Everything Is Advertising with Ryan Barwick

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3:39Hello and welcome to Better Off Line. I'm the single most punished individual alive. My name's Ed Zitra and I'm your host.

3:56Today I'm joined by Ryan Barwick of Morning Brew and Marketing Brew specifically, of course. Ryan, thank you for joining me. Hey man, what's up? How's it going? We are in the beautiful New York studios of iHeartRadio. Daniel Goodman, of course, producing live with us, live to tape, of course. And Ryan's here to talk to me about advertising. And we're going to start somewhere fairly obvious, which is what is the kind of status of the Google Ads antitrust case? Where are we at? Yeah, I spent in September, I spent two weeks in Alexandria, Virginia, sexy Alexandria, Virginia, sitting on a wooden bench, listening to hours and hours of economists explaining auction bidding.

4:38I know you're very jealous of that. This is what the listeners love. No, but seriously, actually explain it. Yeah, no, no. I mean, it was, I got a nosebleed halfway through it because it was at times very dull, but also very exciting. Essentially, the DOJ is arguing that Google doesn't just have a monopoly on digital advertising, but they own the entire supply chain, right? So Google owns the software that publishers use, like the New York Times or the Wall Street Journal, to run ads on their website and to monetize their content. Google also owns or has a monopoly on the software that advertisers are using to reach those audiences on the New York Times and the Wall Street Journal.

5:20And in between those two pieces of software, there's this auction software. There's a bidding platform. And Google also owns that. Right. So they own every piece. The DOJ is alleging that they own every piece of the supply chain. And they really, I mean, at one point, the DOJ said Google sees, I think, nine out of every 10 digital transaction. So that's pretty large, right? That's a lot of them. That's pretty big. And it was fascinating. Over the course of two weeks, I was only there for two weeks. I believe it went on for a little bit more than three. hey, we kind of got a history of ad tech, which is this incredibly complex, incredibly dense, incredibly dorky industry to just kind of explain how the internet makes money.

6:08And Google has been on the receiving end of a lot of those advertising dollars, of those ad budgets. And it's fascinating. So we had the Monday before Thanksgiving, we had closing arguments, which is where the DOJ and Google get to make their final stand before the judge and make their arguments. The DOJ, again, just kind of pointed to Google's size. And that they own every single part of the stack, kind of. Right, or certainly the most successful parts of the stack. And then Google essentially countered by saying, look, we're really good at what we do. And it's hard to argue with them in the sense that they have so much data that they can monetize these things really efficiently.

6:50Because they see so much, they can get really good at advertising. But it feels like the argument there would be, well, you have all this data from the monopolies you're doing. So I'm guessing that's kind of how the DOJ came in it? Yeah, yes. And it was interesting. On the first day, the DOJ said, you have all of these advertisers. But we never really delved into why they have so many advertisers. YouTube was almost never mentioned during the case. Really? Gmail, Chrome, right? Obviously, there's a much sexier trial that is still ongoing. Well, it's entering the remedy phase. Yeah, it has already reached its conclusion.

7:25The real heads were at the EdTech trial, I like to say. The real dorks were at the much more complex and boring trial. So that wasn't really necessarily touched on. And again, it will be really interesting. One thing that I kind of took away from the trial, and this is called like, it's a rocket docket. So it happens really quickly. We could find out before Christmas or even in early January what decision the judge has reached. But one thing that I really took away from it is that the DOJ was basically pointing out issues or decisions Google made to maintain a monopoly, things that had happened 10 years ago, things that had happened 12 years ago in some instances.

8:10So Google does something and the industry has to respond and then Google does another thing. Can you give an example? Well, there are these, you know, strategies. One was called like last look where Google would get the last look at a bid between an advertiser and a publisher. Jason, Jason brought that up on a preview. Like the idea that like right then they go and we can just bid under them. Right. Exactly. So then Google would do that. Right. And then the industry would try to work around that. um and ultimately things have reached kind of i don't know if copacetic is the correct term things have kind of leveled out there especially as advertisers are more drawn to like streaming platforms they're more drawn to a platform like a tiktok or twitter social media platforms um you know banner ads are kind of like i think among most buyers are kind of like the least sexy version of advertising can you i think the common frame like can you name any banner ad you've ever seen only that mcdonald's one from like 20 years ago where it said i'd hit that okay there we go that was a great ad i i've never fucked a burger but i thought about it for at least a second so but never correct and it's my question is is that kind of advertising dying is banner traditional that kind of media dying is it being replaced or is it just cheaper and shittier but you would hope it doesn't die because that is the kind of advertising that a lot of publishers i wasn't asking because i wanted it to happen right that a lot of publishers use right um and obviously publishers have shifted to try to get subscriptions um i don't know if i'd go as far as saying it's dying but the budgets are definitely shifted and in the same way that linear television um is is losing viewers every year and people are adopting like streaming platforms right um Yeah, it's just, it's not as interesting.

10:02It's not as sexy. And I do not know, to kind of tie the knot here, I don't know what kind of remedy might solve that. Like if Google's forced to sell, it's auction software. It's exchange. What does that do to - Like double click? Just they finally, after buying it, they just sell it again? Couldn't they sell access to the data? Because that's kind of what they're suggesting with the search remedies. Listeners, if you didn't know, part of the suggested remedies from the government have been selling Chrome, which I'm kind of there on. But they're saying that they would allow other search engines to access Google's data dump.

10:35Now, could a similar thing happen with this? Yeah, I don't really know. Like the bit streams here, it's so complex. There's so many players involved. I don't entirely know what that would look like. And I think that's part of the, I'm sure Google's lawyers and the DOJ's lawyers are wrestling over this kind of stuff. But you definitely got the sense, at least from the however many reporters were there, that this stuff is so weedy and so complex that I don't know how much of it is ultimately. I don't know what kind of remedies ultimately alleviate the concerns in the industry. Certainly many people feel like Google is a monopoly, but I'm not entirely sure where else they would take their dollar.

11:21but again part of that is because Google isn't because there's never been another option kind of makes me think of Facebook as well because I know that there's have they done an antitrust case against them I forget but I know the argument is that they have a monopoly over social media which is true but breaking up these companies seems I want them to do it they need to do it but I just have no idea how they could possibly like they're so deeply embedded in every corner of every part of the internet at this point I just don't know how practical that would be yeah it was interesting Google brought up on the last day of the trial they brought up Microsoft as its competitor look Microsoft has Xbox that's inventory that Google doesn't have access to that's an advantage Microsoft has over Google I don't think I've ever met a media buyer that has ever said well that Xbox inventory really makes a difference or that Microsoft has made a lot of in rows with retailers for example.

12:17Haven't Microsoft been trying to do ads for years and never really made it? Well, they make like a billion from Bing. Yeah, well, they have a very successful business around it, but it's certainly not - It's not Google-sized. A juggernaut like a Google or an Amazon. And for context listeners, I think what, a billion in revenue compared to several hundred billion from ads that Google makes? 40 billion a quarter. Jesus Christ, this fucking company. But there was one story I did want to talk to you about that you wrote back in September that we've talked about a few times. So this Facebook ad story, because I actually think that this may be a story that gets bigger and bigger, but you wrote this story about how you talked to a few ad buyers with Facebook and that Facebook's ads platform is kind of broken.

13:00Can you go into that a bit? Yeah, this is something I noticed on Twitter, or I guess we call it X now. I don't. He dead names trans people, I'm dead naming Twitter. There you go. Essentially, buyers were saying, hey, so there are advertisers, but advertisers aren't pulling the levers. Usually advertisers go to ad agencies and the ad agencies, I don't know if your audience cares necessarily about that delineation. But I saw a bunch of buyers saying, hey, we had$10 ,000 disappear. We put it into meta and poof, it disappeared. It's gone. We don't know what happened to it. and you know one guy saying that it's like okay maybe that is a bug but then when you talk to eight media buyers and they all say since roughly january that the platform has become really wonky that there are a lot of hurdles to overcome wonky how like bugs essentially like again someone in ad tech described these advertising platforms like a google like we were talking about or a meta described them that like i shouldn't think about them as platforms i should think about them as ATMs that like you put money in these machines and then maybe money will come out or at least you'll get a metric that tells you you made a metric which only they have right exactly that they have decided for you um and they are the ultimate auditor as well right yeah they're essentially the they're uh and buyers would say that these companies operate black boxes right that you can't really audit but the black boxes do sell do hickeys and widgets right like people do buy stuff on Instagram and on Google and even on TikTok, amazingly.

14:36But anyway, I ended up talking to several buyers that were saying that, again, they would create a budget and then out of nowhere, I want to advertise on Instagram. And then in the middle of the night at three in the morning, the campaign only targeted people on Facebook and only targeted 80 year old people on Facebook. And it didn't really work. And again, when you have so many people saying that that's what they encounter, that the platform wasn't really working the way they had expected to or the way it intended. And Meta essentially was saying kick rocks, like there's nothing we can do. Yeah, would Meta not refund their money or anything?

15:12No, I believe at the time I was talking to people, I don't think people had gotten credits yet. And as they were saying this, Meta had its like best quarter ever, right? So Meta doesn't necessarily need to help alleviate these small kind of buyers, even though these people in many instances are spending six figures on their advertising campaigns. Yeah, just breaking that down. So these media buyers, they're not just for the listeners to break this down. So they're not buying for like one company. They represent more like 10, 15. Yeah, they can work with 10 brands. They can work with 15. So they're like an agency of sorts.

15:43Exactly. So, I mean, my thought on that would be is how is Meta making all that money? And it's just, it's very, there's no, just very basic thing. There's no other way to advertise on these platforms, right? There's no other inroad with Instagram or Facebook. right? It's just this? Yes. That is insane. That is bonkers. Did you hear from Meta at all? Did they get back to you? Yeah. I mean, I think they would say that advertisers love Meta, right? Great. And I think a lot of people, a lot of buyers will say, well, it does work for them. Again, outside of, that's why TikTok has become so interesting because TikTok kind of presents this third option where previously you could really only spend on a meta.

16:27Snap obviously exists. That doesn't always gain a lot of traction. That company is not a good business. It never has been. I loved it in high school. No, but that's the thing. It's like an app that has uses, but when they tried to add the business stuff, it just immediately like, oh, this just burns money. Yeah, Snap's interesting because they take over every industry event and they always have such a presence. And yet I feel like the story, at least every time I talk to people about Snap as platform. Reddit has impressed a lot of people lately. But again, it wasn't until TikTok that people actually kind of raised eyebrows about another platform.

16:58It gives advertisers kind of a diversity outside of just meta and Instagram.

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20:04Why isn't, is their stuff just not effective? Are their ads not good? I don't know if I could necessarily speak to that. Okay. I'm always looking for like a broader picture. Sure, I don't even mean a qualitative one. It's just like, what are people saying stuff? Or is it just not that effective? It's just not that like interesting. Like I don't think that every time I ask people about that, I don't get that many interesting answers. Reddit is fascinating. Reddit is like the wild west of the internet. And I use Reddit constantly. We've got the better offline Reddit full of various criminals. and it's great.

20:35Do you see a lot of ads there? I move past them with the speed of Pegasus. You've got the trained eye. Yeah, I've just like old school into that just like no. Just my brain removes it. Do you do that with newsletters too? Yeah. See, I feel like this is the thing. I'm curious how this evolves. This is the dorkiest conversation ever. This is better offline. We are the dorkiest. I'm curious in five to ten years and I work at a newsletter company. But I'm curious if in five to ten years people aren't even going to look at newsletter ads because we've just trained the behavior to look away to know exactly when to skip i've done test ads of like mates products like i don't no one will pay me for an ad other than on this podcast that will humiliate me by trying to sell you ai software which everyone loves to tell me about but like with the newsletters people do click people do engage and i found that across the board and my general view is right now is newsletter companies are actually going to do better i don't do you remember back in like 2021 when every publication was like we have to do newsletters now and then they immediately junked it three months later it just feels insane because that feels far more the future than any kind of subscription product like subscribe like the verge has a subscription product now and it's like i get why they have to do it because money things cost money but it just feels that that the whole media industry right now needs to work out a way to connect with the readers and it feels like their email address is good?

21:58It's like a good place for it? That's where I want it. New York Magazine launched an app. And I want it to succeed. I love New York. An app? They launched an app. They created an app. As if it's, you know, the iPad era of news, whatever. But like an app for the magazine. An app for the magazine. Apparently not. Or they didn't put a lot of resources behind it. And I think that's great. I hope it makes money. But I just want a newsletter. And they do. They've got amazing newsletters. I'll take another newsletter. I'll read something else from New York Magazine. so this is now a completely different subject but it's my damn show um the thing that i've been really thinking about right now with the media is the this objectivity problem where everyone has to be objective but it also feels like every outlet is trying to suck the life out of the reporters not like literally but no personality no voice morning brew actually does a pretty good job with that they've actually like allowed you to talk like human words but it feels like the times the Post, both New York Post has a voice, just not a nice one.

22:59Washington Post, Business Insider has experimented with the discourse thing, which I do write for, so I guess I can't trash them. You're describing much more successful reporters than I am, by the way. But Morning Brew, I like Morning Brew, even though the video stuff rankles me a little bit. I cringe easy. But it's just, we're in this weird point now, and I think ads comes into this as well, where I'm not sure anyone in the media knows what the fuck to do business model wise. I think everyone's a bit scared. I just want to report the news. Exactly. Like you just want to get like. Yeah, I don't know.

23:33I have the timid, cowardly reporters attitude towards this. You know, so my beat primarily is advertisers, right? There is a cottage industry of ad tech companies that actively or inactively prevent advertisers from appearing in news publishers. Really? There was a whole culture around. There's like a Jezebel article about this, I feel. Yeah, yeah, yeah. It's these brand safety companies. There's a whole cottage industry around. And the example that everyone uses in the industry is that if I'm United Airlines or JetBlue or whoever, I don't want to run my ad next to a story about a plane crash.

24:13Right. You can see why that's a conflict. Understandable. But I think the industry several years ago is not necessarily the interest in this tech has waned. Right. But the industry internalized that United Airlines example as I don't ever want to be near news at all because that is a negative environment. Right. I can't control it. Right. Exactly. You can't control it. And they shouldn't be able to control it. Right. Advertisers shouldn't have a say on what's on a front page of a newspaper. um and the report to that is i have never thought differently about an advertiser um based on the content it's next to i don't think that's how humans think it it fails any critical thinking um and yet these are billion dollar companies i and this is a very better offline thought but a lot of that is the people making those decisions don't read the news anyway so they're just like well, this thing I've made up is very scary.

25:09Or they think consumers are kind of dumb, which I don't think is fair. I don't think that's accurate, but I think that's the best sense. And it also just suggests they haven't talked to consumers. Like it feels like you could ask someone. And so thematically though, kind of want to explain to listeners why I've had Ryan on, I've been factored marvelous at this, is the reason I talk about ads so much is it's kind of something you said earlier. Google is what? 9 out of 10 of all digital transactions. Though advertising is this annoying thing that everyone hates and complains about, it is the reason everything goes like this.

25:42Ads on this show, there's ads on every website, every single publication you read has a bunch of ads, banner ads, whatever, video. And everyone has been trying to work out how not to do that for some time. And I think - It's how the internet exists. It's how the internet makes money. That's like the way I try to, and I think this is me stylizing it, but it is how the internet is monetized through ads baby google is an advertising business meta is an advertising business tiktok it's an advertising business is tiktok effective do ad buyers actually like it uh yeah absolutely they love it they wish it wasn't chinese but they absolutely love it and and they're still there uh they're they're still have a very large presence even though obviously it's been diluted a bit since the election, but even though there is a threat that it could not, there was a threat that it could not exist.

26:34Yeah, it doesn't seem like that. Seems like Trump's gonna keep it now, which is very funny. It's just like, okay, I'm xenophobic, but not that. It's interesting as well, because I feel like the news media could have, I'm not talking necessarily about Morning Bro, it feels like it's an undiscussed thing that only a few years ago, we had the first major online ad company pop up that challenged any of the monopolies. Like the fact that TikTok exists and just fucking popped up is insane to me because it's relatively new. Like what, 2018, 2019? I mean, various versions of it might have existed before.

27:11And it's interesting. It makes me wonder whether any other company could spin up, just shove a bunch of money and do the same thing. Yeah. I mean, it's, I know this is something that you've talked about a lot, but every time I go on facebook.com yeah I think man there should be cobwebs here this doesn't look this isn't appealing to me as a user this is a couple batshit people I went to high school with kind of just screaming in the grocery aisles yeah um and even Instagram I feel like has become that I'm speaking purely oh no no I've said very similar things a lot of times and way more swear words like it's fine um it's just really interesting and also kind of what pisses me off about it you don't have to agree i can rant all i want but is that the cobwebs thing it's just like the products like they're ad companies and they've just stopped pretending they're not like they're not pretending like oh yeah we're going to connect you with your friends your family's just like ego pig eat your slop well i'd say meta has gone us so far as to say we're actually not as interested in connecting you with your friends what about this 70s funk band video would you like to see this content shown constantly that's my algorithm i just get bands that i get steely dan clips which is cool but that's that's that is far from why i intend initially signed up for the app because i wanted to see everyone i went to high school with for a solid six month period all i got was these insane self-defense things it was just like three second clips because they don't show you the click they want you to click on it and it'd be like how to stop a guy and it would like you watching like this guy if i did this i would die like i this this is not useful information and then a post from three weeks ago just from like a band that i liked when i was 22 years old and it's just it's such a strange product and tiktok is extremely manipulative with their algorithm sure but so it's meta but it also feels like more of a functional bit like a thing that you use and enjoy i find it horrible it upsets me i'm too old you find it horrible it's too much i i don't like infinite scrolling i must be done and like so i don't even like scroll down my instagram pictures anymore because there's so much crap you go like two scrolls and you've got an ad for a mobile game that doesn't exist and then an ad for a direct to consumer like low carb product i'm trying to be healthy and it's just like discordant the whole thing just feels like very weird and then tiktok at least feels like yeah we're manipulating you but we've got fun thing look at this i love it i find tiktok so i don't want to sound like a shrill but i think in terms of just like the algorithm as an entertainment platform i find it fascinating and again i'm very dull and boring so i'm looking at travel to paris videos and cooking videos i just get a lot of cooking i feel like that's more representative of regular people though you don't need to go like three levels deep of irony right enjoy something you don't need the brain rot like i and i need like extra brain i need the shit that is like a like the golden shiva looking thing that says type yes to affirm that you have been affirmed like i'm like three levels deep i'm deeply unhappy but you do normal stuff i well i want my friends to send me the brain rot stuff right that's how i curated i get the group chat now now my Twitter is all brain rot.

30:31That's how I like it. Perfect. And Blue Sky. Blue Sky. Yes. And we're a pro Blue Sky platform. So you're on Blue Sky. I got 103 ,000 followers. I'm cooking. I'm cooking. It's the best. And actually, Blue Sky is interesting because I don't know how much time you spent on it, but I've really been enjoying it and enjoying the posts that are like, yeah, wow, I shared a link on here and everyone saw it. Just the insane, we are beaten dogs. who just like, oh, yeah, yeah, I can see the people I follow. And there's not just a griper in my reply telling me he's going to bomb my house or three different people.

31:05Well, see, you have a much larger presence than I do. I've been going, I've been A-B testing. Right. What works on Twitter? Nothing works on Twitter. It's dying. I don't know. I still feel like I still get more among my very small pool there. I feel like I still get more of a reaction. And I feel like Twitter is more unhinged in a way that I find pleasant. But to your point about avoiding newsletter ads, I feel like I can now avoid the Nazis. Oh, I can do that. I mean, I've been, I was on the internet using like Usenet and V-Bulletin and shit. Like I grew up on gaming forums, like, oh, a Nazi, that's just one of the many freaks that pops up on IRC.