AdExchanger Talks: Frank Predictions For 2025

Host: Alison Schiff
Guest: Andrew Frank, VP and Distinguished Analyst at Gartner
Release Date: January 7, 2025

Introduction

In the inaugural episode of AdExchanger Talks for 2025, host Alison Schiff welcomes Andrew Frank, a distinguished analyst from Gartner, to discuss the tumultuous events of 2024 and forecast trends for the upcoming year. The conversation delves into significant industry happenings, including antitrust trials, major mergers, the evolving landscape of trust in marketing, and the practical applications of AI in advertising.

Guest Background

Alison Schiff:
Andrew Frank begins by sharing his diverse career trajectory, highlighting his early experience as a video game designer and his academic background in music from Wesleyan University. While Frank played instruments like guitar and bass, his current focus lies in the agency world and industry analysis.

Notable Quote:

"I spent the first part of my career as a video game designer back in the early days of console games, and that's where I got my start in the media and technology space." (02:11)

Reflections on 2024 and Looking Ahead

Alison and Andrew reflect on the chaotic nature of 2024, characterized by significant acquisitions, industry struggles, and high-profile legal battles. They discuss whether the intensity of the past year is a result of actual events or a cognitive bias stemming from living in tumultuous times.

Notable Quote:

"It could just be a natural cognitive bias that, you know, when you're living in times of chaos, the most recent chaos seems like the most intense." (04:25)

Google Antitrust Trials

One of the primary topics is Google's antitrust trials, both in search and ad tech. Alison probes whether Google's loss in the search trial will impact its investments in generative AI search.

Key Points:

• Market Forces vs. Legal Outcomes: Andrew suggests that evolving search habits and the adoption of conversational interfaces may have a more significant impact on Google's dominance than the antitrust verdict.

  Notable Quote:

  "The market forces are actually a much more significant factor right now." (05:33)

• Antitrust Implications: While Alison anticipates Google's loss in the ad tech trial, Andrew refrains from predicting the outcome, citing the complexities of antitrust resolutions.

  Notable Quote:

  "I'm not going to make a prediction on the outcome." (12:03)

• Advice for Brands: Andrew advises brands to experiment with diverse platforms and strategies to mitigate potential disruptions from the trials.

  Notable Quote:

  "Look at more experimental capabilities to test out different platforms, different strategies." (13:51)

Trust in a World of Lies

The discussion shifts to the challenge of building trust in marketing amidst widespread misinformation. Andrew introduces the concept of "trust ops," emphasizing operational strategies to ensure content truthfulness, verifiability, and provenance.

Key Points:

• Operationalizing Trust: Implementing systems that institutionalize truthful content and detect false information.

  Notable Quote:

  "We call it trust ops that can help basically institutionalize the things that you need to do in order to make sure that the content... is truthful and verifiable." (09:25)

• Enhancing Skepticism: Encouraging a more skeptical approach to information consumption to combat the acceptance of fabricated truths.

  Notable Quote:

  "We're going to need to think about how we educate people differently about the nature of truth." (08:29)

Omnicom-IPG Merger

Alison brings up the $13 billion merger between Omnicom and IPG, seeking Andrew's perspective on its implications for the industry.

Key Points:

• Talent Redistribution: The merger is expected to free up talent, allowing for greater insourcing and the scaling of independent agencies.

  Notable Quote:

  "I think that it will free a lot of talent... create more opportunities for independent agencies." (21:59)

• Motivations Behind the Merger: Beyond principle-based media buying, the merger aims to enhance innovation and competitiveness against other major players like WPP and Publicis.

  Notable Quote:

  "This gives them a chance to shake things up a bit. And I think that's not just about principle based buying." (22:44)

AI in Marketing

A significant portion of the conversation revolves around the role of AI in marketing, particularly in light of Gartner's hype cycle positioning generative AI entering the "trough of disillusionment."

Key Points:

• Practical Applications vs. Hype: Andrew anticipates a period of backtracking as organizations grapple with the limitations of generative AI, acknowledging overhyped capabilities.

  Notable Quote:

  "You are going to see a lot of backtracking. I don't know if we're looking at quite the Internet winter, but... companies struggling to make these investments work." (24:35)

• Customized AI Models: Emphasizing the importance of fine-tuning AI models with brand-specific data to produce authentic, commercially viable content.

  Notable Quote:

  "Encourages you to think about your brand vocabulary and what are the significant assets and themes." (29:58)

• AI Governance and Trust: Andrew advises the establishment of cross-departmental AI councils to develop responsible policies, ensuring AI tools are used ethically without stifling innovation.

  Notable Quote:

  "You need to have a new charter for a group of people from different areas of the organization coming together to really hash out some of these policies." (34:35)

Data Collaboration and Clean Rooms

The conversation touches on the future of data collaboration platforms and clean rooms, especially in the context of evolving FTC regulations.

Key Points:

• Flexibility of Clean Rooms: Data clean rooms can be leveraged responsibly, but transparency and adherence to privacy laws are paramount.

  Notable Quote:

  "Data clean rooms can be used in various ways along a spectrum of safety and compliance with the spirit of the law." (16:29)

• Consumer Respect: Emphasizing that data collaboration should align with consumer expectations and ethical standards.

  Notable Quote:

  "Respect is... What do you want it? What would your aunt or your mom... think if you described XYZ practice to them?" (17:10)

Third-Party Cookies

While Google's official stance on third-party cookies has evolved, brands still seek strategies to mitigate signal loss.

Key Points:

• Diminishing Concern: Inquiries about third-party cookie deprecation have lessened compared to previous years but remain relevant.

  Notable Quote:

  "It's a long fade out, I guess. We still do get inquiries about that, but they're certainly a lot less frequent." (36:55)

• Strategic Responses: Marketers grapple with balancing signal recovery and adhering to legal constraints, often seeking advice on navigating these challenges.

  Notable Quote:

  "Whether X workaround is kosher, that sort of thing." (37:05)

Lightning Round: Andrew's Hot Takes

In a rapid-fire segment, Alison poses quick questions to Andrew, eliciting concise responses on various industry topics.

• Curation as Ad Networks Reborn:
  "Yes, you got it." (38:41)

• Programmatic Supply Chain Transparency:
  "No." (39:09)

• Ad Buyers Pushing Back on Fees:
  "I doubt it. They've already been mad as hell." (39:31)

• Regulatory Approval of Omnicom-IPG Merger:
  "I don't know." (39:56)

• Open Web's Future:
  "I think it's a powerful construct and it has a future." (40:02)

• Google Spinning Off Chrome:
  "I don't think it matters that much." (40:27)

• Federal Privacy Law in Next Four Years:
  "No." (40:38)

• Reflection on 2019's Data Oligopoly Critique:
  "I don't see any reason to change my view on that." (41:45)

Buzzword Buster: Terms to Eliminate

Andrew expresses his frustration with certain industry buzzwords, advocating for clearer terminology to prevent misconceptions.

Key Points:

• "Autonomous Agents":
  Andrew criticizes the term for misleadingly attributing human-like reasoning to AI tools.

  Notable Quote:

  "Autonomy carries a lot of excess baggage... creating the illusion that these things are reasoning for themselves." (42:52)

• Personifying AI:
  Alison and Andrew discuss the dangers of attributing human characteristics to AI, such as naming AI agents after people, which can lead to unrealistic expectations and misuse.

  Notable Quote:

  "It's a tool, it's not a person. And if we call it Einstein, then we're going to treat it like it has a personality." (43:11)

Predictions and Resolutions

As the episode wraps up, Alison and Andrew share their predictions and resolutions for 2025.

Andrew's Predictions:

• Royalty Payments for AI Models:
  Andrew predicts that AI model providers will incur significant expenses in paying royalties to creative talents whose works are used in training datasets.

  Notable Quote:

  "Within five years, the largest expense for AI model providers will become the royalties that they need to pay to creative talent." (49:54)

Resolutions:

• Personal Resolution:
  Andrew aims to maintain focus on big-picture narratives amid chaotic news cycles.

  Notable Quote:

  "I'm going to try to keep focused on larger ARC stories." (44:46)

• Industry Resolution:
  Emphasizing transparency and serving clients authentically without operating on conflicting interests.

  Notable Quote:

  "Re-double down on the commitment to transparency... work for one side or the other." (44:46)

Conclusion

The episode concludes with a reflection on the industry's current challenges and the importance of fostering trust, transparency, and ethical practices as it navigates the complexities of AI integration and regulatory landscapes. Alison expresses her appreciation for Andrew's insights, setting a thoughtful tone for the year ahead.

Highlighted Takeaways:

• Trust Operations ("Trust Ops") are essential for maintaining content integrity in an era of misinformation.
• AI's Practical Applications require customized, brand-specific models to ensure authenticity and effectiveness.
• Regulatory Developments will continue to shape the advertising landscape, necessitating adaptable and transparent strategies.
• Industry Mergers, like Omnicom-IPG, can unlock talent and foster innovation but also pose challenges for market dynamics.

Notable Overall Quote:

"There can be no trust without truth." (10:29) – Emphasizing the foundational role of truth in building trust within marketing and advertising.

This comprehensive summary encapsulates the key discussions and insights from the "Frank Predictions For 2025" episode, offering valuable perspectives for marketers, advertisers, and industry stakeholders navigating the evolving ad tech landscape.