However, news of Meta’s impending demise would be awfully premature, as Sam reminds us.
For all our Schadenfreude at Meta losing several hundred billion (!) $$$ in market value – at present, their share price is down a cool 35% from the beginning of the year, suffering the ignominy to temporarily drop behind Nvidia on the list of largest US companies – the attention capitalist behemoths Alphabet, Amazon, and Meta now hold a share of 46% of global ad spend, as opposed to 33% pre-pandemic in figures released by the World Advertising Research Center (WARC).
And yes, that’s total as in everything, not just digital…
In the third of our new (but growing) series of Small Data Podcast interviews with data mavens, Sam is joined by media analyst Ian Whittaker. Ian is the current City AMAnalyst of the Year – a gong he scooped for the second time in 2021. He has more than 20 years on the clock, assessing the financial performance of media and tech stocks.Ian’s understanding of the numbers and data underpinning media and marketing businesses is both broad and deep, and he writes regular columns for both City AM and marketing industry bible, Campaign. We spoke at the start of September 2021.
Ian is optimistic that the media and marketing industry – at least in part – is making good use of data and analytics to target consumers more efficiently and effectively. Most have moved beyond the bombardment many consumers experienced not so long ago, and some of the bigger players – including consumer goods behemoth P&G – are combining the logic of data and the magic of creative to good effect. That said, some, both client- and agency-side, still have their heads buried deep in the sand.
This doesn’t mean there aren’t road bumps along the way, from the deprecation of third-party cookies (when Google finally decides to turn them off) as well as legislation and regulation, regular topics of Small Data Forum dialogue, from GDPR to CCPA.
Ian believes that the future belongs to “those who hold the data”, meaning more power for the FAANG five, as well as retailers from Wal-Mart to Target and their mountains of first-party, customer data. It’s both the middle-ground and smaller players who will lose out, Ian believes, as the oligopoly goes from strength to strength.
Ian’s not sure if Apple vs Facebook is an actual war or more of a phoney war. When consumers are asked by parties with vested self-interest whether they want to be tracked by advertisers, only 5-30% say they do. But there’s no spontaneous consumer uprising against trading personal data for targeted marketing.
So, while Cook and Zuckerberg have deeply-entrenched, strongly- and honestly-held beliefs, Ian wonders whether ‘Apple vs Facebook’ might be more of a war for hearts and mind than a fight to the death. Incidentally, Ian thinks Apple could prevail over Facebook, thanks to its deeper pockets, larger market capitalisation, country-sized cash reserves, and its greater ability to withstand losses. It just won’t come to that.
On the potential for “another Cambridge Analytica”, Ian is sure there will be one – a scandalous data breach for nefarious purposes – but he’s keen to suggest that the furore about the original was more about for whom the data was misused (Vote Leave and Trump) than the data breach per se.
Sam mischievously suggests that, with POTUS 45 rumbling about standing again in 2024, we may not have too long to wait. And though it’s hard for an incumbent to lose a U.S. election – catastrophic pandemic responses notwithstanding (“It is what it is!”) – both Biden’s age and his decision to follow through Trump’s policy on Afghanistan make it likely he won’t be seeking a second term.
Ian’s assessment of Martin Sorrell’s second coming at S4 Capital is particularly interesting. Although S4 is not alone at doing very well through and with data and analytics – particularly in comparison with the media agency holding companies (like Sorrell’s previous baby, WPP) which were built in the pre-digital 1980s and 1990s – there are two elements to S4’s secret sauce.
First, a ruthless approach to automating and digitizing everything. And second, the way Sorrell’s new baby buys and folds good assets into the family. Unlike the agency model (cash and earnouts), S4 gives 50% cash and 50% shares in the holding company, baking the long-term success of the acquired into the long-term success of the parent business.
Fascinating that something as simple as incentivization should be so revolutionary.
Beyond Sorrell, Ian believes we should watch keenly the progress of both Next 15 Group and You & Mr Jones. Successful use of data and analytics is central to the future success of agencies and brands. But another important facet will be brand.
The pandemic has led to a renaissance in trusted brands – witness the strong performance in the last 18 months of houses of brands, from P&G and Unilever to Colgate and Kellogg’s. Big tech regularly uses brand advertising – often, Sam points out, in very traditional, analogue media such as broadsheet newspapers and out-of-home – and AirBnB is the latest exponent of brand advertising over search.
In 2022 and beyond, Ian concludes there will be increasing balance brought to the Force, with the yin of data and analytics being balanced by the yang of brand.
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Many thanks to Ian for his time and for this interview. You can subscribe to his regular newsletter here. His City AM columns are here and his LinkedIn profile is over there.
The next episode of the Small Data Forum is our 50th, to be recorded in late September live and direct at our favourite Italian, Olivelli, in the South, Waterloo, South London.
Publication of SDF 50 planned for Monday 27 September.
As if proof was needed that new Netflix edu-docu The Social Dilemma is highly Marmite among (social) media cognoscenti, the SmallDataForum verdict is very much a score draw, from Sam’s firm thumbs-down to my approval and on to Neville’s not-seen-it-yet.
I share Sam’s take that there’s not much new to learn – certainly for topic obsessives like us – and I also agree that eminent voices such as Shoshana Zuboff’s and Jonathan Haidt’s seem overly muffled and perhaps squandered.
But then we’re not the primary target audience. Neither are new media commentators, such as the Verge’s Casey Newton, who feels that the film misunderstands social networks. If it gets the average Netflix user to reflect a bit more on what they do with social media (and social media with them), then that can’t be a bad thing.
For understandable reasons, the last four, regular monthly episodes of the Small Data Forum podcast have been focused – almost to the point of obsession – on coronavirus. From the uncertain first fumblings of life under lockdown, through escalating mortality and morbidity, and on to a fundamental lack of trust in the competence of blustering, blond, male, right-wing leaders … the last four episodes have had it all.
Some have said that this podcast was made for events like the pandemic, scrutinising as we do the uses and abuses of data big and small in politics, business, and public life. There’s been plenty of that about of late.
So, with lockdown restrictions being lifted all around the world – and Government advice completely ignored on the beaches of Bournemouth in the mini-U.K. heatwave last week, leading Dorset police to declare the overcrowding “a major incident” – our focus in this episode was much more catholic.
Indeed, with Facebook, GDPR, and brand safety the dominant topics, you could be forgiven for thinking you’d fallen through a wormhole in the space-time continuum and teleported back to 2018.