Frenemies: The Epic Disruption of the Ad Business (and Everything Else)

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Book: Read Frenemies: The Epic Disruption of the Ad Business (and Everything Else) for Free Online
Authors: Ken Auletta
kind of interaction you have with a consumer.” Within five years, he continued, six billion people will be connected to the Internet, meaning marketers “are going to have to interact with their machine, which we refer to around here as ‘the second brain.’ You’re going to have an advertising model that works fluidly for the consumer but also works fluidly for what that machine is.” He illustrates the machine’s power by telling of a visit he made that week to a Mastercard board reception where they displayed future products. One was a gas station pump that recognized your Mastercard and regulated the price at the pump based on whether you were a regular customer or not. “In the future, the pump pricing may change based on what type of customer you are and whether you’re in a points program. But also, the company will have a lot more information on you.” And the smartphone will “keep track of all your relationships with all the companies you deal with. The exponential power of using that data will change consumer behavior. It will shift more power into the consumers’ hands. And it will shift more power to companies that move faster into this world.”
    Marketers will have to befriend the machine, he continued. “The phone or machine will be as powerful as a second you, with a lot more ability to use software to simplify things for you. Today, the consumer does all the work. You have to get in your car and drive to the store. You have to go online to Amazon and figure out what you want to buy. But in the future if you have this machine that has a deep understanding of what you do, when and how you do it, the things that may be helpful for you, it’s likely that the onus on the consumer to do all the shopping will shift to the corporation.” Information for the consumer will be screened and presented by your smartphone’s digital assistant, which will be more sophisticated versions of Amazon’s Alexa, Apple’s Siri and its HomePod speaker, Google Home, and Microsoft’s Cortana. “It may watch how you behave over the course of a year and say, ‘Here are all the things you’re doing and here are three or four products that may help you live a longer life, may help you save twenty percent of your income.’” The digital assistant becomes your agent, potentially supplanting the middleman, including the agency middleman.
    Agency employers stewed over all this. And as they also stewed over Jon Mandel’s claims in 2015, Michael Kassan heard a new drumbeat from various clients: trust. Or mistrust. Kassan was all too aware of the views of a frequent client, Beth Comstock, who was promoted to vice chair of General Electric after the innovations she instigated as their CMO. “You hear this time and time again, a lot of people are frustrated that there’s a disconnect between their agency and what they want,” she says. “I think we want more media properties to come to us,” to bypass the agency and collaborate directly on creating an ad campaign, as the New York Times did in creating an award-winning virtual reality campaign for GE. Over the years, she says, the mistrust between client and agency intensified because the media-buying agencies came to see themselves as the customer. “They gathered all theclients together. They negotiated the sales.” They, not the client, directly paid for the ads. They didn’t always assign their best people to a client’s account. They were sometimes opaque about rebates or why they placed bets on different media platforms. To Comstock the trust issue boils down to this: “Are you working for me or for the media company? I’m paying you!”
    Agencies are naturally anxious not to become superfluous middlemen, supplanted by clients who seek lower costs by building their own in-house marketing departments, or by turning to advertising platforms that

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