Two reasons you’re wrong to be gloomy about 2024
Opinion: 100% Media 0% Nonsense
The signs are that Big Tech will learn further in to AI and big agency/media owner players will consolidate this year. But there are plenty of opportunities for our industry’s practitioners, writes the editor-in-chief.
Today, I would like to exclusively reveal the answer to the question that everyone has been asking all week.
The answer is “yes”.
Yes, it’s now officially too late to say “Happy New Year”. Saying those words will now ostracise you to professional loserdom.
Of course, it’d be dishonest to ignore what has been the big theme of this first full week back at work: the drumbeat of lay-offs and restructuring that appears to be happening across media, particularly in tech.
Pay-offs and lay-offs
Restructures are a necessary evil in business.
As unfortunate it is for individuals involved when they lose their jobs, we need businesses to adapt to constantly changing circumstances.
Meta, for example, was undoubtedly the media owner of the year in 2023, based on its financial performance. It sharply cut costs (lay-offs) while increasing revenues, it is claimed, due to the success of AI-powered tools that have streamlined online ad campaigns across Facebook and Instagram.
The same thing is happening at Google, which had spent last year planning on reorganising its own 30,000-person ad sales division. The Media Leader revealed last summer that key UK sales executives were set to leave the business or take new roles.
These changes mean that Big Tech, or the world’s biggest media owners, are doing what they are supposed to be doing: figuring out how to make more money for their bosses and shareholders.
In this case, “more money” means selling more effectively direct to advertisers, enabling them to capture more revenue while cutting costs and, importantly, with fewer media agencies involved and taking their cut.
As I argued last week, it may be time for this industry’s army of specialists to rediscover the joy of generalism. Some specialities can quickly become redundancies.
No sacred cash cows
In more traditional media circles, we should also expect cost-cutting and perhaps merger activity as broadcasters continue to lay down arms in what had become “the streaming wars”.
Funny how streaming was the future of TV and ad-funded “telly” seemed to be the past. Now, ads are back, except the likes of Netflix, Amazon and Disney will aim to sell them algorithmically on their streaming services, for which they hiked up prices for ad-free options last year.
A media industry that had grown comfortable with investing in “the future”, because interest rates were low and borrowing was cheap, is now turning to ads again because rates have gone up and everyone needs more cash.
So we should expect media companies with high debt, such as Paramount and Warner Bros Discovery, to be frequently mentioned in M&A conversations this year.
We should also expect companies that are quite good at generating cash, such as network agency groups like WPP, to be a focus of speculation. The group is reportedly considering selling its 40% stake in Kantar, leading many analysts to consider what other part of its sprawling empire may be put up for sale.
These networks might still have enviable client lists and an array of talent and international reach, but they have a lot of agency brands and a lot of work that — see above — could be replaced by AI or be sold direct.
There was a clear consensus at The Year Ahead event last week that our sector is expecting 2024 to be defined by so many elections happening in the same year, trust in media and the ongoing integration of AI.
As we revealed on Friday, our Future 100 network has rated diversity and retaining talent as the biggest current challenges for this industry.
That doesn’t sound like a happy new year at all, actually.
But here’s the thing: if you’re reading this, you’re likely not just a consumer of media and advertising — you’re a practitioner.
You can do something.
And, as Ipsos CEO Kelly Beaver reminded us in an excellent presentation at The Year Ahead, there is a disconnect among people when thinking about what’s going on around us (pessimistic) and what’s going on in our own lives (generally more optimistic).
Yes, this shows a bias. But it’s a healthy bias we should lean in to.
You should be optimistic (perhaps “too optimistic”?) about the year ahead because change creates opportunity and optimism gives us the drive to seek out those opportunities.
Two things that make you special
It might seem strange to talk about opportunities in the context of lay-offs and the rise of AI. Isn’t this proof that AI is already destroying jobs in media and advertising?
Yes, but only in the short term.
AI is technology and all technology eventually can be commodified. So AI will never be a unique selling point — eventually, it will be part of all of our working lives. AI won’t differentiate Google from Meta from Microsoft from Amazon; the only thing that will make them different are their data and the humans making strategic decisions.
And any good media strategy will continue to remain rooted in culture. And it will benefit from creativity. Two things that humans are generally pretty good at cultivating.
Omar Oakes is editor-in-chief of The Media Leader.