Morning Brew Daily
$13B Mega-Deal Creates Advertising Giant & Google’s Staggering Quantum Computer
Tue, 10 Dec 2024
Episode 471: Neal and Toby chat about the mega-merger to create the largest ad agency in the world as the industry contends with AI and social media platforms to stay alive. Then, Nvidia is hit with a probe from China, alleging breaking anti-monopoly laws as the US-China trade wars heat up. Also, Google unveils its new quantum chip capable of solving problems that even the most advanced supercomputers can’t do in minutes. Meanwhile, Toby dives into the latest trend of professional back scratchers that unlock a new level of relaxation to their customers. Lastly, the biggest headlines you should know about. Visit https://www.sage.com for more! Subscribe to Morning Brew Daily for more of the news you need to start your day. Share the show with a friend, and leave us a review on your favorite podcast app. Listen to Morning Brew Daily Here: https://link.chtbl.com/MBD Watch Morning Brew Daily Here: https://www.youtube.com/@MorningBrewDailyShow 00:00 - CEO Shooting Suspect Arrested 03:00 - Mega Ad-Merger 07:30 - China Probes Nvidia 10:50 - Google Quantum Computer 15:35 - Back Scratching as a Career 18:24 - Headlines Learn more about your ad choices. Visit megaphone.fm/adchoices
Chapter 1: What are the details of the CEO shooting suspect's arrest?
Good morning, Brew Daily Show. I'm Neil Freiman. And I'm Toby Howell. Today, the ad companies behind Got Milk and Think Different are combining to upend the marketing industry. Is it because they're worth it?
Then Google has made a quantum leap in quantum computing. It's Tuesday, December 10th. Let's ride. A suspect in the killing of UnitedHealthcare CEO Brian Thompson was taken into custody yesterday in Altoona, Pennsylvania. Luigi Mangione, a 26-year-old former high school valedictorian from Maryland, was arrested after being recognized at a McDonald's 280 miles away from the initial crime scene.
They found Mangione in possession of a gun similar to the one used in the shooting, multiple fake driver's licenses, as well as a three-page handwritten manifesto. According to online court records, Mangione has been charged with murder hours after he was apprehended. He was also charged with three gun-related charges and forgery. So, Neil, finally a suspect in custody.
Chapter 2: What is the significance of the mega ad-merger?
What do we know about Luigi Mangione as of now?
Well, we know quite a bit. He had a very extensive digital footprint that people were combing yesterday. He did come from a prominent and influential real estate family in Baltimore, went to a prestigious prep school there named Gilman, then went to UPenn for engineering, got a bachelor's and a master's there. It seemed like he was very interested in technology. computer gaming.
He even built a mobile app before college. And from his goods reads, it seems like he was very interested and is from his Twitter profile, very interested in things like self-improvement, healthy eating, also veered into criticism of capitalism. And then it feels like a few months ago, he kind of went off the map after back surgery.
In his manifesto, he railed against health insurance companies and corporate America, saying they were seeking profits over putting customers. And Americans are So still a long way to go to understand what what really motivated him. But quite a digital footprint that left a lot of people, you know, amateur sleuths researching what this guy was all about.
Chapter 3: What are the implications of China's probe into Nvidia?
He's now being held without bail in Pennsylvania and at some point will be extradited to New York.
Yeah, and we'll keep you updated as we learn more about this story. Now a word from our sponsor, Sage. Neil, can I hit you with some stats early this morning? Do it. If you ever wonder if all this AI hype actually leads to real business impact, just listen to the finance pros Sage talked to.
They found that 87% of CFOs who have incorporated AI report a significant effect on their businesses, and 88% that use machine learning also see a strong influence on business outcomes.
Chapter 4: What breakthrough has Google made in quantum computing?
And these are the movers and shakers at their companies too. Top CFOs saying overwhelmingly that they are using the power of AI and automation to transform their roles.
So if you are a financial decision maker, consider trying out Sage. Its outlier detection capabilities and capacity to optimize decision making will turn you into a growth driver at your company.
We'll be right back. The tie-up is legacy marketing's response to AI and big tech firms like Facebook and Google revolutionizing the way advertising works at their expense. You may not have heard of Omnicom and Interpublic Group before, but their vast network of agencies are behind many of the TV commercials you mute and the online ads you scroll quickly past.
Their client rosters include AT&T, Amazon, Pepsi, Unilever, and Geico, while they're responsible for some of the most iconic ad campaigns in history, such as Apple's Think Different, L'Oreal's Because I'm Worth It, and Got Milk. Together, the combined company will be worth more than $30 billion.
But times, they are a changing, and this isn't Don Draper's ad industry anymore. The days of asking Peggy and Michael to whip up some copy and present it to your client on an easel are over. Artificial intelligence has dramatically lowered the cost to create and serve ads, while big tech is eating a growing share of the marketing pie.
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Chapter 5: How is back scratching becoming a professional trend?
Neil, is it too late for Madison Avenue to compete with Silicon Valley?
We're going to find out. I mean, these companies are trying to refashion themselves more as digital technology companies than classic media agencies. They've been on a buying spree, acquiring smaller companies over the past decade that you would think has nothing to do with classic advertising. digital brokers. These are influencer marketing platforms.
These are e-commerce companies that help you sell on Amazon. The entire industry has shifted under their feet and they think they need to build scale now to compete against AI, which lowers costs and renders a lot of their services obsolete. You know, say I want to, I would typically go to an agency to whip up some ad creative for me.
Chapter 6: What are the major headlines to know today?
Now I can just use maybe an AI generator that Adobe makes and create something on my own for a fraction of the cost. Maybe I would go to an ad agency to help me plan my media buying. Where should I buy ads? Should I buy this billboard? Should I buy a TV commercial? Now I can just go to Facebook or Google and they'll all do it for me and have all these personalized services where I can target
people in a way that I never could before. So this is a rapidly changing industry and there's big four companies are buying all of these other smaller companies to keep up.
So clearly these agencies are scrambling, trying to say that, no, we're at the cutting edge. We're at the forefront of the AI boom to try to attract those clients. But another aspect of this that
Even though that they're parading around AI as a reason for this merger, I do think scale is very important in the advertising business because there's this thing called principle-based media buying where agencies go around and just snap up all this ad inventory in advance, then sell that in packages back to companies.
This is definitely a little controversial because they don't tell the companies what they initially bought the media inventory, the price that they bought it at. But that is something that scale definitely lends itself to. If you can be the biggest player in the advertising industry, that means you can buy more of the ad inventory space.
And that's where these are the company's bread and butter, which is media buying, which is managing media spend for big companies. So even though you hear this A.I., as the thing that they're saying, this is why we're combining. Under the table, the scale is very helpful in just the good old-fashioned meat and potatoes, the ad industry as well.
And scale could be a problem. As I mentioned, these are the third and fourth largest advertising companies in the world. And combining, they would be the number one eclipsing company Publicist Group and WPP, which are the are one and two right now that could raise antitrust concerns. Yes, we are moving away from the Biden administration's very harsh antitrust stance.
But the incoming Trump administration, Trump nominated Gail Slater, who's a pretty tough and competition enforcer to run the DOJ's antitrust division. So this combined company could get a look from regulators. She is known. Slater is known for going after big tech companies pretty hard. But we'll see. This is you know, these companies want to fashion themselves as as tech companies now.
So we'll see what happens in the in the antitrust realm.
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