Meta Wants AI to Create Ads & Gen Z Could Save Chain Restaurants?
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Good morning, Brew Daily Show. I'm Neil Freiman. And I'm Toby Howell. Today, stay on good terms with your former boss because boomerang hires are on the rise. Then the chain restaurants you grew up going to are making a comeback led by none other than Red Robin. It's Tuesday, June 3rd. Let's ride. ♪

It's getting a little dusty in here, and not because I just rewatched Marley and Me. A literal massive dust storm coming from the Sahara Desert in Africa has blanketed the Caribbean and is expected to reach the Gulf Coast of the U.S. by the end of the week. Giant dust plumes traveling across the

the Atlantic Ocean are normal around this time of year, but it's still one of the world's more remarkable weather events. The good news for Americans is by the time they reach Florida, Louisiana, Alabama, and Mississippi, the plumes have lost most of their concentration. It's

5,000 miles of travel after all. But if you live in those states, don't be surprised to walk out to Mad Max vibes this weekend. Yeah, it's bad news for sunbathers, but the dust storm is actually good news for this year's Atlantic hurricane season, which began on Sunday. What characterizes a giant Sahara dust cloud? Very dry air. What do hurricanes or tropical storms need to form? Moisture. So you're seeing this natural tug of war between Mother Nature, the

the hurricane season in one corner and the Saharan dust cloud in the other. As Jason Dunnian, a meteorologist, told the New York Times, Mother Nature is fascinating. It set up this Saharan dust factory right next to the hurricane nursery. So shout out Mother Nature. Pretty neat, Neil. And now a word from our sponsor, LinkedIn Ads.

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when really they should have been using LinkedIn. With LinkedIn ads, you can target by job title, industry and company and more. So, you know, you're reaching the right people and doing it efficiently instead of overpaying for a man city striker who couldn't score any goals this year. Way to go, Toby. Maybe next year, LinkedIn ads will roll out a Premier League tool. Really?

That would help me a lot. No, they're too busy helping B2B marketers make smarter targeting decisions. Fair enough. Head to linkedin.com slash MBD to get started. That's linkedin.com slash MBD. Have you left a job for a position at another company, realized a few months in these new people are super weird and skedaddled back to your previous employer? Well, there are a lot of you. A new report from ADP found that 35% of all

all new hires in March were so-called boomerang employees, the term given to rehiring former workers because circling back was already taken. That 35% is up from 31% last March and the highest rate for that month since 2018. It's also notable because March isn't typically a month where people come back to old jobs,

like, say, December with holiday retailers or June when college kids return to their ice cream shop. Employment analysts say the boomerang boom is a sign of where the labor market is right now. Very stable, but also with hiring that's very cautious, both for employers and for workers, ADP chief...

Economist told HR Brew or Toby, as your favorite movie puts it, stick to the stuff, you know, sticking to the status quo is happening in one industry in particular, the information sector, which contains media and tech companies. In March, an astonishing 68% of all new hires were returning employees. Toby, if there's one takeaway from this, it's don't burn bridges with your former boss. They could be your future coworker. Yeah. If there's one takeaway for this is look at

me because I'm a boomerang hired to Morning Brew. Neil originally hired me. I left and then I stayed on good terms with my co-host and now look at us. We're hosting a podcast together. But yeah, I think what it shows is a job market that just is in search of stability rather than anything new because

What does a boomerang hire represent? It represents someone that the employer knows. It also represents a company that the employee knows very well. That kind of two-way street leads to just a much smoother hiring process. Job prospects don't want to be out testing this

slightly fuzzy job market for too long. And employers don't necessarily want to go and have to retrain and rehire a whole new person who doesn't know the company culture. So you're getting a lot of great bang for your buck when you target these returning employees. So it's a fascinating thing where it's almost like going back to your ex because it's just what's comfortable to you. Maybe it's the right decision. Maybe it's not. But in this current job market, it seems to be the right decision for both sides of the

employer and employee. And it's also a repudiation of the great resignation from a few years ago. Remember in 2021 and 2022 scores of people were leaving their jobs for what they thought were greener pastors and maybe a pay hike, but now they're coming back to, they're coming back home. 80% of workers who quit in the great resignation have regrets. That's according to a new survey by

paychecks. And according to another survey, this is international. Nearly 20% of workers who quit their jobs during the pandemic have since returned to their old employers, you included. So you know why people do this. Could be perhaps that the company that they went to did

you know, wasn't all that was advertised. And another reason is that perhaps they did like the company they were at. They just didn't see much career advancement. So they were like, I love the people there. Just my upward mobility was a little bit limited. And so they went to another company to find that upward mobility, to find that manager track. And then once they found that experience after a year or so, they're saying, okay, now I can come back to my old company, which I actually really liked with all this new experience. And now

I have probably a better paying job and I'm now managing people or, you know, up the career ladder a little bit. And then one final aspect that makes boomerang hires more common in the modern job market than before is that a lot of people are not moving to start a new job. Think back a few generations ago. If you got a new job, oftentimes you had to pick up your family. You had to move across the country and go work in person, work in an office. But now given the rise of remote work, when you took that new job, when you do,

in the great resignation, you probably just stayed exactly where you were. So there was no material factors, geographical factors that made it a barrier to reenter the job market at the same job you just had. So it's just fascinating. And then you just toss in housing prices as well. A lot of people weren't moving because of that. So it made it very easy to just say, hey guys, remember me? You just knock back

on the virtual office door because you never moved in the first place. Let's move on. Meta thinks it has a use case for AI beyond pretending to be your friend, and it's making ads. Meta already offers some AI tools to generate variations of existing ads, but the company thinks it's

on track to enable brands to fully create and target ads using AI by the end of next year, according to a Wall Street Journal report. If you are a new pickleball shoe brand, for instance, you could input a product image and budget, then lean on meta to generate a full slate of ads souped to nuts, including images, video, and text. But it doesn't stop there. It would also then enable you to target specifically

Facebook and Instagram users with scary levels of precision. For example, one layer of personalization that AI could help with is location. So a pickleball player in SoCal might see an image with palm trees while a New York City-based customer might be targeted by an image showing the Knicks losing, I mean, someone playing pickleball in a city. Meta sees this as a huge unlock for small to medium-sized businesses who can afford to make more in-depth ads to

that don't require the big production crews used by larger companies. But it's also a big boon for Meta, who generated 97% of its overall revenue from advertising last year. This idea of a full-stack service supporting both ad creation and targeting is sort of a white whale in the ad industry, one that Meta thinks it can crack sooner rather than later. It's also an asteroid potentially that's coming to wipe out the existing ad

advertising infrastructure agency model as we know it, because how does advertising work now, especially for big brands? Say you're Coke and you have a Super Bowl ad that you need to fill with 60 seconds of content. You're going to go to what is an in-house

agency like Wieden and Kennedy. There's a number of these types of agencies. And you say, give me here's the product that we're pitching, like give me the creative and create this ad. And that's what big brands use. This potentially could wipe out that entire ecosystem, which is why you saw a pretty severe reaction from advertising companies on the stock market yesterday. Publicist Omnicom, these massive ad players all fell in stock market because in this scenario that Zuck is projecting, which is, you know,

Meta handles advertising soup to nuts, then these agencies and the existing advertising industry as we know it does not exist anymore. And that is a pretty startling fact to think about. The positioning of it is interesting, though, because a lot of this is geared more towards small and medium.

medium-sized businesses who can't afford going to white and kenny who can't afford going to omnicom and saying hey this is our budget it's millions of dollars now go make us something it's more for like the pickleball shoe company founders who don't have a lot of money to play with but they do want to create uh some high quality creative so meta thinks that hey you can input hey here's my shoe i want this it on the background of a pickleball court and i want it to be in southern california it

the AI can then go in and make it for you, but then it can also go out and target it because you gave it the budget. So that for small businesses is a big unlock in the advertising game. It was fascinating though, to see these big advertising firms fall because you would think that they are a little bit, but it,

insulated from that, but maybe as AI progresses, it will start to eat into those big production budgets. But that's what's right now. The issue is the quality isn't there for someone like Coke. Like Coke doesn't necessarily want to use AI, even though I'm eating my words because they did roll out a fully AI generated ad. It does seem like it is targeted more towards smaller people who are okay with maybe a little bit of loss in quality in exchange for just

what it frees them up to do yeah the big or small companies are all looking to cut costs and if you don't have to pay a huge creative team to come up with a concept and you can create what they're calling infinite creative which ai can generate infinite types of this ad to segment based on where people are or what they do then i could see large companies doing this as well turning to ai once the quality gets high enough and we've seen meta and google most recently rolling out roll out these

stunningly realistic video generation tools that can create ads. You're already seeing AI ads out in the marketplace. I think what Meta is trying to do will only further that proliferation. I think there will come a day sometime soon where every single ad you're seeing is created by AI.

Last fall, 10,000 people traveled to Randall's Island in New York City to attend Chain Fest, a festival celebrating America's iconic chain restaurants run by The Office actor BJ Novak. And it wasn't an anomaly. According to The New York Times, classic chain restaurants that had been passed over for Chipotle, Cava, and Sweetgreen are on the comeback thanks to a nostalgia-fueled desire to recapture that feeling of plopping down in a booth with your friends after a soccer tournament.

Just look at Red Robin. After posting a surprise profit on Thursday, the maker of a criminally underrated burger has shot up 90% on the stock market in three days, including a 20% spike yesterday. Another chain that's been riding the nostalgia wave is the Rainforest Cafe. Yeah, remember Rainforest Cafe? Its regional VP said...

More 25 to 35 year olds want to revisit their experience as kids with their own children, resulting in 32,000 people slamming the chains pop up at the Empire State Building last October. Now, Toby, this is no doubt great news for chains, but newfound fame brings headaches and tradeoffs. At the same time, these hordes of new younger customers are coming through the door. They also must cater to the ride or die loyalists boomers.

And those two groups have very different preferences in what they want from a restaurant. Yeah, these chains are like, oh my gosh, oh my gosh, the young people are noticing us right now. What do we do? Because for a long time, their core customer base has been boomers, been Gen X. Gen Z only makes up 17% of patrons at sit-down, mid-price,

casual dining establishments in 2024. So it's a bit of a risk-reward scenario that these restaurants are weighing right now. Do we go all in and try to cater to these young people that only make up 17% of our business at the expense of maybe pissing off, for lack of a better word, these older people who don't want to see any changes to menus, they don't want to see any forward-thinking...

They just want to know what they've been getting for the last decade or so is what they're going to get when they sit down at a Red Lobster, at a Red Robin, etc. So it is kind of this thing where they've got this new crowd of people potentially coming in, but it's not necessarily something they can mortgage their whole future and bet fully on young people. But one brand that has bet fully on young people is Chili's, and it's doing that to great success. Sales at Chili's last quarter

We're up 31% over the year before, and it's done that through these viral marketing, very much targeted to Gen Z. But investors have really rewarded that strategy. Sales of its parent, or its stock of its parent, Brinker International, has doubled over the past year. So Chili's has fully leaned into the Gen Z. It doesn't really care about its older customer base. We'll see what happens with chains like Red Robin, Carrabba's,

California Pizza Kitchen. Those are some other names in that sort of mid-priced casual category because Gen Z, it's unclear whether they get that nostalgia hit like once every few months if they'll actually go back and sit down because there has been a general transformation of dining away from actually sitting down in booths and spending time there to just picking up a burrito bowl on the go. Yeah, a lot of analysts are like no amount

of endless shrimp deals. No amount of new menu changes will recreate the feeling of sitting down with your grandma after a soccer tournament or something like that. So nostalgia only goes so far. You do have to meet young diners where they're at, which usually is updated in new menu items. Up next, let's talk about Toby's Trends.

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There are a lot of questions that reveal generational differences. Do you wear high socks or low? Can you afford a house or not? Do you think Friends was a good show? But a new question has emerged that Gen Z answers in a very specific way. Do you want to start a bar tab? To which they often answer, no.

No. And it's that reluctance that I want to talk about on today's edition of Toby's Trends. There is a growing cohort of Gen Z bar goers who simply refuse to open a tab. Their aversion is the subject of a recent New York Times article that chronicled how many 20-somethings

are opting to close out after every single overpriced Allagash White rather than keep their tab running. One explanation for their tab trepidation is that younger drinkers consume less alcohol, so they're fine with one-and-done transactions. Also, tap-to-pay has become so ubiquitous that buying around falls into the same muscle memory as buying your morning coffee. Mainly, though, they don't like carrying around that extra mental weight.

It increases anxiety in me when I leave a tab open, a 26-year-old beer sales rep told the Times. If we want to move somewhere else, it's a lot harder to close out and then leave. You know, the business angle of this is that Gen Z actually is drinking less than previous generations, with a 2023 Gallup poll showing a 10-point decline over the past few decades in the share of 18- to 34-year-olds who report consuming alcohol. So the reticence is...

to an open tab is downstream of that. But also, maybe they're just shy. What do you think of this shift in bar etiquette, Neil? Does Gen Z have a point or do they need to loosen up a little bit? I'm rolling my eyes a little bit. I'm not generally a generational hater, but I do think this is not...

good bar etiquette right like if you know you're going to have multiple drinks at a bar you are taught to open up a tab and the reason that is because it is less work for a bartender who is slammed every time that you need you close out they need to go fiddle around create the check give it to you take it back and that creates just a lot more time and headaches for them it also increases costs because outside of labor and the actual product the

The number one operational cost for a bar is credit card transaction fees, because every time they swipe your credit card, they're paying a percentage of your tab and a fixed cost to the credit card company. So the fact that they have to swipe it multiple times when they could just put it on one tab and swipe it once is just adding cost to them. It's adding time.

I just don't like it. That's fair. It is on brand for Gen Z, though, because one, they think that it mentally just stops them from getting too carried away on a night out because every time you have to pay and then close out, that's another drink that's hitting just your mind, essentially. Like, you know it's a very conscious action rather than just having...

this amorphous tab open. And if you are trying to drink less and if you're trying to be more budget conscious, those are two factors that do lead to this sort of behavior. That tap to card moment too is something they don't even, a lot of people don't even go out with their credit cards. They still, they just use fully Apple Pay. And that is kind of something that comes up

downstream of the pandemic, this behavior. So you can see where it arose from, whether you think it's good or bad. Neil falls in the bad category. So do most bartenders who honestly, they get confronted by these hordes of young people who haven't even thought about opening a tab. A lot of people say like,

"Oh, I'll close it later." And they go, "What do you mean you'll close it later? "That's what a tab is. "You either open it or close it. "Just tell me what to do." So some of these bartenders are saying like, "We have to politely bully these kids "into figuring out what proper bar etiquette is." 'Cause maybe they just didn't get that conditioning when the pandemic was going on. So just a fascinating generational difference.

Let us know maybe in the comments or in emails where you fall on this because it is sort of a generational divide. Yeah, I'm sure maybe some of the older people will be like, oh, yeah, these kids are doing – this is awful. And then the younger people listening to this might be like, well, obviously I'm going to close out my tab. I don't want to even think about it. There's been certain times where I've wanted to go and I just couldn't get the bartender's attention to close out my tab and it's created more headaches. So I'm sure there are loud voices on both sides of this argument. Yeah.

Let's sprint to the finish with some final headlines. Is cream of mushroom a recession indicator? Campbell's CEO said yesterday that its customers are cooking at home at the highest level since the lockdown era of early 2020, perhaps a sign that Americans are avoiding eating out to save money during uncertain financial times. That trend, combined with its

with its acquisition of Rao's Pasta Sauce, helped sales of Campbell's meals and beverages grow 15% last quarter. Toby, is economic growth inversely related to sales of canned soup? It's a fascinating tie, and Campbell's is just a very interesting company in general because they also have a snack division, think Goldfish, and they said that

what the gains they've seen in their soup and food division was offset by losses in their snack division where people are becoming a little more choiceful, a little choosier, and not splurging on snacks like Goldfish, opting instead eating at home, eating their cream of mushroom soup. So Campbell's is a fascinating company that does reveal a lot about consumer preferences and the fact that they're cutting back on discretionary stock

purchases and cooking more meals at home, yeah, it may be a little bit of an economic indicator. Aldi, the low-cost grocery chain, is in hot water for doing something your middle school teacher would be disappointed in, copying someone else's work. The snack giant Mondelez is suing Aldi, alleging that the grocer's low-cost store brand snack packaging blatantly copies Mondelez's whole flow. It said Aldi's cookie and cracker packaging was likely to deceive and confuse consumers, which

is hard to deny when you see some of these side-by-side images. All these Nutter Butter dupe says peanut butter cream-filled cookies instead, but has the same iconic red packaging. Its Chips Ahoy knockoff also sports a big cookie on the front, framed by a blue back

I mean, it's crack. It's wheat thins are called thin wheat. Yeah.

I would say it does push it up close to the line and perhaps over the line. If you look at a legal challenge that it faced last year in Australia, it was held liable for copyright infringement. But this is the Aldi playbook. They do their in-store brands, make it look as close as possible to what the brand names that you are using.

accustomed to, but at a cheaper price and hopefully not violate any copyright infringement at the same time, even though in certain cases it has in other countries and perhaps it has in the United States as well. We'll see how this lawsuit plays out, but it's this playbook is working for it because Aldi's is one of the fastest growing grocery chains in the entire country. It has more than 2,500 stores now in 39 States. They're opening one just down the block from me. So this, uh,

This company is a rocket ship right now, and I don't think a little lawsuit from Mondelez is going to slow its roll. Moving on, it's not going to be a short king summer if Tinder has any say in the matter. The app is testing a height filter for its premium users, saying the feature is part of a broader effort to help people connect more intentionally on Tinder. If that sounds like a joke, it won't.

was just a few years ago. On April Fool's in 2019, Tinder teased a height verification feature in a wink to how important, supposedly, a partner's height was for some people. Now, height preferences are rolling out for real, and critics say it only reinforces Tinder's reputation as a superficial hookup app, which it's trying to evolve away from. Yeah, I mean, online dating has led to this moment in general because online

when you're just swiping on someone on a phone, the primary sorting factor you have is just their physical appearance, look, size, et cetera. So that's been the primary factor of over this last generation of dating. So of course a filter is going to come downstream of that. And Tinder is not the only company that has done this hinge and other, uh,

dating apps have also allowed this filter, but Tinder just is kind of one of the biggest names in the biz, which is why we're talking about it right now. So yeah, I mean, short King summer is on pause for now, but that just gives you more license to go spit game in person anymore. Cause there's no height filters in real life. Just go talk, talk to someone and see how it goes.

The highest active volcano in Europe erupted yesterday, sending ash flying and tourists scattering. Mount Etna in Sicily is a major tourist attraction visited by one and a half million people every year. But travelers got a lot more than they bargained for on Monday when a sudden loud boom sent a plume of hot gas, ash, and rocks several kilometers high into the air in its biggest eruption since 2014.

Etna is one of the most active volcanoes in the world, and more often than not, eruptions stop as soon as they start, with this latest one posing no danger to the population, according to the president of the Sicilian region. No one was injured, and nearby airports remain open as well. Still, Neil, it's feeling a little too close to 79 AD out here with a powerful Italian volcano erupting. Well, it is interesting to see Etna outside of a crossword puzzle for once, but yes, this is a very active volcano.

volcano. It typically is not so dangerous because most of Etna's eruptions are, you're going to want to write this down, strombolian eruptions, which are ejections of cinder, gas, and molten lava that are from repeated but relatively small explosions. Vesuvius is the big one. I know you mentioned 79 AD. Vesuvius is set to blow at some point. It is also an active volcano that's on the mainland of Italy, and its eruptions are considered to be

more dangerous and hasn't had one in a while. So we're on Vesuvius watch. But yeah, be careful with Edna. I would say definitely go watch the video of this eruption because it was pretty spectacular. All right, that is all the time we have. Thanks so much for starting your morning with us and have a wonderful Tuesday. If you have any thoughts on today's episode, send an email with questions, comments or feedback to morningbrewdaily at morningbrew.com.

Let's roll the credits. Emily Milliron is our executive producer. Raymond Liu is our producer. Our associate producers are Olivia Graham and Olivia Lake. Heron Bakeup keeps the tab open. Devin Emery is our president. And our show is a production of Morning Brew. Great show today, Neil. Let's run it back tomorrow. Oh, hello, Morning Brew Daily. It's Money with Katie here.

When I first started learning about money, I heard all about the best practices, right? Spend less than you earn, max out your 401k, pay off high interest debt, all good advice. But

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