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When Big Tech Kills the Ad Industry
37 Plays27 days ago
In this episode, Eric talks with advertising author and former agency CEO Bob Hoffman about the incentives quietly shaping the modern digital world.
The conversation begins with social media and children but quickly expands into a broader discussion of advertising, platform economics, AI, media buying, creativity, and the concentration of power inside a handful of technology companies.
Bob argues that many of the problems people associate with social media are not accidental. They are predictable outcomes of business models designed to maximize attention and advertising revenue. He explains why outrage consistently outperforms nuance, why advertisers continue funding platforms they publicly criticize, and why legislation has struggled to keep pace with technological change.
Eric and Bob also explore the future of advertising agencies, the difference between brand building and performance marketing, the limitations of digital metrics, and why creative thinking is becoming increasingly undervalued inside organizations.
The discussion closes with AI, cyber warfare, and a broader question about modern society: What happens when more power becomes concentrated in fewer hands?
Rather than treating advertising as a narrow business topic, this conversation explores how incentives shape culture, technology, institutions, and the decisions we make every day.
Questions Answered
- Why is social media so harmful for children?
- Why do outrage and conspiracy theories spread so effectively online?
- How do advertising incentives shape social media platforms?
- Why hasn’t legislation kept pace with digital platforms?
- What is Section 230 and why does it matter?
- Why are advertising agencies losing influence?
- Is performance marketing replacing brand building?
- Why are digital advertising metrics often misleading?
- Why is creativity becoming less valued in advertising?
- How are Meta, Google, and other platforms changing the advertising industry?
- What risks does AI pose beyond marketing?
- Why is concentrated technological power a societal concern?
Episode Links
- Bob Hoffman’s books on Amazon: https://www.amazon.com/stores/Bob-Hoffman/author/B007W8R8H6
- Bob Hoffman’s website: https://www.bobhoffmanswebsite.com
For more episodes: https://unfoldingthought.com
Questions or guest ideas: eric@inboundandagile.com
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Transcript
Introduction to Bob Hoffman
00:00:02
Speaker
Bob Hoffman, thank you for joining me. This is your second time on the podcast. yeah Would you mind reminding me a little bit about you and your background?
00:00:13
Speaker
I'm a former advertising executive, CEO of a couple of agencies. I retired a while back. Since then, I've been writing and speaking about advertising.
Bob's Influence in Advertising
00:00:27
Speaker
I've had seven books that were number one sellers at Amazon in the advertising category. And I've spoken in 24 countries.
00:00:39
Speaker
I am not doing any more speaking because I'm sick and tired of traveling, and it's it keeps getting more unpleasant every day.
Social Media's Impact on Children
00:00:49
Speaker
so I'm done with that.
00:00:51
Speaker
um But I'm still trying to keep my finger on the pulse of the advertising industry, um and I'm not...
00:01:03
Speaker
as connected to it as i once was, but I still try to keep up with the the main topics, I think. When I reached out to you, you sent me a couple of things that you've been staying on top of or that you're interested in. And so I wanted to start with one of them, which is social media and kids.
00:01:26
Speaker
So it seems like we have reached fairly broad agreement. You can ask almost any group of people what I think about the impact of social media on kids. And yet very little is happening, whether we look at legislation or whatever else.
00:01:42
Speaker
So I'm really curious about, Bob, what do you think about social media's effect on kids and why do you think it was happening? It's very unhealthy for kids. I don't think there's much question about that. um Kids on social media are exposed to inappropriate content.
00:02:02
Speaker
They experience mental health harm often. ah They um suffer addiction to it, and and this this causes attention damage.
00:02:16
Speaker
There is cyberbullying and social cruelty um among kids in social media. There's sexual exploitation and grooming of young girls.
00:02:32
Speaker
ah There's distorted identity and body image problems. There is political and ideological radicalization.
00:02:45
Speaker
And there's manipulation by influencers. So those are some of the problems, obviously, with um with social media for
Advertising's Role in Harmful Content
00:02:56
Speaker
kids.
00:02:56
Speaker
Now, one of the disturbing things is that the degree to which the giant web platforms rely and thrive on an inventory of outrage and an inventory of unwholesomeness for kids, AI-generated nonsense, lies, conspiracy theories, pornography, and hate are all part of what makes these these online platforms so powerful and so dangerous to kids. It has evolved into a crisis that touches every family in the world that has a kid.
00:03:39
Speaker
Every parent is concerned about what their kids are seeing online. Yet nothing is seriously being done. Everyone's pounding the head, oh, this is so terrible, this is horrible, and nothing is getting done.
00:03:57
Speaker
Bob, when you say nothing is getting done, i think probably one of the first responses that you'll get is that, you know, we see the phone-free schools movement, if you can call it that.
00:04:12
Speaker
And i have my own opinions about that, but do it sounds like you think that's not nearly enough. It's a footnote. It's not anything substantial.
00:04:23
Speaker
One of the horrifying things about this is that it's the advertising industry that is financially supporting all this. All the web platforms are get their money from the advertising industry. for Facebook, I think it's like 97.8% of their revenue comes from advertising. everything and the advertising industry has done absolutely nothing about this. They continue to support this rotten thing for kids, and they could do something about it.
00:05:05
Speaker
They could do something about it, but they haven't. Now, we saw a couple of months ago, two court cases ruled that Facebook and Google through YouTube were criminal in the way they have utilized their powers.
00:05:24
Speaker
And ah nothing has come of that. that Either agencies, talking particularly about media agencies, are too stupid to understand what's going on or too greedy to care about what's going on.
00:05:42
Speaker
But it's very clear that these platforms are doing enormous damage to kids and that we should be doing something to stop that.
00:05:54
Speaker
So if I look at other media, other channels, you know, if I think of broadcast TV, for example, so let's go back to, I don't know, 1998 or something like that. perhaps.
Targeting and Privacy Concerns
00:06:09
Speaker
Sometime before algorithmic driven feeds and programmatic advertising, you know, there was targeting. Certainly there's always been targeting with advertising.
00:06:22
Speaker
Eric, the targeting back then was demographic targeting. It was aimed at a group. It wasn't individual targeting. That's what makes this so much more dangerous. this is They know what every individual, they have files on billions and billions of people. I think Oracle's claims they have, a few years ago, claimed they had files on 5 billion people.
00:06:49
Speaker
In the world. that At the time, that was everyone with an internet connection. They had files. And I'm sure Google and Facebook have equally robust files.
00:07:03
Speaker
And... um The fact that we are now targeting individuals rather than demographic groups, how we used to target in 1990, whatever you said, 1999, 1990, makes a huge difference.
00:07:17
Speaker
makes a huge difference even if I don't capture the whole picture of incentives and where the dollars and cents are coming from, i think it's easy enough to recognize that if Meta or YouTube or whatever can keep me on site or in app and reloading and interacting in one sense or another, swiping, clicking, whatever, yeah as much as reasonably possible, then...
00:07:48
Speaker
they can generate more dollars from someone else, an advertiser, and as opposed to, I don't know, some of these tech platforms that try to be more wholesome or however we might describe them, and they never last, right? You know, there was ah probably decade ago or more, there was a platform called PathPath. I think it was where you could only connect to 150 people. I don't even know if that exists anymore.
00:08:16
Speaker
And all of these attempts to create something that gets away from the attention economy type thing just never work because i think there's this fundamental aspect of the, of the economy, I guess the digital economy that comes back to How long can I keep you engaged so that I can generate more dollars from advertising?
00:08:42
Speaker
Exactly. the The longer they can keep you inside the corral, the more they can sell your time to their customers, to their advertisers.
00:08:53
Speaker
it's ah It's a simple economic work. principle, not difficult to understand. The hard part is, that the dangerous part is the way, it turns out, the way to keep more people inside the corral is through outrage, through scatological things, through pornography, through conspiracy theories, through These are the things that people are attracted to, sadly.
00:09:27
Speaker
And as a result, that's what they do. they all all that They don't really care about what the content is. They pretend they care, but they don't. They just want content that's going to attract eyeballs and keep them there for a long time and take you down rabbit holes ah through the algorithms And it's a very simple economic ah process.
00:09:55
Speaker
and That's how they make money. And it's doing a lot of harm to the world and particularly to kids. But ah there is no one willing to step in and stop it.
00:10:10
Speaker
And, ah you know, the the main problem, if you want to go all the way back to the beginning, it happened in 1996 with something called
Regulatory Challenges and Platform Power
00:10:21
Speaker
Section 230. It gave...
00:10:22
Speaker
it gave online publishers' protection from being responsible for what they were publishing, which no medium in history has ever had before.
00:10:37
Speaker
Yeah, this was the distinction that they make between, you know, they claim like we're a platform. Right. We're not the publisher creator or something. Right. Yeah. They say they're not publishers. They're they're a billboard, which is total bullshit. Right. The algorithm pushes certain things and and these platforms want to claim that they have no influence. Yeah, they're a disinterested third party. It's total bullshit.
00:11:05
Speaker
That allows Facebook, Instagram, X, TikTok to publish anything they want without responsibility.
00:11:18
Speaker
No other medium can do that. If if I publish a lie about you in the New York Times, you can sue me for a libel or you can sue me, you know. and um But if you if I do it online,
00:11:34
Speaker
You got nowhere to go ah because I'm protected. And it's ridiculous. It makes absolutely no sense.
00:11:44
Speaker
And yet it continues. And you said that advertisers, you know, the big, I guess, media buying agencies could do something. But whether it's whether you want to start there or with legislators or someone else, why do you think nothing is changing?
00:12:04
Speaker
ah Because the platforms have too much power. They have, ah in many ways, they're more more powerful than countries in some instances.
00:12:16
Speaker
For example, Ireland is the country that's responsible for enforcing digital policy in Europe.
00:12:29
Speaker
Ireland is hand in glove with Facebook because Facebook produces a lot of jobs in Ireland, a lot of economic additions to the Irish economy.
00:12:45
Speaker
It's like they almost, they don't quite own the country, but they are an an enormous influencer on the country's ability to actually fulfill their responsibility as watchdog for the digital watchdog over the digital industry in Europe.
00:13:05
Speaker
It sounds like you're describing a similar relationship to, believe it was Eisenhower, who initially was going to talk about the military-industrial-congressional complex. And then, you know, of course, that changed to military-industrial. But the basic idea, as I recall it, was that Boeing or Lockheed Martin or whoever it was back then,
00:13:27
Speaker
would put a plant in every state, and you're describing a similar thing, if we employ 2,000 or 5,000 or 10,000 people in Ireland, then it makes it difficult for that legislature, whoever it is, to pass laws or judgments against us.
00:13:49
Speaker
The watchdogs have a financial interest in the success of the people they're supposed to be watchdogging. ah That is what you call corruption.
00:13:59
Speaker
You know, the platform saying that their billboards and their are disinterested third parties are is baloney. they They curate everything we see on their platforms. They rank everything we see on their platforms. They make recommendations to us on what we should watch on their platforms. And they amplify things on their platforms that they think are going to hold us into in the corral.
00:14:28
Speaker
We're living in laws that were made 30 years ago that make no sense anymore. And it's doing tremendous damage. Where do you see this going in the next, I don't five, 10 years?
00:14:41
Speaker
If we go up to 35,000 feet and take a broad look at what's happened in the advertising industry, I think agencies are evaporating slowly but surely.
00:14:55
Speaker
And they are being ah taken over by the platforms, by the online platforms. And they don't, I'm not sure that they realize that, but agencies, so many media agencies now are just the sales arm for Facebook and YouTube and Instagram.
00:15:21
Speaker
ah they've They've become the sales arm, ah the sales department for those companies. Their clients come to them. They've already bought, you know about principal buying, right? Where they they They buy up chunks of, let's say, Facebook inventory and resell it to their clients and make money on reselling it.
00:15:45
Speaker
So they are completely incentivized to sell that stuff, to sell their clients on Facebook inventory or YouTube inventory.
00:15:56
Speaker
As a result, advertisers... are starting to realize, what do I need a media buying agency for? I can just go directly to to Facebook and get it directly from them. Why am I paying...
00:16:14
Speaker
a media a media agency for what I could do in a second because all Facebook does is push a button. You know, here's our target. Here's who we're trying to reach being push a button and it spits out a ah media plan.
00:16:31
Speaker
The agencies make a lot of noise about how they, but really they're pushing a button and getting a media plan. ah I'm oversimplifying, but it's kind of like that.
00:16:44
Speaker
You're not far off, though. As a result, the platforms now have what? Like 50% of the advertising revenue in the world is going to those you know handful of platforms. It's not going through. a lot of it is not going through agencies anymore.
00:17:00
Speaker
And i expect that that will snowball. If you look at the facts, you have the platforms with like almost 50%, if not 50% of all the advertising revenue in the world. And they are projecting and they're selling their stock, their shares on the basis of 10% growth the year.
00:17:25
Speaker
Now, if they're going to go grow 10% a year, where is that coming out of? That means someone is going to shrink 10% a year. Looking at it from a ah very wide-angle perspective, I think the advertising agency business is going to contract substantially in the next 10 years.
00:17:46
Speaker
So eat one on that, the point that you were making earlier, you're really not far off when you talk about sort of just clicking a button and you get a media plan. yeah My experience with some of these platforms is today they do a really terrible job, but you've made the point for a decade or longer, that most of these brands don't actually pay attention to their advertising.
Digital Metrics and Industry Changes
00:18:15
Speaker
You know, they just want to see the Super Bowl spot or whatever it is, or they want to see the presentation that tells them you have all of this awesome creative and we're going to run it to only the highest quality targets or whatever else, but, but they don't pay attention. And so that's why a lot of these big brands, their ads end up running, you know, on adult websites or on terrorist YouTube videos or something of that nature. and So I think someone doing a lot of digital advertising would respond and say, no, actually, they met a, you know, Facebook, YouTube can't do an ad plan.
00:18:58
Speaker
But the reality is it can do it well enough that the client doesn't bother to validate and check. And so I could see agencies disappearing. Even if the agency does do a good job of doing a media plan, half of it goes to these platforms.
00:19:19
Speaker
And these platforms then take the plan and execute it. And nobody knows where it winds up. Because they are black boxes. They won't tell you. You know, the average online campaign now winds up on 40,000 different websites.
00:19:39
Speaker
Okay? How in the freaking world are you going to do forensics on 40,000 websites to find out what actually ran and where it actually ran and when it actually ran and if it actually ran?
00:19:56
Speaker
ran It's impossible. Can't do it. Now, maybe someone will come up with an ai way to do that, but... You know, a lot of media buying is ah you cross your fingers and hope.
00:20:13
Speaker
and It's the best. you You get reports from these people. The report the reports are supremely unreliable. and And the reports give you KPIs that are meaningless. How many people did we reach? Well, how do you know any of those people actually look?
00:20:32
Speaker
No, there's no way of doing that. that I found reliably in any advertising media, not just online. But online is very much more questionable than other media.
00:20:47
Speaker
I agree 100%. Mark Ritson had this presentation that he gave, it probably was a decade ago or something, where he was equating people watching, think it was Gone with the Wind, to digital advertising.
00:21:03
Speaker
And, you know, he starts playing the opening and it's full screen and all this. And he says, oh, wait, no, actually, we don't have to have the sound. And so he plays it again with no sound.
00:21:14
Speaker
And he says, oh, wait, no, to count as a view, we don't even have to have it completely on screen. and And eventually he gets down to a point where you imagine, you know, his projector screen and Gone with the Wind is playing in black and white, of course, and no sound. And you can only see it down in this little corner. And he says, an advertiser, you just paid for that view.
00:21:37
Speaker
And I think about this actually quite frequently because you've probably made this point before, Bob, that some of these words that we use, like a view or an impression, they don't mean the same thing.
00:21:52
Speaker
From one medium to another. And when my client, when I tell them, well, this billboard in this location, you know, there are whatever, 5,000 people that are going to drive by it every day.
00:22:09
Speaker
I think that we all have a reasonable idea of how much of an impression that billboard is going to make because we drive by billboards and we can have a sense of, well, do I even pay attention?
00:22:24
Speaker
You know, but maybe not, but I drive by it five times a week. And so you have this feeling. of what that impression, I don't know what they call it with billboards, means. But online, when somebody says impression or view or play or something like that, I think you think of all of those YouTube videos that you watch to help you with your plumbing, for example, and you watch the whole six-minute video or 13-minute video.
00:22:50
Speaker
That is not the same play as a play of a 30-second online commercial that people skip after three seconds.
00:23:00
Speaker
Right. Or don't even spend the, they just scroll through it. day Right. I know that's what I do when I'm on one website. So, yeah, I did a calculation in, I think it was 2022.
00:23:14
Speaker
I'm not sure what the figures would be today. And I calculated, I called it the programmatic poop funnel. And ah I found that for a dollar spent buy an advertiser, the advertiser on average gets $0.03 worth of real people seeing real ads.
00:23:37
Speaker
And I doubt it's gotten any better. if anything's proper with With all the AI slop online now, it's probably gotten even worse. Do you think that the evaporation of the agency business is, I mean, there's a lot going on, of course, but, you know, we've seen omnicom and whoever else, the mergers that have been going on. And there there traditionally has been a cycle with agencies where, you know, there's a lot of consolidation and then people get frustrated or whatever, and they go out and they start new agencies or the next crop of young people start some agencies and there's a new medium, there's social media or digital video or whatever.
00:24:21
Speaker
do you Do you see that some of the consolidation is different nowadays? But then also, do you think that some of these these tech platforms just absorbing the media buying function and planning function is a ah major contributing factor to that evaporation of the business? Yeah, well, well I think and going back to what you said about... um agencies consolidating, people so getting tired of that and spinning off, I think that will definitely create new agencies.
00:24:57
Speaker
But... The consolidation will destroy more agencies than it creates. And so right now we have, what, four or five or six huge holding companies that control an awful lot of the advertising business in the world. So yeah, there are in still independent agencies. There will always be some so some independent agencies, but they are not having the economic impact that they once had. Most of the economic impact is coming from the major holding companies, the very large holding companies there.
00:25:36
Speaker
Most of the big accounts in the world, you know, the Coca-Colas and the and the Nikes and the McDonald's and all those kinds of, they're with very large agencies. they're They're, for the most part, not with independent creative agencies.
00:25:52
Speaker
Do you think in the past that agencies, big or small, holding companies perhaps, do you think that the the people in these companies, the leadership, I guess, felt more of a responsibility, I guess a moral responsibility perhaps to you know, do really creative work or to do work that didn't harm society.
00:26:19
Speaker
And maybe now we've gotten to a point where it sounds like you're saying they they just either have no intention of moral or ethical action or they feel powerless.
00:26:30
Speaker
Let's not pretend the advertising agency business was ever philanthropic or filled with angels. There was always, you know, there's always been self-interest and greed and all all the all this all the deadly sins were part of the advertising business. But not like it is today, I don't think. I think today the corporate keepers of the of the business are far less likely to react to, and I think it's been proven, to do so societal harms than in the past.
00:27:10
Speaker
I don't know if it's corporations that make them that way, the fact that they have to show growth every quarter regardless of impact. And maybe it's just the nature of capitalism that you know everyone wants to make more money.
00:27:26
Speaker
i don't know. But um it's I think it's definitely an unhealthier business than it was previously.
Globalization and Responsibility
00:27:36
Speaker
There is more lack of concern for the public good than there ever has been before, I think.
00:27:43
Speaker
Personally, i think it's the nature of these large systems where you're exposed to people that are different from you, but you have no meaningful interaction.
00:27:56
Speaker
So if we think of just shareholders, for example, the, you could be a billionaire shareholder of one company or another, and maybe you have the best of intentions to, you know, the, the, the company that you own stock in, you have the, you have some desire that they take care of their employees or their customers or society or whatever else.
00:28:21
Speaker
But the thing is that you never have really any meaningful interaction with those employees or many of the customers.
00:28:32
Speaker
And the customers that you do have, let's say you hold 5% of Coca-Cola. You know, you the Coca-Cola drinkers that you interact with are probably a lot like you.
00:28:44
Speaker
And so, you know, there's been actually a lot of research that's been done in about the last 20 years on things like this community and culture and so on and And basically what the the findings have shown that when you're exposed to someone that's different from you, but you don't have meaningful interactions,
00:29:05
Speaker
then the existing things that make you different, skin color, sex, age, whatever else, just become cemented in your head as, oh, that's what you know ah white men are like, or that's what, whatever, you know pick your category. That's what Catholics are like. I don't know what.
00:29:24
Speaker
And, but if Bob, you and I are different in some way and we interact enough to start to realize, hey, you know, as being Coke drinkers, we actually have a lot of similarities. Is it the Coke drinking that makes us similar?
00:29:42
Speaker
Probably not. It's whatever it is that we're doing together. And I think that the problem, if I can boil it down to, you know, where does this ultimately come from?
00:29:53
Speaker
Of course, there are economic incentives, and I think that's a big deal. But why is it that I would prioritize my financial benefit as a shareholder over the impact that Koch's, I don't know, environmental practices or whatever they are, might have on some community or their advertising, their supportive meta might have on you know young children? Why would I prioritize my benefit?
00:30:19
Speaker
In large part, because I don't feel like I'm a part of something. with all of those other Coke drinkers. And I think that's just the nature of, i I'm painting with a fairly broad brush here, but I think that's the nature of our financial system and globalization.
00:30:36
Speaker
A great case history of selfishness in in the platforms is the story last year that FaceMeta, through Facebook, earned $16 billion dollars through fraudulent advertising.
00:30:58
Speaker
And they even acknowledged it themselves. And ah what did they do about it? Did they get rid of fraudulent advertising? No, they charged more for it.
00:31:12
Speaker
They decide, we'll still let fraudulent advertisers on a platform, but they're going to have to pay more. That's the kind of rancid attitude that is so disgusting. And it it it makes you so skeptical and cynical about what's going on in the ad industry and in marketing.
00:31:36
Speaker
These kinds of case histories are, there are dozens, hundreds of self dealing at the, at the known expense of the public.
00:31:50
Speaker
Bob, I think I might have emailed you about this, but if not, of course I will, I'll explain here. i have seen the argument from several people that over time, marketing broadly, but we can speak to specifically advertising if we want to, has become more and more associated with just execution.
00:32:16
Speaker
Whereas go back, I don't know, 30 years, 50 years, whatever you want to go back, And I think broadly, we used to think of the marketing people or the advertising people as being the creative people. That's not to say that everybody was a designer or a copywriter, but the argument as I've seen it, and I have ah taken this on, i've I've accepted it, is that we used to think creative people.
00:32:41
Speaker
crazy creative ideas coming from the advertisers, the marketing people. And now we really think if I'm the CEO of a company, when I think of the marketing team or my advertising agency, more than likely, I'm not thinking about creative ideas or real strategy.
00:33:01
Speaker
I'm thinking of, you know, lower level strategy closer to execution because I just need you to get this out there and drive money for me, drive revenue.
00:33:12
Speaker
to Define what you mean by execution. Let me put some simple things in opposition to one another. So on one hand, we have, I need you to create an ad and I need you to get and get it in front of people.
00:33:28
Speaker
That's, I have, I'm not asking for a lot of planning. I'm not asking that my marketers or my advertisers, how are we going to grow 10% over the next year? What I'm asking is get the stuff in front of people so that we will grow.
00:33:45
Speaker
And then, you know, might I, as a CEO, might I say that you need to use Facebook or YouTube or billboards or whatever? ah Probably not. I mean, maybe in smaller businesses, of course, but even in the bigger businesses,
00:34:01
Speaker
I tend to think of my marketers less as strategists or real high-level business thinkers. And I think I'm the business strategist.
00:34:12
Speaker
You are the person, you're the hands-on keyboard. I think that's probably true. i don't think it's universally true. I think there are still companies that value creative thinking.
00:34:25
Speaker
And I think it's probably, as you go up the ladder to to more substantial companies, I think you find that you will find C-suite people more interested in in ideas than just in spreadsheets.
00:34:45
Speaker
But there's no doubt that there' what you described is going on to a large extent. And you know that's part of the failure of the advertising industry.
00:34:57
Speaker
and the marketing industry to explain to advertisers why creative thinking is so important. You know, there there have been studies that, quote, creative ads have 10 times the impact of of standard ads.
00:35:16
Speaker
So, you know, anyone who... who thinks about this stuff should understand the power of creativity. Why do some movies make a zillion dollars in some clothes after two days?
00:35:32
Speaker
It's very simple. They all start off the same. They start in a theater. And some of them have been beautifully, creatively done. And some of them are just, you know, let's get something out in the theater.
00:35:48
Speaker
It's true in any medium. it's very hard to It's very hard to do. Yeah, this is important. Very hard to do good advertising. Good advertising. You can't just snap your, oh, let's do something good.
00:36:01
Speaker
You know what I mean? ah the Everyone's trying to do good, usually, and the on the creative side. Everyone's trying to do good. But 94% of the time, it turns out to be crap. That's just the world.
00:36:16
Speaker
The same with books. 94% of books are crap. 94% of records are crap. 94% of TV shows are crap. You know, I'm making up a number, obviously. But the point is, it's very hard to do excellent, creative work, whatever the field is.
00:36:37
Speaker
And it's it's not any different than advertising. Very hard to do good ads. Believe me, I spent my whole career making bad ones. So I know how good it is to make, how hard it is to make good ones. And it's hard for marketing people and advertising people to explain to clients, particularly, you know, like you said, CEOs and CFOs who are bottom line oriented,
00:37:05
Speaker
ah the value of spending a lot of time and money and energy on on creativity. When, you know, they're just looking at, yeah, well, prove it. Show me. Show me the result. And it's very hard to show because, you know, great advertising, particularly brand advertising, it takes like three years. When you do sale advertising or sense-off advertising,
00:37:31
Speaker
That stuff shows results instantly, right? But the brand style of advertising, it takes a while for it to take hold and to show to show results. But I think, you know, Benetton Field showed where short-term advertising, you get a bump and then it goes down, then you get a bump and then you get bump. And the bump at first is pretty significant. and then the bump you know But when you do brand advertising, it's a slower build. But over time, it way outperforms offer advertising.
00:38:09
Speaker
It's a shame that in advertising, short-term and long-term goals aren't aligned.
Short-term vs Long-term Advertising Strategies
00:38:17
Speaker
In advertising, there's there's very little alignment between short-term and long-term goals. Short-term goals lead you to performance advertising. Long-term goals lead you to brand advertising. And over time, brand advertising has been shown to outperform performance advertising.
00:38:42
Speaker
But, um you know, the average CMO is there for what, 18, 24 months. By the time he his brand advertising starts to really show, he's gone or he's been fired already. So he doesn't care. He just wants to keep his job today.
00:38:58
Speaker
that's That's his goal. Well, you said, i think you said that there There are pockets, I guess, there are still some people who equate marketing or advertising with higher level strategy, more business related, business moving strategy. And so part of what I'm wondering is, have you seen at least as I'm sort of painting this picture, this change over time,
00:39:27
Speaker
Do you see a shift toward or away from in the long term brand advertising, for example, something that industry wide, you know, like your're your Fortune 500 businesses that they're going to move towards or away from more execution oriented stuff? I've seen some columns from Mark Ritz and with ah figures that show that ah advertisers in general are moving away from brand advertise from long-term brand advertising and more and more towards short-term performance advertising. Will that hold up forever? I don't know. you know i don't know what's going to happen. if One thing we have to realize in marketing and advertising, that there are no guarantees on anything.
00:40:20
Speaker
It's all likelihoods and probabilities. The fact that you're doing brand advertising doesn't mean that you're going to have a strong brand. Sometimes brand advertising fails. Sometimes performance advertising does very well over the long term.
00:40:35
Speaker
So there are cases that are, yeah that there are no guarantees. And um you have to use your head.
00:40:47
Speaker
That's a horrible thing for today's marketing person is to actually fucking think. But that is required. And you have to create your own ideas about what works and what doesn't. Just taking somebody's, I wrote about that this week in my column, taking someone else's ideology and using that as your own, that ain't good.
00:41:15
Speaker
What you need is your own ideas about what works and what doesn't work and what's good and what's bad. And if you have that, then you have something to build. you have ah You have a platform. You have a structure on which to make advertising decisions. But if you're just if you don't have that, if in your mind you don't have an idea about what's good, what's bad, what works, what doesn't work, then you're flying blind.
00:41:44
Speaker
You're just picking, oh, we'll do this, and then we'll do that. But if you know what you're looking for, if you have decided And you've got to be willing to change when things change.
00:41:57
Speaker
But at least you have a some principles upon which you make advertising decisions. You're in much better shape than someone who's just, you know, picking things out of the air. Let's do some of this and some of that, and let's try that. That ain't good.
00:42:16
Speaker
that That means you' you're not really sure what you're doing. You don't really know what your aim is. You don't have a philosophy upon which you can make simple decisions.
00:42:29
Speaker
Bob, whether we want to look at advertising or social media or culture, you know, politics, for you, is there something you i are either most concerned about or that you have the most hope for, you know, in the near future, this thing is the thing that we should most be talking about and or I think that You know, and don't think that this is the case, Bob, but at the time of our recording, you know, a lot of people are talking about SpaceX is going to have a big IPO this Friday, I think.
00:43:07
Speaker
And maybe you tell me, hey, I think that's a world changing thing. what's What's on your mind that you feel like it's we got to watch it or it's ah it's going to change the world? Well, i obviously, AI is one of those things that I am very lukewarm about.
Future Challenges with AI and Platforms
00:43:26
Speaker
i don't I don't think anyone knows which way it's going. i think a lot of people pretend they know where it's going, but I don't think anyone really does. But that that presents a a potential major danger to society.
00:43:42
Speaker
I think... um Specific to advertising, the fact that platforms are taking over the advertising landscape is not good.
00:43:56
Speaker
I don't see that changing anytime soon, but I still believe it's not good. and And to a large degree, because the people running these platforms are not good people.
00:44:10
Speaker
I don't trust any of them. When you talk about AI, you are you thinking mostly about creative or decision-making or something else?
00:44:22
Speaker
I'm thinking of overall impact on the world. I'm not just thinking about its impact on advertising. um I think AI presents enormous potential problems and enormous potential good.
00:44:40
Speaker
But I don't know i don't know which is is going to be the outcome. As it stands now, um i'm I'm betting on bad outcomes, not good outcomes from this, because I see too many people who I don't trust with their hands on the steering wheel.
00:44:56
Speaker
Bob, if you could put one belief or thought in people's heads that would have a meaningful impact on their behavior, whether it's advertising industry people, the general public, legislators, what is it that, well, first of all, who would it be? And what is it that you would have them believe so that tomorrow they change their behavior?
00:45:20
Speaker
I would, uh, the most important thing for people to do right now is to buy my books. If they buy my books, everything will work out fine. I like it. Is that okay?
00:45:33
Speaker
I love it. Yes. And I have enjoyed your books. And as you said, you have been a bestseller numerous times. And I think there, I've been a fan of yours for a long time. Nice to hear that.
00:45:47
Speaker
Thank you for being here today. I really appreciate it, Bob. My pleasure, Eric. And good luck to you and all your viewers and listeners. And just have some fun, okay?
00:45:59
Speaker
Thank you. I appreciate that.