tv Whatd You Miss Bloomberg October 26, 2021 4:30pm-5:01pm EDT
caroline: i'm caroline hyde. sonali: romaine bostick is out today. caroline: for busy week of earnings and they roll on. at the closing bell, alphabet, microsoft, robin hood, twitter and others. we dig into those and what the companies say about the advertising market in particular. we want to dig in, youtube, google of course which owns youtube, twitter reaching the next generation of consumers,
ones that want content, information, trading tools. taylor, first let's dig into the financial details. taylor: let's start with google. the big headline number, and i will keep this broad and brief him cloud revenue growth slowing just a little bit. getting revenue that -- you are seeing a little bit to the downside with the slowing growth within the cloud segment. that is the opposite when it comes to microsoft. the cloud computing strength has been fueling sales and profit growth. when we talk about the at environments on google, you want to talk about that with twitter, at least twitter says we are up 3% because maybe the impact from the apple and the supply chains, like we heard from facebook, maybe those aren't as bad as we thought. they are seeing less of an impact. texas instruments is a big mover on the day. the overlying headline is that you are getting weakness on some of the revenue forecasts. sonali: are you taking a look at
robinhood as well? taylor: yes. we are seeing them take a plunge in the post-market trading. that is because they are moderating from where they were in the second quarter. the monthly active users, down from the second quarter as well as crypto trading. a down arrow for robinhood. sonali: we will dive into all of this and try to roll these things together, particularly when we look at the ad environment and what analysts are looking for when it comes to big earnings in ad revenue. let's do this with paul, an analyst and head of digital advertising. we appreciate having you. i just for us where we are seeing may be results that weren't as bad as feared, at least when we look at analyst notes from facebook and the commentary from twitter. not as bad as feared when it comes to the impact of what analysts were thinking would be
a negative ad spending environment. paul: i think the earnings last week sort of cast a shadow over the whole ad sector because the app referred to the changes in apple's privacy settings and the supply chain issues having pushed down their earnings. but the more we look at these other earnings results, the more it seems this was more specific to snap because facebook did quite well. google seems to be a mixed picture. we will have to look at it more closely. from an ad perspective, twitter has downplayed the effect of these external factors. overall, we think the digital ad market is very strong. our forecasts show robust growth for the duration of our forecast period. caroline: dig into alphabet a
little bit more. they have been trying to focus on youtube. that is a catalyst of growth for them. how much are they seeing, how much are they wanting to spend and how much are they having to pay out for that advertising? paul: the traffic acquisition costs, what they pay out to affiliates, they are quite high for google. i think those costs went up a little more than expected. overall, we see youtube as a core strength for google, and we see video advertising as a particularly hot segment within digital advertising overall. it is the fastest growing sector , and within video, connected tv in particular is gaining and expected to grow at a more rapid rate. of course, youtube plays in the video space, increasingly playing in the connected tv space as well.
our outlook is quite positive, despite maybe a slight miss for youtube in particular this quarter. sonali: maybe you can put this into perspective because we saw the weakness over facebook, you already mentioned snap. the ability for google to generate ad revenue through youtube, how much do we look at that compared to what you are seeing among the other tech giants? paul: youtube is facing a lot of competition, in particular in that migration to the connected tv space. they are facing competition from many streaming services that have come online over the past year, many of them ad supported. it is a market that they obviously pioneered, and have always had a huge share in, but it is also a more competitive market. at the same time, you have the social video platforms like instagram, snap, tiktok that are
eating into youtube ad revenue and its share. sonali: talk about that. sometimes it feels like commerce will be the future as well. many of the big tech companies, facebook, snap, twitter have talked about integration of social commerce. you see that as cannibalizing some of the other revenue, or is that good in addition to revenue? paul: i think social commerce via video platforms is something we will see grow. many companies are doubling down on it, including youtube which made an announcement about integrating ads with urls on connected tv but then link to your laptop or cell phone. i think overall, the link between commerce and advertising, whether that is through retail networks like amazon or whether it is through shoppable ads on instagram or
tiktok or snap, that is an area i think all of these companies are looking at. i don't see it as cannibalizing their business. i think it is additional revenue potential. caroline: let's get a read on smaller businesses pouring money into digital ads. we saw concerns around snap and the supply chain issue. we talked to companies wanting to put money into snapchat because they can't stalk them on the shelves. is snapchat the third choice after facebook, google? is that why they will hurt more than perhaps youtube or instagram? paul: snapchat being a smaller player in this market is more exposed, particularly to the privacy changes that apple imposed on its devices. whereas google has much more
data they are collecting on their own, through their apps and through their sites. at the same time, facebook is also a bigger player. i think these effects from the privacy issues, and even from the supply chain issues, are definitely more pronounced for the smaller players. caroline: paul, thank you so much for coming on. coming up, the -- a cfo will discuss third-quarter results. we will have the latest. this is bloomberg. ♪
caroline: we have been focused on earnings all week as big tech names release the latest results. let's dive in on alphabet. they came in with record revenues. taylor: they are talking sales estimates. you have ads and e-commerce fueled growth. if you want eyeballs, your advertising on google, put a much facebook, those are the top spots where you go. perhaps some of the declines we have seen in the post-market come off about 2% after hours, is a slowdown you see with google cloud growth. that perhaps is where that growth and revenue missed expectations, which does contribute to some of the profitability. let's do this with emily chang, who is getting off the call with alphabet's cfo. what are they saying about this echo what are the key takeaways? emily: obviously very optimistic about the quarter, looking pretty good across the board. she said the consumer sentiment
is broad-based and remains strong and even as the world reopens, she believes that is a trend that will stick. specifically she said digital is real even as people start to get vaccines and the world reopens, people want more choice and information. the online to off-line work continues to be relevant. we tried to zero in on supply chain issues. i asked her what kind of challenges they are seeing. she says they have been managing the challenges well. she believes they are working closely with partners to plan and pivot where and when they need and with a strong man for the pixel six machine says they expect some supply constraints. i specifically asked her if they are seeing advertisers pullback because of supply chain issues, because they don't want to advertise products coming over the holidays that might be difficult to get or impossible to get. she didn't give me a direct answer. we asked about the apple ad tracking technology changes, how that will impact alphabet.
we believe there is potentially significant impact, especially on the youtube side. that is not something she would answer directly but we are expecting to hear more about that issue on the call. caroline: where people are picking holes in the numbers is the cloud. is the growth not strong enough? we are seeing rapid growth when we look at microsoft. how is google faring? emily: the cloud is one place where our team was expecting to see better numbers. i did ask her about this, why did they come in light? she said it was slightly off estimates but they feel good about momentum, they are pleased with ongoing progress and progress -- product innovation and the strength across verticals. we know google remains the third-place player behind amazon web services and microsoft azure. it is a growing business so that is a piece of the pie that google can command, and that is
something she remains optimistic about. sonali: thank you as always, emily chang. stay tuned to catch bloomberg technology live at 5:00. coming up, emerging trends in digital advertising. we will do that with the founder and ceo of marketing and influencer agency black girl digital. she will explain how it is done. this is bloomberg. ♪
at it. i spend all my time on cat videos. i feel great. i am one hour per day on cats. let's take a look. herein lies the problem. with facebook, we talked about this, the traditional blue app, this is in minutes per day per average user, only about 46 minutes. the numbers at a little better if you are watching cat videos on instagram, about 50 minutes. that is an hour of your day that is gone. caroline: look at tiktok. sonali: this is you. caroline is on tiktok all day long. taylor: 83 minutes per day. when you think about where you're putting your ad dollars, you want to go to tiktok. sonali: makes you wonder whether certain platforms should be distribute in information differently. make sense twitter is lower on that scale. when you go for the big ads, tiktok has the eyeballs. caroline: how diverse is the
messaging? how much are we managing to target precisely the people, potential consumers for your brand? for a deep dive, latoya shambo is the founder of black girl digital, a content agency. you are a businesswoman with a million dollar marketing budget for other brands. what is working? if you want to reach a 20 something-year-old woman of color, is there bang for your buck in tiktok? latoya: absolutely. i'm going to have to say yes to tiktok. within the last year, tiktok campaigns rose 325%, and 68% of marketers are actually looking to leverage the platform more. at black girl digital we ran a campaign with one of our clients
, a natural hair care product, and for them, the success was really in them understanding who your core audience was. for us it was saying, if you want to reach this younger black female -- let's try it with tiktok. we leveraged tiktok creators, black females on tiktok that had less than 100,000 followers. and i tell you, we saw over one million impressions in a matter of days. days. taylor: impact ready immediately. how do you feel about some of the more legacy companies? what is the difference about going from tiktok to youtube? latoya: if you understand your ultimate goal, and understand your target consumer, you have to think about how they are using the platform.
while youtube is still a great platform because the content is there forever, it is also where consumers go to get more information about things. so if you are a legacy brand and you introduce new product to the marketplace, this is the opportunity to use the platform, leverage influencers, to communicate your new product of the new benefits, and what you are doing now with your brand so when the consumers are on youtube looking for more information, you are there and you are part of the conversation , not left behind. taylor: what about turning impressions into monetization? if we are targeting teenagers come are they going to their parents and saying, buy me this? are you hoping to lock them in so when they are working in their 20's, 30's and 40's and they have the power to make those purchases, that you have locked them in? latoya: that's a good question. i will start with my daughter,
who is always on tiktok. she is 10. anytime she sees mcdonald's, popeyes, i promise you it is, mommy, i want popeyes or mcdonald's. i know for a fact that these brands should be on tiktok, and it is going to work. the kids and teenagers are going to their parents and making us pay. this is what i like, this is what i want to try, we should try this, we should use that. but it is also trying to fill the long-term loyalty -- build a long-term loyalty, the brand loyalty because generation x will eventually have to pick a decision on, i want to use this brand for other -- forever. the point is, you have to be on these platforms in order for that generation to know you exist. caroline: how much have you seen demographics change? i know it is ironic that tiktok
videos of people my age, in their late 30's going what is it with this, and 10 days later they are obsessed themselves. we are seeing a broadening of the demographic. are we seeing a desire to shop through the apps, being more efficient in that way? how much staying power do you think they have? latoya: my father is 60 and i saw him on tiktok the other day. what are you doing, what is your name? how are you not following me on tiktok echo i think -- on tiktok? i think the generational gap is closing as it relates to the platform. it is entertainment. people want to be entertained, no matter how young or old you are. i think that is definitely why the age has increased on these platforms. the ability to shop seamlessly i think will keep the consumers,
and those eyeballs, on those platforms. for example with instagram shop or even pinterest making it easy to buy products when you are on their platform, that is the pool point of all those platforms, to keep you engaged and entertained and keep you on for how many minutes per day? 83 minutes for tiktok having people on their platforms? i think the more they are creating engaging platforms and allowing people to do more things like shop, that will definitely increase the usage and keep all ages on all platforms. sonali: you mentioned instagram, very popular. a question that has been brewing, this is a tougher one, is that, what about facebook? what about the blue app? what about the -- with all the rhetoric around facebook these days, is there a lack of trust with the app? latoya: i do think there is a lack of trust with facebook. however, people won't give up on
it. especially the older generation. it keeps them connected to their family, to their friends. so they are not going to abandon the app. there is constant conversation around their data being sold, and even when the platform goes down, people will complain about it within the day but the minute the platform goes back up, they are back on it. it has become consumer behavior. when you wake up in the morning, the first thing you do is you go to your phone, you look at a social platform, whether it is facebook, instagram, tiktok. you are looking for that instant connection all the time. so the trust factor, yes, it is a thing but it is not a big enough thing for the average consumer to no longer be part of those platforms. caroline: so good to have some time with you. latoya: thank you for having me. caroline: i'm excited to see
what you do next. latoya shambo, ceo and founder of black girl digital. the way she talked about pinterest in there, if you are in a marketing role you have to have knowledge of how to target your audience, which is the best area. and across all of them i guess. taylor: one thing we didn't get too, maybe we will next time, is risks from the advertisers. we have talked about the image that girls feel when they see filters on snap chat. what is the risk to advertisers when you look at some of the negative connotations that young users and young women in particular are feeling on these apps? i wonder how some of these advertisers navigate some of the risks. sonali: and from demographics, i feel old. i use twitter more than anything. apparently people aren't spending time on twitter. caroline: just journalists and
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