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5 Things Happening Around The Internet Ad Space This Week

5 Things Happening Around The Internet Ad Space This Week
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In a research note, Wells Fargo analysts noted five events in the internet ad space and provided their takeaways on these.

Event 1

Snap-on Incorporated (NYSE: SNA) has acquired Flite, an ad tech company that helps to launch, manage, measure and optimize digital ad campaigns in real time. Snapchat is “rapidly emerging as a key competitor for online video advertising,” the analysts said.

Marketers are showing high interest in Snapchat, as they look to engage the platform’s “broad, youth-oriented” audience. The analysts pointed out, however, that there have been cases of “supply-chain friction,” with some marketers trying to justify the expense of creating custom creative units.

“To hit its growth goals, we believe Snap needs to build out a wider portfolio of advertising units and measurement capabilities,” the Wells Fargo report stated.

Event 2

Facebook Inc (NASDAQ: FB) has introduced Live Audio, with similar functionality as Live Video. Facebook stated that live content experiences would be a key focus area of development in the near to medium term.

Live Audio could provide “another engagement lever” for Facebook, building on the success of the company’s investment in video content, the analysts mentioned. “Given FB's audience and engagement scale, we believe the company could be well-positioned to broadcast live concerts or serialized podcasts.”

Event 3

Tripadvisor Inc (NASDAQ: TRIP) has announced an Instant Booking agreement with Expedia Inc (NASDAQ: EXPE), under which inventory from some of Expedia’s brands would be added to Tripadvisor’s instant booking platform. The analysts consider Instant Booking’s success as being key to the investment case of Tripadvisor.

While the move was widely anticipated, there are positives for both companies. The analysts mentioned, however, that Tripadvisor had added inventory from Priceline Group Inc (NASDAQ: PCLN) a year back. “We expect the benefit from EXPE participation to be far more muted-as the addition likely expands addressable IB supply only modestly.”

Event 4

The New York Times reported that Snapchat provided only limited preferential treatment for celebrities and influences, and mostly treated them as typical users. Celebrities and other influencers had played a key role in the growth of Facebook, YouTube, Instagram and Twitter Inc (NYSE: TWTR).

“What remains to be seen is whether Snap will continue to resist what we believe will be significant pressure from marketers to ease ''influencer-marketing'' restrictions and liberalize the company's tight creative control over marketing on the platform,” the analysts commented.

Event 5

Bloomberg reported that Airbnb’s flight-booking tool was still in the early stages and that the company was considering several entry points to flights including M&A.

Airbnb’s expansion into flights would pose additional competition to Priceline and Expedia. “Our survey work suggests Airbnb has built a remarkable level of unaided brand awareness, consideration and preference,” the analysts mentioned. Although it was difficult to succeed in the high volume, low margin space for flight searches and bookings, Airbnb has brand strength that positions it better than many of the other second tier flight search providers.

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