What If...Abercrombie Was a Lifestyle & Google's AI Paid For Content | Behind the Numbers

Summary

Podcast Summary

Podcast: Behind the Numbers: an EMARKETER Podcast
Episode: What If...Abercrombie Was a Lifestyle & Google's AI Paid For Content
Date: April 10, 2026
Host: Marcus (EMARKETER)
Guests:

• Yuri Wormser (Principal Analyst, NJ)
• Susie David Kern (VP of Content, Retail, NYC)
• Nate Elliott (Principal Analyst, AI)

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Episode Overview

In this engaging Friday episode, the Behind the Numbers team brings back their “What If” segment, where each panelist pitches a bold, forward-looking prediction about the future of digital, retail, or AI. Then, in a playful Shark Tank-style, the group debates the plausibility and impact of each scenario before voting whether to “invest”—that is, to express belief—in these predictions. The three main topics discussed center on Apple’s AI ambitions, Abercrombie’s potential transformation into a true lifestyle brand, and the repercussions of AI search on web publishers, specifically whether Google will need to pay for content used in AI responses.

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Key Discussion Points & Insights

1. What If Apple Delivers on Its Vision for Apple Intelligence?

Pitched by: Yuri Wormser
Timestamps: 03:54 – 14:45

Summary

Yuri explores the much-discussed but as yet unrealized promise of Apple Intelligence—a vision where Siri seamlessly integrates all personal device data (calendars, emails, location, preferences) to proactively solve users’ needs in a smart, helpful, and personalized manner. Despite Apple’s decade-long effort to improve Siri, it still lags behind competitors. The company’s new approach leverages Google’s Gemini large language model (LLM) after recent partnerships, aiming to leapfrog ahead in the AI assistant race.

• Apple’s “Vision”: All user information—appointments, locations, correspondence—would be integrated for predictive, context-aware assistance via Siri.
• Technical Challenge: Stitching together disparate services (Calendar, Maps, Mail) and deeply integrating with advanced AI models from partners like Google.
• Strategic Rationale: Apple’s bet is that LLMs will rapidly commoditize, and their unique advantage will come from controlling the device ecosystem and on-device, privacy-protected user data.
• AI Partnership Implications: If Siri becomes powerful through Gemini, does Google gain undue leverage (and revenue streams) should the partnership prove successful?
• Incremental or “Light Switch” Progress?: Likely a large functional leap, followed by steady improvements, once Apple can successfully integrate the required technologies.

Notable Quotes

• Yuri (05:07): “It takes all that information across your device... and integrates it so it knows you and responds appropriately.”
• Nate (06:14): “Siri is sort of famously one of the worst personal assistants in terms of its use of effective AI.”
• Yuri (07:30): “Apple’s bet... is that these large language models will get commoditized and they won’t be all that differentiated in a few years.”
• Susie (09:32): “My Android... told me when a flight was going to be late before I even knew. And that was not LLM-based.”
• Yuri (10:20): “The LLM part now is... if you can just say what you need through Siri, [it] can interpret that much better than it can now.”
• Marcus (11:02): “Is this going to be a bit of a light switch moment... or is this going to be that every year you notice it improving a little bit?”
• Yuri (11:22): “When it works... you’ll see a big leap in its capabilities, and then you’ll see incremental improvements.”

Panel Verdict

• Nate: No chance this year (13:31)
• Susie: No, too much red tape and not at “the master peak point” yet (14:36)
• Marcus: Half-in (14:35)
• Yuri (self): Yes, optimistically in (14:35)

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2. What If Abercrombie Evolves Fully into a Lifestyle Brand?

Pitched by: Susie David Kern
Timestamps: 14:49 – 23:42

Summary

Susie proposes that Abercrombie, riding the momentum of its internal “lifestyle brand” transformation, might soon expand into hospitality and experiential spaces—think fitness studios, spas, coffee shops, or even hotels—aiming to be present in consumers’ everyday lives and not just at purchase moments.

• Retail-to-Hospitality Shift: Many retailers—Tommy Bahama, Ralph Lauren, Restoration Hardware—are branching into restaurants, cafes, or event spaces to deepen customer engagement and add non-product revenue streams.
• Changing Consumer Behavior: With the “K-shaped” economy, consumers spend more on experiences versus products. For Abercrombie to maintain relevancy and growth, it may need to offer experiences that extend beyond fashion.
• The Athleisure Angle: Abercrombie’s “Your Personal Best” athleisure line (YPB) provides a natural segue for wellness- or fitness-oriented offerings.
• Execution Ideas: Pop-ups, in-store coffee corners, fitness co-activations, minimal investment experiments—test the market for more permanent lifestyle experiences.
• Gen Z Appeal: While some panelists are skeptical whether coffee shops or gyms attract Abercrombie’s youthful base, Susie posits that “third spaces” (cafes, juice bars, etc.) cater to younger, wellness-focused consumers, expanding the brand reach and relevance.

Notable Quotes

• Susie (15:26): “There’s this need to deepen the engagement with consumers... retail is moving into hospitality.”
• Susie (17:18): “They were the ones that had the stores you had to go visit in the ‘90s because the scent was really, really strong and they had people out front.”
• Susie (19:02): “My original, absurd prediction was... maybe the way to get into that fitness ecosystem is... could they buy something like, not a Mirror, but something in that world?”
• Nate (20:34): “Do Gen Z go to coffee shops?... Coffee shop doesn’t sound like a real natural fit for 24-year-olds who wear Abercrombie or Hollister.”
• Susie (21:07): “You’d be surprised at who their core customer is and what they do.”

Panel Verdict

• Yuri: In (22:42)
• Nate: Out—not “highly unlikely” enough and too straightforward (23:06)
• Marcus: Half-in (23:42)
• Susie (self): N/A (proposer)
• Score: 1.5 points; Susie wins the episode.

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3. What If Google Starts Paying Publishers for Content Used in AI Responses?

Pitched by: Nate Elliott
Timestamps: 23:50 – 31:02

Summary

Nate examines mounting concerns over generative AI “stealing” publisher content—summarizing and answering questions with website-derived information without sending users to the source site, threatening the advertising-funded web. Amid mounting lawsuits (e.g., New York Times vs. OpenAI), global legislative rumblings, and precedents from Google paying news outlets in countries like Australia, Nate foresees Google proactively agreeing to pay more widely for content surfaced in AI summaries—putting pressure on smaller AI players and possibly averting stricter regulation.

• Current Landscape: AI-generated responses often cite publisher content but result in minimal direct traffic, eroding revenue for content creators.
• Google’s Unique Position: With its massive cash flow and search dominance, Google can afford to pay out and may do so voluntarily to avoid or shape regulation—leaving less well-funded rivals at a disadvantage.
• Payment Mechanisms: Cited content or sourced information in a response could trigger a micropayment; crawling alone wouldn't require payment.
• Sustainability: Even these “pennies” may be better than nothing for publishers, but overall, the economic model of the content web is growing more tenuous.

Notable Quotes

• Nate (25:51): “Google makes hundreds of billions per year... Paying publishers is not just something that preempts government action, it might put competitors like OpenAI in a tough spot.”
• Nate (27:54): “Even public information comes with a tax on users, which usually comes in the form of advertising. And [AI] keeps people on the platform, taking away that ad revenue.”
• Nate (29:47): “If this becomes the standard, OpenAI, Perplexity, Claude are all out of business in a year or less, and Google’s still doing fine.”
• Nate (30:00): “There will be a publishing apocalypse of some level because of what’s happening right now... It’s going to keep getting tighter for publishers.”

Panel Verdict

• Yuri: In—totally convinced (31:06)
• Susie: Out—not likely within this year, too little time left (31:19)
• Marcus: Out—not enough timeline in 2026
• Nate (self): N/A (proposer)

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Memorable Moments & Quotes

• Running Joke:

  • “If you put a drum roll in, I’ll be furious.” (Marcus, 00:57)
  • “Kids aren’t going to know what a pencil is, are they?” (Marcus, 13:29)

• Retail Hospitality as a Trend:

  • “Restoration Hardware has... this really hard to get into brunch place in some of their locations.” (Susie, 15:32)

• Publishing Apocalypse Warnings:

  • “I am genuinely worried that there will be a publishing apocalypse because of what’s happening right now.” (Nate, 30:00)

• Generational Tech Reference:

  • “When are they going to bring back the Newton?” (Nate, 11:43)
  • “You might have to tell people what that is.” (Susie, 11:53)

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Timestamps for Major Segments

| Time | Segment/Topic | |----------|-----------------------------------------------------------------------| | 03:54 | What if Apple delivers on its vision for Apple Intelligence? | | 14:49 | What if Abercrombie evolves into a full-fledged lifestyle brand? | | 23:50 | What if Google starts paying for content used in AI responses? | | 31:02 | Voting & results wrap-up |

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Episode Verdict

• Susie’s Abercrombie prediction wins (“in” from Yuri and half-in from Marcus; 1.5 points).
• AI and Apple predictions seen as “not quite there yet”; web publisher compensation could be more imminent but faces timeline skepticism.

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Tone and Takeaways

With their trademark blend of sharp analysis, playful ribbing, and market-savvy debate, the team surfaces critical trends for marketers and industry watchers. Whether you’re curious about the future of digital assistants, the next evolution in retail, or the existential threat facing publishers from AI, this episode packs insight, skepticism, and a few laughs—all in one power lunch break.

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For marketers, publishers, and retailers—this episode is a primer on where the digital winners and losers may be found as generational shifts and AI disruption change the business landscape.

Transcript

[A]

Verve's global omnichannel advertising platform redefines what's possible Beyond Ward Gardens, Verve illuminates, connects and activates high fidelity signals that drive outcomes for brands, agencies and publishers at scale. Learn [e-mail]. Hey, gang. It's Friday, April 10th. Yuri, Suzie, Nate and listeners, welcome to behind the Numbers new marketer podcast made possible by the berv. I'm Marcus, and joining me for today's conversation we have with us three folks. We start with the principal analyst living in New Jersey, it's Yuri Wormser.

[B]

Hello.

[C]

Hey, Marcus, how are you?

[A]

Hey, fellow. Very good. How are we?

[C]

I'm doing great today.

[A]

Good, good, good. We're also joined by a VP of content, heads up our retail desk. Also host of our e marketed podcast, Reimagining Retail, living in New York City. None other than Susie David Kern.

[D]

Oh, my God. Is there a drum roll?

[A]

No. No.

[D]

Come on. You made it sound like there was. I'm so excited to be here. This is my favorite episode to do.

[A]

The title's ridiculously long. That's the only reason Production. I swear, if you put a drum roll in, I'll be furious.

[D]

Take control, Marcus.

[A]

I'm trying all sorts. So early. We're also joined by our lead voice on AI, principal analyst, also in the city sometimes Nate Elliott.

[B]

Guten tag, Marcus.

[A]

Hello. Oh, okay. German Today's fact. So the average American will spend how much money during their lifetime on coffee? Any guesses?

[B]

$100,000.

[A]

Susie, this is where you chime in with the guests.

[D]

I don't know.

[A]

Okay, good.

[C]

Yuri, I'm going to go with $40,000.

[D]

Your question wasn't specific enough?

[A]

It was. It seemed fine. Nate and Yuri were able to venture,

[D]

like, if you have an espresso after dinner, that counts or. No, it's just the coffee that you have in the morning. You know what?

[B]

I'm all included in the average.

[A]

Yeah. Yeah. Thank you. Thanks.

[D]

Nate, what country are you in?

[A]

Oh, my goodness. America.

[D]

I don't know.

[B]

Average American did say us.

[D]

Oh, he did?

[A]

Is the American abroad? Do they live over here?

[D]

Right. You're totally right. I don't know. 50 grand? I have no idea.

[A]

No, don't even bother. Because you're. Well, 121n's pretty close. Luxembourg spends the most at close to half a million. Wow, that's too much. Okay, Luxembourg, well, they probably live longer. No one needs to visit Luxembourg and let them know no one else is drinking that much coffee.

[B]

They drink that much coffee. I don't know if they do live longer, Susie.

[A]

It's five cups a day. That's too much. Americans will consume about 26,000 cups of coffee during the lifetime, an average of just. Just 1.2 cups per day, which is surprising. Wow. Luxembourg, five. And then you've got Finland, four. Sweden and Norway two and a half. Every other country less than two.

[D]

I don't believe this. In France, they definitely drink at least

[A]

three or four, but on average, because some people don't drink at all.

[D]

Okay, fine.

[A]

Yeah.

[D]

Averages.

[A]

All right, good.

[B]

Today's real topic.

[A]

All right, here's how this episode works. Yuri goes first. He's gonna get 60 seconds to pitch a what if prediction. This used to be highly, very specific, but highly unlikely. It was too long, so we changed the name to what if. So he's gonna pitch a prediction for this year, and then me, Susie and Nate and everyone listening will decide if we're going to invest in it. It's Shark Tank style. Invest means believe, because we don't have any money in the prediction. Suzy goes next, and so on and so forth. Let's do it. Yuri, what do you have for us? What's your pitch?

[C]

What if Apple delivers on its vision for Apple intelligence? The reason I say that is Apple has been working with Siri, trying to improve Siri for a decade without a lot of luck. Two years ago, they came up with their vision for Apple intelligence, which essentially integrates everything into a seamless experience for Apple users. And it all revolves around Siri. To this point, they haven't been able to deliver. I'm not saying they will or not, but that's my prediction that they. They will actually deliver on that this year. It's unlikely, but

[D]

did you just sell out your.

[C]

I mean, the thing. It's. The thing is

[A]

the point in the episode. So what remind people what the vision is? Because it was something along the lines of someone messages you and says, can you hang out on this day? And your phone is able to look into your calendar, check places close by, because the person said they want to go to a coffee shop, figure out between appointments, it's going to be this far away, you'll be able to make it at these times. It's supposed to help you with those types of things.

[C]

Yeah. I mean, it takes all that information across your device, including programs like Calendar, what you're writing, and integrates it so it knows you and responds appropriately given what it knows about you. The element that's really kind of up in the air, it's done parts of that already, but it doesn't create a perfect experience right now because most of the information isn't integrated yet. And it also works through Siri, and Siri itself isn't plugged into it completely. So if they can get Siri working through Gemini, working through ChatGPT, whatever extension it uses to actually integrate that and orchestrate it, then it could actually work. It depends on a lot of pieces falling together, coming together that haven't yet come together. But if they do that, then you can actually provide a personalized response and actually anticipate what you need and deliver it.

[D]

I'm surprised it's not doing it yet, honestly.

[B]

Well, it's not even close, right? Siri is sort of famously one of the worst personal assistants in terms of its use of effective use of AI. I just wonder though, if, if, if it's the Gemini deal that allows them to deliver on that vision, isn't that actually a problem for Apple? I mean, they don't want Siri to keep being as unloved as it has been, which is why they signed the deal with Google. That and the fact they didn't want to keep pouring hundreds of billions of dollars of resources into building language models. But if they have to pay Google every time someone uses Siri and Siri gets better, doesn't that just make it a lot more expensive for Apple to have this tool?

[C]

I don't know if they are paying a blanket fee.

[B]

I mean, even, even if they're paying a blanket fee and not a per usage fee, if, if it works, if it goes gangbusters, everybody loves it and it becomes the hot thing, then Google kind of has them over a barrel when the contract comes up for renewal. Right, because otherwise, you know, they're signed to whatever terms Google's asking for. They start over from scratch. And their version of scratch hasn't been very good so far.

[C]

I think there, I think Apple's bet to this point is that these large language models will get commoditized and they won't be all that differentiated in a few years. So if Gemini works for the interim, while there is differentiation, that's okay with them. If it creates lock into the Apple ecosystem, they're really concerned mostly about the devices, some services as well. But I think if Gemini works, that works for them until they either develop their own or the LLMs are commoditized enough and similar enough that they can switch easily. So I don't think it necessarily means that they're locked into Google. I think it gives Google a really strong revenue stream for the moment. And it could give them an advantage in terms of training their models as well. So it definitely is good for Google. I can see Apple's strategy though in that they may be able to avoid being locked into Google.

[B]

So, so if you think that they believe LLMs will be sort of commoditized in a few years, then what does it mean for them to deliver on their vision for intelligence?

[C]

I think it, by Bill, I think for them it's creating sort of a unified experience within their, within their devices and their ecosystem. It assumes that they will maintain sort of that all that personalized information on the device or they'll protect that information from other platforms. So you know, just as in a lot of their advertising right now they have, they have privileged view of the data. I think they're assuming that they'll have privileged view of the on device data and the on device data is what's going to run a lot of this stuff. So I, you know, I, I think that they see this as a way of safeguarding their device advantage rather than, you know, giving away the data that they now control.

[D]

So you know what I don't understand my, of course I have an Android, so there's already that. But my Android 10 years ago, I'm rounding told me when a flight was going to be late before I even knew. And then I think people weren't ready for it and so it was creepy and they stopped with a Google Assistant. But it was not LLM based. So why does Apple even need to do it through an LLM? Like they should be able to do that within their own ecosystem, right? Surf the news, just see your emails, know what flights you're taking, know where you're meeting people, ping you and the subway is delayed. I don't what's the LLM piece like? Why do they need Gemini for that?

[B]

I mean it wasn't an LLM but

[D]

it was machine learning, it was AI, it was regular, but it wasn't. They were doing that well before we were talking about the generative piece of the LLM. Right. Like that's the whole piece right now.

[C]

Yeah, I mean that was Google. Now they gave up on it because as you said, consumers just didn't want it at that point. The LLM part now is that it's really about Siri. Did Siri. If you can just say what you need through Siri, it can interpret that much better than it can now. Siri is not very good. So by integrating the LLM part to that, making Siri actually a real personal assistant instead of, you know, kind of a robot sounding, not very good assistant, then it. Then you can actually have a lot of utility that doesn't have right now.

[A]

Last quick question for me, then we'll decide if we're going to invest. Is this going to be a bit of a light switch moment where they, all of a sudden you're saying they don't have access to certain types of information? Is it going to be that all of a sudden they do and this thing becomes incredibly useful just like that? Or is this going to be that like every year you kind of notice that it's improving a little bit?

[C]

They have access as a company to this information. It's a matter of stitching it all together. So I think, I think you'll see when it works. And this could be this year in the unlikely situation, it could be longer down the line, you'll see a big leap in its capabilities and then you'll see incremental improvements beyond.

[B]

Okay, and when you say that Apple wants to focus on their device leadership, I think everyone wants to know, when are they going to bring back the Newton?

[D]

You might have to tell people what that is.

[B]

Yeah, don't know.

[C]

Google it. So Nate is trying to age us.

[B]

It's not that hard to age us.

[C]

No, no, it's true. Why? I love doing the audio podcast.

[D]

Oh, my God. Did you just ask to come on the retail one?

[A]

No.

[D]

Yeah, I totally just did.

[C]

Newton was mid-90s device there was kind of the predecessor to the iPad. It was. It was a computer. It wasn't, you know, it wasn't a single. A single slab in a screen, but it basically was the same idea. It had a. It had a. It's not a stencil. A stylus. The stylus. Thank you. It had a stylus. You could. You could interact with it with the stylus. It was Steve Jobs's baby as he returned to Apple in the mid-90s and it was a flop. But a lot of the learnings from that led to things like the iPad, the ipod. It was really instrumental in kind of the design of Apple going forward, but as a device, it flopped. And that's the reason none of you know about it.

[A]

Stylus for kids is a pencil with no lead. All right, let's move on.

[B]

The plastic stick. Exactly. Are you in that they're going to realize a vision this year?

[A]

I just realized kids aren't going to know what a pencil is, are they?

[B]

Anyway, yes, it's a plastic stick. No, I'm sorry, Yori, I don't Think there's any chance to realize a vision for Apple intelligence this year?

[A]

No, for this year. Okay, Susie, so wait, I thought it

[D]

was that they're gonna partner with Gemini to get to the beginning stages. Is it that it's gonna be actualized this year?

[C]

Yeah, because they've already partnered with Gemini.

[D]

Right. Obviously I should know that, but I got the impression from you saying it that they were. But that it's like that part I already got. But that it's going to be completed. Like their whole thing is going to be said and done and ready to go.

[C]

Yeah, I dandy dear.

[B]

Even Yuri. Come on, Yuri.

[D]

I got that. They're already working on it together. But this is like the Warner brothers one from Paul Verna.

[A]

Okay.

[D]

So I am sorry. No, me too. I'm a no. I want it to be a half.

[A]

So it was a no from Nate. No from Susie. No from Yuri. It seems no, I'm gonna go half. I'm going to go half in. It is a vote.

[C]

I'm going to say it's going to happen.

[D]

I think that there's just too much red tape for it to all happen now and to be at that master peak point of achieving the vision.

[A]

All right, half a point. Susie, you're up.

[D]

Okay, you guys ready? I love doing these ones. Okay, so first I have to give you the what if statement. What if Abercrombie, who is already leaning into lifestyle brand momentum evolves beyond just selling products and retail and moves into more off premise experiences like fitness or spas or hotels or coffee shops. So it can show up in consumers daily lives, not just when they're buying products.

[B]

Can't wait to see the Chiron for that. It's going to cover the entire screen.

[A]

Asked for one sentence. Headline.

[D]

That was a whole run on sentence.

[B]

Yes.

[A]

All right. I'd say elaborate, but is okay.

[D]

No, wait, so there's three. Yes, yes, of course. You need me too. So there's three reasons why retail is already moving into hospitality. We're seeing this sort of need to deepen the engagement with consumers. And so like if you think about Tommy Bahama has a restaurant. Ralph Lauren has both coffee shops and restaurants. Restoration Hardware has like this really hard to get into brunch place in some of their locations. So it's already happening. Equinox has hotels that they're working through. They have spas in their gyms now. So there's that on the other end, consumers are shifting their behavior. In this K economy everyone's talking about, people are spending more on experiences than they are on things. So how is Abercrombie going to keep the money if they're not doing more? More experiences, but also for Abercrombie itself, they own multiple brands. Some brands are doing better than others. I don't know if you guys have heard about their Athleisure brand ypb, which is called your personal best. It's like their private label Athleisure brand and they kicked it off in 2022ish. And I think that was when the conversation was more around denim versus Athleisure and what category is going to win. However, that's the wrong way of thinking about it. It's much more about capital B brands, lifestyle brands that are going to win. And so that's what they did. Right. They built out a bunch of different from Hollister to this brand to a few other ones to have sort of a whole ecosystem. And the next component of that is experiences. And we all know, we talked about this. They were the ones that had the stores that you had to go Visit in the 90s because the scent was really, really strong and they had people in the front who, who were dressed a very specific way.

[B]

Welcoming what you're referring to.

[D]

Yes, they were welcoming you. Right. And people would wait in line to go into the store. So like they already have that experience thing sort of covered a all Abercrombie Inc. Not just the brand, all of it. Right. Plus they've reinvented themselves so their product is better. But I still believe that to really be a lifestyle brand, which is what they're working towards, they also need some experiences to go with it.

[C]

Do you see any evidence that they're moving that direction?

[D]

I see that some of their brands are doing better than others and that every retailer is thinking about like if people are not buying as much and if we're moving into resale and recycling, what are some of the other things that we need to do to get more money in our pockets? And before you ask me, like, oh, it's very expensive to put up a gym. I don't know that they need to put up a lot of things. Right. They can either carve out space, some of their stores are gigantic to do a little coffee shop, but they can also do like pop ups and act co activations and maybe down the line get a little bit further into creating their own sort of retail and or restaurant spaces that are, you know, there's so many, so many retailers are closing stores that there's a lot of empty inventory. So I think Will they go at it alone 100%? Probably not, but I think there's room for them to be able to experiment in a cheap kind of way.

[B]

So your actual prediction or what if then is that they will do marketing

[D]

activations with fitness brands, with fitness brands, with coffee shops. But I think it'll be branded Abercrombie. Like I don't think they'll be like Equinox brought to you by Abercrombie. I think it'll be Abercrombie and then maybe there'll be a light touch on the Equinox if that's the right sort of co consumer.

[B]

Well, that's my question is who's going to do this with them? Because Equinox doesn't tend to do anything with a light touch. I know you've thought of Peloton, but they missed that window. Right. If they wanted to buy a Peloton, they should have done it two or three years ago. And now Peloton seems to be doing well enough that they're so who they actually work with that is meaningful.

[D]

So I don't think it's just gyms. Like one of my original, like absurd, you know, highly unlikely, but very specific was that because they have this brand that nobody knows about that's truly an athleisure brand that's doing relatively well for the few that know them. Maybe the way to get into that fitness ecosystem is Marcus, literally, this is absurd predictions. I'm following exactly what the request was.

[A]

All right, sorry.

[D]

So, so I did think about like, would they buy something like not a mirror because someone else has them, but something in that sort of world? I don't think there's anything that's distressed enough for them to do that that would make sense. And then that only takes a component of this whole ecosystem that makes it a brand that's a lifestyle. So that would only be in the fitness world. Right. And one day that might. No, that might not be as big of a thing or it's sort of like saturated market. So for me it's beyond the fitness. It' coffee shops and I think coffee shops, as we heard, people spend a lot of money in lots of different places and it's not that expensive to put up a coffee shop. Right. So like I think there will be little different things that they can do to be top of mind in that ecosystem.

[B]

Do Gen Z go to coffee shops? I mean, I'm listening to this. The thing that makes most sense for this brand, this set of brands and for the age of their average Consumer is a bar or a dispensary, and those are both far too complicated and laden with regulations and everything else for them to go into that space. Coffee shop doesn't sound like a real natural fit for 24 year olds who wear Abercrombie or Hollister.

[D]

I mean, I think you'd be surprised at who their core customer is and what they do.

[A]

Yeah, gyms, they care a lot more about their health than most previous generations

[D]

of the same bars. Yeah, I don't think they would do their own gym right now, but like juice bars and coffee bars. I think you'd be surprised at how like Bab Boba Tea, whatever that thing is. You know, like, there are lots of different. I say coffee, but there could be lots of different iterations of this idea of a third space.

[C]

They should start in Luxembourg. That's me.

[D]

Oh yeah. Five copies a day.

[B]

I actually, one of the things just

[D]

for that, if I'm, if I'm taking a page from Yuri's book, like one of the things I was thinking about was that's a customer that maybe doesn't have a high disposable income. And so are they going to be doing these sort of activations enough other things, or are they going to be buying clothes? But they're also the ones who care a lot about the environment and are minimalizing their purchases and are more into the experiences and the like Instagram pictures. So there is a chance that that could happen more. Plus, I think it's about like, at some point, like I'm not a. There's. I was going to say name a brand, but I'm not going to say it. But like there are some brands that are doing these things that I'm not a purchaser of. Let's call it Restoration Hardware. But I still went and had dinner there or brunch there because it's like a cool thing to do. So I think it'll also open up the, the like aperture of who the consumer might be, especially given that they've already reinvented themselves and their clothes are not really teeny boppery anymore. Right. Their. Their core assortment is more elevated.

[A]

All right, time to vote. Yuri.

[C]

I'm going to vote for it.

[A]

He's in. All right. That one vote already means that she beat you. But it's.

[D]

Well, I took a page from his book and I gave you a potential as to why it was not gonna happen.

[B]

I'm gonna go back and, and give Yuri a point for his Luxembourg reference

[A]

point for the reference.

[B]

I'm not gonna vote for it. Not because I don't think it'll happen, but because it's. If the. If the argument is they're going to open up one or two Boba tea shops in the next year, that seems like a fairly low lift that mimics what literally every other retailer has already done. I mean, Barnes and Noble's had coffee shops in their stores for 35 years. So I know we're not calling this the highly unlikely podcast anymore, but I think it's. It unfortunately stumbles on the. On the fact that it's just a little too straightforward.

[A]

It's out. I'm half in. 1.5. Well played. Nate, you're up.

[B]

All right, what if Google starts paying the websites whose content it uses in AI responses?

[A]

Oh, okay.

[B]

So there's a lot of talk about how AI is in danger of killing the open web. We know that the low single digit percentages of people who see an AI response actually click through on those responses and go see the website that the content actually came from. Likewise, we know that a lot of the responses are based on the training data for which there isn't even necessarily a website. And there's been a lot of movement and speculation on the publisher side to either individually or collectively take action against the LLMs, including OpenAI and Google, to try to make some money for this what they deem unfair use of their content and their information and for what they would say is the stealing of their traffic and their visitors. So lots of companies like the New York Times, groups of publishers and book authors have filed lawsuits against LLM companies. But we're also starting to see legislation. The IAB a couple of months ago announced that they would be working with Congress to pursue legislation to force publishers, force the LLMs to pay publishers. We know that in other countries there's movement towards this as well. And one thing we know about Google is that faced with imminent legislation that would make them do something anyway, they tend to just go ahead and do it, right? So when Australia said you need to start paying news publishers a few years ago because you're not sending any traffic to news publishers, Google didn't like that. But they actually did start paying some amount of money to publishers. And this is a place where Google can actually use its enormous leadership in the online advertising space as an advantage. OpenAI can't keep spending this amount of money forever without making any money back. Google, on the other hand, makes hundreds of billions of dollars per year. Paying publishers is not just something that might preempt government action. It might actually put their competitors like OpenAI into a tough spot. So I think that it won't be enough. The publishers will still say they're owed more, but I think Google will start paying publishers at least some of the time when they use a publisher's data in their AI responses.

[C]

So Perplexity is doing a little bit of this already. Do you see Google taking a similar type of approach like per crawl or per. How do you see it working? You know, in practice?

[B]

I don't think they want to do per crawl. I mean, so the problem is these LLMs, as you know, crawl billions of pieces of content and then in any one response to a user prompt might mention Surface or leverage maybe four or five or six of the pieces of information that they've collected. It's important to these tools to crawl the data, to build the version of the world that the LLMs live in, and to know which pieces of information are most relevant. But part of that process means deciding that literally billions of pieces of content are irrelevant for any given user prompt. So I think they're much more likely to pay publishers when either their site or their page is directly cited by the AI response, or when information or content that was first found by the LLM on that publisher is used as part of the response.

[D]

So, but if the publisher information that comes up in the certain, like whatever the LLM response is is ahead of the payable, Right. By default, the LLMs crawl, I don't know if crawl is the right word, but they go horizontal, right? They gather all the information that is publicly available. Why would they need to pay for that? That's already public?

[B]

Well, two reasons. One, even public information comes with attacks on users, which usually comes in the form of advertising. And because LLMs essentially capture those users and don't send them, they make a practice of specifically working to keep the LLM user on the LLM on the AI platform. They often don't Surface links at all. When they do Surface links, they encourage users to reprompt the chatbot. They're working really hard to keep people on the AI platforms and not send them away. And by not sending them away, they're taking the advertising revenue from the publishers who.

[D]

Right, that's a publisher problem. Right. So like the publisher can just close

[B]

the gate instead problem until it becomes a legal problem. And as I said, there is legislation in the works in the United States and a number of other countries that would compel Google to do this.

[D]

And what would the legislation be like? Like what, what is the.

[B]

I Mean, the reality is the AI chatbo are visiting these sites. They are not humans consuming ads, which is the revenue model of the publisher. And then they're going back to their own platform and encouraging people to not visit the publisher whose information they used to answer the user's question. So, I mean, it's not very hard to envision the United States Congress or other national or state provincial legislatures from creating laws that would compel the platforms to do this. And one of the benefits that Google has, one of the advantages they have over every other company that's a serious player in AI platforms is that they can actually afford to do this if this becomes the standard OpenAI perplexity. Claude are all out of business in a year or less and Google's still doing fine based on the quarter trillion dollars in search ad revenue they make every year.

[A]

Is there a version of this that can be a sustainable business model for publishers where they're going to get compensated enough to kind of agree that, yes, this is the new way that the Internet works?

[B]

I don't know that they have a choice. I mean, I think for a lot of publishers, they're either going to get these pennies or they're not going to get anything at all for being crawled and used, used by the chatbots. And so the pennies are better than nothing. I mean, I am genuinely worried that there will be a publishing apocalypse of some level because of what's happening right now. Clearly there are publishers who are able to charge enough money to keep themselves alive in terms of subscription fees and able to keep things behind paywalls. And those companies are less at risk, though they're not home free either. And there will be some other companies who can figure out how to, you know, scrape together the pennies that they're given as licensing fees by the LLMs, along with the pennies they make per user on showing ads to the people who do still show up on their sites. But I think it's just, it's going to keep getting tighter for publishers as it has been getting tighter for publishers for decades.

[A]

Vote time. Yuri.

[C]

I'm, I mean, I kind of made this prediction right at the end of last year, so I'm, I'm in. I mean, totally. Very convincing. And it's. You're much more fleshed out. I, I totally, I'm totally in on this one.

[A]

Susie. I'm a no, I'm out.

[B]

Just because I don't think it will

[A]

happen this year because it's already April. I think that, yeah, I think it's definitely possible, but I think because of the timeline, I'm out. But that means drum roll. Now, we didn't need one earlier, but we can have one now to build suspense. But if everyone's been counting, they know that Susie wins today with one and a half points. First time, a very low score. It's kind of like a soccer game. If they get out. Half points. 1.5 to Susie and Abercrombie evolving beyond retail into a lifestyle style brand. Nate had one point. Google starting to pay for its content content on its AI uses. And Yuri's had half a point for Apple delivers on its vision of Apple intelligence. Well played, folks. That's what we've got time for for today's episode. Thank you so much to my guest. Thank you. First to Susie, today's winner.

[D]

Thanks for having me.

[C]

Of course.

[A]

Of course. Thank you to Nate.

[B]

Auf Wiedersehen.

[A]

Oh, it's because you're going to Germany soon. Is that why?

[B]

Yes.

[A]

Okay. I just got it. Yuri, thanks for being here.

[C]

Always great to be here.

[A]

Yes, indeed. Thank you to the whole production crew, of course, in the background, Danny, Lance, and. No, Luigi. Yes, in the background, helping us out with this one. So thank you so much to those guys. Thank you to everyone for listening to behind the Numbers, new marketer podcast made possible by Verve. Have good weekends. That's it. We'll see you Monday.