It’s earnings season for public media companies.
Facebook – which finally seems to be embracing its media company-ness – saw its stock climb after it beat Q2 revenue expectations despite slower user growth.
Twitter also beat on revenue but saw its stock tumble on flat user growth.
Snap reports its earnings today after market close and, while user growth may be slowing on the platform, its revenue is ramping.
And then there’s Google, which beat revenue and earnings expectations but saw its share price fall because cost-per-click rates were down.
As for traditional media companies, CBS beat on revenue and saw its stock rise, Comcast also posted strong revenue and profits sending its stock up despite cable’s losses, Disney’s revenue and stock was dragged down by its cable networks, and ITV saw declining revenues and in turn share prices.
So what does this all mean for marketers?
Not much, really.
For one thing, Netflix is not ad supported so there’s no real opportunity there beyond old fashioned product placement – Leggo my Eggo! – and Disney is readying to pull its content and create its own streaming service.
As for the other players, the only thing marketers need to worry about is if stock prices fall far enough that the company can no longer spend money to innovate – or worse, operate.
Until then, it’s business as usual.
Why is this the case?
Quite simply, investors focus on very different metrics than marketers.
Wall Street obsesses over KPIs like user growth and CPC. Marketers care about their own business outcomes.
Sure, when evaluating media properties, user growth matters. But, once you reach a certain size and scale you’ve earned a place on the plan – it just becomes a matter of how you use it.
What’s more important is engagement. Media companies with large, engaged audiences are prime places for brands to reach and engage customers. In this sense, time spent becomes as important as total users – advertisers want captive audiences. And high-impact ad formats like video are critical.
As for CPC, advertisers definitely care but they prefer rates to be going down.
Ultimately, when it comes to hitting earnings most media companies rely on ad revenue. In this sense, Wall Street and Madison Avenue are aligned. Marketers will spend more on properties that deliver better outcomes.
The bottom line for investors and marketers always comes down to ROI. And that’s the only thing anyone should be worrying about.
Now, stock up on more of 4C’s Insights!
Read the rest of 4C’s Insights Volume 68 here.
Subscribe to our newsletter to get updates from 4C in your inbox.