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What a Fool Believes
An era is ending in media. The next will render the past unrecognizable.
Welcome to People vs Algorithms #69.
I look for patterns in media, business and culture. My POV is informed by 30 years of leadership in media and advertising businesses.
Sometimes it’s nice to read in the browser.
Before we process some of the important ideas shaping the future of media, perhaps I can share a poem one of my kids sent the other day. She doesn’t send poems and might be characterized as lacking sentimentality. Now happened to be a good time for her to share this ditty, sitting between Mother’s and Father’s day. In it, noted twentieth century British poet and grumpy loner, Philip Larken, offers a bleak view of parenthood:
They fuck you up, your mum and dad.
They may not mean to, but they do.
They fill you with the faults they had
And add some extra, just for you.
But they were fucked up in their turn
By fools in old-style hats and coats,
Who half the time were soppy-stern
And half at one another’s throats.
Man hands on misery to man.
It deepens like a coastal shelf.
Get out as early as you can,
And don’t have any kids yourself.
Naturally, I countered that the joy of having her as a daughter was life’s greatest reward. And, only later discovered the poem was from the popular Apple TV series, “Ted Lasso,” a show I wanted to dislike. I am not ashamed to admit the final two episodes were deeply satisfying emotional cookies oozing with gooey, chocolatey sentimentality.
Where were we? A transition from one media era to the next. This is what I want to talk about. How might we start to process what’s ahead, maybe to avoid some of the downsides of the internet era transition. It’s certainly not a stretch to see the AI shift as something much more profound.
Yesterday, a content executive at a major media company remarked that the problem with this new AI era is we have no idea how we will truly optimize for it. She's right. Let’s say we can get our heads around how AI reshapes content creation, itself a massive structural disruption. It’s the distribution side that is the most confounding, and distribution is where the media bread is buttered. Google plays the lead role here as the web’s spinal cord. It matters to everyone in digital media and its traffic delivering mechanics are poised to change profoundly. In “Will Google’s AI Plans Destroy the Media?”, John Herman at Intelligencer did a great job of breaking things down for us:
This is a facet of the larger AI story — which is to say it’s about automation. But it’s also a story of a large platform deciding to compete more aggressively in the marketplace it controls. With snapshots, Google is pushing into some of the most lucrative parts of the content business over which it already exerts enormous influence. That the sorts of content it seems to be automating first are explainers, guides, and product rankings is no coincidence — these are styles of content that publishers currently produce with Google traffic in mind. If Google hired tens of thousands of contractors to produce “snapshots” and product recommendations for popular searches, it would be easy enough to conceptualize and very bad news for a number of Google-dependent online industries; that it’s doing so with “generative AI” suggests that what was holding it back from attempting to replicate or replace some of the most trafficked sites on the web wasn’t some lofty notion of how Google should function as a market or an ecosystem, some sense of stewardship over “the web” as a concept, but cost.
That fog of AI driven uncertainty is disconcerting to many, not the least of which is anyone trying to put a value on a digital media acquisition right now. I found myself really questioning my ability to forecast web / app driven ad growth on a project I am working on. Media impressions always have value, but things get much more difficult when there is mid-term uncertainty in our current search web model. It’s a hard time to predict how an audience will sustain or grow.
The exercise had me thinking backward and forward. I lived through the fundamental transition to the “demand-based” media state created by the internet. The next state is that on steroids. How might we think about it? A simple media generational model might be described as follows:
1. Brand-led distribution:
The state of things before the internet. Media controlled the distribution connection to the consumer. Great media brands were forged here, packing enviable cultural power, reinforced over time inside of a stable and oligopolistic distribution arena — Vogue, CNN, NYT, Time, Forbes… Seinfeld.
Magazines protected an audience connection with slow subscription accumulation and ubiquitous newsstand positions. Newspapers benefited from direct consumer connections and monopolistic ownership of local news markets. Network and cable television owned positions on the dial, even if billing relationships were outsourced to cable cos.
Optimization meant building your media brand the old fashioned way — storytelling, packaging and promotional repetition. Profits followed.
2. Consumer-led distribution:
The internet turned things on their head. Consumers were given the ability to pick what, when and how they wanted to consume. Technology platforms emerged as a new intermediary. These platforms optimized for consumer satisfaction with interfaces that transcended media brands and connected content with communication. Media brands were disaggregated at a story level.
Critically, volume exploded as anybody could now create content. Algorithms provided new interfaces to sort through the cacophony.
Media had neither the relationship scope or technical depth to compete for the primary connection to the consumer. Few, like the New York Times or Netflix, had the gravitas sit as the primary interface point to the end user.
In short, tech won. Media was forced to optimize to a new God, the platform. Things got faster and ruthlessly competitive. This was good for some for a while but optimizing your business to someone else’s priorities eventually ends in heartbreak. This is the “Traffic” era that Ben Smith describes in his new book. It is ending in earnest now.
3. Personalization-led distribution:
For lack of a better descriptor, let’s define the next as the Personalization Era. We might have also called it AI-led, but its distinguishing characteristic is its ability to extract exactly what you want from a world of information and present it back exactly as requested. Knowledge becomes on-demand, a kind of augmented intelligence.
In a text thread, my podcast pal, Alex Schleifer, made an offhand comment that resonated with me: “I think we’re completely underestimating the shit storm coming. When anyone can summarize anything based on how they absorb information, nobody will tolerate friction. Browsing the news will feel like gathering firewood.” Media shifts from meal to ingredient, delivered to you with the convenience of Uber Eats.
Fundamental new problems emerge. Personalization robs content of context. Important signals of trust, once the domain of brands, disappear or get relegated to empty signifiers.
Interface collapses into a single, lonely chat box. Media brands lose even more ability to draw attention to the things they deem attention worthy. The power imbalance between the center and periphery is exaggerated.
Yes, the best and most worthy human created content escapes the AI meat grinder, but only that sought by a motivated consumer and containing a perspective and humanity that makes the connection worthwhile. It just gets harder for media to find an unimpeded path to an audience.
The efficiency connection of content desire to content fulfillment inevitably makes advertising much more efficient, but that efficiency robs many in the content business of a livelihood.
Media will fight the tide, but the powerful consumer-pleasing tech will prevail, as it did before.
Again, News Corp CEO Robert Thompson will be the voice of the resistance. His appeal began last week. “We expect our fair share of that monetisation,” Thomson said. “Generative AI cannot be degenerative AI,” insisting “These are super snippets, containing all the effort and insight of great journalism but designed so the reader will never visit a journalism website, thus fatally undermining that journalism.” Thompson and the Murdock org have a long history of standing strong against the platforms. While there have been small victories, their cries have been drowned by more powerful waves of consumer indifference and techno-delight. Google, OpenAI or Meta are not going to save the day. The power imbalance is profound. History suggests platforms will not become the central banks of the attention economy.
Axios founder, Jim VandeHei might see the value of News Corps vaunted media brands, the WSJ in particular, as a hedge to an AI mediated future where chat interfaces leave consumers looking for signatures of trust. VandeHei offered a clear and much more optimistic message in an Axios post. Delivered in the signature Axios bullet style, his “eight transformations” are worth a look. Among the points he makes, social media traffic games are over, trusted brands, direct relationships and expertise matter more than ever, consumers will demand efficiency or depth not filler that sits between. There will be more pressure on consumers to sort through the good and bad, the enterprising tool users will be ever more advantaged.
Eras do not end with definity, especially in media. They blend from one to the next. But we are beginning to see the shape of things to come. Imagine looking backwards in ten years hence. Building on Jim’s take, I can see a few things that are likely to define the next era.
Media filler evaporates. Heretofore, much of what is created was made to fill time and space between ads. Total personalization means you get what you want, how you want it. Bots do not tolerate inefficiency. They separate the wheat and chaff and deliver it to you. News transforms into efficient digests separated from commentary. The committed will seek out commentary in participatory communities or trusted personalities.
Lifestyle media, the stuff of magazines, continues to evaporate into a real time influencer-fueled video feed. These once famous brands persist as reassurances framing shopping content. It's hard to see a future for the lifestyle category of media outside of affiliate or real world “activations” like the Met Ball. Taste is always valuable. But increasingly difficult to monetize inside scaled media brands.
When it is filler, we will consume it as such. Ambient media, a conversational backdrop now called podcasting, grows influence as a low lift path to human conversation and personal connection.
Advertising always persists, but is increasingly divided between a marketplace enabler, helping you find the right thing at the right time with confidence, or a type of brand storytelling that can only succeed as entertainment or a “brought to you by” enabler — the opportunity to do this narrows to sport, spectacle or as ads delivered to those unwilling or unable to commit to an ad-free premium streaming tier.
Underneath all this some will take comfort in a redeeming promise of a unique data position, something ownable inside of the AI mediated machine.
Let’s say you have enough of it to train your own AI chatbot and get consumers to use it. That feels valuable. Here you are the Mayo Clinic or Bloomberg. Or, maybe you offer a unique data position or something akin to that, be it deep vertical expertise, unique POV, or a enviable list of validated products, conditions, vendors, parts, etc. that can persist inside or along side of someone else’s chat vortex. This may afford you a protected position in the new universe and will be extremely valuable.
But these are tough positions for a class of media incumbents to earn, both due to a lack of differentiated content or the ability to change fast enough to fight the current.
The Personalization Era is going to render our existing system of media unrecognizable. It will not be kind to a previous generation.
ON THE PODCAST
The End of Ads
Ads are like cockroaches. You might not like them, but they always find a way to survive and multiply. But without a doubt, the ad industry is facing momentous challenges, not just from short term economic pressures, but the possibility of structural collapse from the shifts driven by AI. Bonus… a high quality Alex rant. Not to be missed.
She musters a smile for his nostalgic tale
If the connection to the title of this piece seems a bit dubious, I can live with it. Like an ice cream headache, I had Doobie on the brain and could not shake it. We are good now. Thank you.
"What a Fool Believes" is a song written by Michael McDonald and Kenny Loggins. The best-known version was recorded by the Doobie Brothers (with McDonald singing lead vocals) for their 1978 album Minute by Minute. Debuting at number 73 on January 20, 1979, the single reached number one on the Billboard Hot 100 on April 14, 1979, for one week. The song received Grammy Awards in 1980 for both Song of the Year and Record of the Year.
The song was one of the few non-disco No. 1 hits on the Billboard Hot 100 during the first eight months of 1979. The lyrics tell a story of a man who is reunited with an old love interest and attempts to rekindle a romantic relationship with her before discovering that one never really existed.