‘Advertising Is The ATM For Media’: ‘Frenemies’ Author Ken Auletta On Profound Change In Ad Land

Ken Auletta’s new book, “Frenemies: The Epic Disruption of the Ad Business (and Everything Else),” examines an ad industry in the midst of profound change.

He followed pillars of the ad industry, including former WPP CEO Martin Sorrell, former GroupM Chairman Irwin Gottlieb, Facebook’s Carolyn Everson, CBS’ Les Moonves and MediaLink’s Michael Kassan. The group navigated disruption wrought by data and the erosion of trust between client and agency.

The closing pages of “Frenemies” anticipated some major changes, two of which ultimately happened after the book went to print: Kassan sold MediaLink to Cannes Lions owner Ascential in the book’s final pages, Moonves foresaw the fight over CBS’s merger with Viacom and Gottlieb hinted at retirement – and followed through in April.

But Sorrell had no plans to leave WPP.

“I will stay here until they shoot me,” Sorrell told Auletta.

“Well, they shot him,” Auletta told AdExchanger. Sorrell did not retire, but left in April after the board hired a counsel to investigate a misuse of funds. Shortly after, he set up a new shell company that plans to acquire marketing services companies.

Post-publication changes in this world are inevitable.

“I wrote this book not as a series of snapshots, but as a moving picture,” Auletta said.

Auletta spoke with AdExchanger about the advertising world he’d been chronicling for decades, from his 1991 book “Three Blind Mice” about the cable industry’s disruption of network TV through his 2009 book “Googled,” which focused on the search engine’s disrupting power. His latest book, “Frenemies,” came out Tuesday.

AdExchanger: You must have heard the term “programmatic advertising” a lot when you were researching this story. What was your initial impression of what it meant?

KEN AULETTA: Starting around 2016, programmatic advertising got the same amount of hype and sense that it was about to explode into success as happened with native advertising. Both terms were bandied about incessantly. I think programmatic will play a larger and larger role in advertising, but it seems to me their implementation has been slower than many optimists expected.

Did Martin Sorrell saying ‘I will stay here until they shoot me’ foreshadow his exit this year?

We know he was forced out, but we don’t know why. They said publicly he used a non-material amount of company funds he shouldn’t have. What is a non-material amount in a $21 billion company? Is it $5? Five million dollars?

 I’ve heard all sorts of rumors and don’t give credence to any of them. There will be lawsuits, and there already have been. I can conceive of a time where someone on the board, feeling besieged or defensive, leaks their version of what happened. My guess is [what happened] will not stay silent.

You’re a journalist, where advertising is often seen as a frenemy. What is the future of ad-supported journalism?

I think it’s really problematic. In the book I talk about the school of thought: “Why can’t subscriptions replace advertising?” I think it’s a pipe dream. It may be attractive as a thought, but it’s not realistic as a thought.

The one thing Trump and Clinton agreed on is that the middle class and working class income has been frozen for 10 years. And the thought that they will have money to replace advertising? And pay for Facebook and Google? It’s not going to happen.

That doesn’t mean there aren’t successful subscription models. Look at The New York Times. But where it does make its profit is the print newspaper, in part because people spend much less time looking at digital ads than in the newspaper, and therefore they don’t go for as much of a premium.

And increasingly we are seeing digital news outlets shrinking – you see pressure on BuzzFeed, HuffPost and Vice, who are not seeing the same growth in advertising they once did. It’s a tough future. Advertising is the ATM machine for media. You want to see [media companies] leaning forward and not seeing the digital world as a problem, but an opportunity.

You open the book with former Mediacom CEO Jon Mandel’s speech to marketers at the ANA conference condemning kickbacks. Why use that to frame the narrative?

I used it to crystallize the growing mistrust between clients and agencies. His speech spurred that and helped instigate a series of agency reviews – and who is at the center of it but Michael Kassan? It was a way of not only introducing the growing mistrust in the advertising world, but the entrance of the power broker, Michael Kassan.

Why did you pick Michael Kassan as one of the main characters in the book?

I’m writing a book that will have readership not just in the advertising world, but beyond that. Martin Sorrell, or Les Moonves or Carolyn Everson, are interesting characters that people might relate to. Kassan is someone who is in everyone’s pocket. He is powerful in an industry that is suddenly buffeted by profound change and worries about the future.

You talk about Donald Trump, who used more earned media than paid, challenging perceptions of advertising. Since publication, we’ve learned about how social media may have influenced the election. 

I don’t think it alters the conclusion I reached, which is Donald Trump did spend more on social media and did not go heavy on traditional [media], 30-second advertising spots. He was successful in free media, and no matter what we learn about Cambridge Analytica and Russian [influence on the election], just think about the targeting. He successfully targeted Michigan and Wisconsin as states he could win, and Hillary Clinton didn’t. He did some successful things.

You focus on the people on top in the advertising industry. Who are the successors to that group?

You look at a guy like Gary Vaynerchuk. He’s a little full of himself. He’s not a man of modesty. But he’s a man of creativity and balls. He’s got a lot of courage and risk-taking. You would watch something like that, and think, “Hmm, this guy is interesting.”

There are a lot of talented people in advertising. But the pay scales in advertising and morale are among the lowest. You get the CMOs who are increasingly under the heel of the CFOs and the procurement officers who are saying, “You are spending too much,” and see advertising and marketing as an expense.

If a client is looking at a junior copywriter making $55,000 a year and isn’t happy with the work – well, if you want the best, you have to pay more. That’s the tension right now between clients and agencies.

This interview has been edited and condensed.

 

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