Speaker 1: Also media.
Speaker 2: Hello, and welcome to Better Offline. I'm the single most
Speaker 2: punished individual alive. My name is Ed Zitron. I'm your
Speaker 2: host today. I'm joined by Ryan Barwick of Morning Brew
Speaker 2: and Marketing Bruce specifically, of course, Ryan, thank you for
Speaker 2: joining me.
Speaker 1: Hey man, what's up? How's it going?
Speaker 2: We are in the beautiful New York studios of iHeartRadio,
Speaker 2: Daniel Goodman of course producing Live with Us, live to tape,
Speaker 2: of course, and Ryan's here to talk to me about advertising.
Speaker 2: And we're going to start somewhere fairly obvious, which is,
Speaker 2: what is the kind of status of the Google Ads
Speaker 2: antitrust case? Where are we at?
Speaker 1: Yeah? I spent in September. I spent two weeks in Alexandria, Virginia,
Speaker 1: sexy Alexander, sitting on a wooden bench, listening to hours
Speaker 1: and hours of economists explaining auction bidding. I know you're
Speaker 1: very that.
Speaker 2: This is no, but seriously actually explain on.
Speaker 1: Yeah, no, no, I mean it was. I got a
Speaker 1: noseblade halfway through it because it was at times very
Speaker 1: dull but also very exciting. Essentially, the DOJ is arguing
Speaker 1: that Google doesn't just have a monopoly on digital advertising,
Speaker 1: but they own the entire supply chain, right, So Google
Speaker 1: owns the software that publishers used to like the New
Speaker 1: York Times of the Wall Street Journal, to run ads
Speaker 1: on their website and to monetize their content. Google also
Speaker 1: owns or monopoly has a monopoly on the software that
Speaker 1: advertisers are using to to reach those audiences on the
Speaker 1: New York Times in the Wall Street Journal. And in
Speaker 1: between those two pieces of software, there's this auction software.
Speaker 1: There's a bidding platform, and Google also owns that, right,
Speaker 1: So they own every piece of The DOJ is alleging
Speaker 1: that they own every piece of supply chain, and they really,
Speaker 1: I mean, at one point the DOJ said Google sees
Speaker 1: I think nine out of every ten digital transaction. So
Speaker 1: that's that's pretty large, right, That's a lot of them.
Speaker 1: That's pretty big. And it was fascinating over the course
Speaker 1: of two weeks. I was only there for two weeks.
Speaker 1: I believe it went on for a little bit more
Speaker 1: than three. We kind of got a history of ad tech,
Speaker 1: which is this incredibly complex, incredibly dense, incredibly dorky industry
Speaker 1: to just kind of explain how the Internet makes money.
Speaker 1: And Google has been on the receiving end of a
Speaker 1: lot of those advertising dollars, of those ad budgets, and
Speaker 1: it's fascinating. So we had the Monday before Thanksgiving, we
Speaker 1: had closing arguments, which is where the DOJ and Google
Speaker 1: get to make their final stand before the judge and
Speaker 1: make their arguments. The DJ again just kind of pointed
Speaker 1: to Google size.
Speaker 2: And that they own every single part of the stack.
Speaker 1: Right, or certainly the most successful parts of the stack.
Speaker 1: And then Google essentially countered by saying, look, we're really
Speaker 1: good at what we do, and it's hard to argue
Speaker 1: with them in the sense that they have so much
Speaker 1: data that they can monetize these things really efficiently. Because
Speaker 1: they see so much, they can get really good at it.
Speaker 2: It feels like the argument that would be, well, you
Speaker 2: have all this data from the monopolies you're doing, so
Speaker 2: I'm guessing that's kind of how the DJ came in it.
Speaker 1: Yeah, yes, And and it was interesting on the first
Speaker 1: day the DOJ said, you have all of these advertisers,
Speaker 1: but we never really delve delved into why they have
Speaker 1: so many advertisers. YouTube was almost never mentioned during the
Speaker 1: case Gmail Chrome right. Obviously, there's a much sexier trial
Speaker 1: that that is still ongoing. Well has already Amy has
Speaker 1: already reached its conclusion. The real heads were at the
Speaker 1: attack trial I like to see. The real dorks were
Speaker 1: at the much more complex and boring trial. So that
Speaker 1: wasn't really necessarily touched on, and again it will be
Speaker 1: really interesting. One thing that I kind of took away
Speaker 1: from the trial, and this is called like the it's
Speaker 1: it's a rocket docket, so it happens really quickly. We
Speaker 1: could find out before Christmas or even in early January,
Speaker 1: what decision the judge has reached. But one thing that
Speaker 1: I really took away from it is that the DOJ
Speaker 1: was basically pointing out issues or decisions Google made to
Speaker 1: maintain a monopoly, things that had happened ten years ago,
Speaker 1: things that had happened twelve years ago in some instances.
Speaker 1: So Google does something and the industry has to respond,
Speaker 1: and then Google does another thing. Can you give an example, Well,
Speaker 1: there are these, you know strategies. One was called like
Speaker 1: last look, where Google would get the last look at
Speaker 1: a bid between an advertiser and I Jason.
Speaker 2: Jason brought that up on a previous like the idea
Speaker 2: that like right then they go and we can just
Speaker 2: bid under them.
Speaker 1: Right exactly, so so then that Google would do that right,
Speaker 1: and then the industry would try to work around that,
Speaker 1: and ultimately things have reached kind of a I don't
Speaker 1: know if copasatic is the correct term. Things have kind
Speaker 1: of leveled out there, especially as advertisers are more drawn
Speaker 1: to like streaming platforms. They're more drawn to a platform
Speaker 1: like a TikTok or a Twitter social media platforms, you know,
Speaker 1: Banner ads are kind of like I think among most buyers,
Speaker 1: are kind of like the least sexy version of advertising,
Speaker 1: can you Yeah, I think the common frame like, can
Speaker 1: you name any banner ad you've ever seen?
Speaker 2: Only that McDonald's one from like twenty years ago where
Speaker 2: it said I'd hit that.
Speaker 1: Okay, there we go.
Speaker 2: That was a great ad. I've never fucked a burger,
Speaker 2: but I've thought about it for at least a second,
Speaker 2: so but never letting me correct. And it's my question
Speaker 2: is is that kind of advertising dying? Is ban a
Speaker 2: traditional that kind of media dying? Is it being replaced
Speaker 2: or is it just cheaper and shittya?
Speaker 1: You would hope it doesn't die because that is the
Speaker 1: kind of advertar. Yeah, that a lot of publishers.
Speaker 2: I wasn't asking because I wanted it to happen.
Speaker 1: Right, that a lot of publishers use, right, And obviously
Speaker 1: publishers have shifted to try to get subscriptions. I don't
Speaker 1: know if I'd go as far as saying it's dying,
Speaker 1: but the budgets are definitely shifted, and in the same
Speaker 1: way that linear television is losing viewers every year and
Speaker 1: people are adopting like streaming platforms.
Speaker 2: Right.
Speaker 1: Yeah, it's just it's it's not as interesting, it's not
Speaker 1: as sexy, and I do not know to kind of
Speaker 1: tie the knot here. I don't know what kind of
Speaker 1: remedy might solve that. Like, if Google's forced to sell
Speaker 1: it's auction software, it's exchange, what does that do?
Speaker 2: Like double click? Just they finally they after buying it,
Speaker 2: they just sell it again. Couldn't they sell access to
Speaker 2: the data, because that's kind of what they're suggesting with
Speaker 2: the search remedies listeners if you didn't know part of
Speaker 2: the suggested remedies, and the government been selling Chrome, which
Speaker 2: I'm going there on, but they're saying that they would
Speaker 2: allow other search engines to access Google's to them. Now,
Speaker 2: could a similar thing happen with.
Speaker 1: This, but yeah, I don't really know, Like the bitstreams
Speaker 1: here is so complex, there's so many players involved, I
Speaker 1: don't entirely know what that would look like, and I
Speaker 1: think that's part of the I'm sure Google's lawyers and
Speaker 1: the DJ's lawyers are wrestling over this kind of stuff,
Speaker 1: but you definitely got the sense, at least from the
Speaker 1: However many reporters were there, that this stuff is so
Speaker 1: weedy and so complex that I don't know how much
Speaker 1: of it is. Ultimately, I don't know what kind of
Speaker 1: remedies ultimately alleviate the concerns in the industry. Certainly many
Speaker 1: people feel like Google is a monopoly, but I'm not
Speaker 1: entirely sure where else they would take their dollar. But again,
Speaker 1: part of that is because Google is.
Speaker 2: Because there's never been another option.
Speaker 3: Right.
Speaker 2: It kind of makes me think of Facebook as well,
Speaker 2: because I know that there's I have they done an
Speaker 2: anti trust case against them? I forget, but I know
Speaker 2: the argument is that they have a monopoly of a
Speaker 2: social media which is true. But breaking up these companies
Speaker 2: seems I want them to do it, they need to
Speaker 2: do it, but I just have no idea how they
Speaker 2: could postbly like they're so deeply embedded in every corner
Speaker 2: of every part of the Internet at this point, I
Speaker 2: just don't know how practical that would be.
Speaker 1: Yeah, it was interesting Google brought up on the last
Speaker 1: day of the trial. They brought up Microsoft as its competitor. Look,
Speaker 1: Microsoft has Xbox. That's inventory that Google doesn't have access to.
Speaker 1: That's an advantage Microsoft has over Google. I don't think
Speaker 1: I've ever met a media buyer that has ever said, well,
Speaker 1: that Xbox inventory really.
Speaker 2: Yeah, we've got to make sure we're on a right.
Speaker 1: Right so like or the Microsoft has made a lot
Speaker 1: of inrows with retailers, for example.
Speaker 2: Haven't Microsoft been trying to do ads for years and
Speaker 2: never really made it? Well, they make it like a
Speaker 2: billion from being.
Speaker 1: Yeah, well, they have a very successful business around it,
Speaker 1: but it's certainly not It's not Google a juggernaut like
Speaker 1: a Google or an Amazon.
Speaker 2: And for context listeners, I think what a billion in
Speaker 2: revenue compared to several hundred billion from its the.
Speaker 1: Google makes forty billion a quarter.
Speaker 2: King is christ But there was one story I did
Speaker 2: want to talk to you about that you wrote back
Speaker 2: in September that we've talked about a few times. So
Speaker 2: this Facebook ads story because I actually think that this
Speaker 2: may be a story that gets bigger and bigger. But
Speaker 2: he wrote this story about he talked to a few
Speaker 2: ad buyers with Facebook and that Facebook's ads platform is
Speaker 2: kind of broken. Can you go into that bit?
Speaker 1: Yeah, this is something I noticed on Twitter or I
Speaker 1: guess we call it X now.
Speaker 2: I don't he dead names trans people. I'm dead naming Twitter.
Speaker 1: There you go. They're essentially buyers were saying, hey, so
Speaker 1: there are advertisers, but advertisers aren't pulling the levers. Usually
Speaker 1: advertisers go to ad agencies and the ad agencies. I
Speaker 1: don't know if your audience cares necessarily about that the alligation,
Speaker 1: but I saw a bunch of buyers saying, hey, you know,
Speaker 1: we we had ten thousand dollars disappear. We put it
Speaker 1: into into meta and it poof, it disappeared. It's gone.
Speaker 1: We don't know what happened to it. And you know,
Speaker 1: one guy saying that it's like, okay, maybe that is
Speaker 1: a bug. But then when you talk to eight media
Speaker 1: buyers and they all say since roughly January that the
Speaker 1: platform has become really wonky, that there are a lot
Speaker 1: of hurdles to overcome wonky how bugs.
Speaker 2: Essentially.
Speaker 1: Like again, someone in add tech described these advertising platforms
Speaker 1: like a Google like we were talking about, or a
Speaker 1: meta describe them that like, I shouldn't think about them
Speaker 1: as platforms, I should think about them as ATMs that like,
Speaker 1: you put money in these machines and then maybe money
Speaker 1: will come out, or at least you'll get a metric
Speaker 1: that tells you you made.
Speaker 2: A metric, which only they have.
Speaker 1: Right exactly that they have decided for you.
Speaker 2: And they are the ultimate auditor as well.
Speaker 1: Right, yeah, they're essentially there are buyers would say that
Speaker 1: these companies operate black boxes, right, that you can't really audit.
Speaker 1: But the black boxes do sell do hickeys and widgets,
Speaker 1: right like people do buy stuff on Instagram and and
Speaker 1: on Google and even on TikTok amazingly. But anyway, I
Speaker 1: ended up talking to several buyers that were saying that
Speaker 1: you know again, they would they would create a budget
Speaker 1: and then out of nowhere, I want to advertise on
Speaker 1: Instagram and then in the middle of the night at
Speaker 1: three in the morning. The campaign only targeted people on
Speaker 1: Facebook and only targeted eighty year old people on Facebook. Huh,
Speaker 1: and it didn't really work. And again, when you have
Speaker 1: so many people saying that that's what they encountered, that
Speaker 1: the platform wasn't really working the way they had expected
Speaker 1: to or the way it intended, and Meta essentially was
Speaker 1: saying kick rocks, like there's nothing we can do.
Speaker 2: Would meant to not to have that money or anything.
Speaker 1: No, I believe at the time I was talking to people,
Speaker 1: I don't think people had gotten credits yet. And as
Speaker 1: they were saying this, Meta had its like best quarter ever. Right,
Speaker 1: So MEDA doesn't necessarily need to help alleviate these small
Speaker 1: kind of buyers, even though these people in many instances
Speaker 1: are spending six figures on their advertising campaigns.
Speaker 2: Breaking that down. So these media buyers then not just
Speaker 2: of the listeners to break this down, so they're not
Speaker 2: buying for like one company they represent, well like ten fifty.
Speaker 1: They can they can work with ten brands they right, fifteen.
Speaker 2: So they're like an agency of Soort exactly. So I
Speaker 2: mean my thought, and that would be is how is
Speaker 2: Meta making all that money? And it's just it's very
Speaker 2: there's no just very basic thing. There's no other way
Speaker 2: to advertise on these platforms, right, there's no other inroad
Speaker 2: with Instagram or Facebook. Right, it's just this, Yes, that
Speaker 2: is insane, that is bonkers. Like, did you hear from
Speaker 2: Meta atal Did they get back to you? Yeah?
Speaker 1: I mean I think they would say that advertisers love
Speaker 1: meta right, great, and I think a lot of and
Speaker 1: a lot of people, you know, a lot of buyers
Speaker 1: will say, well it does work for them. Again sometimes
Speaker 1: outside of like that's why TikTok has become so interesting
Speaker 1: because TikTok kind of presents this third option where previously
Speaker 1: you could really only spend on a meta. Snap obviously exists.
Speaker 2: That company is not a good business. It never has been.
Speaker 1: I loved in high school.
Speaker 2: No, but that's the thing. It's like an app that
Speaker 2: has uses, but when they tried to add the business stuff,
Speaker 2: it just immediately like they're like, oh, this just spurns money.
Speaker 1: Snap's interesting because they take over every industry event and
Speaker 1: they always have such a presence, and yet I feel
Speaker 1: like the story at least every time I talk to
Speaker 1: people about Snap as a platform, I was getting Reddit
Speaker 1: has impressed a lot of people lately. But again, it
Speaker 1: wasn't until TikTok that people actually kind of raised eyebrows
Speaker 1: about another platform giving them that it gives advertisers kind
Speaker 1: of a diversity outside of just Meta and Instagram.
Speaker 2: Maybe you can actually answer this going back to Snapchat.
Speaker 2: Why isn't it? Is this stuff just not effective? But
Speaker 2: that ads not good?
Speaker 1: I don't know if I could necessarily speak to that. Okay,
Speaker 1: I'm always looking for like a broader picture, and for.
Speaker 2: Me in a qualitative one is just like what people
Speaker 2: saying stuff? Or is it just not that effective?
Speaker 1: I say, it's just not that like interesting, Like I
Speaker 1: don't think that. Every time I ask people about that,
Speaker 1: I don't get that many interesting answers. It's Reddit is fascinating.
Speaker 1: Reddit is like the wild West of the Internet, and
Speaker 1: I use Reddit constantly.
Speaker 2: We've got the better Offline Reddit full of various criminals
Speaker 2: and it's great.
Speaker 1: Do you see a lot of ads there?
Speaker 2: I move past them with the speed of pegasi. You've
Speaker 2: got the trained Yeah, I've just like old school hit
Speaker 2: just like no, just my brain removes it.
Speaker 1: Do you do that with newsletters too?
Speaker 2: Yeah?
Speaker 1: See, I feel like this is the thing. I'm curious
Speaker 1: how this evolves as the dorkiest conversation.
Speaker 2: What this is better offline? We have the dorkiest.
Speaker 1: I'm curious in five to ten years, like and I
Speaker 1: work at a newsletter company, but I'm curious if in
Speaker 1: five to ten years people aren't even going to look
Speaker 1: at newsletter ads because we've just trained the behavior to
Speaker 1: so look away, to know exactly when to skip.
Speaker 2: I've done test ads of like mates products like I
Speaker 2: don't no one will pay me for an ad other
Speaker 2: than this podcast that will humiliate me by trying to
Speaker 2: celluate I software, which everyone loves to tell me about.
Speaker 2: But like with the news letters, people do click, people
Speaker 2: do engage, and I found that across the board, and
Speaker 2: my general view is right now is newsletter companies are
Speaker 2: actually gonna do better. I don't. Do you remember back
Speaker 2: in like twenty twenty one, when every publication was like,
Speaker 2: we have to do newsletters now, and then they immediately
Speaker 2: junked it three months later. It just feels insane because
Speaker 2: that feels far more the future than any kind of
Speaker 2: subscription product like subscribe, Like The Verge has a subscription
Speaker 2: product now, and it sucks, like I get what they
Speaker 2: have to do it because money. Things cost money, But
Speaker 2: it just feels that that the whole media industry right now,
Speaker 2: needs to work out a way to connect with the readers,
Speaker 2: and it feels like their email address is good, it's
Speaker 2: like a good place for it.
Speaker 1: That's where I want. A New York magazine launched an app,
Speaker 1: and I want it to succeed. I love an app.
Speaker 1: They launched an app. They created an app as if
Speaker 1: it's you know, the iPad era of news whatever, but
Speaker 1: like an app for the an app that didn't magazine
Speaker 1: apparently not or they didn't put a lot of resources
Speaker 1: behind it, And I think that's great. I hope it
Speaker 1: makes money. But I just want a newsletter, and they do.
Speaker 1: They've got amazing newsletters. Yeah, I'll take another newsletter. I'll
Speaker 1: read something else from New York Max.
Speaker 2: So this is no completely different subject, but it's my
Speaker 2: damn show. The thing that I've been really thinking about
Speaker 2: right now with the media is the this objectivity problem
Speaker 2: where everyone has to be objective, but it also feels
Speaker 2: like every outlet is trying to suck the life out
Speaker 2: of the reporters, not like literally but no personality, no voice.
Speaker 2: Morning Brew actually does a pretty good job with that.
Speaker 2: They've actually like allowed you to talk like human words.
Speaker 2: But it feels like the Times, the Post both well,
Speaker 2: New York Post has a voice, just not a nice one.
Speaker 2: Washington Post even Business Insider has experimented with the discourse thing,
Speaker 2: which I do right for sort of guess contraction.
Speaker 1: You're describing much more successful reporters than I am, by
Speaker 1: the way, as I reached.
Speaker 2: But Morning Brew, I like Morning Brew, even though the
Speaker 2: video stuff rankles me a little bit that I cream jeezy,
Speaker 2: But it's just we're in this weird point now, and
Speaker 2: I think ads comes into this as well, where I'm
Speaker 2: not sure anyone in the media and those the fuck
Speaker 2: to do business buddle wise, I think everyone's a bit scared.
Speaker 1: I just want to report the news exactly, want to
Speaker 1: get like, yeah, I don't know, I have the timid,
Speaker 1: cowardly reporters attitude towards this, you know. So my my
Speaker 1: beat primarily is advertisers, right. There is a cottage industry
Speaker 1: of ad tech companies that actively or inactively prevent advertisers
Speaker 1: from appearing in news publishers. Really, there was a there's
Speaker 1: a whole culture around.
Speaker 2: Like a Jezebel article about this field.
Speaker 1: Yeah, it's these these brand safety companies. There's a whole
Speaker 1: cottage industry around, and the example that everyone uses in
Speaker 1: the industry is that if I'm United Airlines or Jet
Speaker 1: Blue or whoever, I don't want to run my ad
Speaker 1: next to a story about a plane crash.
Speaker 3: Right.
Speaker 1: You can see why that's a competable. But I think
Speaker 1: the industry several years ago this is not necessarily the
Speaker 1: interest in this tech has weaned, but the industry internalized
Speaker 1: that United Airlines example as I don't ever want to
Speaker 1: be in your news at all because that is a negative.
Speaker 2: Environment, right, and can't control it.
Speaker 1: Right, Exactly, you can't control it, and they shouldn't be
Speaker 1: able to control it.
Speaker 2: Right.
Speaker 1: Advertisers shouldn't have a say on what's on the front
Speaker 1: page of a newspaper. And the report to that is
Speaker 1: I have never thought differently about an advertiser based on
Speaker 1: the content it's next to. I don't think that's how
Speaker 1: humans think. It fails any critical thinking. And yet these
Speaker 1: are billion dollar companies.
Speaker 2: I and this is a very better offline thought. But
Speaker 2: a lot of that is the people making those decisions
Speaker 2: don't read the news anyway, so they just like, well,
Speaker 2: I this this thing I've made up is very scary,
Speaker 2: I think.
Speaker 1: Or they think consumers are kind of dumb, which I
Speaker 1: don't think is fair. I don't think that's accurate, but
Speaker 1: I think that's I think that's in the sense.
Speaker 2: And it also just suggests they haven't talked to consumers
Speaker 2: like that. It feels like you could ask someone and
Speaker 2: so thematically, though kind of want to explain to listeners
Speaker 2: why I've had Brian on of in fact your marvelous
Speaker 2: at This is the reason I talk about ads so
Speaker 2: much is it's kind of something you said earlier. Google's
Speaker 2: what nine out of ten of all digital transactions, though,
Speaker 2: advertising is this annoying thing that everyone hates and complains about.
Speaker 2: It is the reason everything goes like there's ads on
Speaker 2: this show that adds on every website, every single publication
Speaker 2: you read has a bunch of ads, banner ads, whatever,
Speaker 2: video and everyone has been trying to work out how
Speaker 2: not to do that for some time.
Speaker 1: And I think it's how the Internet exists. It's how
Speaker 1: the Internet makes money. That's like the way I try
Speaker 1: to and I think this is me stylizing it, but
Speaker 1: it is how the Internet is monetized through ads.
Speaker 3: Baby.
Speaker 1: Google is an advertising business. Meta is an advertising business.
Speaker 1: TikTok It's an advertising business.
Speaker 2: Is TikTok effective. Do ID buyers actually like it?
Speaker 1: Uh? Yeah, absolutely, they love it. They wish it wasn't Chinese,
Speaker 1: but they absolutely love it, and they're still there. They
Speaker 1: still have a very large presence, even though obviously it's
Speaker 1: been diluted a bit since the election. But even though
Speaker 1: there is a threat that it could not there was
Speaker 1: a threat that it could not exist.
Speaker 2: Yeah, it doesn't seem like that. Seems like Trump's gonna
Speaker 2: keep it now, which is very funny. It's just like, Okay,
Speaker 2: I'm sinophobic, but not that. I It's interesting as well
Speaker 2: because I feel like the news media could have I'm
Speaker 2: not talking necessarily about Morning Bro. It feels like it's
Speaker 2: an undiscussed thing that only a few years ago we
Speaker 2: had the first major online ad company pop up that
Speaker 2: challenged any of the monopolies. Like the fact that TikTok
Speaker 2: exists and just fucking popped up is insane to me
Speaker 2: because it's relatively new, like what twenty eighteen, twenty nineteen,
Speaker 2: I mean, various versions of it might existed before, and
Speaker 2: it's interesting. It makes me wonder whether any other company
Speaker 2: could spin up, just shove a bunch of money and
Speaker 2: do the same thing.
Speaker 1: Yeah, I mean it's I know this is something that
Speaker 1: you've talked about a lot, but every time I go
Speaker 1: on Facebook dot com, yeah, I think, man, there should
Speaker 1: be cobwebs here. It doesn't look this isn't appealing to
Speaker 1: me as a user. This is a couple of batshit
Speaker 1: people I went to high school with kind of just
Speaker 1: screaming in the grocery aisles. Yeah, and even Instagram, I
Speaker 1: feel like has become that I'm speaking purely.
Speaker 2: Oh no, no, I've said very similar things a lot
Speaker 2: of times, and way more swear words. It's fine, It's
Speaker 2: just really interesting and also kind of what pisses me
Speaker 2: off about it. You don't have to agree. I can
Speaker 2: runt all the one. But is the cobwebs thing. It's
Speaker 2: just like the products like they're ad companies and they've
Speaker 2: just stopped pretending they're not. Like they're not pretending like,
Speaker 2: oh yeah, we're going to connect you with your friends
Speaker 2: your family's just like ego pig eat your slop.
Speaker 1: Well, i'd say Meta has gone as so far as
Speaker 1: to say we're actually not as interested in connecting you
Speaker 1: with your friends. What about this seventies funk band video?
Speaker 1: Would you like to see this content shown constantly. That's
Speaker 1: my algorithm. I just get bands out of it, but
Speaker 1: I get Steely Dan clips, which is cool, but that's
Speaker 1: that's That is far from why I intend initially signed
Speaker 1: up for the app because I wanted to see everyone
Speaker 1: I went to high school with.
Speaker 2: For a solid six month period, all I got was
Speaker 2: these insane self defense things. It was just like three
Speaker 2: second clips because they don't show you to click. They
Speaker 2: want you to click on it, and it'd be like
Speaker 2: how to stop a guy, and it would like you're
Speaker 2: watching like this guy. If I did this, I would die,
Speaker 2: like this is not useful information. And then a post
Speaker 2: from three weeks ago, just from like a band that
Speaker 2: I liked when I was twenty two years old, and
Speaker 2: it's just it's such a strange product and TikTok is
Speaker 2: extremely manipulative with their algorithm. Sure, but so it's meta,
Speaker 2: but it also feels like more of a functional bit,
Speaker 2: like a thing of use and enjoy. I find it horrible.
Speaker 2: It upsets me. I'm too old, you find it horrible.
Speaker 2: It's too much. I don't like him from scrolling, I
Speaker 2: must be done, and like so I don't even like
Speaker 2: scroll on my Instagram pictures anymore because there's so much crap.
Speaker 2: You go like two scrolls and you've got an AD
Speaker 2: for a mobile game that doesn't exist, and then an
Speaker 2: AD for a direct to consumer like low car product.
Speaker 2: I'm trying to be healthy, and it's just like discordant.
Speaker 2: The whole thing just feels like very weird. And then
Speaker 2: TikTok at least feels like, yeah, we're manipulating you, but
Speaker 2: we've got fun thing. Look at this.
Speaker 1: I love it. I find TikTok so. I don't want
Speaker 1: to sound like a shrill, but I think in terms
Speaker 1: of just like the algorithm as an entertainment platform, I
Speaker 1: find it fascinating. And again I'm very dull and boring.
Speaker 1: So I'm looking at travel to Paris.
Speaker 2: Videos and cooking videos. I just get a lot of
Speaker 2: cooking that's small representative of regular people.
Speaker 3: Though.
Speaker 2: You don't need to go like three levels deep of
Speaker 2: irony to enjoy something. You don't need the brain rot
Speaker 2: like and I need like extra brain. I need the
Speaker 2: shit that is like a like the golden Siva looking
Speaker 2: thing that says a type yes to affirm that you
Speaker 2: have been affirmed. Like I'm like three levels deep. I'm
Speaker 2: deeply unhappy, but you do normal stuff.
Speaker 1: Well, I want my friends to send me the brain rots.
Speaker 2: Right, That's how I curated.
Speaker 1: I get the group chat now now my Twitter is
Speaker 1: all brain rot That's how.
Speaker 2: I like perfect and blue Sky. Blue Sky's yes, and
Speaker 2: we're a pro blue sky platform.
Speaker 1: You're you're on blue Sky.
Speaker 2: I got one hundred and three thousand followers. I'm cooking.
Speaker 2: I'm cooking. It's the best. And actually blue Sky's interesting
Speaker 2: because I don't know how much time you spent on it.
Speaker 2: But I've really been enjoying it and enjoying the posts
Speaker 2: that are like, yeah, wow, I shared a link on
Speaker 2: here and everyone saw it, just the insane. We are
Speaker 2: beaten dogs, just like oh yeah yeah. I can see
Speaker 2: the people I follow and there's not just a groper
Speaker 2: in my reply telling telling me he's gonna bomb my
Speaker 2: house or three different people.
Speaker 1: You have a much larger presence than I do. I
Speaker 1: have been going. I've been a b testing right it
Speaker 1: works on Twitter, I don't know. I still feel like
Speaker 1: I still get more among my very small pool there.
Speaker 1: I feel like I still get more of a reaction,
Speaker 1: and I've I feel like Twitter is more unhinged in
Speaker 1: a way that I find pleasant. But to your point
Speaker 1: about avoiding newsletter ads, I feel like I can now
Speaker 1: just avoid.
Speaker 2: I mean I've been. I was on the internet using
Speaker 2: like usenet and v bullet and shit like I grew
Speaker 2: up on gaming forums like oh nazi h. That's just
Speaker 2: one of the many, many freaks that pops up on IRC.
Speaker 2: They should be stopped in numerous ways. But X X
Speaker 2: Twitter wherever we call it now is just it feels
Speaker 2: like it's falling apart. Actually it's getting not even like
Speaker 2: the cobweb feeling. It feels like being in like a
Speaker 2: big lots which no one has been in for a while.
Speaker 2: It's just there's just shit falling down. There's some weird
Speaker 2: guy in the corner and he's saying some things. You
Speaker 2: really don't want it. You don't want any business with him.
Speaker 1: Yeah, it isn't quantified, but a lot of the ads
Speaker 1: that I see now on x Twitter are now coming
Speaker 1: from Google. They're coming from Yeah, they're coming from x
Speaker 1: as a partnership with Google just for basic like open
Speaker 1: programmatic advertising.
Speaker 2: So just act oh they're in the hole, then no
Speaker 2: they must be. Is that having to move on too?
Speaker 2: Like a Google partnership.
Speaker 1: Yeah, so so so like a lot of when I
Speaker 1: was back home in Delaware where I'm from, right, Like
Speaker 1: the ads I would see on Twitter were from like
Speaker 1: the pizza parlor down the street, and I have to
Speaker 1: assume the pizza parlor wasn't spending that is hundreds of
Speaker 1: thousands of dollars advertising.
Speaker 2: Do you think that's a bad sign for CKS?
Speaker 1: Well, what's funny is I wrote a story about this.
Speaker 1: What's funny is when I went to the brands that
Speaker 1: were advertising there, I said, hey, you know you're advertising
Speaker 1: on X. They said what? Oh no, they said, what's X?
Speaker 1: This platform? It's just you know, it used to be
Speaker 1: called Twitter. And they're like, no, we're we're on Google.
Speaker 1: And I was like, well you have to go like
Speaker 1: did you go in and did you click on the
Speaker 1: X thing or whatever? And they're like no, well we
Speaker 1: don't know how in the window mat Essentially, you know,
Speaker 1: the Google algorithm believe that they can find cheap impressions
Speaker 1: on X and that's what happened.
Speaker 2: That feels like a bad sign for I'm sorry if
Speaker 2: they if they are like the equivalent platform of like
Speaker 2: they're gonna you know, they're going to add out Brain.
Speaker 2: They're gonna add out Brain and Taboola. And as a listener,
Speaker 2: if you don't know what out brain is, going to
Speaker 2: CNN dot com scroll down to paid content and take
Speaker 2: a look at that dog ship. Also, and I say
Speaker 2: this with respect to the many great reports at the Verge,
Speaker 2: it's also on the Verge, which is disgusting. These things
Speaker 2: are called chum boxes. They're cheap, usually affiliate marketing content.
Speaker 2: You hear it on an upcoming episode. We're really gonna
Speaker 2: get in the guts of them briefly and then punch them.
Speaker 1: I believe it's Tabula. One of them has a partnership.
Speaker 2: They do the definitely Outbrain on CNN.
Speaker 1: Oh yeah, but one of them has a partner. I
Speaker 1: believe it's Tabula. They have a partnership with Apple. They
Speaker 1: do all the InApp advertising, or they were doing a
Speaker 1: lot of the InApp advertising for AP.
Speaker 2: Is it still content stuff?
Speaker 1: I believe it's like Apple News And in.
Speaker 2: A company, what does it say about a society that
Speaker 2: company makes money? They should be in the Stockade's not
Speaker 2: in the stock market. It's disgusting.
Speaker 1: But the look on my face is couldn't say no comment.
Speaker 2: Now he has absolutely no opinions about this. Just to
Speaker 2: be cleared, let's move on to another subject, which is
Speaker 2: my favorite thing at the moment, which is so open
Speaker 2: Ai and Perplexity, so perplexity generative AI powered search engine
Speaker 2: too deeply unprofitable companies. Open Ai has been hinting Sarah
Speaker 2: for Ila CFO, I believe, has been hinting that open
Speaker 2: Ai would go into ads. And the response I've had
Speaker 2: when I've said this is silly is yeah, they'll just
Speaker 2: add ads. And it doesn't sound like you can just
Speaker 2: add ads unless you just plug in Google, which I
Speaker 2: don't think they're gonna do. It just doesn't feel possible.
Speaker 2: Maybe it's possible, it doesn't feel like something they're going
Speaker 2: to spin up overnight.
Speaker 1: So Perplexity, which is obviously the competitor to open ai
Speaker 1: and chat GBT, they they have started rolling out in
Speaker 1: ads model. At the time, they wanted to charge people
Speaker 1: fifty bucks a CPM, and that's very expensive.
Speaker 2: And that's cost per mile. Thousand impressions. Thousand isn't uniques,
Speaker 2: it's just thousand times this is shown.
Speaker 1: And that that is about fifty bucks a CPM. Is
Speaker 1: is what Netflix wanted to charge. Netflix being like the
Speaker 1: most premium inventory you could buy, and Netflix had a
Speaker 1: lower you know, like roughly thirty five.
Speaker 2: Oh yeah, perplex. These don't good.
Speaker 1: So so it's interesting that you do see these these
Speaker 1: ai search companies dabbling with this. SEO advertising is like
Speaker 1: light speed complex in terms of just like basic digital.
Speaker 2: When do you say CEO advertising? What you specifically?
Speaker 1: I mean advertising and search engines right there there it is.
Speaker 1: It's almost like a totally different ballgame. It's a different category.
Speaker 1: People that call themselves, you know, search engine advertisers. I
Speaker 1: don't necessarily think they would consider themselves regular advertisers, right,
Speaker 1: They're they're very uh, they've got a niche skill set
Speaker 1: and they're really good at it, and and and forever
Speaker 1: before Google did this overview answers. That's how Google would work.
Speaker 1: You you could buy and bid on certain terms, right,
Speaker 1: and then you'll link exactly. Uh And so long story short,
Speaker 1: what does that look like for open AI's advertising business.
Speaker 1: The thing I always go back to, and again this
Speaker 1: is very broad strokes, but like my mom isn't using
Speaker 1: a lot of the open ai products yet. And I
Speaker 1: think advertisers, your your blue chip advertisers, your your your
Speaker 1: bud lights, right, your your forwards. I I don't know
Speaker 1: they're they're interested in scale, they're interested in eyeballs. They
Speaker 1: want to reach as many.
Speaker 2: People don't like a niche tech product, even though three
Speaker 2: hundred million weekly uses sounds big. Yeah, that's still kind
Speaker 2: of niche in comparison to Google's billions.
Speaker 1: Off And there could be an audience. There's certainly an
Speaker 1: audience in Silicon Valiant in New York, and I'm pointing
Speaker 1: at myself and the tech doorks.
Speaker 2: That use these tools.
Speaker 1: But it would be really interesting to see how they
Speaker 1: build these tools out, what kind of questions they get,
Speaker 1: and who are the advertisers that are that are interested
Speaker 1: in this, like you could obviously Google has seen interest
Speaker 1: from a lot of shopping e commerce advertisers. If you're
Speaker 1: selling clothing, you might be interested in, Hey, what's a
Speaker 1: good outfit.
Speaker 2: I could wear?
Speaker 1: Like that's obviously a stupid example. It'll be interesting to
Speaker 1: see how they build this out to a great example.
Speaker 2: I'm assuming.
Speaker 1: I'm assuming obviously we've seen open ai has hired executives
Speaker 1: from from Twitter, from Instagram, from Google. I'm sure there
Speaker 1: are a lets smart people that are building that. It'll
Speaker 1: be curious to see how the market does respond to
Speaker 1: it and how much interest there is.
Speaker 2: But just to be clear, you don't just like plug
Speaker 2: the ads. That you have to do like an ad exchange.
Speaker 2: You have to have a place where publishers can buy ads,
Speaker 2: and then you have to have an exchange forbidding on
Speaker 2: the ads. And then there's something else I'm missing like
Speaker 2: at that, like.
Speaker 1: You'd have to build a platform that would allow ads
Speaker 1: advertisers to go in set the parameters that they want.
Speaker 2: It's very technical and you can't buy off the shelfe though.
Speaker 1: Like I mean, maybe you can white label it. You
Speaker 1: can go to a company that does that and say hey,
Speaker 1: give us the tech, and you still.
Speaker 2: Have to find a way to represent those ads within
Speaker 2: queries is the problem.
Speaker 1: And you'd have to have salespeople that go to the
Speaker 1: market and say, hey, you should buy our product. Advertising
Speaker 1: is outside of the monopolies in the space I think
Speaker 1: you know, Google, Amazon, Facebook, Those are obviously where every
Speaker 1: dollar goes. It's a really cut throat industry in terms
Speaker 1: of there's a lot of competition. I think advertisers might
Speaker 1: be willing to test and and try out a new platform,
Speaker 1: but it takes a lot of work to really pull
Speaker 1: the dollars from from a meta, from a Google, from
Speaker 1: an Amazon soalk.
Speaker 2: A while is it took him years to actually build up.
Speaker 2: And TikTok's business doesn't lose money every time anyone uses
Speaker 2: it every single time. It's just I've also had a
Speaker 2: lot of arguments online this week in general, but about
Speaker 2: this specifically, because the response is we will just add ads,
Speaker 2: the ads will be there. But it doesn't even sound
Speaker 2: like the economics of that, because they need they're losing
Speaker 2: five billion, ten that will probably lose ten billion next year.
Speaker 2: An ADS business that does five billion dollars a year
Speaker 2: does not seem something that you've just spin up overnight, right,
Speaker 2: That's not an easy lift.
Speaker 1: Yeah, I can't speak. I've never had to build an
Speaker 1: ADS planning right, although I will say, and this is
Speaker 1: totally different, it's a totally different industry. But you do
Speaker 1: see companies like Walmart, companies like Costco say hey, wait
Speaker 1: a minute, we can actually we've got a lot of
Speaker 1: data here, let's sell this to advertisers, right, and that
Speaker 1: those have very quickly become billion dollar businesses. That is
Speaker 1: not the same thing as a search engine.
Speaker 2: Right.
Speaker 1: People are typing queries into and then getting responses, and it.
Speaker 2: Isn't even obvious if they want to advertise do on
Speaker 2: search GPT or if they just want to do it
Speaker 2: on the regular chat GPT, because those are two different products. Also,
Speaker 2: I don't think people realize how difficult search engines are
Speaker 2: to build. Also, there's like tens of thousands of salespeople
Speaker 2: at Google, right, am I right in saying that rum
Speaker 2: there's a lot of people. Yeah, like it just doesn't
Speaker 2: It feels like an insanely big lift. And also the
Speaker 2: act an act somewhat in my opinion, don't worry.
Speaker 1: I'm curious what is your You know, most people as
Speaker 1: a default hate ads. If they can get Netflix, they
Speaker 1: want to get it without I'm saying people that can
Speaker 1: afford it are going to say, hey, I don't want
Speaker 1: to watch aids. I don't want to engage with that
Speaker 1: kind of stuff. What do you think about ads? Supported media?
Speaker 1: Ads kind of infiltrating everything.
Speaker 2: I think if the ads don't ruin the experience, they're fine.
Speaker 2: If the ads are part of the experience and you
Speaker 2: see them. I like them in newsletters, even though I
Speaker 2: may skip over them like that, just like immediately, I
Speaker 2: don't mind if they're not horribly interrupting. The reason I
Speaker 2: loathe Meta and loa like specifically like Instagram in particular,
Speaker 2: is their ads are intrusive and offensive at times they're annoying,
Speaker 2: and they're not annoying in a way it's like, oh,
Speaker 2: there's a banner at I can click away from that.
Speaker 2: It's like, no, you will see this across your entire phone, dickhead,
Speaker 2: look at it. Look at the new kind of low
Speaker 2: car bagels that don't even taste good. Yeah, they sold
Speaker 2: some bagels to me, but it's just I don't mind that.
Speaker 2: And I also like the option of paying not to
Speaker 2: have ads like I will do it where I need
Speaker 2: to like pay for Netflix that pay for Hulu because
Speaker 2: I actually watch a lot of stuff on there, and
Speaker 2: then Amazon did that, which is rude. But I don't know,
Speaker 2: I think ad support it's fine. It's just one of
Speaker 2: the reasons to what you want here is listeners need
Speaker 2: to know it is not just like you go and
Speaker 2: do like an adcompany dot com and then buy that
Speaker 2: for open Ai and then it works. I also don't
Speaker 2: think they have a lot of time, but that's a
Speaker 2: completely different subject. So all right, to wrap us up,
Speaker 2: what do you see for the next year within ads?
Speaker 2: It feels like a very chaotic time, especially with Lena
Speaker 2: Khan might be on the way out, probably on the
Speaker 2: way What do you think is gonna happen? What are
Speaker 2: you excited for or even just interested in?
Speaker 1: Yeah, that's a good question. One thing I'm particularly interested
Speaker 1: in is this kind of to my point earlier about everything,
Speaker 1: there's this cliche I think Eric Suffert coined it. He's
Speaker 1: an analyst in advertising, that everything becomes an ad network. Like,
Speaker 1: if you have an audience, which ed I believe you
Speaker 1: did I do, You're going to start selling ads, whether
Speaker 1: you like it or not, because it's found money. It's money.
Speaker 1: You looked under your shoe and or you looked in
Speaker 1: your pocket.
Speaker 2: And there was go people to sell to. You sell
Speaker 2: to them exactly.
Speaker 1: And everyone from to what I was saying earlier, everyone
Speaker 1: from Walmart to clearly open Ai has basically figured this
Speaker 1: out figured it out the same thing that Google and
Speaker 1: Meta did you know twenty years ago that hey, you
Speaker 1: can actually monetize this technology by selling advertising. I'm curious
Speaker 1: to see that now that everything is an AD network,
Speaker 1: how do you compete within that? If Uber is selling
Speaker 1: me ads while I am in their car.
Speaker 2: If I'm an.
Speaker 1: Advertiser, well, is Uber a goodbye? Is that better than
Speaker 1: a Google than I'm meta? There's going to be a
Speaker 1: lot of competition in the space and all of these
Speaker 1: kind of tertiary platforms. I'm really curious to see, like
Speaker 1: does that mean there's going to be consolidation? Does that
Speaker 1: mean that there's going to be these kind of like
Speaker 1: partnerships that pop up, Like United Airlines they're going to
Speaker 1: start targeting people with ads in the plane on the
Speaker 1: back of the screens.
Speaker 2: Some of them have done that.
Speaker 1: United Airlines. I believe it is the first.
Speaker 2: Today, I swear to God, I saw what I'm.
Speaker 1: Just so you might see an ad, so you might
Speaker 1: see an ad that everyone's see.
Speaker 2: I'm thinking of the Wi Fi.
Speaker 1: They're going to customize the ads to to each flyer
Speaker 1: on a United Airlines flight and that's interesting.
Speaker 2: So that's interest leave me alone.
Speaker 1: And there's an elon Musk connection. Because the way they
Speaker 1: can do it is because of Starlink, because they have
Speaker 1: a partnership with Starlink, which gives them the Internet, the
Speaker 1: power the advertisers.
Speaker 2: So they're able to actually and a closing questions, thought
Speaker 2: how at some point to your point about ignoring newsletter ads,
Speaker 2: at some point, I wonder if people are just going
Speaker 2: to get so oversaturated that they just stop breezing past
Speaker 2: this stuff that they just like, I don't care, I
Speaker 2: don't believe in, Like, I don't want to be harassed
Speaker 2: like this because talking to the few normal people I know,
Speaker 2: the non dogs, the people aren't smashing cars windows to
Speaker 2: steal people's wallets and such through listen to the show.
Speaker 2: Of course, their general thought is like these fucking apps,
Speaker 2: they're just like overwhelmed by it. Everyone's overwhelmed by everything,
Speaker 2: but the ads part. I'm actually really glad you brought
Speaker 2: up that everything becomes an ad network thing, because I
Speaker 2: think everything already kind of has. It's in your kindles,
Speaker 2: your phones, your planes. Now, I guess back of the car,
Speaker 2: you've got some weird thing on the back of Uber drivers,
Speaker 2: things that advertisers to you. Now it's so weird.
Speaker 1: Yeah, I mean I think, yes, people's eyes glaze over.
Speaker 1: But that's why they're willing to spend seven million dollars
Speaker 1: to get in the Super Bowl, right right, you need
Speaker 1: there are so few opportunities to get as many eyeballs
Speaker 1: as possible and to get people to pay attention. That's
Speaker 1: why as there's less and less surviving media out there,
Speaker 1: it becomes more valuable.
Speaker 2: Ryan, thank you so much for joining me. You are
Speaker 2: one of the best to have reporters out there. I'm
Speaker 2: so glad to have you. Where can people find you?
Speaker 1: Find me on? On Twitter? Ryan Barwick, Morning Brew. I'm
Speaker 1: so sorry I had to describe ad tech to you.
Speaker 2: No I had. This is literally the most important industry
Speaker 2: in tech, like other than like micro chips, like this
Speaker 2: is actually genuinely unlink thing. You can of course find
Speaker 2: me and I have actually changed my Blue Sky name
Speaker 2: and no, no, Mattasowski, I have not re recorded the end. Again,
Speaker 2: very sorry. You can find me on at exitron dot
Speaker 2: com on Blue Sky. You can still find me on Twitter,
Speaker 2: but I think I might be bloody done with that.
Speaker 1: That's what they are say.
Speaker 2: No, but I barely check it now. I feel like
Speaker 2: I feel the same way as I do with Facebook.
Speaker 2: I'm looking at Instagram more. It's disgusting. Anyway, you've been
Speaker 2: listening to Better Offline. Thank you so much. Thank you
Speaker 2: to Daniel GOODMANO producer as well. Thank you Ryan. Thanks
Speaker 2: for the listening. Of course, thank you for listening to
Speaker 2: Better Offline.
Speaker 3: The editor and composer of the Better Offline theme song
Speaker 3: is Matasowski. You can check out more of his music
Speaker 3: and audio projects at Matasowski dot com, M A T
Speaker 3: T O S O W s ki dot com. You
Speaker 3: can email me at easy at Better offline dot com
Speaker 3: or visit Better Offline dot com to find more podcast
Speaker 3: links and of course my newsletter. I also really recommend
Speaker 3: you go to chat dot where's youreaed dot at to
Speaker 3: visit the discord, and go to our slash.
Speaker 2: Better Offline to check out our reddit. Thank you so
Speaker 2: much for listening. Better Offline is a production of cool
Speaker 2: Zone Media.
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