Media Update: Formula 1 Media Rights, Meta's Antitrust Trial, GenAI Search Evolution
Key Highlights
- TV & Audio: Formula 1 is trying to use a new media rights package to cash in on its newfound popularity, but publisher appetites may be starting to wane.
- Paid Social: Meta’s antitrust trial kicked off this week, with the FTC alleging that Meta’s acquisition of Instagram and WhatsApp violated competition laws and seeking divestitures.
- Display & Programmatic: Out-of-home advertising continues on its growth trajectory, surpassing $9B in ad spend in 2024.
- Search: Google and Microsoft continue evolving GenAI Search results with advanced multimodal and chat-based capabilities.
- Ad Economy: Squeezed margins & shrinking budgets: Tariffs spark media investment realignments.
- Consumer Economy: The labor market and inflation showed positive signals in March, with inflation at its lowest level since March 2021, but a brewing trade war poses threats to both.
TV & Audio
Overall sports audiences have been a bit down week-over-week, but recent year-over-year comparisons have been particularly negative due to the massive audiences the 2024 women’s NCAA basketball tournament drew. Without the ‘Caitlin Clark effect’, audiences for the women’s final fell by roughly half in 2025, dropping from almost 19 million viewers to fewer than 10 million.
1. 2024 witnessed a sea change in sports rights, with Amazon winning shared rights to NBA coverage, a development which – coupled with Amazon’s existing NFL deal and growing football involvement from Netflix – signalled the full arrival of streaming TV to premier sports content. Now, another alluring sports property is on the auction block: Formula 1. The most-watched international motorsports competition has seen huge growth in US viewership over the last few years (even with some very early start times for races held in Europe, the Middle East, and Asia), and F1’s owners are looking to cash in.
Liberty Media, an investment group which acquired F1 in 2016, is reportedly seeking $150-180M per year from a potential broadcast partner, up to double the current rate paid by Disney-owned ESPN. Disney recently announced it would not renew its exclusive rights package with the series, leaving the door open for potential competitors including Amazon, Netflix (owners of the popular Drive to Survive F1 docuseries), Warner Bros., Fox, and NBC. However, despite the wide array of potential partners and growing audiences, no one has yet sprung for the significantly elevated price tag. Media executives appear to be growing more focused on bottom line impacts, with one executive commenting, “It’s a cool sport, no doubt. But cool doesn’t pay the bills.”
It remains to be seen where the rights package will ultimately land, both in ownership and in value. But it does seem that the momentum we saw from streamers aggressively pursuing sports rights deals may be starting to wane. Brands should pay close attention to these early signals of a profitability push from publishers, as the networks may also look to squeeze advertisers (via CPMs) and subscribers (via subscription fees) for more of their budgets in the coming months. | Comscore, WSJ
2. Nielsen’s Gauge for March saw YouTube reach its highest viewership level yet at 12% of audience time, far outpacing any of its streaming competitors and reaching half of all time spent with linear cable TV. Of note, that figure includes only YouTube’s main platform, not YouTube TV, the virtual multichannel video programming distributor element that is a more direct replacement for linear TV. This growth is astounding and reflects YouTube’s dominance of the video landscape across devices and formats.
This size and scale recently led MoffettNathanson to value the business at ~30% of parent company Alphabet’s total valuation, implying a valuation of up to $550B. This would put the hypothetical standalone business on par with the world’s largest companies, such as Visa, ExxonMobil, and Mastercard.
Coupling Google’s dominance of the search market, the growth of YouTube Shorts as a competitor to TikTok, and YouTube’s leading streaming TV position, Alphabet stands with Amazon as the only publishers / platforms to enjoy leading positions in multiple distinct marketing areas (though Meta’s cross-social dominance puts it in a similar space). On the one hand, this could give Alphabet firepower to bring more consolidation to the streaming space, perhaps by moving to acquire one of the more troubled publishers. On the other hand, Google already faces intense antitrust scrutiny around its search business, with the government moving to force a sale of the Chrome browser, making greater consolidation unlikely without new direction from the Trump administration. It may be that these enormous valuations and diversified dominance give more momentum to the antitrust arguments against these platforms, which could result in further fracturing. At this stage, it is too early to say what the outcome will be, but advertisers should keep their ears perked for additional statements from the FTC, which could have enormous impact on the TV, social media, and search landscapes. | Nielsen
Paid Social
The FTC’s long-awaited antitrust case against Meta officially kicked off last week, and the implications are massive. At the core of the case is the claim that Meta’s acquisitions of Instagram and WhatsApp were designed to eliminate competition and entrench its monopoly power. Meta CEO Mark Zuckerberg’s own testimony that Instagram “was ahead of us in mobile photos” at the time of acquisition only adds fuel to the FTC’s argument. While these types of legal cases often take months (if not years) to fully resolve, it’s clear that the FTC is seeking not just fines, but a structural breakup of Meta’s business. At the core of the FTC’s argument is that Meta’s only competitors are Snapchat and MeWe(!), but is not classifying the likes of TikTok, YouTube, iMessage, or X in the competitive set.
So, what does this mean for advertisers? In short—uncertainty, and a whole lot of it. Instagram alone accounts for over half of Meta’s U.S. ad revenue, and the thought of Meta being forced to divest that property introduces a potentially seismic shift in the performance marketing ecosystem. If Meta loses the ability to integrate Instagram and WhatsApp data into its broader ad delivery system, we could see less efficient targeting and more siloed buying strategies. For brands that have built robust campaigns around Meta’s cross-platform capabilities, this would require a major reevaluation of everything from attribution models to budget allocation​.
Zooming out, this trial represents a broader trend—regulators are more willing than ever to challenge the way big tech operates. It’s not just about Meta; the FTC’s stance sends a message to the entire industry that acquisitions as a means to squash competition won’t go unchecked. For advertisers, the key takeaway here is to stay nimble. Whether it’s experimenting with emerging platforms like TikTok or doubling down on first-party data infrastructure, flexibility will be your friend in a landscape that may soon look very different from the one we’ve grown used to. | Reuters, New York Times, SocialMediaToday, Meta
Display & Programmatic
Out-of-home (OOH) advertising continues its growth trajectory, surpassing $9 billion in ad spending last year, according to the recent Out-of-Home Advertising Association of America’s (OAAA) 2024 OOH Advertising Facts & Figures report.
This growth is fueled by the rise of Digital Out of Home (DOOH), with Programmatic DOOH (pDOOH) leading the way. In 2024 alone, pDOOH spending jumped 34% and is projected to grow another 23% this year, reaching $1.23 billion by 2026.
The rise of DOOH is also spurring growth across different industries. While OOH has long been considered a medium for local services and entertainment advertisers, retail has emerged as a top growth category, up 12% in 2024. A driving factor is OOH’s ability to drive action.
A Harris Poll revealed that 73% of consumers view DOOH favorably, and 76% of recent viewers said they took action after seeing an ad, whether searching online, visiting a store, or making a purchase. This shows that OOH is no longer just about driving brand awareness but can also drive sales. However, with millions of placements across the U.S.—from billboards and street furniture to transit and place-based media—the challenge for advertisers is knowing where to focus. To drive success, advertisers need to understand their target audience and choose media placements that effectively reach and engage them.
For example, advertising in and around movie theaters presents an excellent opportunity to engage the Gen Z audience. According to the National Research Group, 90% of Gen Z and 80% of millennials attend movies regularly. In fact, in 2024, theaters had 18 opening weekends where audiences aged 18–34 were as large—or larger—than those watching the NFL playoffs, offering a rare opportunity to connect with this highly engaged and often hard-to-reach demographic.
As digital and programmatic buying evolve, OOH is becoming easier to plan and measure. As a result, we expect more advertisers to add it to their media mix, not just for brand awareness but also to drive action across the entire customer journey. | OAAA, OAAA, Adweek
Search
1. Google recently announced that its “AI Mode” search lab is now available to more testers in the US, and is compatible with Google Lens for advanced visual search. AI Mode’s new multimodal capabilities let you snap or upload a photo, ask a question about it, and get a rich, detailed response with helpful links. It combines Google’s visual search expertise with Gemini’s scene-level understanding to analyze context, objects, and relationships within images. Using advanced query techniques, it delivers deeper, more nuanced answers than traditional search.
Visual searches combined with text and/or location queries can surface products from brands the user may not have typed into a search bar. This is likely good news for marketers who can better target context-specific moments, like someone snapping a photo of a dress and saying “show me similar styles under $100 near me”—perfect for a local boutique with matching inventory. | The Keyword
2. In similar AI-powered search news, Microsoft introduced Copilot Search directly in Bing. AI-generated “Copilot Answer” summaries can now trigger in Bing SERP results, similar to how Google’s AI Overviews work.
However, it will be interesting to see how / whether this update changes user search behavior since, to interact in a chat-based manner with Copilot Search, users have to navigate to a completely different section of Bing. That multi-step user experience may not be intuitive, which could potentially deter adoption of the deeper Copilot search capabilities.
Once a user moves off the ‘All’ tab in Bing by clicking into the ‘Copilot Search’ tab, they’re taken to a new screen where users can chat with Copilot’s AI to ask follow up questions and explore more deeply. Their original search query transfers over with associated results, and clickable suggestions for related topics appear below the generative results to help searches uncover new information and make deeper exploration easier.
Notably, Microsoft is making a concerted effort to clearly cite sources with outbound links to websites. But given the nascency of this new search experience, its impact is unknown. We’d estimate a small fraction of total search queries will trigger Copilot Answers directly in Bing Search results, and an even smaller number of Bing users will find and navigate to the deeper Copilot Search page. Similar to trying to understand the impact of Google’s AI Overviews, we’ll be watching how and to what extent these AI-generated search results influence visibility of and interaction with paid and organic search results in Microsoft’s ecosystem. | Google’s “The Keyword” Blog, Microsoft Bing Blog
Ad Economy
We previously flagged the risk of a cooling ad market tied to tariff uncertainty; that risk is now a reality. The U.S. has reimposed sweeping tariffs on Chinese imports, and the ripple effects are already being felt across the advertising landscape. This shift isn’t just about geopolitics, it’s about reshaped cost structures, margin compression, and, critically, more cautious consumer behavior.
Brands in high-exposure categories such as electronics, automotive, and CPG have taken an array of approaches with many advertising their ability to weather the tariffs and not raise prices on consumers, in the short term at least. These ads are beginning to evoke a sense of the omnipresent, “We’re all in this together” and “The new normal” taglines of the pandemic era as they acknowledge the economic hardships experienced by many in the face of higher costs.
In the direct line of the Chinese tariff impact, as well as the fallout tied to the de minimis policy shift, Temu, which infamously bought five Super Bowl spots back in 2024, has massively curtailed ad spend. Adweek (in partnership with the Research & Analysis team) notes that while 19% of U.S. Google Shopping ad impressions were bought by Temu as recently as March 31, this has since declined to 0% as of April 12th.
Social media, linear TV & gaming media are poised to absorb the greatest impact from diminished budgets. A new eMarketer analysis shows that linear TV’s long lead times and weaker attribution make it a prime target for early budget reductions. Performance-oriented digital channels may prove more resilient, thanks to their measurable outcomes and flexibility, though all platforms may face pressure as brands pivot toward loyalty programs and organic tactics to preserve margin.
Ad buyers are already adapting. As AdAge reports, many are revising 2025 media forecasts that had assumed more economic stability. Brands are developing ‘Plan B’ playbooks—often prioritizing lower-funnel tactics that deliver deterministic results in shorter windows.
Of course, the broader economic narrative adds uncertainty. While inflation has cooled and consumer sentiment remains modestly positive, the threat of retaliatory tariffs and supply chain disruption has introduced a “wait-and-see” posture across marketing teams. Unlike monetary policy, which moves in deliberate increments, trade actions land quickly—and often with outsize consequences.
For performance marketers, agility is the mandate. 2025 is already emerging as a year of fluid budgets and accelerated re-forecasting. The best-positioned brands for the short term are those aligning tightly with finance, adopting flexible buying models, and staying ready to pivot toward conversion-focused tactics. Those brands that can weather the long-term impact of tariffs by way of absorption, and can continue to focus on brand development with awareness media, may find themselves in a very strong long-term position as they, to paraphrase armchair stock analysts, “buy the dip”. | Wall Street Journal, Emarketer, AdAge, AdAge
Consumer Economy
1. We will endeavor, once again, to start off with good news – and believe it or not, there really is some! The first week of April brought the latest jobs report, which showed that job creation in March was much stronger than expected, indicating that record-high economic uncertainty, government layoffs, and volatility in equity and bond markets has not dented the labor market. Employers added 228k jobs last month, the highest monthly total since December.
The only fly in the ointment is that job creation figures for January and February were revised downward, and the unemployment rate ticked up to 4.2%. The broader fear, of course, is that this is the calm before the storm – the Yale Budget Lab estimates the currently proposed tariffs would raise the unemployment rate by 0.55pp by the end of the year, which equates to putting ~927k people out of work.
There was also good news on the inflation front, which has been our central macroeconomic problem for over four years now – core CPI inflation fell in March to 2.8%, and overall inflation fell to 2.4%, both of which are the lowest readings since March 2021, just before post-pandemic inflation exploded.
Yet again, the fear is what comes next – the Yale Budget Lab estimates the tariffs will raise the price level by 1.7pp – 2.9pp, which would put us back in 4% – 6% inflation territory. Indeed, Federal Reserve officials are already saying that the central bank may need to delay rate cuts due to the inflationary impact of broad import taxes. Tariff policy is of course highly fluid and seems to change by the day, but the Fed’s job will be more difficult if tariffs are not significantly pulled back. | WSJ, NYT
2. We’ve covered declining consumer sentiment often in recent weeks, where the change in outlook has been very stark since the tariff topic entered the fray.
We’re watching this closely, and, while consumers say they’re worried, they’re not yet acting like it in their purchasing behaviors. That’s according to three of the largest US banks – Bank of America, Citigroup, and JPMorgan Chase – all of whom said consumer spending is up 4% – 7% on a YoY basis. BofA’s CFO said on Tuesday, “This is consumers continuing to spend … The signals at this point from the consumer are that the U.S. economy still remains in good shape.” Two things to note: (i) the seemingly healthy increases in consumer spending could reflect demand pull-forward, as consumers rush to buy before tariffs bite; and (ii) the banks flagged that corporate clients have been more restrained than consumers in their spending behaviors.
It seems unlikely that we’re in the clear, however. American consumers are now facing the highest average effective tariff rate since 1903, and the announced tariffs are the largest tax hike on Americans since 1968. Businesses are bracing for impact – Major China-based merchants Shein and Temu have told shoppers they plan to raise prices on April 25th due to “recent changes in global trade rules and tariffs.” Other merchants have begun including explicit ‘it’s not our fault’ messaging in consumer-facing pricing disclosures:
A partner at private equity firm TZP Group, which has 17 consumer brands in its portfolio, said that explicit tariff surcharges will appeal more to businesses with narrower product lineups and smaller basket sizes: “… if it starts adding up across multiple items in a bigger shopping basket, you’ll scare customers away.”
Meanwhile, we have anecdotal evidence of negative spillover to the labor market. Automotive major Stellantis announced that it is temporarily laying off 900 workers at US facilities in the wake of the new duties; the company’s Americas COO said the company is “continuing to assess the medium- and long-term effects of these tariffs on our operations, but also have decided to take some immediate actions.” Major steel manufacturer Cleveland-Cliffs announced it is laying off 1,200 workers in Michigan and Minnesota as it navigates the effects of tariffs on demand for steel-using products (such as cars).
To the extent this becomes a systemic pattern, it puts the Fed in an exceedingly difficult spot, wherein its ‘dual mandate’ of price stability and maximum employment come into conflict. Fed Chair Powell said on Wednesday he saw a “strong likelihood” that consumers would face higher prices and that the economy would see higher unemployment in the short run as a result of tariffs. The odds of a rate cut in May have indeed come down over the past month:
We are not yet in the dreaded stagflation scenario, but the path toward a soft landing has become much rockier. | WSJ, Bloomberg, WSJ
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