Category: Uncategorized

WSJ: “The Age of Inference is the one tech companies of all sizes have been waiting for, where the economics of AI computing potentially flip from red to green—as long as the cost of providing that computing can be kept low enough. AI companies are moving from their growth phase, which involved investing enormous sums in the infrastructure required for model training—including buying millions of Nvidia’s latest GPUs, from its Hopper and Blackwell generations especially—and attracting hundreds of millions of regular users, to trying to monetize their products through subscription fees or metering the consumption of intelligence.”

Philip Howard: “The key to social trust is accountability. Trust erodes when people no longer feel others will abide by norms of fair dealing. Selfishness grows as people see it succeeding. What’s been lost is not our values of right and wrong, but confidence that other Americans will also be held to those values…eople judging people is the main mechanism for a moral culture. Otherwise, morality is just words.” [via Arnold Kling]

NYTimes: “In the mid-1980s, Charles Bennett and Gilles Brassard invented an encryption technology that could theoretically never be broken. Called quantum cryptography, their technology relied on quantum mechanics, the strange and powerful behavior exhibited by electrons, photons and other very small things. At the time, their technique was a fascinating but impractical creation. Forty years later, it is poised to become an essential way of protecting the world’s most sensitive information. [Recently], the Association for Computing Machinery, the world’s largest society of computing professionals, said Drs. Bennett and Brassard had won this year’s Turing Award for their work on quantum cryptography and related technologies…Called BB84, their system used photons — particles of light — to create encryption keys used to lock and unlock digital data. Thanks to the laws of quantum mechanics, the behavior of a photon changes if someone looks at it. This means that if anyone tries to steal the keys, he or she will leave a telltale sign of the attempted theft — a bit like breaking the seal on an aspirin bottle.”

Andy Kessler: “Economist Mark J. Perry’s famous Chart of the Century shows that since 2000 prices for things that government touches—hospital services, college tuition, textbooks, housing and food—have risen faster than overall inflation. Meanwhile, free-market items like computers, software, televisions and cellphone services (thanks Silicon Valley) as well as clothing, furniture, toys and even new cars (thanks globalization) have dropped in price or rose less than inflation after taking into account the increased value of technology, like 75-inch smart TVs…Those who yell the loudest about affordability are actually making the case for smaller government.”

Consolidation as Answer?

In December 2024, Omnicom acquired Interpublic to leapfrog Publicis and WPP to become the largest agency with combined revenues of over $25 billion.

Here is some of the commentary that followed the announcement.

RTE: “Tech giants such as Alphabet-owned Google and Amazon.com have in recent years attracted marketing dollars away from traditional agencies by offering both advertising tools and marketplaces to buy and sell them. Soaring use of AI tools that allow businesses to create ads cheaper and faster has also squeezed traditional agencies, forcing them to scramble to develop similar in-house tools to retain clients. With more tech-driven solutions coming into the market, MoffettNathanson analyst Michael Nathanson said he was concerned the underlying value proposition of an ad agency’s offering would remain pressured.”

PR Week: “Syracuse University PR professor and former national chair of the Public Relations Society of America, Tony D’Angelo, said…“Omnicom and IPG are betting that their combined scale will give them bigger scale and more leverage with tech providers, and with their media buying and planning.” He added that the acquisition is evidence of how digital and AI technologies are changing the PR landscape. “The holding companies and their agencies will tout this as beneficial to clients, and it may help them deliver additional benefits,” he added. “However, clients may well wonder if they’ll get the attention they need from the larger entity.””

AdWeek: “The acquisition reflects the growing value of data and digitally oriented agencies, the opportunity presented by new technologies like generative artificial intelligence…A core element of the Omnicom takeover is the possibility it presents for the resulting company to serve all of its clients but with fewer personnel, according to Quantum Media principal and New York University professor Erica Gruene. “It’s like the old maxim: The only thing an ad agency owns gets in the elevator and goes down every night,” Gruene said. “And nowadays, you don’t need as many people in the elevator.””

FT: “Advertising rivals question whether the deal has been struck from a position of strength with Sir Martin Sorrell, founder and executive chair of S4 Capital, calling it “a circling of wagons; two people huddling in the cold”. [He said], “This is a reflection of the pressure on agency fees, people and margins together with the spectre of the impact of artificial intelligence and increased programmatic media planning and buying.”… Advertising executives saw the irony of announcing the deal as a new report from WPP’s GroupM came out showing that the industry had rocketed to over $1tn in revenues — but also revealing that more than half of the value was now in the five large tech groups, who accounted for almost all of the growth. The report underlined the need for consolidation in the traditional agency holding company model. Executives agree that the future will be about investing in AI and other technology that allows advertising to be done faster, cheaper and more effectively for clients. One area where scale will potentially make a difference is data and AI investment, with the combined group having increased firepower to invest resources in this area, according to analysts.”

WSJ: “If the Omnicom-IPG deal goes through, the combined company will supplant WPP’s GroupM as the largest global media buyer and gain new leverage with ad sellers in the process, according to Comvergence, a market research firm. Any increased buying power the merger could offer would be welcome, as would the companies’ combined technology resources, including emerging artificial intelligence capabilities, some marketers said. “Scale does matter, global scale does matter, efficiency does matter, and innovation does matter,” said Doug Sweeny, the CMO of wearable tech company Oura Health…“Building out their AI, which can impact business in a way that we’re not entirely clear about, as a larger entity together will make them more formidable to pressures on their moat.””

What’s abundantly clear is that traditional agencies face an existential inflection point—consolidation merely addresses symptoms while ignoring the underlying disease. The Omnicom-IPG merger represents a defensive manoeuvre in an industry fundamentally threatened by both technological disruption and structural inefficiency. The path forward demands more than scale; it requires dismantling the acquisition-centric paradigm that has dominated marketing for two decades and replacing it with a retention-first model that eliminates the systemic waste of repeatedly paying to reach existing customers. The agency of the future will emerge not from incremental adaptation but from radical reinvention—one that transforms marketing from a cost centre driven by ephemeral impressions into a profit engine powered by sustainable customer relationships.

Kurt Gray: “Bearing in mind that our species is by nature more prey than predator is a good rule of thumb when interacting with people — and it could help soothe today’s intense political animosity by increasing our sympathy for the other side. Just as you vote to protect yourself and your family, so do those who vote differently. The next time you feel angry at your political opponents, pause to think about how they might feel threatened…Unless they see you as naïve, your political opponents probably view you as a predator. To help them understand your true motivation, consider explaining how your beliefs relate to your fears and your desire to protect yourself, your family, your community. You might start a political conversation by asking, “What worries you most about the future?” or “What makes you feel threatened?””

Gautam Mehra: “The gold standard [in data]: deterministic observed data. This is the data of real actions—what people actually do, not what they claim to do or what we approximate they might do. Whether it’s purchase patterns, digital interactions or footfall data, deterministic observed data provides a concrete and unbiased view of reality…the gold standard: deterministic observed data. This is the data of real actions—what people actually do, not what they claim to do or what we approximate they might do. Whether it’s purchase patterns, digital interactions or footfall data, deterministic observed data provides a concrete and unbiased view of reality.”

Raghuram Rajan: “What is important is [India’s] economy itself is not creating enough jobs. Manufacturing, for example, is becoming much more capital intensive over time. Where we are creating jobs is in construction and agriculture. Construction, of course, because of the boom in infrastructure spending, etc, is understandable. Agriculture is worrisome. Why are people going back to agriculture when, in fact, in every developing country, they should be coming out into the services and manufacturing. Services was creating jobs, but through the pandemic, it has not. I think the big question for the government has to be: How do we create more jobs and higher quality jobs?”

The Generalist: ““Startups need to force a choice, not a comparison.” That’s something that Mike Maples told me recently. If a startup forces a comparison, it will inevitably lose because the incumbent can just RFP you to death with incremental features. You can’t come in and say, “Hey I’m building a CRM with a more elegant workflow.” You have to deliver a value prop to your users that is orthogonal in some way – something that is so different from the current offering: like a CRM that doesn’t require data entry, Uber versus taxis, or Gong versus Salesforce. It should be something that’s essentially impossible for the incumbent to react to because you’re changing the conversation, and what was once their strength becomes a kind of weakness. Mike gave the example of Airbnb versus traditional hotels. The Four Seasons has a standardized, cookie-cutter style that lets you know when you’re stepping into one, wherever you are. What Airbnb had was uniqueness – being at an Airbnb in Paris is not the same as being in one in San Francisco or Los Angeles. It forced a choice: Do you want a consistent hotel stay or to experience the city? People will pick different things, which is fine, but you need to appeal deeply to some narrow subset, not try to build the slightly better Four Seasons.”

NYTimes on Mel Robbin’s new book “The Let Them Theory”: “If you stop trying to manage other people’s opinions, actions and moods, then your well-being and relationships will improve. Friends hanging out without you? Let them! Relatives griping about you? Let them! Your date ghosts you? Let them! Don’t stress about what you cannot control; focus on what you can…The first half of the “let them” idea is about freeing yourself from the burden of trying to manage other people. As for the second half, Robbins turns to another concept: “let me.” It goes like this: after releasing what you cannot control, you say “let me” and take responsibility for your next steps. Without that idea, you run the risk of simply shutting down and isolating yourself, the book warns.

Recent Writings – 2

The Coming Age of Anti-Acquisition: “A seismic shift is about to reshape the landscape of marketing. For the past two decades, the relentless pursuit of new customer acquisition has dominated every marketer’s agenda, fueling the rise of digital-first brands and disrupting countless industries. However, this era of unchecked expansion is drawing to a close, heralding the dawn of what I call the “Age of Anti-Acquisition.” While “retention” might seem the natural successor, the term “anti-acquisition” more accurately captures the impending paradigm shift. It represents a direct challenge to the extreme and often destructive focus on acquisition, reacquisition, and even re-reacquisition that has, like a metastasizing cancer, eroded the health and profitability of businesses across sectors… The Age of Anti-Acquisition promises to fundamentally alter the marketing and business landscape, creating new winners and losers. Just as artificial intelligence is ushering in the Intelligence Age, succeeding the industrial, information, and Internet ages, agentic AI and other innovations will revolutionise marketing beyond traditional branding and acquisition strategies.” [Part 4 of the essay discusses the shifts in marketing.]

I added: “The time is now for marketers to reclaim their role as the true architects of business growth. In this new paradigm, CMOs have the opportunity to evolve into Chief Profit Officers, taking ownership of the entire customer lifecycle and directly impacting the bottom line. Those who successfully lead this transformation may well find themselves on the fast track to the CEO’s chair, as businesses recognise the critical role of customer-centric, profit-driven marketing in overall corporate strategy.”

How BEAM and BEAN can Fashion a New Email Era: “The House of Anti-Acquisition represents a paradigm shift in marketing strategy, addressing the unsustainable practices of excessive customer acquisition and AdWaste. This framework aims to transform businesses from profitless entities into ‘profipolies’ – industry leaders in profitability. The core goal is to maximise customer Lifetime Value (LTV) whilst minimising Customer Acquisition Costs (CAC). Built on ten critical tenets, the House comprises three pillars: Better Data (utilising Unistack and Unichannel for a unified customer view, and leveraging a Large Customer Model), Better Customer Experience (enabling in-channel conversions in all push channels, and creating differentiated experiences for the most valuable customers), and Better Personalisation (leveraging AI-powered Co-Marketers and AI Twins). These are supported by three foundations: AI (predictive, generative, and agentic capabilities), Kaizen Progency (continuous improvement via a thin services layer), and redefined Metrics and Leadership (focusing on Earned Growth and evolving the CMO role to focus on profits). This framework challenges the status quo, prioritising retention over acquisition and utilising AI-driven strategies to achieve sustainable, profitable growth in the digital age.”

Also see Building The House Of Anti-Acquisition For Sustainable Profit Growth.

FT: “Move over, copilots: it’s time to make room for the AI agents. That has been the message from the software industry in recent days, as some of the biggest companies have lined up behind the latest idea for how to turn generative artificial intelligence into a staple of working life…The latest wave of AI agents are designed to go further and take actions on behalf of users…If the industry’s claims prove true, the move from AI assistants to agents could also open the door to a far more disruptive phase in the evolution of generative AI, both for workers affected by the technology as well as software companies themselves. Behind the spread of agents — also widely referred to as “agentic” systems — lie a number of advances in the underlying technology since the first generative AI chatbots.”

Andrew Chen on bad pivots: ” If a product isn’t working, retention sucks, rarely does adding more social features help — no matter how buzzy the features are. And no matter how many notifications they might fire off. The opposite of love is ambivalence, not hate, and similarly the opposite of PMF is low retention. So usually if you add secondary/tertiary features to a leaky experience, people generally won’t engage with them. If you add sharing and invite features to a leaky product, your users won’t be excited either. A better pivot is to do the strong-form version, and make the new the main thing, not add them as features.”

WSJ: “A few years ago, $100 million in annual recurring revenue was often enough to set cloud companies on the path to larger late-stage rounds at lofty valuations and perhaps even an initial public offering. Institutional investors viewed it as the mark of businesses that could keep growing and deliver a significant return. Then the goal posts moved. Higher interest rates and slowing growth for software businesses have pushed institutional investors to raise their sights to $300 million in ARR, according to Asheem Chandna, a partner at venture-capital firm Greylock Partners…Fewer than one in 1,000 enterprise software companies backed by top venture-capital firms achieve $100 million in annual revenue, according to Chandna, who sits on Rubrik’s board.”

TechCrunch: “In May, LinkedIn launched three puzzles through LinkedIn News, like a knock-off version of New York Times games. There’s the logic puzzle Queens (my favorite), the word game Crossclimb (pretty good), and the word-association game Pinpoint (not a great game, but whatever). LinkedIn is adopting the classic tech strategy of seeing what works for another company and then trying to replicate that success, even if it might seem odd to play games on a professional networking platform. But it’s no wonder why NYT Games has spurred this inspiration. In a way, The New York Times is a gaming company now — as of December 2023, users spent more time on the NYT Games app than on its news app.”