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