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[intro music] This is the art of being a good financial analyst, though. It is capturing the vibe, since we're really talking about vibes and numbers. Boy, that's a good name for a podcast. Yeah, let's see that.

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Me and you, that's our new, like... I don't know about a weekly podcast. I don't think the people want that. I don't know how big the TAM is for that.

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[laughs] Too wonky, although we might get, uh, spreadsheet companies, like software makers or- How about Vibes and Sheets? That sounds like hipster, uh- [laughs] Okay, maybe not.

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We'll do- I don't know, bedding, linens business.

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[outro music] This week's episode is sponsored by XCo.

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This year's supply path optimization efforts are being felt across the media industry, and many digital publishers have been looking for ways to consolidate their video solutions without compromising high revenue or a positive user experience.

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XCo is an online video platform that empowers publishers to own their video strategy by offering a machine learning-based yield engine that focuses on revenue growth.

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XCo's platform includes everything a digital publisher would need to execute a successful video strategy on 100% of their pages without any license fees or upfront costs.

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Their AI-based solutions for video management, video monetization, content automation, and video recommendation are trusted by some of the largest publishers globally, including The Arena Group, CBSI, Hearst, Nasdaq, the New York Post, and others.

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For more information about XCo, visit their website at xex.co. [outro music] We'll go right in. I l- I wanna enter, like, right in media res. Uh, here with Brian Wieser. Brian is... I, I don't know what kind of analyst.

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He, he's at the intersection of Madison Street and Wall Street or Madison Avenue. Oh. So I guess that's where the ad agencies at one point were.

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I have no idea when that was exactly, because, like, even when I started covering, there was, like, pretty much no ad- Nope... agencies on Madison Avenue. And Wall Street, which I'm living down from- Oh...

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and I can tell you that they're, the financial firms are also not there. But anyway, that's your brand, Brian. Yep.

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[laughs] So I have spoken to you many times over the years because, you know, I try to fashion myself as someone who is, is connecting the dots and piecing where things are going, and I'm doing it based on vibes and talking to people a lot and then going and trying to find the data that supports what [laughs] the vibes say.

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But you start with the opposite, I feel like. That's a fair way to characterize it. You start with the data, and I think that is... Uh, 'cause it's like, honestly, there's, it's just a different way of doing things.

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Like, my background with being a reporter, it's just... They're kind of similar things in some way, but how do you describe, you know, your analysis? It's...

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That's, that's actually a really good way to characterize it, and I think there are some people who've characterized [laughs] some of what I do as, like, being almost, like, journalistic when it comes to the non-data part.

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Yeah. But no, I mean, some of this comes out of ignorance, and if I don't know what I don't know, but I can find some information to help me organize what I don't know, it's a good way to start.

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I mean, I, I've been, I guess, a, an investment banker and an analyst to start my professional career, although, you know, you go before that, I was an aspiring post-punk independent rock music guy, college radio person, whatever you wanna say.

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Mm-hmm. And so I didn't really know anything about the business side, but I certainly understood frameworks for understanding the business, pursued the CFA charter and business school and all that fun stuff.

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So it was a good way to learn and figure out things.

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But when you go from then, you know, a banking or Wall Street environment to Madison Avenue, as I did in 2003, advertising was kind of anathema to everything I ever did, and anything I ever knew. Why is that?

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Well, college radio, it's anti-advertising as much as anything. Oh, yeah. Yeah. And I, uh, in, in investment banking or Wall Street roles, you don't really know that much about the industry usually.

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You might make claims about how the industry will change, but you're mostly repeating others' assertions. Oh, yeah. Oh, I do.

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I mean, I was always on those, like, earnings calls, and I was like, "Oh, they sort of know some of the words," but, like, I'm also, I'm like, wow, at least before you weren't allowed to ask the question.

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The, the reporters were, like, on the call, but then I'm just like, "Who are these people asking these questions?" "Great quarter, guys." Yeah. And like they... I was like, their knowledge is kind of different.

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Well, and you have to separate the sell side and the buy side. And again, there's individuals with varying knowledge, and their goal is not to be experts about what they're talking about. Their goal is to make money.

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And if you happen to make money through expertise- Yeah, that's true... great, but there are many- That's actually a better model. What am I saying?

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[laughs] This is probably why they had a different, different departments than the journalists on the call are like, "We know more." Yeah, I mean, it definitely, I see how it works.

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Like, there are pathways to a billion dollars if you want that, and not everyone obviously gets there, but I see how it can work. But it really depends on what kind of floats your boat or yacht, depending on the case.

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Yeah, as it were. So let's talk about the state of the ad industry right now because, you know, this is kicking off advertising week, and I can remember the first advertising week. It was a glorious affair.

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There was a parade. Do you remember the parade of the ad icons? I remember it- Yeah... because it was like right after I started, and I was in the Grace, working at the Grace Building. It was a cultural moment. Yeah.

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The Pillsbury Doughboy comes walking by and- Yeah. I mean- Yeah... there, millions of people turned out. I don't think so. Anyway, they stopped that. I think they should bring it back. I agree. I agree.

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That's just my idea. Even if only five people showed up- But-... it's a great symbol.

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So one of the things is when I'm talking with publishers, you know, we do these, like, dinners and private dinners, and they're amazing, and you get people and, like, uh, maybe have one glass of wine, and then, you know, they start being a lot [laughs] loosened up and honest.

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The general feeling is like the advertising industry has been in recession all year, and I'm always asking, I'm like, "You know, I go and I read, like, yeah, Brian Wieser and stuff like this, and I don't s-see it in, like, the...

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I'm not a financial analyst. I'm a vibes analyst, but I don't see it in the results of other parts of the ecosystem." Yeah. Tell me that, that there is this sort of divide.

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I'm like, that might be a structural decline, which is worse.

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Yeah, I mean, it's really interesting where often the case, it's a case where a company's management says that there's a decline and that tells me that eitherThey have really bad internal anal-analysts or really bad internal insights, or they're just unable to recognize [laughs] or talk about the fact that they are losing share in, in many cases, or that they are misattributing secular changes to cyclical ones.

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And yeah, that's, that's pretty common what you just described.

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And, and unfortunately sometimes in, in the press, and it's not just press, but it also then becomes analysts, because again, analysts often repeat back what they hear the press saying under the premise that the press are quoting people who know what they're talking about.

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Unfortunately, the people who claim to know what they're talking about are CEOs who don't. Yeah, that's the, that's the bullshit supply chain you're talking about. I just... Yes, I did lay that out.

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And so, I mean, just take the... And again, just because the CEO of a company says something doesn't mean it's true.

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Even if they might believe it, they might just be wrong, and that's frequently the case when it comes to, you know, claims about how disruptive Apple changing its operating system was. Like, dramatic and say $10 billion.

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Well, no, probably not [laughs]. Yeah. There, there's a lot of the Chicken Little stuff that happens, and like mania, like moral panics, and I think it's like hard for... It's hard for me.

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It's like kind of, it reminds me of like hurricanes. Like when Hurricane Sandy hit, like, you know, over the years, and that was the height of like the weather channel, like ridiculousness with, with storms.

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You're like, "Come on." And next thing I know I'm like evacuating my apartment and like [laughs] getting blown over, like trying to like get to like high land, so- At least you could have your own barometer.

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Like phys- you could have an actual barometer, right, to monitor, and you probably, if it mattered enough, obviously as an individual it's hard to do it. You know.

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But you- I guess my point is like there, there was this thing around ad blocking that was gonna be the, the death of it.

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The, you know, it was like the, the, the duopoly is going to kill like publishing and stuff, and then it became an oligopoly, even worse, and then still people like, you know, "Oh, the, the third..."

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And now it's like the third party cookie is coming and this will destroy the entire, you know, swaths of the industry.

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And I'm like, "Okay, but just like, I'm just going down the line," and like I keep hearing about these extinction events that weren't extinction events. Often there's a misunderstanding- AI. Yeah.

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AI is gonna destroy everything. Well, I think people use the wrong frameworks for thinking about the industry somehow.

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And actually e- going back to the vibes that I would look for, you know, there's a great David Ogilvy line I learned about called that, that people rarely do what they say, what they think, or think what they feel. Yeah.

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And I'm always mindful of that.

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So when someone says, again, me, cub agency guy not knowing a thing, and people who should know the answers say, "Oh, Brian, it's simple when you're trying to understand the advertising industry.

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It's just where the demand is, look where the supply is and you'll find the pricing and you'll find the spending." And then I realized as I dug into this, no, that, that model doesn't work [laughs].

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Like, I built a model based on what this person said happens, and reality does not mirror what this person says. Yeah. A model, let's remember, is an abstraction of reality, right? You're always trying to create...

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It's like a painting on a spreadsheet. You're trying to represent- Mm... this thing that we call- Quite a canvas. Yes, it is.

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But it can be, it can be, and that's the beautiful thing about spreadsheets and numbers that can tell a story if you appropriately reflect it and capture it, just like a good impressionist painter. So- Okay, well...

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it's, it's very similar. And so- All right... when I would hear people say things, I would say, "Okay, now let me actually sit with you and watch you for a few days."

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And then I, I mean, I remember being horrified the first time I sat with a digital media buyer. Which kind? Just because it's like, "That's how you do this?" Like, "That's how you make decisions?

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That's how you choose inventory?" Or even with TV buyers, it's like, "So why do you..." This is the early 2000s. Like, w- Oh.

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How- Well, I mean, with all the data, we act as if like these things are such precision- Yeah... oriented machines, and we all... Like, that's not how it...

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Peop- humans make decisions in s- with so many different ways, and the people within advertising [laughs] are very human. Exactly. With all the human foibles. Foibles and contradictions.

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I mean, just take the un, un- Yeah... unfortunate, uh, slide that so many people in the industry relied on for so long, and even now will reference- Mary Meeker? Oh, you know where I'm going with this one [laughs].

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Oh, yeah, that's my favorite. Oh, thank God. I mean- See... knowing nothing- Even for a, for a vibe-based analyst- You're, you're good... that was the best. You're good. Yeah. No, but it, it's a great example.

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For those who don't know the Mary Meeker slide, it was the slide that showed the delta, and obviously I'm going into analyst speak, between, uh, time spent, uh, by medium and budget spent, and there was always a big gap between the time spent on, quote-unquote, the internet and the spending.

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That was a good, great summary. And it, it, because the framework- And TV was always overweight. Exactly. And that was always the thing, was like, where are the TV dollars going? Where are the TV dollars going?

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We've gotta make the internet safe for brand advertising, like people [laughs] are gonna shift their budgets from, I'm sorry, laughing out of retrospect, 30-second ads on a TV where the families gather around to like a banner ad on AOL.

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Yep. Didn't happen. Well, and it speaks to this- No, it happened, but it just went to Google and Facebook. Well, except... Well, hold on, let's pull this apart a bit.

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It speaks to an incorrect framework, an incorrect, like y- you look- Okay... at the historical data, you ask why this happened, and you try to make sure the model mirrors why decisions are made.

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The common narrative was always, it's time, it's how people spend time. That's what drives the money. And then I just realized, no, if that were true, radio would be a much bigger business.

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And that was always one of these great anomalies. Yeah. Well, if this logic that was in the Meeker slide was correct, radio would've had more spending and would've actually possibly even grown. Yeah. But why didn't it?

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The fact that it didn't- Because it, it was missing like three out of the four of like sight, sound, and motion. Yeah.

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So, so we're- I mean, well, if you're gonna, if you're gonna, like, if you're gonna try to affect someone with brand advertising, at least this is how it was always thought, everything has become DR now- But this is what people assumed...

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so it's just not gonna be as effective. But every academic study, and I'm not a radio defender to be sure, but everyone could say, well, they would ignore the radio line. Yeah.

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Every academic study you could look to around effectiveness of, of advertising would show radio is ridiculously high. Or take direct mail. Yeah. Same deal. And then of course-Print.

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First of all, go back to the underlying data, forget about the vibe. So tell me, Ms. Meeker, how exactly are you quantifying time spent with newspapers? Let's go through that process.

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And then if time is the driver of budgeting, w-well, first of all, no one has good measures of time in print at all. It just doesn't exist. It's not the right driver. A model, again, an abstraction of reality.

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What is the driver? What is the decision-making factor? And I realize there are subjective factors that tend to drive media plans at different segments of marketer levels, right?

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And if you can understand what that typical media mix is for, and you can make it a really simple model. Say there's three or four different segments of advertisers.

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They tend to have allocations to these kinds of media for these very subjective factors.

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They're often historically rooted, and they tend to evolve very gradually over time, for reasons that may not be the ones that everyone says to be true. Yeah. You can model that out.

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[gentle music] This is like, I know you just made a, you had made a compelling case for, uh, spreadsheets as a creative- [laughs]...

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uh, canvas, um, which I'm definitely gonna clip 'cause I think it's gonna go viral with the spreadsheet crowd. Uh, that doesn't fit on a spreadsheet, right?

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And I think that was the sort of, uh, I think w- if there's a criticism of sort of economics and stuff like this is like they're, they're looking at the data and they're saying, "Oh, inflation is like coming down.

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Like we look at this basket if you take it out." And then you go outside and you're like, "I just paid like $19 for a BLT. Like what are you talking about?" [laughs] Yeah.

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It, that doesn't like -- and I understand that it's a, a mix of things, but I think the subjectivity of advertising, and this is where the sort of like there is a, a mix between numbers and vibes, is that decisions are made in so many different ways, and actually the impact of advertising is not even fully understood, even with all, you know, it does so many different purposes- I agree.

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So the-... where when you try to scientifically boil it down to performance and just clicks and stuff, you're not, you're missing a lot of the stuff, right?

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Missing this- This is the art of being a good financial analyst, though. It is capturing the vibe. Since we're really talking about vibes and numbers, boy, that's a good name podcast. Yeah. [laughs] Let's see that.

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Me and you, that's our new like, I don't know about a weekly podcast. I don't think the people want that. I don't know how big the tan is for that.

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Too wonky, although we might get, uh, spreadsheet companies like software makers as- How about vibes and sheets? That sounds like hipster, uh- [laughs] Okay, maybe not. We'll do- I don't know, bedding, linens business.

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So you've gotta capture the vibe and the spirit of the budget justification.

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Go back to when I was at Magna, and the way I produced the model that we distributed widely to everyone, I laid it out based on share because I realized that if you're gonna make this abstraction of reality into a model, share allocations is the right way to characterize it.

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Because if you ask planners, "How are you thinking about your allocation to TV or print or radio or digital, whatever?" And there's no one answer, of course.

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Broadly, you could characterize it to say, "Well, we're," the year is two thousand and five, "60% television, we're probably 15% digital, we're putting probably 15% into print and 10% into whatever."

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And the next year you'd say, "Well, we pulled a couple percent out of this and did a couple percent of that."

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And it's not exactly that clean, of course, but it's the cleanest characterization I could make of how budgets would actually get allocated, right? Yeah. That's, it's expressing the model. Yeah.

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Can I just jump in with one thing? Yeah. But like, so that, Troy had mentioned this in the other podcast I do, People Vs.

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Algorithms, which everyone should listen to, and that is the reason that the top person in a category was way more profitable than the fifth.

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They had the same cost base, but like the money flowed downwards from the top down. Totally. Well, if you were the-- and this is true when it comes to sale.

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This is why it's so important to understand the mechanics and, and, and how marketers are, and planners are, are thinking. If you get the first look at a wallet, you will get a higher share of it.

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And so if the way, the process by which media gets planned and bought has relatively more favorable suppliers who can disproportionately satisfy a goal, whatever that goal is, so it's why broadcast networks could get relatively more money- Yeah...

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than cable. The, the up-fronts that everyone's like, "Oh, they're antiquated," their an- up-fronts were amazing. They're efficient. This is- Yeah, they were efficient. They were too.

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This is a thing that's not always appreciated as well. Like, people would constantly say this new thing is great and the, the old thing is a dinosaur. I've joked about a new business idea that I've got.

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Uh, Brian, would you like to hear about it? Yeah, please. Okay, well, here's this new business idea. It's gonna combine new apps, hydration technology, and drones.

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That, that should be, that alone in a, in a good year should raise, you know, ten million dollars on a hundred million valuation, right?

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Okay, so the idea is- I'm trying to think of the two-by-two chart that gets you on the upper-right quadrant. Oh, oh, gotta do that. Just p- I'll just pay a third party to, to put me there.

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So the idea is, all right, I'm gonna get this, uh, drone, I'm gonna go get it with a hook, and it's gonna lift a bucket in my backyard, and it's gonna fly 50 miles up the, up the river, and it's gonna go find some really good water.

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With my phone, I'm gonna cause it to lower that bucket into the river, and it's gonna get this water, and it's gonna bring it back up, and then it's gonna fly back here.

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Now it's gonna cost, you know, thousands of dollars per bucket, but I'm gonna get this advanced app-based drone-delivered hydration. Or I could just go- Yeah... turn on the faucet.

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This hundred and fifty-year-old- [laughs]... infrastructure, right? It's cheap. It works. Yeah.

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And that's kind of the thing that I observe with television or a lot of traditional processes that like they don't necessarily not work. And I think sometimes we just assume because something's new, it must be better.

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Yeah. And that's not necessarily the case.

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But I think there was also the idea, at least when I was covering it, was a lot of the money was wasted because of Nielsen, because they didn't, those people had the TV on, but they're in the bathroom, et cetera.

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Or they're using TiVo. [laughs] Remember, that was gonna kill advertising.

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Talk about another thing that didn't end up killing anything that like I, I was like, "Oh, wow, here comes another-" Well, again, I mean- As I get older, I gotta say, something is gonna come along that will be like an extinction event, and I'm gonna be like the old guy who's like, "Oh, this again."

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But like if it happens like 25 times in a row, I think it's inevitable that you become a little bit likeWell- Oh, God, another killer... but in all cases, good research can help provide the answers.

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So I remember again in 2003, I show up at agencies, and I hear everyone talking about the end of TV, and the, there were doomsday articles all over at the time because of, you know, TiVo. Oh, yeah.

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Remember the Bob Greenberg, the 30 second spot- Exactly... was where at, at RGA. Oh. Everything was gonna become like brand websites. Yep. Micro sites. And- Gonna replace TV ads... and I remember...

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Now I had just finished covering the cable industry, and I remember thinking, "Wait, don't these people realize that Comcast isn't gonna distribute TiVo, and so there's no real distribution plan, and they've got an order from Scientific Atlanta for boxes, but they can only make a maximum of like one million boxes per year 'cause no one's investing the capacity to do more.

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Motorola really isn't there yet," and so it's like, okay, mechanically this can't actually play out over for much longer than most people think. Don't people know this?

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Of course, you're not studying supply chains- Yeah... of Scientific Atlanta in Mexico. I get that now. And but at the same time, I would say, well, wait, but let's just see what other research is out there already.

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And so at the time, Sky, which was far and away the leader in terms of distributors of distribution of DVRs or PVRs, as the Brits like to say, they did- Yeah... a lot of work on this to understand what the behavior was.

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And the be- behavior was they, they looked at cohorts of adopters, the first adopters of the DVR, the first ones that got the first shipment in, I don't know, 1999, and then let's only look at what their habits are three years or four years later.

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And the study was very clear. It's like, yeah, they never consume more than 20% of TV through the PVR, and they skip like half of ads because they can't be bothered for one reason or another.

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Always bet on human laziness. Oh. That is what a- Totally. This was in a study I remember reading in 2003 or 2004, and it's like, guys, like has anyone done better work than this in the United States? No.

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Why is everyone worried? Yeah. Yeah. But I think, so basically, I mean, the shift though did happen from linear TV. Like, I mean, and so I guess what I wanna know from you is like who's winning right now share?

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Because, I mean, there's still a... The advertising industry is growing. To the wrong model. So where is- Hold on. This is really important. Okay. The wrong model. They assume with the- Or is it not growing?

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Well, ho- hold on. W- the model for thinking about what drives the human behavior, you're right, laziness is first, or whatever you've done before. But what persuades you to change your behavior?

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If someone else spends a ton of money on compelling you to do something different, and it took- Raw force. Oh, yeah.

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And if you said, if there's $70 or $80 billion of spending on content 10 or 15 years ago, and if all of a sudden 5% of that spending will go to streaming-based content or content you can only possibly access through a streaming device, there's gonna be a shift of consumption, and that becomes 10% of spending on content.

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Yeah.

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And by now, it's like if there's $100 billion of spending on content, there's $30 billion going to content on streaming services, it shouldn't be surprising if, for professional content at least, that's roughly the proportion of consumption.

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It's really clean. Whether or not people skip ads or not is dependent on where the content is. If the content's really good and sufficiently compelling, there can be ads.

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I, it might be too late, I think, for a lot of streaming services. But the point is, it took the brute force of spending billions of dollars on actual content that was only available in that environment.

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If Netflix had decided to become HBO in a linear environment and spent the same amount of money for an HBO competitor on linear TV, they would probably be in the same place they are now. Yeah.

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But at the same time, professional content is losing to UGC. Time is finite. And I can remember growing up, it'd be like it was a moral panic over how many hours a day Americans watch TV. [laughs] And it was always...

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I, I don't know if you've looked into these numbers- Oh, yeah... but they were always bullshit to me. I'm like, "There's no way people are spending seven hours a day watching the television." I just do not believe it.

141
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There's must be a lot of people watching TV for 20 hours a day- Well, actually-... because I, I just don't believe the average person was watching, very few people. I didn't know anyone who watched seven hours of TV.

142
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I don't believe- So-... like that was a common behavior... I would argue that the, more specifically, there was eight hours of consumption in a household in a typical day.

143
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The in- average individual is more like four in the US. I totally believe it. Okay, maybe with the TV on. Yes. There, there was those weird people who left the TV on all the time.

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Yeah, but actually you can look at different cohorts- Like was in the report... and you could say like the first decile or, or quintile, it's like you or me, like we don't actually have it on that much.

145
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But honestly, I've got Bloomberg on 13 hours a day because- Yeah, but that doesn't totally count Why not? That's what I mean.

146
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Well, anyway, the, I, I guess my point is there's only so much time in the day, and everyone is just...

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The TikTok and Instagram is sucking up so, so much time that professional content is losing because, like, the financial model cannot compete. Uh- Am I missing something? Yeah, a little. A little.

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I mean, it's at least it's a point of disagreement I might make. It's not to say 'cause there's no definitive answer. Okay. No, there, to be clear, there, there's- That's very polite, I like that...

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there's things where I'll pound the table and say, "Nope, that's wrong." In this case, it's, it depends on how you wanna look at it.

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So the way I would characterize it, I don't have access to, you know, Nielsen and POWER at the present time, so I, I, I can't say I've independently pulled this data. Someone get Brian a login.

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[laughs] One of my listeners please- Yes... discreetly give Brian a login. So- I used to have to do that with Comscore. Oh. I used to have to ask people. They wouldn't give me access. I was like, "Can I just buy access?"

152
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And they wouldn't- What?... sell me access to Comscore. Oh. 'Cause I, 'cause I was like, they gatekeeped the information to, 'cause they wanted to protect their clients. The embarrassing stuff, they wouldn't give me.

153
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You know? Like, I knew people were, what they were doing with their traffic, but they wouldn't give me... They had the evidence, but they just wouldn't give it to me.

154
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That's really, that's a sign of lack of confidence in a product. Yeah. But- Well, I mean, I don't know, like they just wanted to control it. I don't know.

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They, I mean, when people cite data from these sources, these companies are doing this for marketing purposes. True. So it's serving a role in the sales process.

156
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They're not devoted to, quote-unquote, the truth or da- like, it's, this is for a purpose. They're releasing this data because it, they think it's gonna lead to a True. True. That's a fair characterization.

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I don't think anyone listening to this, uh, would be, like, horrified by what you said. No, they, no, no, that's true. That's true. But, but okay, so- Oh, my gosh...

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so here's my characterizationTelevision in a broadly defined, professionally based video content form is probably stable, maybe even growing a little bit in the US at least.

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The ad-supported share is declining pretty significantly. It's possible that total video consumption is declining a bit depending on the period of time.

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I mean, again, Nielsen's giving us some data through the gauge, and so you got something there.

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But the point is, assume stable, but assume that the ad-supported piece is falling, and then again, certain demo groups, it might be falling dramatically because the percentage of people who are paying up for the ad-supported tiers is still relatively small.

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And every hour of time shifted out of linear ad-supported TV that does go into streaming, because that's where all the spending on content is, means a loss of like, you know, three ads for every one, you know, for one ad for every...

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You end up with one ad for every three you used to get exposed to, something like that. So there's a meaningful loss of ad exposure in this world. That's absolutely the case.

164
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But the total time spent from a consumer perspective, you know, it's not radically different now versus five years ago. But what's happening at the same time is that there is more concurrent content consumption.

165
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And so there's always been different forms of multitasking, but it probably- Yeah... is up a lot.

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The best study for this, I don't know if you remember, the Committee for Research Excellence from two thousand and eight, nine. The, the thing that still never fails to, it never- I don't remember that one weirdly.

167
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[laughs] But that might... I think that would be very strange if I was like, "Yeah, of course."

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You would get a kick out of this because it is, to my knowledge, the only proper full-scale ethnographic study of media consumption- Oh, really?... in the modern era.

169
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And it's stunning that no one else has tried to replicate it.

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It costs in the low millions of dollars, funded by Nielsen, but administered independently by thirty or forty different independent media owner-based researchers, but administered by Ball State University.

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And so it was like several hundred homes participated in this ethnographic study where for weeks, I believe, there'd be an individual standing in your home watching you do stuff. Oh my God, what a terrible...

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How much did they pay these people? Well, they're PhD students I think. I, I mean, well, isn't this gonna skew the data? `Cause like, again, like, I wonder, like, who would- Oh, the homes?... opt into that.

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No, the homes I believe were actually representative of a broader population in Muncie, Indiana, or wherever. No, I mean, it's a, it's a good study.

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They just would have some like, some random PhD student living with them and writing down, like, what they're doing. I believe that's how it worked.

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I, I, I should re-read the process, but- That is a, that is very intriguing. It's, it's the only way, but it's the only way to get a proper- I understand. Okay, so what they tracked was multitasking.

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They looked at how much TV consumption is occurring where TV is the primary medium versus the secondary versus tertiary, and what was the other thing that people were doing at the same time. Mm-hmm.

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And then there is no study that's comparable to this. Yeah. And then they did, they- So then, I mean, that, that's another example of why time spent is, like, the worst metric. It's a metric.

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I guess it's like- It tells you something...

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it tells you something, but, like, time spent should not be your guiding metric, `cause first of all, there's time is spent, like it's overlapping, and there's like a dominant, and then there's a secondary.

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Like, if you're watching a football game live on a stream, on a network, whatever, and you also have your phone next to you, those are not equal. You might be in like bimodal- Yeah... but like they're not equal.

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So here, that, that's true, and now you're hitting a really important subtlety.

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But where I was going to go with the time spent thing, what I think a lot of people conflate or mistake is that time spent inside of a medium is a really good metric to look at.

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So the fact that NBCU properties might have twenty percent of TV consumption and let's say AMC has four percent, you should reasonably expect that NBCU properties will have five times the revenue, if not more, some little bit of a premium because of the breadth, right?

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But if you said if NBCU is twenty percent going to twenty-one percent, and the Paramount properties are eighteen percent going to seventeen percent of total available gross rating points, right, which is fundamentally a metric of time, that is where time and money actually do relate to each other really well.

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But I think what people mistake or, or, or are unaware of is those time spent metrics are primarily useful inside of a medium when it's directly comparable to something almost identical. It's hard to apply this- Yeah...

186
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across media, though.

187
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[gentle music] My former colleague, Sahil Patel, gets so angry about, like, you know, when someone like Elon Musk compares, like, the views that Tucker Carlson got on Twitter to how many people tune into Fox News.

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Yeah. It doesn't speak to a sophisticated view of... I mean, I don't doubt that the man's a genius, but that is like the oldest- Not a statistician when it comes to media...

189
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the oldest trap of saying that you don't really quite understand how media, the media business works, I think. Tell me you don't understand the media industry without saying you don't understand the media industry. Yeah.

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Let's talk about views. Well, that was always the, uh, you know, if you moderate, uh, one of these panels, if you do sort of tune out- [laughs]...

191
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and you just kinda come back, too, just say, "Okay, let's talk about metrics." Or you can start talking about privacy in metrics. I mean- Yeah, let's talk about privacy... both important. Well, this is another one.

192
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So, so let's actually touch on that. Does any of this, `cause again, the sky is falling.

193
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The, they're, the sort of free for all era of, like, sucking up data and doing God knows what with it in the back of the room is, are seemingly coming to an end.

194
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They're, you know, everyone's whined about GDPR now for almost a decade. I guess it's been a decade.

195
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And they said it was gonna destroy the internet then, but now the third-party cookie's being deprecated, at least at some point. It's gonna destroy the internet. I don't think it will.

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What is the net impact of all of these moves that if they have made m- my privacy more protected, I haven't noticed it, but, like, I have been clicking on a lot of cookie banners blindly.What has been the impact on the advertising industry?

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Well, I mean- Has it just been like any regulation, and it's just led to higher prices? Yeah. But it, to be clear, I think privacy and related issues are really important and underestimated and underappreciated even now.

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The basic premise that, you know, your data should be like your organs, you're not allowed to sell them at any price, uh- Depends on the jurisdiction. I don't know. I'm doing this from Florida. Fair enough.

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They're selling reptiles here. I mean, you can do a lot of stuff. That is Florida, that's true.

200
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But the, the basic spirit of it, as I understood some of the, you know, the roots of, uh, of GDPR, like I, I get it, especially if, you know, if it was written by people who grew up in East Germany and are afraid of what can happen to data.

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Trying to get something of that in, into, into law is not a terrible thing. Trying to get people to think about the data and the possible consequences is not a bad idea.

202
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Okay, [laughs] so you're giving them the A for effort. Yeah, totally. Get, give, give me the grade then for the execution later.

203
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Well, okay, so then marketers I think are the ones who made the mistake in terms of not appreciating fully, and, uh, and media owners too.

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The basic, basically what, what GDPR said to marketers was, "Marketer, if you cannot persuade a consumer to part with their data, perhaps you don't deserve it," right? Yeah.

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Read the text of GDPR and have that in mind, and it's like, okay, makes sense. It's not unreasonable. Yeah. So I don't think marketers properly appreciated that, certainly not going into it.

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It's like the ra- it's like the RadioShack thing, right? What's that? Like, I mean, the... I know you remember RadioShack. I remember RadioShack.

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Like, you would always go in, and they'd be like, "What's your phone number?" Oh. And I'd be like, "I just, I just bought a stapler or whatever." Like, I guess not a stapler.

208
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It's not staples, but I just bought like, I don't know, a cord or something, and- Yeah...

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you know, they were kind of quasi-forcing you to give up your data when you're just trying to make like a transaction, and I didn't want... I don't, like, why are you on my number? Like, what- Yeah.

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And like, I'd be like, "No," and they're like, "No, we, we just do it at every..." And I'm like, "That's strange, no."

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And I've always argued, and I g- I remember arguments going back 20 years even with, I don't know, a really good academic, Professor Joe Turow, who's done a lot of good work in privacy.

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I remember debating or discussing with him when it, in the 2000s that I think that many people are concerned about privacy are overestimating what marketers can actually do. Doesn't mean that the spirit of- Oh, yeah...

213
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right, in RadioShack, we, we saw how good RadioShack was with all that first party data, right? It doesn't necessarily do it, get you anywhere. [laughs] No.

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[laughs] But, but I think that the spirit of it is the right one. Absolutely, and I think that marketers should be thinking in those terms, and it probably makes a marketer a better marketer to think in those terms.

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And I think that we're at a point where marketers do in fact care for the most part. They recognize the pathway forward.

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They know the right side of history to be on for these purposes, and I think that most of them genuinely are trying to, at least larger brands, are trying to work in that world.

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They've all seen the consequences of like data breaches, and that it can actually hurt the brand. Yeah.

218
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And so- Okay, but like when we get down to spending, who benefits from a world in which data is more permissioned- Yeah...

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if you will, if that's a word, and is more expensive because any time it's gonna be s- there's scarcity, it drives up prices. Does this benefit content publishers who are trying to get it? Well, here's the thing.

220
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The total... And this is also something that people misunderstood when GDPR came into effect, so we had a good opportunity to see this at a large scale in a, in a jurisdiction.

221
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The, I argued going into GDPR, the total spending on advertising would not be impacted, but the share of spend might shift a bit. That is what happened, right?

222
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You cannot look at the data without seeing that and say that there was any noticeable impact on total spending despite what was a massive change regulatorily speaking, right? But- Yeah...

223
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what happened was- But it went to the people who have the most data, right? Exactly, because in advertising- And that's platforms. Yep. That's why the platforms were like, "Yes." And that was, that was also predictable.

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"We need, we need a global-" Yep. "We need a national global privacy law passed." They just want to lob in these things. More regulation absolutely has the effect of protecting incumbents, all else equal.

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What I think is funny is like there's a lot of people who are incredibly anti, you know, the stranglehold that platforms have, and then like when something comes like these privacy regulations, they're literally on the same side as- Yeah, they don't understand, because-...

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you know, the people that they're also regulating. I'm like, I don't know, I guess- Back to our vibes versus models... but it doesn't seem very strategic.

227
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The thinking un- b- between the people who would, would have made those laws probably was very anti-Google, anti-Facebook, and the problem is that there, you have the wrong framework for why budgets get allocated the way they get allocated, you end up with that consequence.

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And I could have told you, data is a least bad alternatives business, right? It's not about whether or not data's any good or not, but whether it's better than the next best alternative.

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It's all bad, it's all flawed, it's all limited. See RadioShack.

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You can't do that much with it, not as much as a lot of people think, even though you make claims to the contrary, in most cases with most marketers and most media owners.

231
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But with that said, everyone wants to try to use data wherever they can to make a bad situation incrementally better. So you're given data to use. Will you use it? Sure. And you'll look for the least bad data available.

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So if you, you're t- telling me a regulator says, "Okay, you can't use data this way," or, "You can't get data that way," fine.

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I'll work with whatever I can work, and it's all bad, it's all flawed, just like it was before, but it's differently flawed. Now I'm gonna find the least bad data available.

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Who benefits, to your question, is whoever has the most least bad data [laughs] and that's why the platforms benefit. Yeah, exactly.

235
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It's funny because you ta- I talk about it too, like, you know, like the myth of scale does matter in a lot of areas, and data is because it's g- yes, there's gonna be a bunch of flawed data, but like you can just, you can win by sheer force, and- Well, if I may, scale, so there, there, there's m- another nuance to consider, uh, and sometimes we, we, we have the right idea but sometimes incomplete and, and sometimes an- uh, regulatory bodies or analysts or others are, are looking incompletely.

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I agree scale matters, but on what dimensions exactly? And you mentioned earlier how, you know, uh, you know, w- we've seen the, the, the so-called duopoly- Well, scale and data assets.

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Like, I mean, if you have more first party data, you're gonna do better. All else equal, yeah. Like, and that is like literally just like all better. All else equal. But, but- Like, it doesn't go over to like content.

238
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If you have more pieces of content, it doesn't mean better. Correct. Yeah, totally, totally agree.

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Like, I don't- And, and I think there can be a proxy for if you have a bigger budget for contentIs there going to be a relationship between if your share of spend on content is higher than it was before, are you going to see more audience?

240
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Yes, almost certainly. Just randomly, you would expect that to be the case if content is priced fairly.

241
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But the, the point I was gonna make that I think a lot of people missed out on is the biggest trend that's been happening globally that's been underappreciated is how much the industry's globalized while a lot of people weren't looking.

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And so we unfortunately tend to focus too much on the countries we're based in, and regulars tend to do the same. And so- Well, I mean, excuse me, we're not based in like Belgium, though.

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I mean, we're [laughs] based in a, the b- by far the biggest media economy, and so the companies are more likely to focus on their domestic market when their domestic market is massive and huge. Right.

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Except where I'm going is the consequences for Belgium, let alone Malaysia and everywhere else, are that the American state have taken over.

245
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And it's to say, we, look, we don't see it quite the same way from here in the United States.

246
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But what I'm getting at is, so I've estimated that in twenty sixteen, the twenty largest sellers of advertising account for about forty-five percent of all advertising.

247
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In twenty twenty-two, that number is about seventy-two percent, right? What's happening is single country players are getting obliterated. Oh, okay, yeah.

248
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And that's the biggest trend that's going on that people don't seem to fully appreciate.

249
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It's the globalization of the industry in a way that, yeah, we kinda say it in a truism kinda way, but we don't really fully appreciate it.

250
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But I mean, the globalization is just, I mean, by their nature, I mean, this is the platforms driving this, right? But it's all platforms.

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I mean, it's not- It's like every, any player that's operating at a multinational level takes share, full stop. So scale, ba- this is back to the point you made about scale mattering. It does, and at a global level.

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So the Snaps, the Pinterests, the, you know, go down a tier.

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I mean, the fact that, that a Pinterest is a top twenty seller advertising globally, I mean, bigger than Media for Europe or JC Decaux, like that sort of thing, right?

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Like, there are big global players that are losing share by the day, and that's one of the biggest trends that's not appreciated. So all these players that happen to have... It's not even about data.

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It's just that they're on line items of media plans everywhere around the world, and they're taking share collectively because of the, they can apply scale in a way that single country players can't. Right.

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But it's mostly technology companies. Yeah. What I'm saying is like, is the, is it globalization, or is it just technology companies which are global by their nature- Well, the thing, they can do it more efficiently...

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are, are gobbling up big percentages, right? So it's like, it's not like it... Is it a competitive advantage to be a, a quote unquote global content-based media company? I don't know. Is it?

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So I would argue if, pick a so-called linear traditional media company, if they had invested in more individual markets and had been willing to take the losses to do so, would they have bigger share of the world?

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Absolutely. The difference is that Snap and others have been willing to do it without making any profit. [laughs] Wow. Zerp. I- That's my point is it's not about- I wanna do a Zerp as a- Zerp, that's a good one.

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It's not about the whether-- I mean, yes, technology just means you think you can do what you're doing more cheaply and that you can build the platform once and run it out in, in a hundred different countries relatively easily.

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But it's not to say you can't do it.

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I mean, it used to be the case that the RTLs of the world, the JC Decaux of the world, you know, they were in-- and even many American media company, the traditional media companies, were investing in countries around the world, but it means having feet on the ground, right?

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It means it takes a little bit longer to do it.

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But the willingness to do that and make those kinds of investments in the long term isn't really there for most of the traditional media companies, and that's a bigger problem, that they don't have faith in their own businesses in many cases.

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Publishing, if I may, as a great example, and you'll, you know, I'm sure you, you'll have seen this or studied it a lot more than I have.

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I would argue one of the biggest problems in publishing and journalism in general is that the owners of publishing from the ninety, nineteen nineties believed wrongly that they could sustain their profit margins, and so they failed to invest sufficiently in the thing they knew was coming.

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When I looked at the top ten sellers of advertising twenty years ago in the US, the fact that Knight Ridder- Yeah... and Gannett, The New York Times were all among them is stunning. Yeah.

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I mean, it was mostly self-inflicted- Yeah... wounds. I think we've gone beyond the Craigslist, blah, blah, blah. They coasted like most monopolists- Yeah... and oligopolists do. They missed the transition.

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That's why they usually fail. But they missed the transition to national. They killed themselves. That was the thing. They missed the transition from- Yeah.

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Well, like, even, so even, like, and The New York Times is the exception to the rule- Absolutely... I feel like in the publishing industry. And, like, let's go back in time, though.

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They had About.com, which became Dotdash, and which is now Dotdash Meredith, and they treated it notoriously as just an ATM. They totally didn't invest in it. They didn't see the value in it, and they had that...

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This is the best run of the publishing companies, at least if you look at it now. Fine, it's gone through different, you know, management, but, like, they totally screwed up that opportunity. Yeah. And I- Totally...

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I think that, that there's, it's, mismanagement is an underestimated factor explaining why the world is where it is. [laughs] Okay. That's for our next Vibes and Numbers. Vibes and Sheets.

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I think we call it Vibes and Numbers podcast. Vibes and Sheets. It'll grow on you. All right, Brian. Thank you. Always good to talk to a fellow Brian. Absolutely. Thanks for having me.

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[upbeat music] Thanks for listening. Thank you to Jay Sparks for producing the Rebooting show. If you have a podcast that you're considering making, you should check out Podhelp Us and what Jay can do for you.

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Go to podhelp.us.

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