The Rundown: Amazon advertising delivers

In this week’s Rundown: Publishers pin their hopes on Pinterest, YouTube Red’s future and why Amazon’s ad business is on track to rival those of Google and Facebook.

YouTube Red is not Netflix, but it’s no Facebook Watch, either
A recent Bloomberg report said YouTube was capping the budget it devotes to YouTube Red movies and TV shows over the next two years, as YouTube Red tries to figure out what, exactly, it wants to be. YouTube still plans to make between 20 and 30 shows per year, with budgets that range from $400,000 to $800,000 per episode for half-hour shows — and even more for hourlong programs, sources have told me.

Overall, YouTube will spend several hundred millions of dollars on original content per year — far below the $8 billion that Netflix plans to spend in 2018. But it’s still real money. Meanwhile, Facebook is increasing its budget for Facebook Watch shows, but it’s mostly been acquiring cheaper, celebrity-driven content outside of a few bigger projects here and there. And Snapchat is not funding its shows; rather, it wants production partners to pay for them.

While Facebook and Snapchat are open to working with digital and legacy publishers on shows, YouTube Red (like Netflix, Amazon and Hulu) is increasingly calling on entertainment companies. That leaves a limited market for publishers that were hoping to pivot to studio productions and entertainment. — Sahil Patel

Pinning hopes on Pinterest
Now that Facebook’s in the rearview mirror for most publishers as a source of audience growth, publishers are casting about for other ways to gain traffic, and some are landing on Pinterest. Pinterest is still an odd duck for most publishers; its utility lends itself to lifestyle publishers and it’s a light lift, but its user base isn’t even as big as Twitter’s. Pinterest has been slow to introduce ways for publishers to make money on the platform, despite the fact that Pinterest seems to be fertile ground for a lot of big consumer products categories.

One reason for publishers to be hopeful is that unlike other platforms that put user content first, Pinterest seems to recognize that high-quality content is the main reason people keep using the platform, and that means keeping publishers (and individual creators) happy. And having been burned by Facebook, publishers aren’t likely to let themselves be strung along by platform promises with no follow-up this time around. — Lucia Moses

Amazon delivers
Amazon’s attempts to establish its place in the advertising world appear to be working because ad buyers have certainly taken note. “Amazon is going to be as important as Google and Facebook, or possibly already is. I think they’re doing a really good job,” said Susan Schiekofer, GroupM’s chief digital investment officer, onstage at the Digiday Media Buying Summit in New Orleans this week.

Ad buyers say the company’s ad products — although relatively immature — are developing nicely. There are still questions around the data buyers receive from campaigns and how best to optimize them, but the self-service ad-buying options and application programming interfaces Amazon is beginning to offer are exciting buyers. One sign of Amazon’s growth: Many marketers now say they feel they have no choice but to work with it, which is much like their relationships with Facebook and Google. That power dynamic may not be ideal for ad buyers, but a viable third option to the duopoly is good news for everyone. — Jack Marshall

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