More Impressions, Less Human Connection? | Jack Myers

Advertising and TV space are one of the first industries that have been disrupted by automation and technology. Today we sit down with Jack Meyers, who's an advertising industry veteran, as well as the author of Tao of Leadership and Your Third Brain. He's been observing what's happening in the advertising space. He's here to tell us what will happen to many of these industries, and what leaders need to do to position themselves for the future. The economy of Hollywood has collapsed. The economy of the advertising economy that supports quality and connections with human connections has collapsed, and I think we're about to see that in pretty much every economic sector. So this is coming to other industries. From what you're saying, we're gonna have some higher-end service for select people, and then we're gonna have very low-end on the other end of it. We have a lot more content and a lot less content that we care about. I'm Siamak. Welcome to Market Insider. Jack, it's great to have you on. Welcome. Siamak, thank you for inviting me. We wanna talk to you about AI, and a lot of people are concerned that with AI taking off, a lot of the industries will change from where they are today, and maybe some jobs will disappear, and we will get impacted as a society significantly. You have been in a space that has been the forefront of all of this. Can you tell us what you're seeing first, and then tell us about your experiences? Thank you. First of all, I agree with you that every company, every individual is going to be impacted by AI. We're in the earliest stages of AI, and the speed with which it's accelerating is to the fact where they've had to pull some of the frontier models at Anthropic and OpenAI, and said, wait, we better wait until we have more security around them. The media advertising, the media industry has really, it's the canary in the coal mine for other sectors, other economic sectors. The shifts and transformation of the fundamental economics are shifting and have shifted so dramatically, and we're about, we're already seeing that in other sectors, in finance and health, agriculture, where we're finding the impact of AI, but we're just at the beginning stages of a, what I think is the biggest shift and transformation in the economic underpinnings since the industrial age emerged in the late 19th and early 20th century. Do you think it's gonna get there to the point where it could replace us? All, if you look up the word intelligence in the dictionary, there's no word human attached to it. So it will, it is replacing us in many ways. Can it replace us as human beings? Frankly, I believe that's up to us. That's up to the human race. That's up to humanity to decide if we want to begin really empowering a lot of the skills and capabilities that we've allowed data and technology to repress empathy, as an example, a very uniquely human quality, yet it's something that until recently we haven't talked a lot about empathy, creating a sense of belonging, of togetherness, and common sets of belief that we can all come together around. We've been more polarized. And again, I think media has some responsibility for that as well. Listening as a skill, creativity. We like to think of ourselves as creative. I think AI is going to be incredibly influential in empowering us to be more creative in many ways. Machines are going to be the influence in allowing us to be co-intelligent with it, as opposed to it being a tool that we use for us. Now, you've seen that this trend of AI entering the advertising space and you've seen this industry change completely. Can you tell us what you saw? Well, it goes back well before AI. It goes back to the really early age, the digital age. The internet was introduced in 1993 with Mosaic. So about 20, 25 years ago, we saw a move of advertising and media placement, media buying, responsibility at the brands, at the major advertisers, move into what's called procurement or financial management. So advertising, the media placement was put under the CFO, the chief financial officer instead of the chief marketing officer. So it was a separation of advertising creative and advertising media. It's now data drives about 90% of all advertising. Placement now, 10% to sports, events, major tent poles that brands like to use. So that's been a huge transformative shift to data and technology from creativity and innovation and emotional connections. Think about the last commercials you saw. How many of them evoked emotions that you connected with the advertiser because of the environment in which they were advertising was relevant and you were already kind of attuned in? That's almost disappeared except in sports and big major events, the Academy Awards or the Tony Awards, things like that. So that transformation, that data, technology-driven data-led business model, and that shift away from human connections is happening across every sector. And AI is accelerating that and driving it across. So what we've seen the last 20 years, which is a drive toward efficiency and is happening across the board. That's, we could say from a corporate point of view, Wall Street likes that because it allows companies to reduce costs, reduce overhead, replace people with machines. But ultimately, I think we're going to begin maybe two years, three years, five years to see that ultimately it's those that invest in their human talent that are going to be the winners going forward. So when it went to the CFO and on their purchasing department, it became just the numbers. Just the numbers. The creativity and the joy or like the connection, the human connection, it became more of a number-driven, this ad works, he displayed it here, it's generating X amount of sales. So the agencies, when the marketers shifted budgets into the financial department, the agencies, which had both the creative and the media together, separated them out. So media became much more of a business-led technology data and the creative stayed within creative departments and that remained under the auspices of the marketing departments at the clients. And then the media itself played right into that shift by even the major legacy media companies made the mistake of competing with the digital, with Facebook, with search, and shifted their focus from relationships with the brands, with the advertisers and sponsorships to a focus on making sure that they were investing also in providing the data and increasing their investment, shifting their investments to technology. The legacy media companies have been generally unsuccessful. The TV networks, the magazines, the newspapers in finding a path toward competing with the digital media. Where is that industry headed based on what you're saying? The legacy media. I consider there's a media business and there's a media industry. They obviously are one in the same, but the industry includes Facebook, includes Meta, includes Google, includes OpenAI now, which is selling and projected to generate $10 billion just this year and add sales. That's an industry, it's not a business. And the legacy media, we're seeing the Warner Brothers Discovery merging or being acquired by Paramount Skydance. We're seeing Disney expanding with Disney Plus and Fox with 2B acquiring Roku. So they're continuing to compete primarily. It's a supply and demand business. Media and advertising is a supply and demand business for a hundred years, demand exceeded supply. With digital, supply began exceeding demand. So the economics shifted with it and we continue to see a focus on increasing supply, which improves the efficiency, but doesn't necessarily improve the effectiveness of advertising. And what about the quality of the products? Like does that? You tell me. First of all, advertising itself, I think is horrible. I'm embarrassed to be in an industry that creates and puts the commercials on the air. I think of pharmaceutical advertising as an example, but when really when's the last time that there was an ad that was really memorable? There are a few out there, they win awards. They're not necessarily effective. When I worked at CBS, which was back in the 1980s, company could only own five television stations, which could only cover 17% of the country in the aggregate. Today, they can own over 200 television stations and reach 90% of the country in the aggregate, one company. So, and they can control and manage the local news on those stations, which we've seen Nextar and Sinclair. I think that's a fundamental danger to society with the loss of newspapers, you're losing a voice of truth in your local community. But I do think that's where we're headed is that local stations will become more entertainment news than quality newscasts. So, you're seeing a lot of consolidation. We're gonna have a few big companies that have- We already have a few big companies. What we're losing is the middle, CMOC. We're losing the middle, and I think losing the middle is not just an economic reality in our country, where the middle class, which was created by the industrial age, is now being, you know, kind of greater wealth aggregation at the top end and greater poverty at the bottom end. In media, it's the same thing. We're seeing a collapse of the middle. We're seeing sports, those big high-quality, high-prestige events that people, that advertisers want to be a part of that environment. And at the other end, and we're seeing a growth of what was, at one time, that low end, that those cheap media exposure impressions bought cheaply through technology was about 10% of the business. Today, it's about 60% of the business and growing. So, the middle, which was once about 80% of all media advertising, today is down to about 30%. And that's the broadcasting cable, television networks, for the most part, are in that middle. Some of the large mass magazines continue to be in the middle. But even in the print business, we're seeing the very expensive, high-end luxury brands succeeding. And then some of the really low-cost subscriptions, like Substack, succeeding. And a huge growth in the middle. But podcasts, a great example, 250,000 podcasts. 1,000 podcast hosts are making enough money for it to be their career out of 250,000. Only several thousand podcasts are individually successful, probably not even that number. But it's the aggregation that iHeartMedia or Acast or the other aggregators are able to just put. The middle is collapsing, and you're getting advertisers who are willing to spend huge amounts of money for a Super Bowl ad, but the vast majority of their budget is just going into cheap impressions. Like YouTube or Google. YouTube, Google, Search, Meta, TikTok, Reddit growing quickly. Those are quick impressions. Many of which try to drive commerce. So there's a deliverable on that. But for the most part, the industry itself or the media business that I grew up with and the content that I loved, the economic models around most of that quality content are collapsing. So what's the impact of that? We have a lot more content and a lot less content that we care about. So it's a business that used to be for the consumer, the audience, that is now for the advertiser. Subscriptions are, I think, peaked out across all the different streamers. So we'll begin to see more aggregation, more consolidation around the content. And just producing to get eyeballs but the impact for the consumer is less that we care about. So from what I'm getting, less meaningful content. Is it demeaning or is it? You said, is it the meaning? And I heard, is it demeaning? And I think a lot of the content that we have, a lot of the news is demeaning to humanity. And I'm embarrassed in many ways to be a part of an industry that used to care about the public interest, convenience and necessity. It was regulated. There were codes of behavior in broadcast and in television of public interest, convenience and necessity that today has just disappeared. Because we have to compete from what it sounds like. You have to compete with a lot of people. And then that's when you bring the quality down. If you care about an audience, you have to then invest in building a relationship with that audience. And that requires a real focus on people. And it also requires an investment in your advertising sales team to build relationships with advertisers to convince them that you actually have an audience that they wanna associate with, that they wanna create specialty messages, whether it's ads or commercials for. It's too expensive to do that today. The studios, the networks in Hollywood have gone away from a model that rewarded the talent to a model of work for hire where the talent gets paid. And it's like a gig economy in Hollywood, what used to be an economy where the talent, the producers, the directors, the studios, the distributors and networks all made money on success. And therefore they were willing to invest in the failures of which there were many, but the successes paid everyone. Today, the economy of Hollywood has collapsed. And I believe the economy of the advertising economy that supports quality and connections with human connections has collapsed. And I think we're about to see that in pretty much every economic sector. So this is coming to other industries. From what you're saying, we're gonna have some higher end service for select people. And then we're gonna have very low end on the other end of it. Think about agriculture. There's a big investment being made now in regenerative farming, not just organic, but regenerative where they're investing in the soil. They're not planting every year. They're using nutrients. It's regenerative where the soil regenerates its vitamins, its health. And those are typically small farms. You can succeed as a small farm if you're in a local community and the community's willing to support that. But the real money in agriculture is at the big end where it's mass produced, where there are pesticides being used. Right here in California, Governor Newsom has made an effort to minimize or at least warn the areas when pesticide was about to be used. But it's impacting on the small farms because they spray it. But that's where the business is. So it's a mass production business versus a... And we'll see that in health where you have AI is really empowering, much easier access to health information, but getting the hospitals funded and supported. And that personal care of the nurses and the doctors is being commoditized. You go into an emergency room, it's unlikely you're going to see anything other than a resident. So we're seeing it across every sector. Finance, I think is going to be one of the next most affected categories. The stock market is not an accurate indicator of economic health or growth. And the stock market in Wall Street supports large, big. All the money going into open AI and technology doesn't support the small entrepreneur. From what you're saying, you're seeing all of these, potentially these AI companies, they come into different industries and compete. And they lower the cost or they come to do the lower end of the market. Provide- Well, that's certainly been where Facebook, Google, search has been, yes. You're seeing at the same time that the human connection is going away. Because when we were going to the bank or when we were talking to different people for a service, you think the human connections. What are you seeing there? So the sales organizations of most media companies today are managing the technology. They're managing the system rather than building or managing relationships. At the same end, the agencies have done the same thing and the clients have done the same thing. So you've got an industry that has essentially said the human relationship doesn't matter, except for that 10% where we're paying premiums for that association. And that's, look, since the mid 90s, I've been giving advice to media companies to protect your quality, protect the relationships, invest in relationships, build your inventory. That's a value. Don't reduce the middle, grow that high end. They haven't done it. And I don't see any reason to believe they'll begin doing it now. So they're not gonna fall off a cliff. The media, legacy media companies are walking slowly toward a horizon and they're gonna discover it's a flat earth. What about the societal impact of this? Unlike other sectors, unlike other industries, media has an enormous influence over the public interest, public perceptions, culture, cultural norms, identity, who we see ourselves. We see that news media has kind of formed identities as opposed to relating to people. So the fact that there is no governance in media that encourages funds or supports the public interest, I think we're already experienced in our political system, the impact of media where truth is not an issue. According to the research that I've seen, about 30% of advertisers' dollars spent in digital media never reaches a consumer. It's bought traffic. That 30% of the inventory that's out there that's being bought through the systems is bought. Advertisers have said, we don't care for the most part. There's been a lot of talk over the last decade around brand safety, brands wanting to be in safe environments. News is no longer a safe environment. So news funding is declining from advertisers. Programming, you go back to the 80s, the 60s, programming like All in the Family that had Will and Grace, that had really positive cultural impact. There's not a lot of economic, there's fear, there's high risk in that content today. And they also built themselves Seinfeld, one of the greatest shows ever, built itself off an incredibly small audience that today would not, first of all, make it on the air, but probably wouldn't survive with those small audiences in a commercial model. So those that we do see are in the subscription-based. Consumers are less and less able to pay for the subscriptions for small niche-based audiences. So I think we're going to see a contraction, a consolidation, and a lack of differentiation. And that's not healthy or good for humanity. Do you have any advice for people how to navigate what's coming? Well, I think every human being needs to focus in on what's uniquely human. And what are the uniquely, that's what I write about in my new book, which is called Your Third Brain. And it's really about being co-intelligence. And when you have a machine that's basically smarter than you in almost anything, but where you have your own brain that can grow and develop, to focus in on what are those capabilities that I, as an individual, as a human being, want to do for myself that AI can help me with. And I think that, as I said before, includes creativity. A learning empathy, because I think we're going to find that empathy becomes the common bond that brings society, culture, politics back together. Listening, being open, not just listening, but hearing. These are qualities that I think, with an increased focus on AI, that we can develop individually. In terms of careers, again, I think those opportunities to take our skill sets that are uniquely human. The advice I give to my clients who are typically large media companies and brands, I say, invest in your people first. Ask yourself, what kind of relationship do you have with your customers, with your clients? What prevents them? What are the qualities that prevent them from going to your competitors, other than cost? If you lose, if a client, can you even name the people who are responsible for the decision-making at your best and largest clients and customers? If you lose a person, if you lose a core relationship person, does it hurt? Can you replace them with just another person or with a machine? So develop those human relationships. Ultimately, that's where the premium is going to be. That's where the profit's going to be. And the technology of open AI, Anthropic and others, is taking care of itself. So what's the value of the human-to-human relationships? If people say, you know, I can get the same service with the cost, how do you respond to that? Well, I think that the human relationship is valuable when you make a decision that the machine might not be telling you to make. When you have uncertainty and when you have a client that is being told one thing by the machine and you're willing to go out on a limb and say, I'll be accountable for suggesting there's another path that I can partner with you and go drown with and build that relationship. And then be accountable for being right or wrong. Look, the Hollywood business, the TV business, the media business was built not on success, it was built on failure. 10% of all TV shows were successful, financially successful, and funded the other 90% that were failures. Sport athletes, a baseball player will tell you that success comes if you hit, if you're successful three out of 10 at bats. Chachi P.T. and Claude don't understand failure. They're not accountable. They're not responsible for their decisions. So it's that human judgment, that human discernment, that human integrity, that ability to find balance between risk and, you know, risk averse and risky, that ability to be flexible. There's no flex, you know. Chachi P.T. is very flexible because if you say, you know, I read what, or I hear what you're saying, but I think something differently, Chachi P.T. will come back. That's really a wise path to take. And then it will just tell you what you think. And then it will tell you how to do what, so. What you like. So where's the human decision-making in that? So whether it's a large business, a small entrepreneurial business, an influencer, or just a human being, you know, operating in how do you use Chachi P.T. to more effectively communicate with your, with a teacher, or with your children, or with your employer, which it's very good at. It's understanding that it's still you as a human being that have to make the decision and you have to use your own judgment. Do we, as human beings, maintain the power over our own judgment? Or do we let technology determine decisions we make? I mean, neurologists tell you you only use about 10% of your brain. My philosophy is that AI, increasingly what we're calling artificial general intelligence, I call it techno-intelligence, is actually figured out how to tap into that other 90% of the brain we don't use. And it's learning it before we do. But we have the opportunity to also tap into that other 90% of our brain. If we just put our own judgment to use and learn the skills and capabilities that are things that we may want. We can't go out and become a professional golfer just because AI. But if we're not getting out on the course and we're not hitting the ball ourselves and we're not making our mistakes and we're not learning, we can't even become a good golfer. And I think it's that way in business, it's that way in medicine, it's that way in agriculture, and it's that way in media and advertising. We have to be willing to make mistakes. And data and technology is trying to take that judgment and that ability to make mistakes so we can always blame it on the machine. Jack Myers, author, it was great to have you on Market Insider. It was good to be here with you. Thanks for the opportunity. What do you think about this conversation with Jack? Have you seen AI in advertising and television? And how do you feel about it? Make sure to tell us in the comments. I'm Siamak, this is Market Insider. We'll see you next time.