLX, earning call, 2024/Q2)

"Our focus remains on driving profitability and growth for retailers, helping them optimize digital performance for both online and offline, as well as innovate across our shopping and merchant experiences." --- (GOOG, earning call, 2024/Q1)

Sector-Specific Advertising Impacts

Increased advertising and marketing expenses are evident across sectors, with Nike and Coca-Cola ramping up spending, likely influenced by the Olympics. Apple is also considering more marketing investments, potentially driven by the US Election and other global events.

"The increase in demand creation expense was primarily due to higher advertising and marketing expense." --- (NKE, sec filing, 2024/Q3)

"And, you know, given you're struggling to reduce your net -- your -- reach your net neutral cash position and your margins are sort of near highs, do you see ways to deploy capital more to spur replacement demand in your installed base either with greater device financing, more investment in marketing, more promotions." --- (AAPL, earning call, 2024/Q2)

"The increase was primarily due to higher advertising expenses, partially offset by a decrease in selling and distribution expenses." --- (KO, sec filing, 2024/Q1)

"The increase in demand creation expense was primarily due to higher advertising and marketing expense and higher sports marketing expense." --- (NKE, sec filing, 2024/Q3)

"The increase in operating income was primarily driven by favorable pricing initiatives, partially offset by a decline in concentrate sales volume of 1%, higher commodity costs, increased marketing spending, higher operating expenses and an unfavorable foreign currency exchange rate impact of 7%." --- (KO, sec filing, 2024/Q1)

Role of Data and Analytics in Advertising

Changes in data use policies, ethical concerns, and advanced analytics tools are reshaping advertising. Meta and Alphabet highlight the challenges and ethical implications of data-driven advertising, while Amazon, Oracle, and Microsoft emphasize the importance of data analysis and integration in enhancing advertising strategies.

"For example, in 2021, Apple made certain changes to its products and data use policies in connection with changes to its iOS operating system that reduce our and other iOS developers' ability to target and measure advertising, which has negatively impacted, and we expect will continue to negatively impact, the size of the budgets marketers are willing to commit to us and other advertising platforms." --- (META, sec filing, 2024/Q1)

"Although, target advertising plays a significant role in Google's business model, research has shown that such technologies can negatively impact human rights, including violating privacy and freedom of expression and perpetuating systemic discrimination and inequality. In our view, Alphabet has not demonstrated a robust and transparent due diligence system to identify, address and prevent the adverse human rights impacts stemming from its AI driven target advertising technology." --- (GOOG, event transcript, 2024/06/07)

"And it will search all this data, summarize logically, analyze trends, engage in dialogue with customers about this data." --- (AMZN, earning call, 2024/Q1)

"And once we have that, we use Oracle's long history in analytics to now start to make sense of that data." --- (ORCL, conference, 2024/06/05)

"us in how we came to market from an analytics standpoint. So it brought together things like our real time monitoring, BI, data warehousing, all of that into this notion of fabric, aggregating into a data lake called One Lake." --- (MSFT, conference, 2024/05/21)

Impact of Social Media on Advertising

AI and social media are reshaping advertising, with platforms like Meta and Google leveraging AI to enhance ad delivery. However, concerns about social media's negative impacts, especially on children, are influencing advertising policies. TikTok's potential ban could further alter the US social media landscape, affecting advertising strategies.

"And you both talked about the impact AI is having on the advertising ecosystem." --- (META, earning call, 2024/Q1)

"There is widespread concern that Alphabet's media platforms, specifically YouTube, continue to be used in ways that are harmful to children, including online sexual abuse and exploitation, human trafficking, the impact of social media on children's mental health, and the role that generative AI may play in potentially exacerbating these risks." --- (GOOG, AGM, 2024/06/07)

"Please go ahead. Youssef Squali: Great. Thank you very much. Mark with the upcoming ban or sale of TikTok ending to a lot earlier today, how do you think that will impact the US social media landscape in that in particular?" --- (META, earning call, 2024/Q1)

"We're really proud of all the work that teams are doing across the company building new strong opportunities delivering for users, for customers, for advertisers in profound ways and so it was just helping to dimension what we have built over the years." --- (GOOG, earning call, 2024/Q1)

"Mr. Zuckerberg, on January 31, 2024, you stood in the Senate hearing room before bereaved parents who lost their children to the harms of social media and said, I'm sorry for everything you have been through." --- (META, AGM, 2024/05/29)

Regulatory and Ethical Considerations

Regulatory and ethical considerations in advertising are shaped by evolving regulatory structures, transparency demands, and risk management. Companies like AT&T and Meta emphasize the need to navigate regulatory and reputational risks, while Netflix highlights the importance of ethical guidelines and transparency in AI usage.

"So, you know, my fundamental point of view is once the economics and the regulatory structure starts to move out of the way, the customer is going to go that direction." --- (AT&T, conference, 2024/05/21)

"The shareholder proposal requests that the Board of Directors prepare a transparency report on the company's use of artificial intelligence in its business operations and disclose any ethical guidelines that the company has adopted regarding the company's use of AI." --- (Netflix, event transcript, 2024/06/06)

"Regulatory risk, legal risk, reputational risks are only a few. And while Medit touts its current reporting, we've only seen principles and platitudes." --- (Meta, event transcript, 2024/05/29)

"We continue to support regulatory and legislative measures and efforts, at both the state and federal levels, to reduce inappropriate regulatory burdens that inhibit our ability to compete effectively and offer needed services to our customers, including initiatives to transition services from traditional networks to all IP-based networks." --- (AT&T, sec filing, 2024/Q1)