BOTW: What if Elon is (slightly) correct about advertisers?; Media’s $1bn+ inflation hole
Welcome to Best of the Week, mostly edited on Friday on a beautiful first day of summer at Sisters Beach, Tasmania.
Happy World Pear Day.
Today: Elon gets sick of giving advertisers the time of day; Will the SMI data stop the chatterers from talking about an advertising downturn?; and The Unmade Index is dragged back into the 600-point black hole.
Becoming a paying member of Unmade takes you to the next level. Get access to our full archive, which moves behind the paywall after two months; receive our weekly exclusive Tuesdata content; and get discounts and free tickets to our events. Upgrade today.
What if Elon is right, and marketers should occasionally be told to get fuuucked?
Admittedly, it wasn’t the best start.
“Jonathan, the only reason I’m here is because you are a friend”, X proprietor Elon Musk told his interviewer, whose name was not Jonathan.
“I’m Andrew,” came the understated reminder from CNBC’s Andrew Ross Sorkin.
Yesterday we woke up to headlines from the US where every business and marketing publication went big on one of the classic on-stage interviews of all time. It happened at the DealBook conference and was broadcast on live TV.
Normally when you watch the full version of this type of encounter, the news headline doesn’t do it justice. It emphasises the most memorable line, rather than the central tenet of the conversation.
Not so this time. Without ruling out the possibility that Musk was in the grip of a manic episode, he knew what he was doing. It wasn’t a quick slip. The owner of the platform previously known as Twitter enunciated his words slowly and repeatedly.
Asked about brands suspending their advertising on X because of his borderline anti-semitic tweets, he had a ready response.
“Don’t advertise.” There was a painful pause as he waited for applause that didn’t come.
“What do you mean? You don’t want them to advertise?” asked an incredulous Ross Sorkin.
“No. If somebody’s going to try to blackmail me with advertising, blackmail me with money, go fuck yourself.”
“But…?” interjected Ross Sorkin
“Go fuuuck yourself,” Must reiterated, miming it as he went. “Is that clear? I hope it is.” Again, he didn’t get as much laughter from the audience as he would have hoped.
“That’s how I feel, don’t advertise.”
It was the moment when a man who previously never had to deal with advertisers finally snapped, after a year of trying to hide his contempt for people not as clever as him but whose money he needs.
There was also a touch of the dramatic teenager telling his parents they’d be sorry when he was gone. “If the company fails because of an advertisers boycott that will be what bankrupted the company, and everybody on Earth will know. It will be gone because of an advertiser boycott.”
Local media company bosses who’ve had to deal with tremulous advertisers in the face of boycott attempts from the likes of Mad Fucking Witches and other campaigning social media chancers, will feel jealous of Musk’s ability to say it aloud.
Never has there been a more literal manifestation of having fuck you money. Telling the advertisers to get fucked may well bring an end to the business that Musk paid US$44bn for. He’s rejecting adland before it can reject him. Undoubtedly X is not a brand safe platform.
Taking precautions around brand safety is a marketing basic. No marketer wants to explain to their CEO why the logo is next to white supremicists. Particularly when the platform is as non-essential to a media plan as X.
But there can also be an element of grandstanding when it comes to advertising boycotts. Some CMO’s don’t simply quietly pause their ads; they tell the world that’s what they’re up to.
That’s been one of the most fascinating things about Musk’s year as owner of X. He comes from a world where he’s not been conditioned to the disproportionate influence that marketers hold within the ad-funded media. SpaceX doesn’t need marketing to send its rockets into space. The Boring Company doesn’t need advertising to dig its holes. Tesla has managed without paid ads.
Musk’s introduction to the world of marketers has been a collision of somebody who has spent a lifetime of being told yes, suddenly having to be polite to people he doesn’t respect, merely because they are gatekeepers of their company’s budgets,
The veneration of marketers is a deal which anybody working in the advertising funded media must make peace with. Indeed, when you rise within the industry, you barely notice it going on and become part of the system.
You can’t just follow the money, you have to flatter it.
Chief marketing officers sit at the top of the ego pyramid. Anybody who looks at LInkedIn would be aware of that.
Take a look at any recent LinkedIn prognostication from a CMO, and ask yourself: would I pay money to read that in a newspaper? Now look at the comments.
Even the most predictable pronouncement from a budget-holding CMO is venerated from those working further down the ecosystem. Dozens of admiring comments, hundreds of likes from agency suppliers and media sales people. Very few people are as smart as those comments would suggest.
It must have been hard enough trusting your judgement as a marketer when you merely had to resist your creative agency selling you its mediocre campaign idea. It must be nearly impossible to control your ego when every day provides the dopamine hit of workday adulation.
For those who are not well balanced enough to see the obsequiousness for what it is, returning to civilian life must be a horrible shock when the professional love bombing dries up.
Of course, many marketers are smart, capable people. But when you speak privately to people from agencyside – often the ones shouting in public about their client’s marketing brilliance – they have less flattering things to say than the tongue bath they deliver on LinkedIn. No marketer can be as good as the LinkedIn comments from an agency account executive suggest.
That’s one reason why Musk’s comments were so shocking. Marketers have become accustomed to utter respect, whether it’s deserved or not. The arrival of somebody who won’t play that game – even if the price is the destruction of his business – comes as a huge shock to the ecosystem.
Musk has got most of his moves with X wrong. Refusing to play the game with advertisers is one of them. But gee, it’s fascinating to watch.
Second best year ever? Not really
The October ad spend data from Standard Media Index dropped on Friday afternoon.
Bsed on forward bookinga, the update also contained SMI’s first run at what the spend for the entirety of 2023 will look like.
At first glance, it’s a reasonable number. According to SMI Guideline, the total spend in the market via media agencies is likely to land at $7.22bn for the calendar year.
AS SMI points out, that’s the second best year on record, after the 2022 post-Covid bounceback. As SMI boss Jane Ractliffe put it in the accompanying press release: “There’s a lot of market chatter about the decline in the ad market this year, but that pessimism is sadly misplaced.”
But is it? I may be one of those chatterers.
To compare the state of media before and after the pandemic, we need to do two things: first, we need to go all the way back to the calendar year of 2019; and second, we need to allow for inflation since then. Many of the same factors affecting consumers have hit the cost bases of media companies. And that’s before factoring in sports rights blowing out. To stand still, revenues needed to grow to cover these costs. Others profits eventually shrink to zero unless cuts are made.
In our last “normal” year of 2019, agency spend in Australia was $6.7bn, according to SMI. In that context, $7.2bn sounds decent.
But we’ve had painful years of inflation. The Consumer Price Index grew by 0.9% in 2020; 3.5% in 2021; 7.8% in 2022 and is likely to land at around 4.9% in 2023.
Compounded across those four years, that amounts to 27%. Which means that in order to stand still in real terms, the spend would have needed to rise to $8.5bn. So $1.3bn has leaked out of the market.
Tougher yet for the existing players – the share taken by the big digital platforms has continues to grow. No wonder life is so tough in linearland.
All that comes against a backdrop of many brands delivering record profits to their shareholders thanks to the public paying more.
That means marketers have been able to invest a smaller portion of profits to deliver the same or better results. If it’s sustainable, that’s good ROI for marketers but bad juju for media.
Whether this short term yield-based profiteering comes at the expense of long term brand health remains to be seen.
We also see in the October numbers that old media mostly continued to do it tough. Television was down 11.5%; newspapers by 23.3%; magazines by 13.6% compared to the same month in 2022.
But there was an (extremely) honourable exception for outdoor, up by 19.3%. And radio earned some respite – flat after months of falls. The smaller medium of cinema was up too.
We’ve now had 12 consecutive months of SMI reporting a monthly decline in overall adspend. The last time SMI issued a monthly update with a plus rather than a minus number in it was for October last year.
Could the November numbers (due out at the end of this month) be where it begins to turn? I’m not sure it feels like it.
Campaign of the Week: Holey Moley’s Fun Way To Test Friendships
In each edition of BOTW, our friends at Little Black Book Online highlight their most interesting advertising campaign of the week.
LBB’s ANZ reporter Casey Martin writes:
Dentsu Creative has created a new campaign for Holey Moley demonstrating how people show their true colours in a round of mini golf.
Three spots use dry and witty humour to showcase why Holey Moley is the place to “test friendships”. It plays into the fact that mini golf, much like Monopoly, can bring the very best and very worst out of people.
Unmade Index can’t escape the 600 vortex
The Unmade Index’s attempts to escape the 600-point zone were thwarted again yesterday, with a fall of 0.99% taking it back down to 596.9 points.
The number represents a 40% fall in the value of ASX-listed media and marketing stocks since the index began on 1000 points in January last year.
Yesterday’s biggest fall was for Nine, which lost 1.81%. Southern Cross Austereo lost 1.43%, Enero 1.58% and IVE Group 0.25%.
ARN Media was the only stock to rise, by 1.57%. ARN is trading at its highest price since it kicked off its bid to take over SCA in October.
In case you missed it…
On Tuesday, we looked at the road to recovery for Optus as the governemnt announced the terms of its inquiry into the telco’s meltdown:
On Wednesday, we discussed how the free TV lobby had won the anti-siphoning battle, and half of the smaart TV prominence fight:
On Thursday, we talked Nick Smith, managing director of content agency Medium Rare about News Corp’s growing influence in. the commercial content sector:
On Friday, we focused on retail media including shopper behaviour during Black Friday, and Uber Advertising’s aim to focus on attention metrics:
Time to leave you to your weekend.
I’ll be back on Monday with Abe Udy for Start the Week.
Have a great weekend
Toodlepip…
Tim Burrowes
Publisher – Unmade
tim@unmade.media
