Book Review of “Frenemies: The Epic Disruption of the Ad Business (and Everything Else)”

“Advertising in Times Square”, image by Dirk Knight

Every so often, an ad campaign comes along that is strikingly brilliant for its originality, execution, persuasiveness, longevity, humor and pathos. During the mid-1980’s, one of these bright shining examples was the television ads for Bartles & Jaymes Wine Coolers. They consisted of two fictional characters: Frank Bartles, who owned a winery and did all of the talking, and Ed Jaymes, a farmer who never spoke a word but whose deadpan looks were priceless. They traveled across the US to different locations in pursuit of sales, trying to somehow adapt their approaches to reflect the local surroundings. Bartles was very sincere but often a bit naive in his pitches along the way, best exemplified in this ad and another one when they visited New York.

These commercials succeeded beyond all expectations in simultaneously establishing brand awareness, boosting sales and being laugh-out-loud hilarious because Bartles’s and Jaymes’s were such charming, aw-shucks amateurs. In actuality, these ads were deftly conceived and staged by some smart and savvy creatives from the Hal Riney & Partners agency. For further lasting effect, they always had Bartles express his appreciation to the viewers at the end of each spot with his memorable trademark tagline of “Thanks for your support”. These 30-second video gems are as entertaining today as they were thirty years ago.

But those halcyon days of advertising are long gone. The industry’s primary media back then was limited to print, television and radio. Creativity was its  cornerstone and the words “data analytics” must have sounded like something actuaries did in a darkened room while contemplating the infinite. (Who knows, maybe it still does to some degree.)

Fast forwarding to 2018, advertising is an utterly different and hyper-competitive sector whose work product is largely splayed across countless mobile and stationary screens on Planet Earth. Expertly chronicling and precisely assaying the transformative changes happening to this sector is an informative and engaging new book entitled Frenemies: The Epic Disruption of the Ad Business (and Everything Else) [Penguin Press, 2018], by the renowned business author Ken Auletta. Just as a leading ad agency in its day cleverly and convincingly took TV viewers on an endearing cultural tour of the US as we followed the many ad-ventures of Bartles & Jaymes, so too, this book takes its readers on a far-ranging and immersive tour of the current participants, trends, challenges and technologies affecting the ad industry.

A Frenemy of My Frenemy is My Frenemy

Image from Pixabay

This highly specialized world is under assault from a confluence of competitive, online, economic, social and mathematical forces. Many people who work in it are deeply and rightfully concerned about its future and the tenure of their places in it. Auletta comprehensively reports on and assesses these profound changes from deep within the operations of several key constituencies (the “frenemies”, conflating “friend” and “enemy”). At first this might seem a bit too much of “inside baseball” (although the ad pitch remains alive and well), but he quickly and efficiently establishes who’s who and what’s what in today’s morphing ad markets, making this book valuable and accessible to readers both within and outside of this field.  It can also be viewed as a multi-dimensional case study of an industry right now being, in the truest sense of the word, disrupted.¹ There is likewise much to learned and considered here by other businesses being buffeted by similar winds.

Frenemies, as thoroughly explored throughout this book, are both  business competitors and partners at the same time. They are former and current allies in commerce who concurrently cooperate and compete. Today they are actively infiltrating each other’s markets. The full matrix of frenemies and their threats and relationships to each other includes the interests and perspectives of ad agencies and their clients, social media networks, fierce competition from streamers and original content producers like Netflix², traditional media in transition to digital platforms, consulting companies and, yes, consumers.

Auletta travels several parallel tracks in his reporting. First, he examines the past, present on onrushing future with respect to revenue streams, profits, client bases served, artificial intelligence (AI) driven automation, and the frenemies’ very fluid alliances. Second, he skillfully deploys the investigative journalistic strategy of “following the money” as it ebbs and flows in many directions among the key players. Third, he illuminates the industry’s evolution from Don Draper’s traditional “Mad Men” to 2018’s “math men” who are the data wranglers, analysts and strategists driven by ever more thin-sliced troves of consumer data the agencies and their corporate clients are using to achieve greater accuracy and efficiency in selling their goods and services.

A deep and wide roster of C-level executives from these various groups were interviewed for the book. Chief among them are two ad industry legends who serve as the x and y axes upon which Auletta has plotted a portion of his reporting. One is Martin Sorrell, who was the founder and CEO of WPP, the world’s largest advertising holding company.³ The other is Michael Kassan, the founder and CEO of MediaLink, a multifaceted firm that connects, negotiates and advises on behalf of a multitude of various parties, often competitors in critical matters affecting the ad business. Both of these individuals have significantly shaped modern advertising over many decades and are currently propagating some of the changes spotlighted in the book in trying to keep it vital, relevant and profitable.

Online Privacy v. Online Primacy

“Tug of War”, image by Pixabay

The established tradition of creativity being the primary driver of advertising creation and campaigns has given way to algorithm-driven data analytics. All of the frenemies and a myriad of other sites in many other parsecs of the websphere vacuum up vast amounts of data on users, their online usage patterns, and even go so far as to try to infer their behavioral attributes. This is often combined with additional personal information from third-party sources and data brokers. Armed with all of this data and ever more sophisticated means for sifting and intuiting it, including AI4, the frenemies are devising their campaigns to far more precisely target potential consumers and their cohorts with finely grained customized ads.

The high point of this book is Auletta’s nuanced coverage of the ongoing controversy involving the tension between frenemies using data analytics to increase click-through rates and, hopefully, sales versus respecting the data privacy of people as they traverse the Web. In response to this voracious data collection, millions of users have resisted this intrusiveness by adding free browser extensions such as AdBlock Plus to circumvent online tracking and ad distribution.5 This struggle has produced a slippery slope between the commercial interests of the frenemies and consumers’ natural distaste for advertising, as well as their resentment at having their data co-opted, appropriated and misused without their knowledge or consent. Recently, public and governmental concerns were dramatically displayed in the harsh light of the scandals involving Facebook and Cambridge Analytica.

Furthermore, Google and Facebook dominate the vast majority of online advertising traffic, revenues and, most importantly, the vast quantum of user information which ad agencies believe would be particularly helpful to them in profiling and reaching consumers. Nonetheless, they maintain it is highly proprietary to them alone and much of it has not been shared. Frenemies much?

Additional troubling trends for the ad industry are likewise given a thorough 3-D treatment. Auletta returns to the axiom several times that audiences do not want to be interrupted with ads (particularly on their mobile devices). Look no further than the likes of premium and the major streaming services who offer all of their content uninterrupted in its entirety. The growing ranks of content creators they engage know this and prefer it because they can concentrate on their presentations without commercial breaks slicing and dicing their narrative continuity. The still profitable revenue streams flowing from this are based upon the strengths of the subscription model.

Indeed, in certain cases advertising is being simultaneously disrupted and innovated. Some of the main pillars of the media like The New York Times are now expanding their in-house advertising staff and service offerings. They can offer a diversified array of ads and analyses directly to their advertisers. Likewise, engineering-driven operations like Google and Facebook can deploy their talent benches to better target consumers for their advertisers by extracting and applying insights from their massive databases. Why should their clients continue go to the agencies when their ads can be composed and tracked for them directly?

Adapt or Go Home

“Out with the Old, In with the New”, image by Mark

The author presents a balanced although not entirely sanguine view of the ad industry’s changes to maintain its composure and clients in the midst of this storm. The frenemy camps must be willing to make needed and often difficult adjustments to accommodate emerging technological and strategic survival methods. He examines the results of two contemporary approaches to avoiding adblocking apps and more fully engaging very specific audiences. One is called “native advertising“, which involves advertisers producing commercial content and paying for its placement online or in print to promote their own products. Generally, these are formatted and integrated to appear as though they are integrated with a site’s or publication’s regular editorial content but contain a notice that it is, in fact “Advertising”.

However, Auletta believes that the second adaptive mechanism, the online subscription model, will not be much more sustainable beyond its current successes. Consumers are already spending money on their favorite paywalled sites.  But it would seem logical that users might not be thus willing to pay for Facebook and others that have always been free. As well, cable’s cord-cutters are continuing to exhibit steady growing in their numbers and their migrations towards streaming services such as Amazon Prime.6

Among the media giants, CBS seems to be getting their adaptive strategies right from continuing to grow multiple revenue streams. They now have the legal rights and financial resources to produce and sell original programming. They have also recently launched original web programming such as Star Trek: Discovery on a commercial-free subscription basis on CBS All Access. This can readily be seen as a challenge to Netflix despite the fact that CBS also providing content to Netflix. Will other networks emulate this lucrative and eyeball attracting model?

As Auletta also concludes, for now at least, consumers as frenemies, appear to be the beneficiaries of all this tumult. They have many device agnostic platforms, pricing options and a surfeit of content from which to choose. They can also meaningfully reduce, although not entirely eliminate, ads following them all over the web and those pesky stealth tracking systems. Whether they collectively can maintain their advantage is subject to sudden change in this environment.

Because of the timing of the book’s completion and publication, the author and publisher should consider including in any subsequent edition the follow-up impacts of Sorrell’s departure from WPP and his new venture (S4 Capital), the effects of the May 2018 implementation of EU’s General Data Protection Regulation (GDPR), and the progress of any industry or government regulation following the raft of recent massive data breaches and misuses.

Notwithstanding that, however, “Frenemies” fully delivers on all of its book jacket’s promises and premises. It is a clear and convincing case of truth in, well, advertising.

So, how would Frank Bartles and Ed Jaymes 2.0 perceive their promotional travels throughout today’s world? Would their folksy personas play well enough on YouTube to support a dedicated channel for them? Would their stops along the way be Instagram-able events? What would be their reactions when asked to Google something or download a podcast?

Alternatively, could they possibly have been proto-social media influencers who just showed up decades too soon? Nah, not really. Even in today’s digital everything world, Frank and Ed 1.0 still abide. Frank may have also unknowingly planted a potential meme among today’s frenemies with his persistent proclamations of “Thanks for your support”: The 2018 upgrade might well be “Thanks for your support and all of your data”.

 


For a very enlightening interview with Ken Auletta, check out the June 26, 2018 podcast entitled Game Change: How the Ad Business Got Disrupted, from The Midday Show on WNYC (the local NPR affiliate in New York).


September 4, 2018 Update: Today’s edition of The New York Times contains an highly enlightening article directly on point with many of the key themes of Frenemies entitled Amazon Sets Its Sights on the $88 Billion Online Ad Market, by Julie Creswell. The report details Amazon’s significant move into online advertising supported by its massive economic, data analytics, scaling and strategic resources. It comprehensively analyzes the current status and future prospects of the company’s move into direct competition with Google and Facebook in this immense parsec of e-commerce. I highly recommend a click-through and full read of this if you have an opportunity.


1.   The classic work on the causes and effect of market disruptions, the disruptors and those left behind is The Innovator’s Dilemma, by Clayton Christensen (HarperBusiness, 2011). The first edition of the book was published in 1992.

2.    Netflix Topples HBO in Emmy Nominations, but ‘Game of Thrones’ Still Rules, July 13, 2018, New York Times, by The Associated Press. However, see also Netflix Drops Dud on Wall St. As Subscriber Growth Flops, July 16, 2018, New York Times, by Reuters.

3.   Sorrell is reported in the book as saying he would not leave anytime soon from running WPP. However, following the book’s publication, he was asked to step down in April 2018 following allegations of inappropriate conduct. See Martin Sorrell Resigns as Chief of WPP Advertising Agency, New York Times, by Matt Stevens and Liz Alderman, April 14, 2018. Nonetheless, Sorrell has quickly returned to the industry as reported in Martin Sorrell Beats WPP in Bidding War for Dutch Marketing Firm, New York Times, by Sapna Maheshwari, July 10, 2018.

4.  For a very timely example, see The Ad Agency Giant Omnicom Has Created a New AI Tool That is Poised to Completely Change How Ads Get Made, BusinessInsider.com, by Lauren Johnson,  July 12, 2018.

5.   Two other similar anti-tracking browser extensions in wide usage include, among others Ghostery and Privacy Badger.

6.   See also  Cord-Cutting Keeps Churning: U.S. Pay-TV Cancelers to Hit 33 Million in 2018 (Study), Variety.com, by Todd Spangler, July 24, 2018.

Single File, Everyone: The Advent of the Universal Digital Profile

Ducks at Parramatta, Image by Stilherrian

Throughout grades 1 through 6 at Public School 79 in Queens, New York, the teachers had one universal command they relied upon to try to quickly gather and organize the students in each class during various activities. They would announce “Single file, everyone”, and expect us all to form a straight line with one student after the other all pointed in the same direction. They would usually deploy this to move us in an orderly fashion to and from the lunchroom, schoolyard, gym and auditorium. Not that this always worked as several requests were usually required to get us all to quiet down and line up.

Just as it was used back then as a means to bring order to a room full of energetic grade-schoolers,  those three magic words can now be re-contextualized and re-purposed for today’s digital everything world when applied to a new means of bringing more control and safety to our personal data. This emerging mechanism is called the universal digital profile (UDP). It involves the creation of a dedicated file to compile and port an individual user’s personal data, content and usage preferences from one online service to another.

This is being done in an effort to provide enhanced protection to consumers and their digital data at a critical time when there have been so many online security breaches of major systems that were supposedly safe. More importantly, these devastating hacks during the past several years have resulted in the massive betrayals of users’ trust that need to be restored.

Clearly and concisely setting the stage for the development of UDPs was an informative article on TechCrunch.com entitled The Birth of the Universal Digital Profile, by Rand Hindi, posted on May 22, 2018. I suggest reading it in its entirety. I will summarize and annotate it, and then pose some of my own questions about these, well, pro-files.

Image from Pixabay

The Need Arises

It is axiomatic today that there is more concern over online privacy among Europeans than other populations elsewhere. This is due, in part, to the frequency and depth of the above mentioned deliberate data thefts. These incidents and other policy considerations led to the May 25, 2018 enactment and implementation of the General Data Protection Regulation (GDPR) across the EU.

The US is presently catching up in its own citizens’ levels of rising privacy concerns following the recent Facebook and Cambridge Analytica scandal.¹

Among its many requirements, the GDPR ensures that all individuals have the right to personal data portability, whereby the users of any online services can request from these sites that their personal data can be “transferred to another provider, without hindrance”. This must be done in a file format the receiving provider requires. For example, if a user is changing from one social network to another, all of his or her personal data is to be transferred to the new social network in a workable file format.

The exact definition of “personal profile” is still open to question. The net effect of this provision is that one’s “online identity will soon be transferable” to numerous other providers. As such transfer requests increase, corporate owners of such providers will likely “want to minimize” their means of compliance. The establishment of standardized data formats and application programming interfaces (APIs) enabling this process would be a means to accomplish this.²

Aurora Borealis, Image by Beverly

A Potential Solution

It will soon become evident to consumers that their digital profiles can become durable, reusable and, hence, universal for other online destinations. They will view their digital profiles “as a shared resource” for similar situations. For instance, if a user has uploaded his or her profile to a site for verification, in turn, he or she should be able to re-use such a “verified profile elsewhere”.³  

This would be similar to the Facebook Connect’s functionality but with one key distinction: Facebook would retain no discretion at all over where the digital profile goes and who can access it following its transfer. That control would remain entirely with the profile’s owner.

As the UDP enters the “mainstream” usage, it may well give rise to “an entire new digital economy”. This might include new services such as “personal data clouds to personal identity aggregators or data monetization platforms”. In effect, increased interoperability between and among sites and services for UDPs might enable these potential business opportunities to take root and then scale up.

Digital profiles, especially now for Europeans, is one of the critical “impacts of the GDPR” on their online lives and freedom. Perhaps its objectives will spread to other nations.

My Questions

  • Can the UDP’s usage be expanded elsewhere without the need for enacting GDPR-like regulation? That is, for economic, public relations and technological reasons, might online services support UDPs on their own initiatives rather than waiting for more governments to impose such requirements?
  • What additional data points and functional capabilities would enhance the usefulness, propagation and extensibility of UDPs?
  • What other business and entrepreneurial opportunities might emerge from the potential web-wide spread of a GDPR and/or UDP-based model?
  • Are there any other Public School 79 graduates out there reading this?

On a very cold night in New York on December 20, 2017, I had an opportunity to attend a fascinating presentation  by Dr. Irene Ng before the Data Scientists group from Meetup.com about an inventive alternative for dispensing one’s personal digital data called the Hub of All Things (HAT). [Clickable also @hubofallthings.] In its simplest terms, this involves the provision of a form of virtual container (the “HAT” situated on a “micro-server”), storing an individual’s personal data. This system enables the user to have much more control over whom, and to what degree, they choose to allow access to their data by any online services, vendors or sites. For the details on the origin, approach and technology of the HAT, I highly recommend a click-through to a very enlightening new article on Medium.com entitled What is the HAT?, by Jonathan Holtby, posted yesterday on June 6, 2018.


1.  This week’s news bring yet another potential scandal for Facebook following reports that they shared extensive amounts of personal user data with mobile device vendors, including Huawei, a Chinese company that has been reported to have ties with China’s government and military. Here is some of the lead coverage so far from this week’s editions of The News York Times:

2.  See also these five Subway Fold posts involving the use of APIs in other systems.

3.  See Blockchain To The Rescue Creating A ‘New Future’ For Digital Identities, by Roger Aitlen, posted on Forbes.com on January 7, 2018, for a report on some of the concepts of, and participants in, this type of technology.