In today’s newsletter, I look at another media ad spending survey, which shows the strength of big tech companies. Here’s today’s edition.
MEDIA: Another Ad Spending Survey
Magna Global, a media research firm, today released its forecast for media ad spending in the US for all of 2020 and for next year.
It shows what other surveys have shown — spending on linear media is declining sharply while ad spend on digital media is growing.
Magna says it forecasts total media ad spending to decline 4.6% in 2020 compared to 2019, but that it expects total ad spend to grow 4% in 2021 compared to this year.
Pink's Bottom LineNotably, Magna says that ad spending on digital video will grow 12% this year compared to last, thanks in large part to Google’s YouTube and Amazon’s Twitch. (Note: If you’re not familiar with Twitch, it’s a video streaming service owned by Amazon.)
In other words, Google and Amazon owned subsidiaries appear very strong, according to Magna, which indicates a broader trend — big tech companies are big beneficiaries of big digital ad spending.
MONEY: Housing Starts
While much of the US economy has suffered due to the impact of the coronavirus, the housing market has been strong during the pandemic.
However, two new statistics released today show that there might some weakness in housing. The Commerce Department reports housing starts fell 5.1% in August compared to the July estimate.
The government also said that the number of authorizations for building permits, which show future homebuilding activity, also declined in August, down 0.9% from July.
(Note: most of the August’s housing weakness is related to multi-family housing units, not single family homes.)
Pink's Bottom LineOne month’s numbers do not make a trend, but it’s worrying to see any weakness from housing, particularly in building permits, which offer good insight into the short-term sentiment of the overall housing market.
Fortunately, mortgage rates are likely to stay low for the foreseeable future following the Federal Reserve’s guidance Wednesday that it essentially expects to keep interest rates at their current levels through 2023.
Low mortgage rates should continue to be attractive for home buyers and should provide support for the housing market.
SPORTS: Lakers and Nuggets
As readers of this newsletter might be aware, I jumped early on the Denver Nuggets bandwagon and said they had a real chance to win the Western Conference in the NBA.
Now, the Nuggets are actually in the Western Conference Finals — they begin their best of seven series against the Los Angeles Lakers Friday night.
Denver’s superstar teammates — guard Jamal Murray and center Nikola Jokic — have been arguably the best one-two punch in all of the NBA during this post-season.
However, the Lakers have LeBron James, the best player in the NBA, and Anthony Davis, one of the top five or six best, as their two resident superstars. Both James and Davis, in fact, were named Wednesday to the All-NBA first team.
Pink's Bottom LineAs for the Nuggets-Lakers series, series, I give the Lakers the edge when it comes to the star players — James/Davis over Murray/Jokic.
However, when it comes to the role players, I think the Nuggets have an overall supporting cast that’s slightly better than the Lakers. I think coaching is about even.
The Nuggets are also playing with house money — few expected them to make it this far in the playoffs — so they can play looser with little pressure.
Meanwhile, pressure and expectations rest on the Lakers not just to win this series, but to win the NBA title.
All of that said, while this series will be close, I ultimately have to jump off the Nuggets bandwagon now and go with the LeBron and the Lakers to win this series in six games.
Jeremy Pink is former CEO of private-equity backed Broadcast Sports International where he led the company to a successful sale and exit during his tenure there. He is also a former CNBC executive in New York, London and Singapore. He currently serves as an advisor to companies in media, technology, sports and financial tech.
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