WEBVTT - Mark Bergen on Apple's Threat to the Online Ad Industry 0:00:10.160 --> 0:00:14.160 Hello, and welcome to another episode of the Odd Locks podcast. 0:00:14.200 --> 0:00:18.239 I'm Joe Wisenthal and I'm Tracy Alloway. Tracy remember in 0:00:18.360 --> 0:00:21.319 like the two thousands or like the financial crisis and 0:00:21.400 --> 0:00:24.120 everyone you can barely remember last year but go on, 0:00:24.360 --> 0:00:27.240 and everyone said, oh, it's such a tragedy. People could 0:00:27.280 --> 0:00:29.720 have been curing cancer, but then they were spending their 0:00:29.760 --> 0:00:32.479 time coming up with like more and more complex derivatives. 0:00:33.159 --> 0:00:35.919 And then I feel like for the tens that more too. 0:00:36.280 --> 0:00:38.360 All the smart people could have been curring cancer, but 0:00:38.400 --> 0:00:42.000 they spent their time getting more ads onto like tiny 0:00:42.159 --> 0:00:44.440 phone screens and stuff like that. This is the whole 0:00:44.520 --> 0:00:48.239 like software sucking up the entire economy idea. But yes, 0:00:48.280 --> 0:00:50.400 I do remember that criticism. There was a lot of 0:00:50.440 --> 0:00:54.280 thought that went into how to best advertise on the Internet, 0:00:54.320 --> 0:00:56.360 and in fact, I think we had an episode at 0:00:56.400 --> 0:00:59.640 one point about how the Internet was actually powered purely 0:00:59.720 --> 0:01:02.520 by that's right, No, I mean it more or less 0:01:02.880 --> 0:01:05.440 seems to be. I mean, I guess people do pay 0:01:05.480 --> 0:01:10.240 for something. But it also feels like that era both 0:01:10.280 --> 0:01:12.680 sort of from a macro standpoint and maybe a micro 0:01:12.800 --> 0:01:16.440 standpoint is coming to a close again again another decade 0:01:16.440 --> 0:01:19.680 pivot because we have seen a lot of these Internet 0:01:19.720 --> 0:01:23.480 mega companies like meaningfully start to slow growth. The business 0:01:23.480 --> 0:01:26.360 models aren't firing on all cylinders as they want to are. 0:01:26.720 --> 0:01:28.679 And then just sort of like tech in general from 0:01:28.720 --> 0:01:33.840 macro reasons, uh, seems to be it had better days, right. 0:01:34.000 --> 0:01:35.880 Interest rates are going up and so a lot of 0:01:35.880 --> 0:01:38.959 the valuations of big tech companies are coming down. But 0:01:39.080 --> 0:01:41.280 also to the business model point, I think this is 0:01:41.319 --> 0:01:44.880 interesting because initially, you know, we talked about very smart 0:01:44.920 --> 0:01:48.800 people going to tech firms and venture capital and spending 0:01:48.800 --> 0:01:50.840 a lot of mental energy. They're trying to figure out 0:01:50.840 --> 0:01:54.080 the business model. But to some extent, it feels like 0:01:54.120 --> 0:01:57.080 the easy gains are kind of behind us, right. It 0:01:57.160 --> 0:01:59.960 was you create a product, you get everyone on your 0:02:00.040 --> 0:02:03.960 particular platform or using your product or whatever, and then 0:02:04.400 --> 0:02:07.280 you make a bunch of money. And now it feels 0:02:07.480 --> 0:02:11.960 like things are changing absolutely. I mean, look at a 0:02:12.000 --> 0:02:15.560 company like um Facebook for example, is just this. You know, 0:02:15.600 --> 0:02:17.960 they're really having to work for it, like their their 0:02:18.000 --> 0:02:21.200 their model is stressed right now, and there's the rise 0:02:21.240 --> 0:02:24.359 of TikTok and so forth. Every one of these companies, 0:02:24.400 --> 0:02:27.880 it feels like, to some extent, after creating a decade 0:02:27.880 --> 0:02:31.000 of like the best money vacuuming up machines that were 0:02:31.040 --> 0:02:33.359 ever created are not like they kind of have to 0:02:33.400 --> 0:02:35.560 really work for it now, yeah, and come up with, 0:02:35.720 --> 0:02:38.840 let's say, more creative strategies. And one of the things 0:02:38.840 --> 0:02:42.520 we've seen recently is something from Apple right. And so 0:02:42.680 --> 0:02:45.919 one of the stories is that Apple has this incredible 0:02:46.040 --> 0:02:48.880 position in the ecosystem because so many people own an 0:02:48.919 --> 0:02:51.639 iPhone and they pull out the first thing they interact 0:02:51.680 --> 0:02:53.960 with is the iPhone to get to the internet. And 0:02:54.000 --> 0:02:56.120 they have a lot of power over these other companies 0:02:56.280 --> 0:02:58.160 in terms of you know what shows up on that 0:02:58.440 --> 0:03:01.640 iPhone and how right, and and they're having to be 0:03:01.720 --> 0:03:04.880 more creative and making money off of those products. Right. 0:03:05.000 --> 0:03:08.400 The iPhone is getting more technologically advanced. You don't have 0:03:08.480 --> 0:03:12.640 to necessarily buy one every year. People are holding onto 0:03:12.680 --> 0:03:15.919 them for longer. So how do you rest more money 0:03:16.080 --> 0:03:19.919 out of that particular customer base. Such a tragedy. Companies 0:03:19.919 --> 0:03:23.240 are having trouble resting more money out of their customer base. 0:03:23.320 --> 0:03:27.240 What a terrible situation. Anyway, that further Ado, I want 0:03:27.240 --> 0:03:31.600 to talk more about online advertising this world, the challenges 0:03:31.639 --> 0:03:34.079 all these companies are facing. We're going to be speaking 0:03:34.120 --> 0:03:36.800 with our colleague Mark Bergen. He's a reporter here at 0:03:36.800 --> 0:03:40.600 Bloomberg and he is the author of a recently published book, 0:03:40.960 --> 0:03:46.320 Like Comment Subscribe Inside YouTube's chaotic rise to world domination. 0:03:46.440 --> 0:03:48.960 So Mark, thank you so much for coming on Odd Lots, 0:03:49.000 --> 0:03:51.440 and congratulations on the book. Thanks so much, Thanks for 0:03:51.440 --> 0:03:55.360 having me so First of all, why a book about YouTube? Now? 0:03:55.400 --> 0:03:57.240 Why don't wait? Why did you do this project? Yeah? 0:03:57.280 --> 0:04:00.280 YouTube is this kind of a sleeping giant and social 0:04:00.280 --> 0:04:03.000 media it's someone described it as like this iceberg that 0:04:03.080 --> 0:04:05.120 no one ever really talks about as much for a 0:04:05.200 --> 0:04:08.960 variety of reasons. I see YouTube as both the past 0:04:09.040 --> 0:04:12.600 and now future of social media. And it was the 0:04:12.640 --> 0:04:18.119 first company to pay online broadcasters and invented the creator economy. 0:04:18.200 --> 0:04:22.840 And now we're seeing with TikTok, Instagram, Snapchat, Twitch, you name, 0:04:22.880 --> 0:04:25.160 it are all moving in this direction. Social media is 0:04:25.200 --> 0:04:28.400 no longer your friends and family and your acquaintances. It 0:04:28.520 --> 0:04:31.839 is influencers, It is celebrity. It is a game built 0:04:31.839 --> 0:04:35.039 around in commerce. Uh. And this is a world that 0:04:35.040 --> 0:04:38.120 that YouTube very much creative. Should we be telling Odd 0:04:38.160 --> 0:04:41.560 Lots listeners to like, come in and subscribe other podcasts 0:04:41.120 --> 0:04:44.120 that an effective called action. All right, everyone like comment 0:04:44.240 --> 0:04:47.960 and subscribe on all thoughts wherever you find it. Okay, 0:04:47.960 --> 0:04:50.799 but you well, but we were talking in the intro 0:04:50.880 --> 0:04:53.800 about this idea that the sort of like easy gains 0:04:53.839 --> 0:04:56.520 are over for social media, and it is true. We've 0:04:56.560 --> 0:04:59.920 seen all these new issues also come up, like anti 0:05:00.040 --> 0:05:03.160 trust when it comes to Facebook and Google, um, content 0:05:03.279 --> 0:05:05.640 regulation when it comes to YouTube. Who should be the 0:05:05.760 --> 0:05:08.920 arbiters of what's true and what isn't? Are the easy 0:05:09.000 --> 0:05:12.679 days over for social media? I think? I mean YouTube's 0:05:12.680 --> 0:05:16.280 business has grown tremendously, uh and and part of it 0:05:16.320 --> 0:05:18.640 was because they really didn't kind of lock into their 0:05:18.640 --> 0:05:24.200 commercial success until so we only the only data we 0:05:24.240 --> 0:05:27.560 have available is beginning in seventeen there as business but 0:05:28.480 --> 0:05:30.840 I was around eight billion last year. It was close 0:05:30.880 --> 0:05:34.880 to uh, pretty phenomenal growth. They just took off their 0:05:35.080 --> 0:05:39.120 the pandemic um when the viewership numbers and we're all 0:05:39.160 --> 0:05:41.719 stuck at home watching there were studios, how them studios 0:05:41.760 --> 0:05:45.520 were shut down, like YouTube became the default media aesthetic 0:05:45.760 --> 0:05:48.160 and uh, you know a lot of kids, a lot 0:05:48.200 --> 0:05:52.400 of you know, yoga videos, just the hours of just exploded. Um. 0:05:52.440 --> 0:05:55.320 But that the business has been crippled I think you 0:05:55.320 --> 0:05:59.159 could make the argument more by Apple's changes than by 0:05:59.200 --> 0:06:02.360 any any regular from this far. Alright, let's jump right 0:06:02.480 --> 0:06:05.720 into it. So Apple, they say, oh, we're the defenders 0:06:05.760 --> 0:06:07.880 of privacy, and now I always get these alerts on 0:06:07.920 --> 0:06:09.400 my phone. It's like, do you still want to be 0:06:09.440 --> 0:06:12.680 broadcasting information to that app? It looks like maybe you 0:06:12.720 --> 0:06:15.720 haven't rethought this or something, which I imagine is not 0:06:15.839 --> 0:06:18.280 great for those apps when I click now. Yeah. I 0:06:18.279 --> 0:06:21.480 mean there were people in in Google and Facebook less 0:06:21.480 --> 0:06:24.680 so at Google, but they will gripe privately. Facebook started 0:06:24.680 --> 0:06:27.920 to do it publicly, like Apple is now building out 0:06:28.520 --> 0:06:31.159 a search advertising business. They're starting to hire more people 0:06:31.279 --> 0:06:33.640 like they have. This is a really savvy move. They 0:06:33.760 --> 0:06:37.080 marketed themselves as the privacy first company. They have restricted 0:06:37.120 --> 0:06:41.839 online cookies on iPhones and like kneecapped a lot of 0:06:41.880 --> 0:06:44.960 potential digital rivals. I think the one way to look 0:06:45.000 --> 0:06:47.359 at it is, you know this is they are making 0:06:47.400 --> 0:06:51.920 the They are driving this, this forced movement towards less 0:06:51.960 --> 0:06:54.400 behavioral and targeted advertising, this sort of foundation for the 0:06:54.400 --> 0:06:58.440 Internet economy of the last two decades. The cynical view 0:06:58.520 --> 0:07:00.839 is that they have found a pretty effective way to 0:07:01.000 --> 0:07:04.400 build out a competing business to Google without the world 0:07:04.400 --> 0:07:08.080 really knowing it. Well, Okay, so first of all, if 0:07:08.080 --> 0:07:09.840 you talk to Apple about this, they will say it's 0:07:09.840 --> 0:07:13.520 about privacy concerns. If you talk to their competitors like 0:07:13.680 --> 0:07:16.280 YouTube or Facebook, they will probably say, this is a 0:07:16.320 --> 0:07:18.960 revenue grap How are you thinking about it? And what 0:07:19.000 --> 0:07:22.320 are the sort of like clues or evidence on either side. Yeah. 0:07:22.320 --> 0:07:24.200 I think Google is a really interesting test case. It 0:07:24.280 --> 0:07:27.880 has this um friend of me relationship with Apple. They 0:07:27.920 --> 0:07:32.080 are competitors, certainly in obviously in smartphone markets, Google's kind 0:07:32.080 --> 0:07:34.080 of got after them a lot around an iPhone, but 0:07:34.480 --> 0:07:37.480 in their prime Google's primary business of search advertising, like 0:07:37.480 --> 0:07:41.720 Apples an extraordinarily convenient partner because for a long time 0:07:41.760 --> 0:07:45.080 Apple Google has been the default search engine for Apple, 0:07:45.160 --> 0:07:47.320 and now that it's a subject of an Apartment of 0:07:47.360 --> 0:07:51.320 Justice antitrust case. Uh. I think this is the chief 0:07:51.400 --> 0:07:56.160 reason why Facebook meta has been graping very publicly about 0:07:56.160 --> 0:07:57.760 what Apple has been doing, and you haven't heard a 0:07:57.840 --> 0:08:01.440 peep from Google. Uh. And in part because their search 0:08:01.480 --> 0:08:04.400 business is less affected like search business, search ads in 0:08:04.440 --> 0:08:08.440 general are less reliant on the kind of third party cookies. YouTube, however, 0:08:08.640 --> 0:08:11.480 is heavily reliant on the fact that they want to, like, 0:08:11.560 --> 0:08:13.800 they can serve much better and higher priced ads if 0:08:13.800 --> 0:08:15.920 they know all the videos that you've watched, all the 0:08:15.960 --> 0:08:18.160 other websites you visited, you know, all the sort of 0:08:18.160 --> 0:08:22.840 granularity that this, this entire complex machinery of online advertising 0:08:22.920 --> 0:08:25.480 is built upon. So can we actually take a step 0:08:25.520 --> 0:08:29.520 back and can you maybe explain exactly how the market 0:08:29.600 --> 0:08:33.680 operated before Apple's big switch, because this is not something 0:08:33.679 --> 0:08:36.760 that I am entirely familiar with, other than as Joe mentioned, 0:08:36.840 --> 0:08:38.600 you know, suddenly you get all these notices on your 0:08:38.600 --> 0:08:41.080 phone saying do you want to opt into data track? Yeah, 0:08:41.120 --> 0:08:44.760 I mean it it is. I think we're markedly similar 0:08:44.800 --> 0:08:50.079 to sort of financial markets in it's like complexity and opacity. 0:08:50.320 --> 0:08:53.480 Um Like there are effectively like two sided markets right 0:08:53.480 --> 0:08:55.480 there by side and the sell side where you have 0:08:55.960 --> 0:08:57.880 you know, publishers that are out there, like have a 0:08:57.880 --> 0:09:00.760 lot of online real estate and that's everything from Bloomberg 0:09:00.800 --> 0:09:03.640 dot com in the New York Times to like very 0:09:03.640 --> 0:09:08.040 popular mobile apps that that and snapchat Twitter right like 0:09:08.080 --> 0:09:10.920 Twitter has real estate and and and then there are 0:09:10.920 --> 0:09:12.840 a bunch of marketers that want to get in front 0:09:13.040 --> 0:09:17.400 of consumers. Google has the machinery on both sides, like 0:09:17.440 --> 0:09:20.640 they own both sides of the market, UM and Google 0:09:20.679 --> 0:09:23.120 has is the world's biggest digital advertising company. They have 0:09:23.240 --> 0:09:26.480 been for for decades now. The sort of primary way 0:09:26.559 --> 0:09:31.480 that public online publishers have monetized with Google AdSense. UH 0:09:31.679 --> 0:09:34.800 that basically ad Sense is the same exact model on YouTube, 0:09:34.880 --> 0:09:37.120 just taken over to video. So it is the world's 0:09:37.120 --> 0:09:41.479 biggest online video advertising service by far UH and effectively 0:09:41.600 --> 0:09:45.400 is a very easy and increasingly automated system where if 0:09:45.440 --> 0:09:49.400 I'm a marketer, I'm PNG PNGG spends you know, millions 0:09:49.400 --> 0:09:52.880 of dollars and billions of dollars of marketing. I'm gonna 0:09:52.920 --> 0:09:55.760 go to Google and I'm gonna kind of give them 0:09:55.800 --> 0:09:57.679 a chunk of money effectively goes through a bunch of 0:09:57.720 --> 0:10:00.920 ad agencies, and then Google kind of allocate that based 0:10:00.920 --> 0:10:02.680 on you know, we're going to get this into search 0:10:02.920 --> 0:10:05.520 in front of people whenever they type a keyword, We're 0:10:05.520 --> 0:10:08.560 gonna put this on display to put on the Bloomberg 0:10:08.640 --> 0:10:10.680 dot coms of the world, and we're gonna allocate this 0:10:10.720 --> 0:10:14.280 to to video, knowing that we can actually reach in 0:10:14.280 --> 0:10:17.199 this very hyper targeted way the consumers we want to 0:10:17.240 --> 0:10:21.560 reach other speculators who might be the equivalent of a 0:10:21.600 --> 0:10:26.720 hedge fund or trading desk cool by ad inventory just 0:10:26.840 --> 0:10:29.520 on the assumption that they can flip it and sell 0:10:29.559 --> 0:10:32.040 it for more than what that person was selling. I 0:10:32.120 --> 0:10:34.160 even heard of that one. There's certainly like all sorts 0:10:34.200 --> 0:10:38.240 of middlemen in the industry, and you know there are 0:10:38.280 --> 0:10:40.040 time in the era. I'm sure that still happens. But 0:10:40.080 --> 0:10:42.679 I used to go to all these advertising conferences and 0:10:42.880 --> 0:10:45.800 you know, all sorts of ad tech companies that you know, 0:10:45.880 --> 0:10:48.160 they've asked him what they do, and it's just you 0:10:48.240 --> 0:10:50.640 don't really understand where they sit in the stack. Right, 0:10:50.679 --> 0:10:53.520 There's just like all sorts of complexities and and they're 0:10:53.960 --> 0:10:57.600 programmatic advertising companies that just do one thing on mobile. 0:10:57.760 --> 0:11:00.240 And there was Bluetooth advertising was a big hot where 0:11:00.240 --> 0:11:02.000 you could actually like serve an add to a consumer 0:11:02.080 --> 0:11:04.640 right when they're in front of the coal gate at 0:11:04.679 --> 0:11:06.920 the aisle. Like this was, I mean, this was we're 0:11:06.960 --> 0:11:11.360 moving towards this world. And certainly before Apple stepped in 0:11:12.120 --> 0:11:15.480 of of incredible like they're geo fencing be able to 0:11:15.679 --> 0:11:18.360 get your cell your data and know your exact location 0:11:18.440 --> 0:11:21.040 and push alerts and um, I mean this is why 0:11:21.080 --> 0:11:25.040 it's under so much privacy and antitrust scrutiny is because 0:11:25.040 --> 0:11:44.880 it became quickly invasive and incredibly unregulated. So can you 0:11:44.920 --> 0:11:49.240 talk to us maybe about like how important data targeting 0:11:49.800 --> 0:11:53.040 or targeting of an audience actually is, because I think 0:11:53.080 --> 0:11:55.480 we hear these things like oh, it's it makes it 0:11:55.559 --> 0:11:58.920 harder for advertisers if they're not able to track your data. 0:11:59.440 --> 0:12:02.960 Why is so important? And like, can you maybe give 0:12:03.040 --> 0:12:06.599 us some numbers around how valuable a targeted ad is 0:12:06.760 --> 0:12:09.400 versus an untargeted one. I don't even know if untargeted 0:12:09.440 --> 0:12:13.359 ads exist on the Internet. Yeah, well, and just on 0:12:13.520 --> 0:12:15.959 to sort of add on to Tracy's question, like, let's 0:12:16.000 --> 0:12:18.640 say I go to golf dot com. Yeah, okay, the 0:12:18.640 --> 0:12:21.440 ads that I get, like, how much is it he's 0:12:21.440 --> 0:12:23.280 on golf but dot com he probably wants to be 0:12:23.320 --> 0:12:26.280 about golf as opposed to ads that I get that 0:12:26.400 --> 0:12:29.200 maybe you know the last ten sites I went to 0:12:29.280 --> 0:12:31.840 is like pets dot com or and so my like, 0:12:31.920 --> 0:12:35.040 how valuable is it for golf dot com to be 0:12:35.080 --> 0:12:37.360 able to know that? I also like pett I mean, 0:12:37.400 --> 0:12:41.199 there there's all sorts of open and unsolved questions about 0:12:41.240 --> 0:12:45.960 the value and x like precision of online advertising. The 0:12:45.960 --> 0:12:48.120 classic example is like you go and you buy a 0:12:48.160 --> 0:12:50.560 pair of sneakers, and then all you see are as 0:12:50.600 --> 0:12:52.600 for the same exact sneakers, Like it's following you around 0:12:52.600 --> 0:12:54.320 the internet, right, So I just bought these? Why do 0:12:54.360 --> 0:12:58.000 you like the world's biggest tech companies that supposedly know 0:12:58.040 --> 0:13:00.480 a lot about you, Like, can't solve that one pair 0:13:00.480 --> 0:13:04.400 of sneakers? I do, but I definitely don't need a second, 0:13:04.800 --> 0:13:08.800 uh stove, Yeah, I mean I think that to a 0:13:08.880 --> 0:13:11.560 certain extent. The like the you know, YouTube is a 0:13:11.559 --> 0:13:14.360 really interesting example in part like they have they built 0:13:14.360 --> 0:13:17.360 this very a fantastic targeting model where they can like 0:13:17.679 --> 0:13:20.360 show an add to a viewer. You mentioned, like if 0:13:20.360 --> 0:13:22.480 you watch about the golf channels, right, like you're if 0:13:22.520 --> 0:13:25.679 you're an advertiser, you're going to probably want to get 0:13:25.720 --> 0:13:27.520 in front of that you know, if you're if you're 0:13:27.559 --> 0:13:30.480 selling golf gear clubs, you want to get in front 0:13:30.480 --> 0:13:32.439 of that person that's watching all the YouTube videos. They 0:13:32.480 --> 0:13:35.120 have this feature, I'm sure, the skippable ad format, which 0:13:35.160 --> 0:13:37.720 is a major part of their success. It was because 0:13:37.800 --> 0:13:40.880 you know, if the consumers actually watching this, because they 0:13:40.920 --> 0:13:44.400 didn't click the skip button that's worth a lot more money. 0:13:44.600 --> 0:13:47.040 And if Nike runs an ad that didn't skip, Adidas 0:13:47.080 --> 0:13:48.679 is going to want to pay more in in this 0:13:48.720 --> 0:13:51.520 automated bidding system. And this is like Google Search kind 0:13:51.520 --> 0:13:53.720 of works really well with scarcity to where it's like 0:13:53.800 --> 0:13:57.319 they can drive up the cost per per mill or 0:13:57.360 --> 0:14:01.560 cost per click um pretty high in these scarce markets. Well, 0:14:01.640 --> 0:14:06.199 let's go back then to the Apple situation directly prior 0:14:06.320 --> 0:14:10.560 to this policy change. What was an iPhone user giving 0:14:10.679 --> 0:14:14.840 to various apps when they use them and when did 0:14:14.880 --> 0:14:16.839 the policy change and what are they getting now from 0:14:16.840 --> 0:14:19.400 those users? Yeah, I mean some of it is is 0:14:19.480 --> 0:14:22.680 really hard to trace. But you know, in if I 0:14:22.720 --> 0:14:25.360 was an iPhone user and I'm using maybe like a 0:14:25.440 --> 0:14:28.280 Chrome or even safari um, You're getting a lot of 0:14:28.280 --> 0:14:31.240 background data and like there's a lot of ad companies 0:14:31.280 --> 0:14:33.920 you've probably never heard of, or like serving a cookie 0:14:34.080 --> 0:14:37.800 on you on your um uh, your mobile browsing some 0:14:37.880 --> 0:14:39.440 of it. There are there are companies that have like 0:14:39.480 --> 0:14:43.000 invented ways to do um deep linking between when you 0:14:43.120 --> 0:14:45.200 bounce from an app to the web. Right, this is 0:14:45.440 --> 0:14:48.200 this has always been Google's fear of Apple in some ways. 0:14:48.360 --> 0:14:52.280 Is that Apple is only if your only experience on 0:14:52.280 --> 0:14:54.680 an iPhone is just moving from app to app, right, 0:14:54.760 --> 0:14:57.320 Like that is you're you're no longer going through the 0:14:57.320 --> 0:15:01.560 turnstile of the Internet, which is Google. Um, so certainly 0:15:01.560 --> 0:15:04.520 amount of data about the websites you visited, how long 0:15:04.600 --> 0:15:06.520 you link, like, what you click on all those sort 0:15:06.520 --> 0:15:09.200 of signals. Is my understanding is like that with now 0:15:09.240 --> 0:15:12.600 that they've kind of fully eliminated third party cookies, and 0:15:12.760 --> 0:15:16.360 Google is has said they're doing the same for Chrome, 0:15:17.440 --> 0:15:21.200 which is they own the crumb browser. Um it is 0:15:21.240 --> 0:15:24.320 actually this Google has pushed that timeline back several years 0:15:24.360 --> 0:15:27.600 I think now as they say, um and so the 0:15:28.000 --> 0:15:31.360 like basically like these third party sites that do the tracking, uh, 0:15:31.520 --> 0:15:34.560 will not you effectively will not be able to know um, 0:15:35.080 --> 0:15:37.240 your Internet history of like what you know if you 0:15:37.360 --> 0:15:39.320 visit golf dot com and then you got to ESPN. 0:15:39.440 --> 0:15:41.360 ESPN doesn't know that you lived at the golf dot com. Right. 0:15:41.520 --> 0:15:43.600 ESPN might just sees you as a sports fan. They 0:15:43.600 --> 0:15:47.400 don't see you as like a golf fanatic. What scope 0:15:47.480 --> 0:15:52.280 do companies have to sort of bypass Apples restrictions on this, 0:15:52.440 --> 0:15:55.160 Like is there a lot of leeway to still somehow 0:15:55.240 --> 0:15:58.160 track people even if they've opted out. This is I'm 0:15:58.200 --> 0:16:01.080 not an expert. Google and face Book have both sort 0:16:01.080 --> 0:16:06.080 of invented these machine learning models that can like walk 0:16:06.120 --> 0:16:11.640 in backwards right kind of exactly. They both have different 0:16:11.800 --> 0:16:14.320 like jargon e names for the for the services, but 0:16:14.440 --> 0:16:17.160 effectively that's it, like, Oh, we're gonna, uh, we're gonna 0:16:17.200 --> 0:16:18.920 put you in a group of people. I'm gonna keep 0:16:18.920 --> 0:16:20.600 going back to this golf example. We're gonna put you 0:16:20.600 --> 0:16:22.400 in a group of We don't know that that you, 0:16:22.600 --> 0:16:25.000 Joe are are actually visiting this, but we know that 0:16:25.000 --> 0:16:28.080 there's enough like golf fans doing this activity or using 0:16:28.080 --> 0:16:31.320 this app, and so we can approximate. I mean, the 0:16:31.320 --> 0:16:34.920 the real issue here is that there's Google and Facebook. 0:16:35.200 --> 0:16:37.480 You know, I have been in a duopoli in this 0:16:37.560 --> 0:16:40.160 world for a very long time. That is the third. 0:16:40.760 --> 0:16:44.560 The actual challenger now is Amazon, right, Like certainly not 0:16:44.600 --> 0:16:47.600 a small company like Amazon's as business has grown tremendously 0:16:47.640 --> 0:16:50.000 in the past few years. Uh, and they're less threatened 0:16:50.000 --> 0:16:51.880 by this because they also it's all in house. Right, 0:16:51.960 --> 0:16:54.560 Amazon's business is based on like the activity on on 0:16:54.600 --> 0:16:58.120 Amazon properties. Um, so that's one way that that that 0:16:58.240 --> 0:17:00.800 companies have got around it. The big push also that 0:17:00.840 --> 0:17:02.520 all the platforms, you see how much of ad tech 0:17:02.560 --> 0:17:06.480 companies have pivoted towards commerce, e commerce, especially during the pandemic. 0:17:07.000 --> 0:17:08.760 For what it's worth and for listeners. I don't even 0:17:08.800 --> 0:17:10.320 golf and I don't have a pet, so I don't 0:17:10.320 --> 0:17:13.320 know why I use those examples. I just needed to 0:17:13.359 --> 0:17:14.879 get that out of there. The ad is that I 0:17:14.920 --> 0:17:18.040 have been getting on Instagram lately have been absolute garbage. 0:17:18.600 --> 0:17:22.159 The worst target in Is that true? Okay? Because the 0:17:22.200 --> 0:17:24.520 ads that I've been getting on Instagram because I I 0:17:25.119 --> 0:17:27.520 experimented with this, because I got really interested. I was like, 0:17:27.520 --> 0:17:29.720 where are they getting this info from? It seems to 0:17:29.800 --> 0:17:31.639 be coming in through Google. It's like if you do 0:17:31.680 --> 0:17:34.960 a Google search, it shows up on Instagram. Yeah, there's 0:17:35.000 --> 0:17:36.600 the one that they always have the debunk, which is 0:17:36.640 --> 0:17:41.040 like if you're talking micro right. I tried that too. Yeah, 0:17:41.080 --> 0:17:43.480 my husband and I did baby carriages or not having 0:17:43.480 --> 0:17:45.760 a baby, but just as an experiment to see like 0:17:45.840 --> 0:17:48.119 what would show up? Nothing if you talk about them 0:17:48.119 --> 0:17:50.560 in front of Alexa, But if you Google search for it, 0:17:50.640 --> 0:17:54.119 they show up on Instagram. I mean Google, weird. Google 0:17:54.160 --> 0:17:56.280 for a long time we kept trying to keep They 0:17:56.280 --> 0:17:58.720 had like a state in church and state separation from 0:17:58.720 --> 0:18:04.520 like search and rest of display. Internet started changing, uh 0:18:04.560 --> 0:18:07.600 and and um. In part that was just about a 0:18:07.600 --> 0:18:09.560 financial concert, like they wanted to give more data that 0:18:09.640 --> 0:18:11.879 they add tech industry. It was just a bigger growth. 0:18:11.920 --> 0:18:13.520 But for a long time at least they said, and 0:18:13.720 --> 0:18:15.719 and and people I've talked to the early days like 0:18:16.080 --> 0:18:19.040 have this almost religious belief that like you're searching, I mean, 0:18:19.080 --> 0:18:21.639 you know, Google has our most intimate data, right, like 0:18:21.640 --> 0:18:24.159 the things we're searching for, we tell Google things that 0:18:24.200 --> 0:18:25.960 we wouldn't tell our spouses is going to write like 0:18:26.560 --> 0:18:29.920 uh and so like that search data is incredibly valuable 0:18:29.960 --> 0:18:32.720 to a marketer if they're you know, trying and selling 0:18:32.720 --> 0:18:35.840 pharmaceuticals or lawyers, right, Like those kind of those are 0:18:35.880 --> 0:18:40.560 the industries that typically have incredibly high search ads because 0:18:40.600 --> 0:18:42.639 there are people that are really in demand for for 0:18:42.920 --> 0:18:46.600 a particular thing. Instagram is I mean Facebook, because you know, 0:18:46.600 --> 0:18:48.720 it's so funny. People talk about how crappy the add 0:18:48.800 --> 0:18:52.600 qualities are. And yet like there as business certainly has 0:18:52.760 --> 0:18:58.240 been suffering because of Apples changes, but it's still that right, 0:18:58.280 --> 0:19:01.760 But like the one of the two kings of the industry. Well, 0:19:01.760 --> 0:19:04.520 then talk about what we've seen specifically. So when you 0:19:04.560 --> 0:19:06.960 say okay there, because this is the core of the 0:19:06.960 --> 0:19:09.680 whole thing when we talk about their businesses has started 0:19:09.720 --> 0:19:13.640 to suffer because of the policy changes that Apple has made. 0:19:13.800 --> 0:19:16.520 What are we seeing concretely in terms of how it's 0:19:16.560 --> 0:19:19.680 spilling over? Yeah, I mean, like the dollars. I think 0:19:19.680 --> 0:19:21.320 some of this was, you know the fact that they're 0:19:21.400 --> 0:19:25.000 like macroeconomic factors, and for marketing, there's the war in 0:19:25.119 --> 0:19:28.159 Ukraine and there's just the pandemic in general. But but 0:19:28.280 --> 0:19:30.400 in part you know, if you're an advertiser, in your 0:19:30.440 --> 0:19:34.359 choices are between say like television or Billboard ad and 0:19:34.760 --> 0:19:37.520 and Facebook. The argument for online has always been like 0:19:38.000 --> 0:19:40.359 you know that there's a joke about TV like I 0:19:40.640 --> 0:19:42.199 don't you put your ad up there? And you have 0:19:42.240 --> 0:19:45.680 no idea who's watching necessarily? And um, that's just sort 0:19:45.720 --> 0:19:48.600 of like brand advertising, right and and um in the 0:19:48.640 --> 0:19:51.000 industry there's brand and there's direct response. In the direct 0:19:51.000 --> 0:19:53.840 response as are the one where you want people to 0:19:53.880 --> 0:19:55.679 make it an immediate action, like you want them to 0:19:55.680 --> 0:19:59.720 install an app, buy a thing. Um. This so this 0:19:59.800 --> 0:20:02.840 is you know, Apple's changes have made it much more 0:20:02.840 --> 0:20:06.040 difficult to do that, and so there's they're getting you know, 0:20:06.080 --> 0:20:08.760 there have to be more reliant on on brand advertising 0:20:08.800 --> 0:20:11.679 that sort of contextual Just just to be clear, do 0:20:11.760 --> 0:20:14.240 we know like have they put a dollar amount or 0:20:16.960 --> 0:20:19.320 Facebook put it amount on there? Actually and I don't 0:20:19.359 --> 0:20:21.800 have it off the top of my head. Um. I mean, 0:20:21.800 --> 0:20:23.760 their market cap has taken a huge it and some 0:20:23.840 --> 0:20:27.760 of it is regulation, but have they really been regulated? Yeah, 0:20:27.800 --> 0:20:30.280 Like it's just there's kind of just the specter of regulation. 0:20:30.359 --> 0:20:33.800 It's not like Congress hasn't gone after Um. The only 0:20:33.920 --> 0:20:35.919 real big tech regulation and I talked about in the 0:20:35.960 --> 0:20:40.000 book is the FTC went after YouTube for illegally targeting 0:20:40.200 --> 0:20:44.520 kids with with collecting data on children under thirteen. Um. 0:20:44.600 --> 0:20:47.480 And and that's another area where like there's this whole 0:20:47.480 --> 0:20:51.760 online academy that then unregulated and and you know you're 0:20:51.760 --> 0:20:55.240 not allowed to collect data on children under thirteen, yet 0:20:55.280 --> 0:20:57.080 a lot of companies have done that. I mean, we 0:20:57.119 --> 0:20:58.720 don't know the numbers for YouTube, in part because they 0:20:58.760 --> 0:21:02.399 don't share their financial data. But what was what was 0:21:02.480 --> 0:21:06.119 meant as market drop valuation dropping the test? I don't know, 0:21:06.320 --> 0:21:09.720 but definitely I'll just say this I'm not. Let's say, 0:21:09.760 --> 0:21:13.399