From "Mad Men" to "math men": Ken Auletta on the new world of advertising
The Emmy Award-winning series "Mad Men" showcased the pressures of the New York advertising world in the 1960s. But bestselling author and longtime New Yorker columnist Ken Auletta says the industry is no longer operating in the style of Don Draper.
Auletta joined "CBS This Morning" to discuss his new book, "Frenemies: The Epic Disruption of the Ad Business (and Everything Else)," as well as the new world of advertising and what would happen if the trillion-dollar industry dried up.
"If you're an agency, suddenly, people who were your friends – Google and Facebook – are competing and going directly to clients," Auletta said, explaining what he means by "frenemies." "The New York Times, BuzzFeed, etc. who you put your ads on are suddenly saying, 'Hey, we can be ad agencies, too,' going directly to the clients."
But according to Auletta, the biggest frenemy of the ad world is in fact the public. People don't want to be interrupted by ads, particularly on their mobile devices.
"Then the advertiser comes back and says, 'We're going to give you ads as information because we'll know so much about you. Isn't this great?' And then the public says, 'Hey, wait a minute. How do you know so much about me?'" Auletta explained.
Most troubling though, is what might happen if the global advertising and marketing industry, which Auletta estimates is worth up to $2 trillion, were to disappear.
"It supports all media. Ninety-seven percent of Facebook's revenues come from advertising. Almost 90 percent of Google's come from that. Newspapers, magazines, much of television, apps all depend on advertising. So if that money dries up, the consequences are profound," he said.
Some companies have turned to subscription-based models – going directly to the consumer for revenue. But Auletta argues that the average American, who already pays around $250 in subscriptions per month, can't afford to take on any more.
"The one thing that Donald Trump and Hillary Clinton agreed on the campaign is that the working class and the middle class, their income was frozen for the last 10 years. How do they afford more subscriptions? It's a wonderful idea but it's a pipe dream."
The most profound change is how the ad industry has shifted from one that favors those with 'people skills,' to those with technical skills like engineers and data scientists.
"It's gone from 'Mad Men' to math men," he said.
"Frenemies: The Epic Disruption of the Ad Business (and Everything Else)" goes on sale Tuesday.
