Tariffs, Trump, TikTok: What’s going to happen to ads in 2025?
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from the vox media podcast network this is channels peter kofka that is me i'm also the chief correspondent at business insider and today we're checking in on the ad business because it seems like the ad business should be in for a world of change tick tock could go away google and meta might be broken up

And there's a worldwide tariff war about to start that could make the economy not great again. So that's why I wanted to talk to Laura Desmond. I wanted to get a sense of how the ad business is actually thinking about some or all of these threats.

Desmond is someone I often chat with when I want to get a snapshot of ad work. She's an ad veteran who used to run Starcom MediaVest, the giant ad planning company. And now she runs Smartly, a company that works specifically with digital ad buyers to help them figure out where and how to spend their money. So she's got a very good idea of what's on the mind of ad buyers at any given moment.

She is also an ad industry executive who's interested in being somewhat candid when you talk on the record with her, which is pretty rare indeed. You're definitely going to hear Laura Desmond talk her book in this conversation. She's going to tell you that the ad business is doing well. Her ad business in particular is doing great. But I think you are going to come away with a very good sense of what's actually on the minds of the ad industry today for now. Okay, here's me and Laura Desmond.

Laura Desmond, welcome to the show. Hey, Peter. Great to be here. Thank you. Good to see you in person again. Before you explain the state of the ad business, you're going to tell us why you know about the state of the ad business, i.e., you're not going to go through your whole resume for us, but you are going to tell us what you're doing today. Prior to this job, you used to run Starcom MediaVest, giant ad business. Giant ad business, that's the correct way to put it. Now you are running a company called Smartly.

Give us the elevator pitch for Smartly. No, not the elevator pitch. Give us the plain English explanation of what Smartly does. I will do my best. I think the best thing I can do that sets up the conversation about why I think Smartly is in the center and why it makes sense for me to be leading it as the CEO is my career has spanned marketing service, advertising service, advertising technology.

And that meant it started at the dawn of the Internet era through to digital transformation, the mobile revolution, and now into the era of AI. What Smartly is is a software company that builds technology for brands and advertisers.

We place and generate more personalized, more relevant creative across all the digital channels. So what does that mean? That means when you're scrolling on Facebook and you see that ad for Nike shoes that you love, that's us. So Nike's a client. Yes. You're not their ad buyer. No, software. So you are doing what for them? So we enable them with our software to place and generate ads.

highly relevant creatives across the digital channels that they believe will drive revenue and growth in

And purchase for them best. So you are helping them figure out, all right, we know we need to be on Google and Meta, et cetera. How is that going to work? What are the actual ads we're going to run? You help them with all of that. Exactly. And it starts with knowing consumers. It starts with knowing and having intelligence around where audiences are. What are they spending time with? What are they engaging with?

And our software sits between consumers and brands and also the agencies that brands might use because agencies use our software too.

Our software sits between brands and agencies to connect brands to the people they need and the people get to see a chance or get a chance to spend time with the brands they love. This is great because you pitched smartly, which is great, and you've also now explained to the listeners why you know what's going on in the ad world because you are watching where the money goes. You're watching where the ad dollars go. You're watching what kind of ads are going, specifically to digital platforms. Yeah.

100%. So to me, it kind of goes back to Watergate and The Godfather. If you want to know how anything works, watch where the money goes. And our platform. I thought it was Leave the Cannoli was The Godfather. Well, it's, yeah, take the gun, leave the cannoli for sure. And be careful about tollways, toll gates in Long Island. Yeah, if you show up with a bunch of oranges, you're probably going to die. There's a lot of lessons you can learn. It's a great business movie. Great, I think. Not a wartime console. Yeah, we could.

We could do Godfather the entire time. Oh, I do that all the time. You need a wartime CFO. You need a peacetime CFO. I use that all the time. So I have a sort of stock list of questions when I talk to you or anyone else in the ad business. How's it going? And I was going through it just now and I realized, oh, wow, this is so obvious. But all the questions I want to ask you about, almost all of them relate directly to the federal government issues.

And the Trump administration, which is exciting, Peter. It's exciting, but it's also that's weird. That is a that is a that is a new state of play for the ad business, I think. Have you ever been in a place where one administration, really one man had so much influence over your business specifically? I don't buy that thesis, to be honest with you. I'll make my thesis for you, first of all. So it's tariffs, right?

That impacts your business. The two big ad platforms, I know you work with Google. Do you also work with, you obviously work with Meta. We do. Are being sued by the Trump administration. Yes. Who theoretically wants them to be broken up. Right? Pretty impactful. So let me start at the beginning. Yep. Because it's a- Oh, and I didn't even get my last one. May or may not ban TikTok. Let me start at the beginning. Okay. Yep.

You are right in the sense that there is a lot of action in the advertising, media, and digital space. You're right. But what really drives the market are people, are consumers.

You know, one of the reasons that we watched, you know, the executive order play out is... Which one are you talking about? For TikTok, is we've seen... The executive order that overrode a law and everyone said, sure, that makes sense. We saw people love the platform. They love to spend time on it. And that is an incredibly important part of understanding the state of advertising in general and the state of advertising today.

Brands are ultimately chasing consumers to get them to buy with more relevant creative, with messaging that works for them. And increasingly, that's privacy first because consumers don't want to be chased and targeted and retargeted with the same old stuff. And that's an important piece of this. The other important piece of this is the antitrust actions that are happening.

Right. Whether or not I'm using Google search or scrolling through Instagram has nothing to do with what's happening in court today. Right.

It's invisible to the consumer. And it is something that brands care about and they want to ensure, too. One of the reasons that I got into advertising is because I actually believe that advertising supports a free market. Buyers who come to learn about the goods they care about, the services they want, the products they need,

and brands and marketers who need to sell things in order to make a living, whether you're a small business or you're a Fortune 500 company. Advertising supports a free market system. It supports a marketplace of goods and services. And that's incredibly important. And that's an underpinning of, I think, a free democratic society, Western civilization, and all the things.

That's one of the reasons that I wanted to get into the business because I thought it was meaningful and it did matter. And it matters to give people what they want and what they need to buy, what they want to buy. And it matters that brands and marketers have a chance to make that connection and build those relationships. So I get that in the end, the advertisers are going to go where the eyeballs are. We're in a place where theoretically those eyeballs could be moved around by brands.

The government could say you just don't have access to TikTok right now. In theory, the government could restrain or change the way Google and Meta operate their platforms, and that would have an effect. And it sounds like part of what you're saying is all that stuff is in the future.

my business is in the present, and my job is to make sure my advertisers who want to spend their money now reach the people they want to reach now. And none of us can spend a lot of time thinking about what might happen six months or nine months, or I don't know, what's the timer on the TikTok ban today? Whatever it is. 75 days. 75 days minus however many days it was before. Is that sort of the mindset of the industry broadly that, look, we cannot be spending time doing scenario planning for what happens if

Google has to unwind its ad stack. Or are the people who are paid to go, we do have to spend that time because it could be really gnarly. Absolutely.

Which one? It is business as usual for brands to be focused on their business, what they need to sell, how they need to build campaigns, have companies like Smartly orchestrate those campaigns, and focus on business, focus on the job to do. That is the state of play. So people who are spending money on TikTok today are not coming to you saying, do you have a plan for if TikTok goes away this summer? I can only tell you what we've seen. Was there...

Conversations like that with some of our customers, yes. Were they significant or dominant or overwhelming? No. And that's because our technology gives advertisers the opportunity to shift in real time if they felt like they needed to. Right. It's one of the feet, right? It's not like the way ads used to be where you would buy months in advance, sometimes a year in advance for television upfront. We're going to show you next fall's show today.

shows this spring and you're going to commit a bunch of money that you'll spend throughout the year on us. Yeah. That doesn't exist. They can change it on the fly. That's the era of madmen, and we are no longer in that era. We still have up fronts. Amazing. There will be up fronts in about a month, and I actually think that in about a month we will know how tariffs are going to play out. So let me pivot to the question around –

Thank you, Laura, because that was my question. So that is the now. That's the now. That's a very legitimate issue. We're recording this on Thursday, April 24th. Things can change. But I was listening to Comcast earnings this morning. They asked them about that. And they said, we have not seen any effect yet from what we're calling uncertainty.

We have not seen any effect yet. You are not seeing it at all? We are not. Even though I'm reading that manufacturing is changing and you see these charts about, you know, Shein and Timu ad spending has cratered. That seems like that's a real change. Well, a lot of that has to do with the fact that there's very little shipping going on between...

You know, China and the U.S. right now. But that seems like a meaningful change, right? It is a meaningful change. And that filters all the way through to all of your clients. It is a meaningful change. It will. I think the next month to six weeks, Peter, in all seriousness, the next month to six weeks will be key to watch.

You saw a couple of days ago, the big box CEOs from Walmart, Target, et cetera, you know, talk about a real concern over shelves that will not be full because product will not be able to make the stores. And again, Donald Trump can, again, like I said, we're recording this a few days before you're going to hear it. Donald Trump can change his mind multiple times throughout the day and offer different messages throughout the day. So it's,

In a lot of ways, a fool's errand to sort of figure out where this is going to go. On the other hand, it is your job to do some of that. Well, our platform allows our customers to have optionality. You know, that is what, you know, the benefit or the value proposition of a technology platform in today's world is.

You can make real-time decisions using the software. And if you see audience moving from meta to TikTok or you see TikTok audience moving from YouTube or see TV on the rise, as I said, it starts with people. It starts with consumers. Then what our technology allows is for that to occur if a client wants to make that call.

Scenario planning around tariffs is real in the sense that it could seriously impact any company operating big and small. And what we're seeing is digital spend is resilient. Let's talk about why digital spend is resilient. It might be that some of the traditional television spending exports. And by the way, 93 of the top 100 programs in traditional television exports.

are sports or sports-related. And not just sports. It's the NFL is like 86 of those 93. I was going to say it's like, yeah, about 75 or so. But the point here is digital spend tends to be more resilient because it's loved by consumers. They engage.

It's trackable. You know what, you know, a purchase looks like, where it comes from and how it occurs. And so you can make more precision decisions about where to put the next dollar or what kind of personal or more relevant creative will work.

in, you know, against a brand or a campaign or promotion that you have that you really have to make sure it's a success. So digital spend tends to be more resilient in general in times like these. And with so much digital spend now commanding the budgets of big brands and even medium-sized brands, you look at, you know, you look at them continuing to spend, I think we will continue to see it hold up.

The next four to six weeks will be a big decision point because if there's no product on the shelves...

then that's going to change anybody's advertising campaign. If you don't have anything to sell you, we're going to pull back our ads, right? Yeah. The consumers might not feel as good about spending. Does that increase or decrease ad spending if people are more reticent to spend? Do the advertisers pull back and go, we're going to leave you alone or we're really going to double down now to extract this money from you? All indications are right now is that consumers want to be resilient too.

And while sentiment is going lower and lower by the week, spending that our clients are telling us about is staying solid.

Does anyone come to you and say, we're still spending, but we're going to pause a little bit or we're going to delay a decision for a week or a month because we want to see how this shakes out? I think there's scenario planning that largely is happening now that will be kicked into gear if it needs to over the next four to six weeks, four to eight weeks. But the point on consumers I think is important. If interest rates go back up,

That is going to cut into pocket books. That's going to cut into people's ability to feel like they can purchase one more thing or have one more experience or take one more trip. And that will directly impact advertising.

Some of the data that I've seen, you know, just general smart research companies looking into what would the impact of tariffs be if digital ad spend is predicted to be around plus 12 percent for 2025. And we haven't seen a lot of down ticks to that, maybe a point or two, if then scenarios.

But if tariffs really kick in across the board, as sweeping and as large as what we've been hearing... If what's on the table today is true in a month... You could see advertising forecasts drop as much by 50%. Five-zero. Yeah. And that includes digital, right? Digital does not get out of this unscathed. Yeah, you could. You could see it. Is that a likely scenario? I wish I had a crystal ball. We're both shrugging our shoulders. Yeah, this is not a video podcast. I wish I had a crystal ball. You do, too. Do you...

And then so day to day then, do you just go, we're just plugging ahead. We've got plenty of stuff to take care of. We just cannot spend time thinking about what might happen in a month or a week. That's a CEO mindset. That is a focused mindset. Control what you can control and, you know, do your best to scenario plan. Understand where you're going to spend your next dollar. Understand how you're going to make your creative even more effective so that it converts consumers and people engage, right?

And that's what you do if you're a CMO. That's what you do if you're a CFO and you're a CEO. And that is what we're seeing across the board. We'll be right back with Laura Desmond. But first, a word from a sponsor.

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And we're back. There is a cliche that in downturns, the first thing to go is advertising marketing. It's the easiest thing for a company to say, we're going to cut back. You're shaking your head. Why is that not true? Not always. What we've seen over the last 10 to 12 years is the rise of the direct-to-consumer growth companies. Uber is a great example of that. Spotify is a great example of that. These are customers Smartly Knows Well. They've been part of our journey for a long time.

You know, these brands started to build profitable revenue growth and commerce directly with consumers via their online website or their app. Yep. And, you know, from a C-suite point of view, if you can continue to advertise and drive profitable revenue growth, you're going to do that even in down markets. You know what? This relates to a question I've always had about when –

When Apple screwed up targeting for everybody else and specifically for Meta, there was this big debate about how much it would impact Meta. And I talked to a lot of folks who used to say, look, I used to reliably put a dollar into Instagram advertising and get $1.40 in orders back. So it was a really straightforward decision.

And it was trackable. But the changes to the targeting, blah, blah, blah, made it more expensive, more difficult, blah, blah, blah. And so we've pulled back. And I kept thinking, but your business is to sell widgets, shoes, whatever. Yeah.

If it now – if you're getting $1.20 back on your dollar, you still have to spend it, right? And there was some disconnect between what they were saying and my question or maybe I'm just dumb. What am I missing about that trade? Because you did see a lot of dollars at least for a while leave Meta because targeting didn't work as well as it used to. I think it's obviously climbed back. What was happening there? Well, the first thing is you had –

you know, a series of, you know, decisions around, you know, allowing apps to track, right? You know, Apple iOS 14 ushered that in. And a lot of people decided to say, yes, track. And a lot of people, more than... Overwhelming majority said no. An overwhelming majority said, no, don't track. And so that caused Meta to have to rethink its

how it would provide the targeting data that brands and others knew from them. Yeah, they were on their heels and they had to reformat stuff. They wouldn't call it on their heels. I would just say they had to reframe. They had to rethink how they were going to offer that confidence around targeting. They said it made a big hit to their business. And maybe you could say they were playing it up a little bit to go after Apple. And I was talking to folks. It seemed like

They didn't think it'd be that big a deal or they didn't think it would really happen. And when it did happen, it seemed like it was really impacting their business. It caused a whole rethink about how you target and how you add value to the experience. And in a way, I think it's led to a renaissance. It's led to a renaissance around creative engagement. What all of the social platforms will tell you, and Amazon will tell you this too, is

for Prime and for their ads business, engaging creative, creative that's more personal, more relevant, is driving performance much more than just the targeting alone. And in that regard, that's good news for this industry. It's good news for us as people and for people in general because an ad-supported media company

is one that's going to be better for people, better for creators, better for the value exchange over time. But it has to offer a value exchange. And that, to me, was actually the silver lining in the iOS decision, which is it pivoted the publishers and brands and technology companies like mine, like Smartly,

to start to think how to make advertising more engaging because the creative was personal and relevant much more than just the targeting alone. But it seems like that change changed

directly affected how people spent their ad money. And that's the part that's confusing to me. It'd be one thing if there were lots of other places the size and scope of Meta, but there really is one, right? It's Google, and they offer a different product. It's not really replaceable. If you're dropshipping t-shirts out of China from a basement in Michigan, and the business used to be really good, now it's less good because the targeting is not as good, and maybe it's more expensive to reach those customers. You

You don't have other places to go, right? That's where I'm hung up on. Well, let's break it down. So when iOS made that decision, it was harder to determine what was working. So $1.40 became $1.20 or $1.40 became another number that no one had confidence for because they didn't have a baseline for.

So then you say, as a marketer or brand, okay, I have to get the best ROI or return on ad spend I can. Where do I have data that will give me confidence? And that is what happened over that year to 18 months. A lot of dollars shifted from social to

to Google search, to YouTube, and to iOS search. But once the reframing around more personal, relevant, creative happened, once Meta started and others like TikTok too, launching products that made the targeting shift and allowed a much more trackable series of metrics around ROAS or ROI,

Those dollars started to shift again. But social isn't just meta anymore. People drove change, too, because they love to spend 90 minutes of their time on TikTok, which is actually more than the average on Netflix a day. Mm-hmm.

And so there was a couple, you know, tectonic shifts going on. There was a targeting shift, yes. But there was also a fragmentation shift of new entrants. So there are alternates for the person who was spending money on Instagram Reels. There are other places they can go. Absolutely. Look at Reddit and Pinterest. Reddit and Pinterest right now are fast, you know, very high-growing, fastest-growing platforms.

platforms today because audiences are going there. You know, ad spend is always going to follow audience. And so audiences fragmented at the same time that the measurement changed. And that's why it was a big event.

But it's also now shifted, I think, to a better place, which is let's focus much more on the messaging and the creative to actually engage. The other aphorism I use all the time was that, yes, the ad dollars follow the audience and the eyeballs, but there's often a really long lag time. In some cases, years and years, right? I've been spending – I've been spending –

a good part of my career online. And for a long time, it was very obvious that a lot of people were online, but the ad dollars were not there. They were still on traditional media. And even today, TV has a huge amount of advertising, even though everyone knows that audience is going, going, gone.

Do you think the speed in which people have – on your end of the business have figured out how to find the eyeballs and get in front of them that you guys have caught up, that your clients don't need to wait several years to realize that TikTok is a major platform and they should be there or pick your spot?

Understanding how fast consumers shift is way better today than it was three years ago, five years ago. But the ability to take action on that is significantly improved because you need technology platform infrastructure.

you know, like what we do, to understand in real time what consumers are doing, where they're shifting to, where that audience is available, and then make real-time decisions. Sometimes it's not just the day. I mean, it's certainly not the week, certainly not the month. It's sometimes not just the day. It's what's happening in platform or across platforms in an hour.

So this is one of the questions, another question I wanted to ask you about. One of the big moves is supposed to be from traditional TV advertising to connected TV, right? People are still watching lots of stuff. They're still watching lots of stuff on their television set. Instead of turning the dial or flipping the channel to ABC, they're watching Netflix. They may even watch an ABC show through Hulu or whatever. CTV, connected TV, is supposed to be, one, great because it's video,

the old TV advertising people are familiar with, high value, and it supposedly has all this data that allows you to target really well. And in theory, the viewer should be happier about that too. I watch a bunch of

Hulu Live and whatever. The ads there are notably dumber. There's a lot of repetition. There's a certain kind of ad I don't see on, rather, there's a lot of pharma ads that I won't see. My son and I would watch Bob's Burgers reruns, and there would always be some ad featuring some older black blues musician selling some kind of, I don't know, cancer prostate product.

You chose multiple times per episode. I think something is wrong here. The targeting is not so good. I still get ads all the time in Spanish. I don't speak Spanish. What's the disconnect here? What's not happening? Or maybe it's all of what I'm saying is true and it doesn't matter because it still is better than not doing it.

There's tremendous untapped potential for CTV. I think the industry, you wanted to talk about advertising and the state of the industry. I think the industry is pivoting now around three things. Social, people's desire to go and connect. Commerce, people's desire to actually shop, discover, take action when they want, how they want. And then entertainment.

That is long-form video, a movie, a television series, or a 15-second TikTok that you spend 90 minutes looking at. Those three things are really changing and shaping this industry. Social has thrived with a business model that allows personal, relevant, creative work.

And people want that. More people today want personalized, relevant, and expect relevant creative than ever before. It's about 10 points in the last three years. People want to lean in and shop or discover and do things that allow them to have the ease and the comfort of not always having to be shopping in a mall. It's the online experience that works so well for them.

Entertainment, CTV, has largely not tapped into those two worlds. And that is the untapped potential. A lot of it just has to do with brands and marketers saying, okay, I know I'm losing a lot of audience to people who just want to watch the same show but on demand. So I'm going to use CTV to do that. And that was revolutionary. But the advertising didn't change.

The spots themselves didn't really change. The messaging didn't really change. And that's largely, with some enhancements, been the state of play the last several years. What you're now seeing is the ability to take the shopper data, the ability to take experience and technology platforms, and start to serve more relevant advertising opportunities.

within that CTV experience. And so everything you... Is it happening or is it coming? It's coming. And it has to come. Because when I see, everything I see seems like, like faints and nods towards it or like, pick which ad experience you'd like. And I don't want either ad experience, but I'll pick on the one where there are the progressive insurance people around a campfire just so I can get to Bob's Burgers. I don't care either way. You can tell me that I'm now more engaged because I picked which addicts, but I was trying to get to my thing that I wanted to watch. 100%.

But over time, the technology will get better. The personal and relevant creative will get better. And I think what you will see is some of these CTV companies, and we're seeing it a bit with YouTube even today. We're seeing it with Amazon for sure. You'll see these companies figure out how to provide a seamless experience that is easy to

to discover, shop, or connect, and have personalized creative that is entertaining and offers that value exchange in an ad-supported world. So who wins? People are going to win.

If the brands, the marketers, and the industry do the job that I believe we can all do together, people are going to win because people will get what they need, which is information, knowledge, awareness, the ability to be entertained, and the ability to shop and buy. But people will win with the companies that actually lean into being an ad-supported company.

I don't think the business models are really favorable if you're not going to be ad-supported in this space. The real cool opportunity for a company like mine is to be able to help Nike, Disney, Uber, Spotify not only create advertising that engages in delights in terms of awareness...

but then helps create advertising that is more personalized so that those offers, those interruptions, they actually work and they work where people want to come back again and again and again. And that's what I'm getting to is when is whomever going to realize who I am, who my kid is, or vaguely understand that even though there might be people who speak Spanish and

eight blocks down the street from us that we don't speak it and not to serve us an ad in Spanish and, you know, to get closer to that level of targeting. The level of targeting that freaks people out, by the way, on their phones. They said, my phone is listening to me and that's why they were able to serve up that ad. They were listening to me talk about my trip I'm taking to Italy. No, you Googled Italy at some point. There is hope for you, Peter. There is hope. I believe it's going to get a lot better. It's going to happen. Okay. I believe it's going to get a lot better. Um,

One platform you've not discussed with me here is Twitter slash X. We all know about advertisers fleeing the platform after Elon Musk bought it. It was never a big ad platform to begin with.

There are stories, I'll read them, that say brands are coming back. I don't see evidence of it. I'm on Twitter all the time. The ads I see are from literally like actual Twitter users trying to boost their posts or really the China stuff has dropped off for obvious reasons. But just really weird sort of bottom of the barrel ads. Maybe it's the feed. But how are your clients thinking about Twitter slash X?

So, again, the starting point is people, consumers, their audience. Their audience, you know, is roughly stable. They have some real bright spots in the Middle East, in Asia, and they've boosted, you know, male audience quite a bit, which is, you know, an important part of, you know, the population that isn't always engaging in media like social media.

So their audience is stable. The larger challenge is not around just awareness, though. The larger challenge is, you know, where are those always-on dollars coming from? And we've talked about this in terms of targeting personalized, relevant, creative. And so X has...

done a lot to build that kind of business out. But when they were founded and they, you know, when IPO, you know, 10 years ago, they did it largely as just sort of this awareness play to begin with. Yeah. And so that's...

That's the opportunity for them. It was brands. It was, you know, you're going to reach influential people. If you want mass reach, we know you're going to go to Facebook. We know you're going to go to Google. We're not in that game. You want to reach people on the coast, basically. You want to be in that conversation. This is a place for you. Those people have left. Do you think they come back?

Do you think they come back for real, not just because they're scared of Elon Musk or Linda Yaccarina or Donald Trump? I mean, the audience is stable. And so I'm not sure you can say— In aggregate, it might be stable. It's certainly a different composition of audience. You know what? That's something I just—I'm not in a great position to comment on in the sense that, you know, we have advertisers who are using it. They find value in it, looking for the audiences that they're looking for. Yeah.

And so it's hard for me to kind of – it's hard for me to do a blanket statement about, well, these types of segments have left and these type of segments are there. You know, it is for our clients to decide how they want to use it. We'll be right back with Laura Desmond. But first, a word from a sponsor. This episode is brought to you by Shopify. Shopify.

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I'm going to ask you about AI. I know you're going to tell me that AI is going to be great for me because I'm a person who consumes media and it's going to help me somehow. It seems to me that it's a real challenge. It challenges lots of industries, certainly challenges my industry. It seems like it really challenges your industry. It seems like a lot of work that is currently done is some of the first stuff that is and is going to be automated and is going to lead to more consolidation, fewer jobs.

How do you feel about that thesis? I think it's a tremendously exciting opportunity for the industry. But I think it's exciting for us as human beings and people. It's going to shift work. It's going to shift how we spend our day. It's going to shift how we learn. For marketing, AI will shift how brands make relationships with consumers. And that is something that mobile did. That is something that

The digital revolution did. It's something that AOL did at the dawn of the century. If we go to a world where the queries I used to put into Google, which then resulted in ads as well as stuff I wanted to know about, are now a chat GPT query or pick your platform query.

Do you assume that advertising is going to manifest in a chat GPT response as well? Or does that just shrink the available space for an advertiser? Because, you know, in theory, Google will be less attractive to your super good question. What AI is showing us, what chat GPT is showing us, by the way, what Lama is showing us, what Gemini is showing us.

is that conversations with consumers on a one-to-one basis are now possible. And in a world where people do want relevant, personal creative, that's a big opportunity. And that's something, honestly, on our product roadmap, you know, in terms of what we're building and what we're doing every day, what I'm personally most excited about this year is a launch of a whole new series of ad products around conversational ads.

where you can see the ad in the newsfeed or in your TikTok scroll, and you can click. But instead of clicking and just going to a homepage where you're not sure if you want to buy or not, you can click and get more information and then have a conversation with the brand based on decision trees and AI-like, chatbot-like conversations. I'm excited about it.

Because it's going to change eras. The last 20 years have been about one to many, one to few. The next 10 to 20 years are going to be about one to one. And that is a huge opportunity. And that will open up a lot of cool stuff so that hopefully you don't get Spanish language advertising if you don't want to see it or Bob's Burgers if you actually want to go to Hardee's. That's cool.

It's a fun time to be in this business. I got to show you Bob's Burgers. It's a great show. I would like to see it. It's not hard. I would like to see it. But that's cool. But ask me the follow-up to this. Ask me the follow-up. So that is great for you and maybe for me if I'm in somewhere where I see one of these ads and I want to engage with it and all of a sudden I'm now having a conversation with a chatbot or whatever it is. I get that theory of the case. But what if –

I'm going to chat GPT and there are no ads there because it's not an ad product. Do you just assume that those, the chat GPTs of the world are going to incorporate advertising one way or another? It's just a matter of how? Yes. Are they talking to you about that?

or the platforms themselves saying, this is our roadmap, here's how we think advertising plays into this stuff? No direct knowledge. But, you know, you start to think about, well, first of all, let's put this into context. You know, I think there are 14 billion searches a day on Google.

And the vast majority continue to be similar to the searching we've always known, you know, links, click, you know, basically the business model that the open web has been built on. And a lot more are Gemini-based, the answer in the text box. There are 400 million users of ChatGPT. It's an incredible skyrocket. Nothing has ever gotten consumer love and adoption like ChatGPT. And that includes Spotify and that includes mobile phones and TVs.

It's an incredible viral product. But, you know, put it into context, right? But Google certainly is worried about it. That's why they have reoriented their entire business, right? And that's why they were willing to risk putting out stupid answers to queries like how to put glue on pizza last year because they were so afraid that consumer behavior was going to shift radically to chat GPTs and the like. And this is why I think it's important, again, you know, kind of to talk about this in the sense that, you know, these companies have –

supported advertising, supported creators, supported brands, marketers, in real relevant personal ways. You look at what's possible, and I think most of Fortune 500 brands and even the mid-market and SMB companies would say, my livelihood is based on winning on these leading channels every day.

A lot of it is just driven off of consumer interaction and exchange.

And that is what the AI companies have an opportunity to capitalize on if they want to because of that one-to-one interaction, the data, the audience. So I have no direct knowledge, but I think just thinking about the last 20 years and how advertising has been a huge flywheel to the economy, thinking about how it has helped support the largest companies in the world today,

in technology like Meta, Google, Amazon, it feels like it's going to happen. And I asked you about how AI affects literally the work you guys do and the job impact. Would you tell a young, ambitious person leaving college to get into the ad business? There's a lot of opportunity there where you say there's going to be less opportunity than there would have been X number of years ago. You should think about something else.

I think there's a ton of opportunity, and I'll tell you why, because I think AI is going to usher in a whole new age of technology.

creativity and the explosion of content and the ability to empower creators to get to their idea or versions of their idea faster and faster. It is not going to replace creativity. It is not going to replace a human being in the sense of ideation and contextual understanding and being able to partner with brands to bring those brands to life and a big idea that matters and is meaningful.

But it will shift work. I want to make sure everyone knows it has to shift work ethically. These models have to be trained ethically. They have to respect IP. They have to respect creators' rights. This is job one. This is what needs to be done. But I think it's a tremendously exciting time to be in the advertising business.

Let me say one more thing, though, about any business. So a lot of our engineering is in Helsinki. That's where Smartly was founded. And I was talking to our head of people and our talent recruiter in Helsinki, along with my chief technology officer when I was there about a month ago, having dinner with them. And we were having a real conversation, real talk about what is –

What is AI doing to the average engineer, the average coder today coming out of college? You know, there's a lot of code that can be written by AI. I asked, you know, what is it doing to them? And they all said quickly and unanimously, it's forcing engineers and coders to become more creative. They realize that the value add is not in just the line of code, right?

The value add is what you can do with it and what you can build on top of it and how you can solve problems faster and faster. And that gives me some cause for optimism. This is a disruptive technology, but in a way it's no more disruptive than technology.

The technology we saw in the Industrial Revolution. That's a pretty big change, though. So was the Industrial Revolution. That's what I'm saying. And it disrupts a lot of people, right? And you and I have seen a million. You have thousands.

You've seen a million of these statements and had a bunch of these conversations with people, at least publicly, where they say it's not going to put people out of work. It's going to it's going to they'll find new creative things to do. And and, you know, the horse and buggy people, you know, had to adapt when the car showed up. That's what's going to happen here. You and I also know that one of the reasons people are excited about this technology is going to allow them to replace people to say we used to need 10 people to do this task. Now we need one or zero.

So it is going to strip out work from a meaningful number of people. I think it's going to shift work. And I think for the one for 10, you're going to have nine other opportunities to do more.

We started this conversation with Donald Trump. We're coming back to it. One of the things you would hear about after last fall's election was it wasn't just that Donald Trump was elected. There has been a vibe shift in America. And you continue to hear people talk about that to justify whatever they're doing. Some people believe that the country really has meaningfully changed and that lots of things have to catch up to that change, like media change.

Do your clients believe that? Do they believe there has been a vibe shift? And if so, are they trying to adapt to that? I think they're just focused on delivering the business. One thing I have thought a lot about as it relates to, you know, the presidency in general, whether it be Obama, Trump, Biden, etc.,

is that a president's ability to command media, the president's ability to personalize and make relevant their messaging by channel has always done well. And that ability to day part, right? To have messaging for traditional media that comes across one way, use social media perhaps a different way, use...

if I can dare to say, a different way. That ability to day part, that ability to adjust and shift is a key part of what we have seen. And we will continue to see it. Like we saw Nike ran Colin Kaepernick ads and then they got a bunch of blowback. And then there was the Bud Light thing. Was it last year, two years ago? Yeah.

with a trans influencer and there was a meaningful change in Bud Light sales, right? If I'm hoping to get the beer right. And so you saw brands going, all right, we have to sort of step back from some stuff we thought was good for us. Are they talking to you about that kind of stuff? Or at this point, it's just, look, we know we're selling this many, we know we need to buy this much ad. Do they talk to you about that sort of stuff? Or is it more sort of transactional? I

It's not transactional at all. I mean, what they're talking to us about is how do we take all the knowledge that we have on your platform about what audiences and people are doing and reach them at the right place, right time with the message that's going to engage them. And that's a critical part of driving profitable revenue growth. That is really what's on their mind.

I think anyone who – what you're speaking about in regards to the examples is a lot of influencer media. It's a lot of user-generated content. And I know most marketers who are engaged or using that, they understand you have to put brand guidelines and governance in place to ensure that you don't have some big misses. Right.

But they also understand the risks. And it could happen. But there's some stuff for like brands would spend a lot of money on pride, the gay pride June, right? All kinds of stuff. And over the last X number of years, you saw bigger and bigger corporations, one that you never would see aligning themselves with anything that had to do with gay or lesbian people.

say, oh, we support this community and we're putting our money there. And there's a thought that you're going to see less of that in 2025. Not your business, obviously. You're not involved in pride stuff, or pride parades, I guess. But do you see any evidence of that shift? No, if anything, it's the opposite. What marketers are really interested in is how do I create more relevant personal creative? How do I reach all these important people?

target segments the way they want to be reached with the information about the brand or the product that will make them want to lean in and buy.

And that is why I'm optimistic about AI. That is why I'm optimistic about, you know, the general state of digital media is because over time it's proven to be very effective at that. And anything along the technology front that will help creators create more, help marketers shift in real time.

help brands get in front of the right target at the right moment with the right brand and the right variation of a creative message is going to win.

And to bring it back, I believe when advertising does its job, brands find buyers, people find things they love and need, and goodness happens in a free market. Laura Desmond, you are optimistic. It's April 2025. I will take optimism in any form I can find it, and I'll take knowledge in any form I can find it. So thank you for coming by. Peter, thank you. It's been a real pleasure.

Thanks again to Laura Desmond. Very nice that she could come into the office for that one. Thanks to Jelani Carter, who produces and edits this show. Thanks to our advertisers, all of our advertisers, who make this show available to you for free. And thanks to you guys for listening. We'll see you soon.