Yahoo Finance Fox (FOXA) and The Trade Desk Strengthen Ad Tech Partnership
Fox Corporation FOXA and global ad tech leader The Trade Desk TTD have announced an expanded partnership aimed at delivering cutting-edge advertising innovations and measurement capabilities to marketers. The deepened collaboration represents a significant industry development as the media and advertising ecosystems continue shifting toward data-driven and audience-based models.
A central component is the integration of The Trade Desk's Unified ID 2.0 (UID2) identity solution and its OpenPath initiative across Fox's AdRise ad platform. FOXA was an early adopter of UID2 through its Tubi streaming service and is now implementing the interoperable identity tech across its full portfolio of broadcast, sports, entertainment and news properties.
The companies cite the benefits of addressable inventory, transparency and identity resolution as catalysts driving their collaboration. UID2 enables advertisers to leverage audience data for precision targeting, while OpenPath facilitates direct and streamlined access to premium Fox inventory.
As structural shifts reshape the digital ad ecosystem, companies moving early on emerging solutions may be best positioned to capitalize. The recent move signals that Fox and The Trade Desk are decisively aligning to shape advertising's data-driven future.
Fox Corporation Price and Consensus
Fox Corporation price-consensus-chart | Fox Corporation Quote
Persistent Slump in Ad Revenues Clouds Growth Outlook
Fox’s recent partnership with TTD reveals how major media firms are prioritizing advanced ad tech integrations to evolve decades-old ad models. With UID2's interoperability across the open web, Fox can unlock the value of its premium content while offering advertisers key capabilities like cross-screen targeting and measurement.
However, FOXA is experiencing a continued decline in ad revenues as advertisers are contending with rising costs amid record inflation, which has led to cutbacks in spending on advertising.
In third-quarter fiscal 2024, advertising revenues (35.8% of the total) plunged 34.1% year over year to $1.24 billion, underscoring broader challenges faced by the traditional media industry as marketing budgets face heightened scrutiny.
At the Fox News Media unit, ad revenues dropped 5% as high-profile departures contributed to viewership erosion versus pandemic-driven peaks.
The sluggish ad performance raises questions about Fox's ability to drive future growth in an increasingly fragmented media landscape. The Zacks Consensus Estimate for Fox advertising revenues in the fiscal fourth quarter is pegged at $989.48 billion, indicating a year-over-year decline of 1.8%.
The ad woes underscore secular headwinds threatening Fox's legacy linear TV model. Online streaming is siphoning away audiences and ad dollars, while major brands increasingly favor digital platforms' superior targeting and measurement capabilities over traditional TV's more scattershot approach.
To that end, Fox has mapped an ambitious direct-to-consumer streaming strategy built around marquee brands like Tubi and Fox Nation that could unlock new growth runways. The fledgling Fox Weather channel is also earmarked for DTC distribution.
Fox's $238 million acquisition of celebrity advice platform UNSPN also signals ambitions in digital media beyond traditional video programming.
However, the streaming pivot is costly and success is far from guaranteed, given stiff competition from tech giants like Netflix, Disney, Paramount and others. As Fox doubles down on DTC, sustaining its lucrative legacy channels will be critical to funding future growth and appeasing investors impatient for accelerated transformation.
Zacks Rank & Stocks to Consider
Currently, Fox carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader Consumer Discretionary sector are Gray Television GTN and Stride LRN, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of Gray Television have plunged 46.1% in the year-to-date period. The long-term earnings growth rate for GTN is 10%.
Shares of Stride have plunged 17% in the year-to-date period. The long-term earnings growth rate for LRN is 20%.
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