What’s going on with the media and advertising industries at 2023’s midway point

At the year’s midway mark, the pair assess notes on the state of the media and advertising and marketing industries. The dialogue ranges from the drop in advert paying to the rise of generative AI, with the duo delving into how the advertisement revenue cycle has transformed and to what extent all those improvements are non permanent or permanent.

Under are highlights from the conversation, which have been lightly edited for clarity. 

The foggy fiscal forecast

Barber: Likely into 2023, a huge concern that we were being inquiring all of our sources was, ‘How prolonged do you believe this economic slowdown, this period of turmoil is heading to very last? When will the crystal ball distinct up?’ And a large amount of people were being expressing [it would happen] by this place [in the year]. They ended up hoping that the back fifty percent of the yr would look very crystal clear or that there would be this inflection level. And we’re listed here, and I never know if which is necessarily the case.

The force on advertisement pricing

Peterson: With advertising, it is like, are advertisers reducing budgets due to the fact they want to slice budgets since they need that dollars so they really do not have to lay off their workers? Or are they cutting budgets because they see an opportunity to force media firms — whether it’s Tv set networks, streaming providers, publishers — to lessen their costs? It does not have to be mutually exceptional. The two can be legitimate. With the upfront cycle that we’re in the middle of, it seems like that is very a lot at enjoy.

Publishers’ embrace of AI

Barber: For media companies who are struggling, all those shiny new toys [like artificial intelligence] are actually superior at acquiring buyers excited and shareholders energized. And it does, I assume, do away with a large amount of operational overhead if employed successfully. Or it replaces a large amount of operational overhead if you get rid of journalists’ roles who ended up the moment [producing content]. I assume it can enable with some price-chopping, but there is a lot of financial investment that goes into it upfront.

AI’s purpose in ad product sales

Peterson: There undoubtedly would seem like there could be a profits option for publishers [to sell advertisers on their AI-related ad products]. But then there’s the other aspect of it [from the advertisers’ perspective] of does that create an chance for them to pressure publishers to lower charges? Simply because[the advertiser could say], ‘If you’re throwing AI at the matter, then that usually means you, publisher, are saving revenue mainly because you really do not have as a lot of human employees doing the job on this.’ I could see that getting one thing that advertisers press on as a way to likely save income or to ensure that the funds they’re expending is becoming employed successfully, that that income is important.