News Analysis

Foxtel’s Upfronts last week masked a muted industry mutiny. It was all but unprecedented for a broadcaster to invite its rivals to attend – and then feature – in its annual market showcase for the year ahead. Former Mediacom boss and now head of Amazon Ads, Willie Pang,  is one individual more involved than most in the rise of the united Australian front of streamers who will understand the potential magnitude of what was signalled last week. He was there and on the big screen talking streaming industry collaboration and kumbaya, after a long career deep inside the broadcast camp. The irony, more broadly, is dripping because this was the blueprint partly designed by Foxtel Media’s Mark Frain six years ago for the broadcast industry. Decades of fierce, old-school broadcaster battles and a go-it-alone domination mindset, however, killed meaningful collaboration. We’re now about to see if a posse of global streaming services hungry for TV network advertising budgets – and led by a turncoat Australian broadcaster – can behave better and do what broadcasters should have but couldn’t. Something even more radical and unlikely is probably needed. 

The debate about whether the emerging generation of digital entrepreneurs is building a superintelligence misses a key point, according to the CEO of Amazon-owned streaming service Twitch. He told attendees at SXSW Sydney yesterday that human intelligence is fundamentally different to machine intelligence because it is based on a desire to connect with other humans and belong. It's not about analytical reasoning. And while not a doomsayer on AI – he believes it will yield both good and bad results – he doesn't think we have the capacity to avoid bad results any more than business leaders during the industrial revolution could have avoided climate change. "We can't fix it now, why would we think they could fix it then."

Six years after a wave of warnings from former top Silicon Valley social media executives and venture capital investors about the damaging effects dopamine-tuned algorithms were having on civics, screen addiction, anxiety and mental health, the Australian government is taking action with new age bans for teen use of social media set to be legislated before the next Federal election in 2025. Led in part by a proposed bill to limit social media access for children under 14 in South Australia by Premier Peter Malinauskas, the Albanese government plans to impose nationwide restrictions on access to social media by teens – the age band is still to be decided but the Prime Minister’s “personal view” is that it should be 16. The Silicon Valley venture capitalist, Roger McNamee, an early investor in Facebook and one-time mentor to Mark Zuckerberg, was part of a long and vocal line-up of big tech identities from Google and Facebook around 2018 who started turning on the companies that made many of them impossibly wealthy. McNamee blamed advertising’s race for consumer attention and the newly discovered tech-psychology tricks that trigger the addictive dopamine neurotransmitter in the brain as a core problem. “The ad models essentially encourage this exploitation of people’s emotions,” he told CNBC at the time. “Science has figured it out – the way you keep people’s attention is you either scare them or you make them angry.” The Federal and South Australian governments are among the first to propose intervention. 

While the memo about brand marketing seems to have finally found its way into the B2B CMO's inbox, the role of the buying ecosystems - called 'buying committees' by Dentsu and 'buying parties' by Green Hat in their respective reports - continues to evolve. The days of the Warrior God B2B buyer in whom all purchasing authority resides are long over. Cue newly empowered millennial executives, who are bringing more than just their newly found purchasing authority to negotiations.

Scott Galloway says big tech is about to get broken up, Bytedance will usurp Meta within two years and that at least one big streaming service will soon go pop. Meanwhile, he stands by last year's cheery prediction of the death of the CMO by 2025 and, alongside Galloway's keynote at ADMA's Global Forum, virtual professor Mark Ritson offered some clues as to why: Only a third know what marketing's foundational four Ps actually stand for, and just one in six know how to calculate return on ad spend, per a poll he conducted with ADMA. But Galloway offered some tips to CMOs looking to survive his oft-prophesied extinction event – and likewise for publishers now getting fleeced by large language models.

The stakes for Alphabet after losing its antitrust case this week are huge. If the judge in the case unplugs the distribution deal between Google and Apple that sees Apple clip the ticket on 10 billion searches a week across Safari - and Chrome searches in iPhones - the search giant's revenues on mobile could be crippled. It could also lose access to the very data it needs to train its AI models that will fuel the next generation of search. A Forrester analyst says we could see Google divest its search business. Apple also stands to lose tens of billions in revenues. According to the US Federal Court ruling in the case brought by the US Department of Justice, at one point the search deal accounted for 17.5 per cent of Apple's operating profits although it can replace the losses by launching its own search business, something it's toyed with in the past.

Big tech firms such as Apple, Anthropic, Nvidia, and Salesforce used Australian content scraped from YouTube to train their databases without the permission of copyright holders, and contrary to Alphabet's rules, courtesy of an open-source AI Institute that scrapes content and then licenses the data. EleutherAI, partly funded by Canva, uses fair use provisions in the US to circumvent Australian law. ABC News, Nine's Sixty Minutes, The Australian Greens, half a dozen local universities, and myriad government departments have content that has been hoovered up by EleutherA. It's the latest example of tech giants gifting themselves new rights over others IP. It's all fair game, says Microsoft's AI chief.

Tech vendors are rewriting platform usage rulebooks, adjusting terms and conditions – and privacy policies – to give themselves legal cover, and in some cases to gift themselves new rights over customer data and content. But even when they are trying to do the right thing, their preference for legal compliance over messaging clarity is leaving customers angry and confused. And a new generation of digital giants has bastardised Mark Zuckerberg's famous entreaty to "move fast and break things." But while the Zuck was talking about internal design processes, the generative AI newcomers are breaking long-held conventions and rules, and arguably laws, by stealing IP according to long-suffering publishers. Mi3 asked some martech majors specifically whether they use customer data to train large language models or other AI. The answers were not always binary.

Despite the almost banal nature of the announcement – a single throwaway line in an earnings call – Oracle's adtech surrender looks like the result of a gross miscalculation, say analysts. But it also speaks volumes about the state of digital advertising markets amid growing privacy concerns over the surveillance of consumers by brands and their technology enablers. Analysts largely agree that attempts by martech vendors to merge adtech and martech into a single unified 'madtech' operating system failed. But at least one analyst told Mi3 that CDPs have helped brands better link the two different worlds. Maybe. But now gen AI enters the mix.