Streaming giants like Walt Disney and Netflix are redefining the landscape of entertainment, embracing ad-supported models that are catching investors’ attention. The success of these platforms is not just about captivating content, but also about the strategic presence of consumer stocks in the advertising realm.
Marriott International: Checking into the Streaming Ad Game
When Disney+ launched its ad-supported version in December 2022, Marriott International stood tall among the advertisers. The move by Marriott to advertise on a platform competing with its own industry is a testament to the open market dynamics at play.
The hospitality giant has its own strategy in play, recently converting three luxury U.S. properties into its coveted Marriott Bonvoy portfolio. Dana Jacobsohn, Chief Development Officer, U.S. Luxury Brands & Global Mixed-Use, rightly points out that Marriott remains a leading figure in the luxury segment, with a global footprint that is hard to miss.
With a lukewarm reception from analysts, Marriott International aims to give back $4.3 billion to shareholders in 2024, a move that signifies confidence in its future prospects.
Starbucks: Brewing Up a Storm in the Digital Ad Space
Starbucks, once known for its discreet marketing approach, has made a splash in the ad scene by lining up with Disney’s streaming platform. The coffee giant’s presence in the ad space signals a shift in its traditional stance.
While Starbucks navigates a challenging period with declining same-store sales and operational hurdles, the company is brewing a plan to revitalize its North American business. The focus on operational efficiency and employee experience shows a commitment to sustained growth.
As Starbucks patrons know the importance of consistency in their brew, the company’s adaptation to new strategies will be closely monitored for its impact on consumer engagement.
The Resilience of LVMH in the Face of Luxury Market Fluctuations
Starbucks vs. the Rest: A Tale of Resilience
Starbucks is known for its ability to navigate challenges effectively, setting it apart from its competitors and drawing investors’ attention.
The Reign of LVMH in the Luxury Market
LVMH (OTCMKTS:LVMUY) brands like Louis Vuitton and Tiffany & Co. making a strategic move by advertising on the Netflix ad-tier signals a desire to tap into a broader American consumer base.
The visionary Bernard Arnault’s journey in transforming a bankrupt group of brands into the world’s leading luxury conglomerate underscores his business acumen, reflected in LVMH’s remarkable financial performance.
In the recent quarter, LVMH reported a revenue of 20.69 billion euros ($22.23 billion), marking a 3% organic growth year-over-year. With a robust operating margin of 26.5% in 2023, the company is focused on maintaining its healthy financial position, having generated 25% of its total revenue of 86.2 billion euros ($92.63 billion).
LVMH’s strategic acquisition of Tiffany in 2021 exemplifies its commitment to elevating brands in the luxury segment, evidenced by the doubling of Tiffany’s profits and substantial investments in flagship locations such as the New York City store.
While fluctuations in consumer demand for luxury products are inevitable, the rising number of individuals able to afford high-end items like a $2,500 handbag indicates a widening market for luxury goods.