Madison and Wall Podcast Episode 6: From Michigan to Madison
Oct 11, 2024
Dive into the intriguing world of advertising and finance as the hosts explore Michigan's consumer sentiment and its surprising disconnect from actual spending behavior. Discover how tech giants like Amazon and Google are reshaping capital expenditures in the industry. Unravel the latest trends from the top 50 advertising sellers and learn about the implications of legal challenges facing major tech firms. Finally, examine the dramatic shift in automotive advertising, focusing on General Motors' cuts and its impact on smaller businesses.
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Consumer Sentiment Does Not Predict Ad Spending
- Consumer sentiment index rose 8% year-over-year to 68.9 despite recent slight decline.
- It has zero correlation with advertising market behavior, highlighting a disconnect between sentiment and spending.
Big Tech Dominates Capital Expenditures
- Big tech giants (Microsoft, Amazon, Meta, Google) control 70% of media CapEx, heavily investing in AI and infrastructure.
- Typical media firms spend ~3% of revenue on CapEx, risking future competitiveness without long-term investments.
CapEx and R&D Drive Future Growth
- High CapEx correlates with a focus on long-term growth and industry dominance.
- Companies investing heavily in capital and R&D position themselves to lead amid technological shifts.