BOTW: Amazon’s Aussie ad slice, Sorrell’s S4 Capital grows; the week in AI
Welcome to Unmade, mostly written (very) early on Saturday morning in rainy, Formula One-obsessed Melbourne.
I spent yesterday at the Grand Prix as a guest of Paramount. If you want a snapshot of how much the industry is changing, the only type of booze that ran out in the Paramount Suite was Heineken’s 0.0, alcohol-free beer. Could it be that the industry is growing up a little?
Pinch, punch, first of the month. I promise there are no lame April Fool’s jokes in what follows. Anyway, congrats on making it through the first quarter. The year is officially 25% complete.
Let’s begin with house keeping. We now have a time and a place for our next event, humAIn – human creativity x AI. We’ll be running humAIn in Sydney on Wednesday July 12.
During the day we’ll explain how the wave of developments in generative AI will change the world of marketing and media, and explore the new opportunities that creates.
Earlybird tickets are now on sale for $360, or just $252 for Unmade’s paying members. We’ll be sharing the members’ discount code in next week’s edition of Tuesdata. With monthly memberships starting at $65, you do the maths…
We’re also going to start sharing a weekly roundup of the latest developments in AI which have the most impact on the world of media and marketing. That kicks off further down.
Today: Sorrell jumps on the AI train; Amazon eats into Australian adspend; What Musk cost Twitter Australia; and Porsche plays Pong.
Three things we learned from the numbers this week
From around the traps, we got three new insights this week.
The most interesting semi-historical nugget related to Twitter.
Standard Media Index – which tracks how much advertising is spent by media agencies on behalf of clients – shared with the AFR Twitter’s agency revenue for the October to December quarter.
Thanks to Elon Musk’s chaotic takeover, it was $3.9m, down from $7.3m in the same quarter in 2021. That’s a fall of 46.6%.
Although SMI only captures agency spend, most of Twitter’s revenue came from big brands, so the chances are the SMI numbers capture a pretty good snapshot of the state of affairs since Musk scared off the advertisers.
Musk only took over at the end of October, so that quarterly fall was really all driven in just two months.
The AFR also pulled Twitter’s last set of ASIC filings, which showed that during 2021 it made annual local revenue of $14.8m – not a particularly impressive number in itself, even before Musk took over. With the local team having been wiped out in Musk’s staffing cull, I suspect there’s nobody around to get the 2022 accounts in any time soon.
As a global business, Twitter’s commercial future is questionable. As a local player, it’s already gone.
Meanwhile, MI-3 also pulled some ASIC numbers this week – looking at the growth in Amazon’s local business.
Most notable was how quickly the company’s local advertising revenue is accelerating:
2018 – $0.5m
2019 – $4.4m
2020 – $21m
2021 – $63.6m
2022 – $102.7m
That growth is still on a straight line. If rival media players aren’t terrified by that then they’re not paying attention.
And the third new piece of data came from Sir Martin Sorrell’s S4 Capital, which yesterday released its results for the 2022 calendar year.
Although it’s going slower than Sorrell – a 78-year-old in a hurry despite keyhole surgery back in February – would want, the company is still inching forward in its ambitions to be a holding company to compete with its bigger global rivals.
S4 Capital, whose main agency vehicle is Media Monks, delivered annual revenue of £1.1bn, up from £687m in 2021. EBITDA profits rose from £101m to £124m.
Sorrell’s economic prognostications tend to forecast the weather for the global marketing industry. His verdict on the outlook? The key word is “slowdown”.
But he also predicted that S4C will outperform the market thanks to a refrain which is about to become familiar from a lot of agency chiefs: “We expect to make continued progress, stimulated, in particular, by the early and rapid implementation of revolutionary new technologies such as AI.”
Every agency boss is talking a very brave game about AI at the moment. Many are in denial about what it will do to their current ability to charge for repetitive, low end services.
The week in AI: Coca-Cola turns to the crowd while Microsoft deals-in publishers
Cat McGinn, Unmade’s head of curated and commercial content, kicks off our new weekly digest of the key developments at the intersection of AI and the marketing industry
Real magic from Coca Cola
Skipping beyond the issues of copyright and ownership dogging generative AI, Coca Cola invited creators to harness AI to make digital art using the brand’s archive of assets. The marketing campaign was created via a collaboration between Bain & Company and OpenAI, for the global FMCG brand’s platform “Create Real Magic”. It combines for the first time the text capabilities of OpenAI’s GPT-4 chatbot with its image creation platform DALL-E.
‘Profound risk’
More than 1,000 technologists, AI experts, researchers and academics put their names to an open letter calling for AI labs to pause training artificial intelligence systems for six months. The signatories, including engineers from Amazon, DeepMind, Google, Meta and Microsoft, as well as former OpenAI co-founder Elon Musk, cited concerns that further developing untrammelled AI with no regulatory oversight or legislative framework poses “profound risks to society and humanity.” Others disagreed, saying the genie is already out of the bottle.
Be My Eyes
GPT-4’s new capabilities have been put to work as a ‘virtual volunteer’ for the visually impaired as part of the Be My Eyes initiative.
Bing gears up monetisation
Microsoft’s revealed more of its plans to monetise its AI-boosted search on Bing. A post from Yusuf Mehdi, Microsoft corporate VP for Modern Life (yes, really), said it aims to share revenue with publishers. “We’re also exploring placing ads in the chat experience to share the ad revenue with partners whose content contributed to the chat response,” Mehdi wrote in the blog post.
Unmade Index ends the quarter steady
The Unmade Index closed the third quarter of FY23 on a flat day, with the index sitting on 662 points.
Among the individual media stocks, HT&E had the best day, rising by 3.67%, while Ooh Media was not far behind on 1.63%.
Meanwhile, Nine saw the biggest fall for the day, of 1.25%.
Campaign of the Week: Porsche goes Pong
In each edition of BOTW, our friends at Little Black Book Online highlight the most interesting marketing campaign of the week
LBB’s AUNZ reporter Casey Martin writes:
This week’s campaign is from Porsche and Atari via DDB, who created a one of a kind campaign for the Australian Grand Prix. Working together they re-developed the beloved game Pong to include customisable electric Porsche Taycans.
The two cars go back and forth in a game of pong, driving at 150km/h as an AI-controlled drone bounces between them. It’s brave and experimental, demonstrating beautiful production values, perfect for the target audience whilst being an incredibly entertaining experience.
Time to leave you to your Saturday.
The gods being willing (by whom I mean Alan Joyce), I should be landing for breakfast back in Tassie as you receive this.
Abe Udy and I will be back on Monday for the Start the Week podcast.
Have a great weekend.
Toodlepip…
Tim Burrowes
Publisher – Unmade
tim@unmade.media
