Yet Another Mole in Need of Whacking

 

In a week when Israel attacked Iran, Trump invaded Los Angeles, four million Americans took to the streets, and a Minnesota legislator was assassinated, the news from the arcane world of digital advertising probably didn’t make it to your list of big concerns. By the time I’m done, it probably still won’t.

But in this miasma of Trumpish distractions, it’s often hard to figure out what we’re being distracted from. It’s a constant game of whack-a-mole, and last week, we got the first inkling of yet another mole that will require whacking.

Warning: This will take a while to explain, and might cause mild-to-severe boredom. Proceed at your own risk:

As we’ve seen, the Trump gang has recently extorted large corporate law firms into defending its pet causes, an ongoing story still developing. Now, apparently, they are trying to do something similar with large advertising agencies. The immediate focus is on the approval, or not, of a major merger between two of the world’s four largest advertising agencies.

Now, mind you, there are dozens of excellent reasons to not allow Omnicom to acquire Interpublic, and the Biden administration was deeply skeptical of the antitrust implications, back when things like that mattered.

The sheer scale of the merged companies would be massively anti-competitive, bringing oligopoly-like pricing power to the already-opaque practices of digital ad-buying. It would ramp up profits and further enrich the C-suites of both companies, even as it sheds many thousands of jobs. Full disclosure, my own agency career ended in similar circumstances, and yes it still annoys me.

If the Federal Trade Commission (FTC) approves the merger, there will now be a three-way oligopoly in the advertising industry. There is little good to be said about oligopolies in general, and this would be no exception. The remaining two mega-agencies, WPP and Publicis, would be significantly smaller than the new behemoth, which we might, for now, call “OmniPublic,” though Trump might want the naming rights for himself.

But the story here isn’t so much the effects of the merger as it is the curious behavior of FTC. Let’s not forget that our most familiar government initials — FDA, CDC, NIH, FAA, USDA, and many more — are all in the hands of Trump appointees. They can no longer be trusted to act in the public interest. Every move they make is deeply suspect, and no Trump-sponsored policy has yet risen to the level of sane.

Let’s stipulate that in this case, the word ‘Trump’ is a metaphor for the people plundering the country in his name. Trump himself has shown neither the energy nor the acumen to do anything more than sign paperwork he hasn’t read, then go play golf while someone else counts his money.

But now Trump’s toadies at FTC have reportedly drawn up a “condition” that would need to be met before the two mega-agencies can merge. Basically, they’re doing what the Trump people do best: blackmail.

The condition would, in effect, say to Omnicom and Interpublic, if we decide to let you merge, you will not be permitted to “boycott” websites based on “political content.”

What they mean is, if the client doesn’t want its ads to appear on a neo-Nazi website, then OmniPublic — who would be buying the ad space for that client — would have to say “Too bad, we can’t let you discriminate against Nazis just because it violates your brand guidelines.”

How this would work is wildly unclear, as is typical these days. But let’s back up and talk a bit about digital advertising and how it works.

We’ve all noticed how often we might search online for a product — or mistakenly click on its ad — only to see that product show up in ads on every website we visit for, say, the next two weeks.

Obviously, this is not coincidence. It’s the product of what the media nerds call “programmatic advertising” and “real-time bidding.”

When I search for a product — say a shirt from Lands’ End — I am digitally identified as a demographically desirable prospect for similar, or related products. At which point Lands’ End’s ad agency’s servers are programmed to serve up ads that specifically target someone like me, or rather their algorithm’s perception of me.

So when I then go to a news site, or a lifestyle site, or in my case a soccer site, there is an instant “real-time” auction that takes place among a bunch of servers. The bidders are the various other products I’ve shown interest in recently, and the winning bidder gets to put its ads right in front of me, where I can’t miss them. Some of the losers also win, in that they can display smaller ads on the same page.

So when Paris-St. Germain won the Champions League final two weeks ago, all the sites that covered that momentous event were ready for me, looking to sell me a whole host of things they think I might want. The sites were peppered with ads for Lands’ End clothing — all men’s, all in my size — as well as for hair products, guitar strings, and massage guns, all subjects of recent searches.

I’m way over-simplifying this, and I don’t pretend to really understand it myself, but the point here is that advertisers — the companies that want to sell you stuff — are always weighing the trade-off between reaching more prospects and pissing those prospects off.

Advertisers can tell their agencies to run their ads anywhere, including out on the hate-filled fringes, but they have to decide if the additional sales are worth the reputational risk of being associated with assholes.

On the other hand, they can be ultra-picky. They can run their ads only on sites more in line with their values, which could end up being good for their conscience, but bad for sales.

So with all this in mind, the Trump stooges at FTC want to require OmniPublic, as a condition of its merger, to assure that those ad-buying algorithms treat “conservative” sites the same as more mainstream sites.

The argument for this is more Musk than Trump. Back when Musk bought Twitter, changed the name to X, and opened the floodgates of hate and disinformation, there was a mass exodus of advertisers who wanted no part of the cesspool he was creating.

Musk responded with a massive lawsuit claiming that advertisers — through their agencies — had colluded to boycott the X platform, in violation of antitrust laws. This was always laugh-out-loud funny coming from the poster boy for antitrust violations — mostly unprosecuted — but irony isn’t what it used to be.

While it was true that advertisers did in fact leave X in droves, that was less about collusion, and more about simultaneous widespread disgust. The case probably won’t be decided this year, but Musk’s legal arguments are, not surprisingly, weak.

Still, this is where it gets murky. One has to wonder how much influence, which is unlikely to be legal, does Musk has over FTC. That FTC is even considering an anti-boycott condition to the merger is highly unusual. And now, with Musk supposedly in Trump’s doghouse, how will that affect FTC’s thinking? And who is FTC working for anyway? Trump? Musk? Both? Certainly not us.

None of this is a done deal. The speculation is based on one story in the Times, which was no doubt leaked, probably as a trial balloon to see who yells and screams — which is a very Trumpish thing to do. So until FTC actually introduces this anti-boycott condition, a grain of salt is required.

Meanwhile, I’m not sure this is something that can hold Trump’s attention, and we have no idea where Musk stands, either with Trump or with FTC.

But whatever they all decide about this merger, we can be sure it will be for all the wrong reasons, and that many millions of dollars will change hands. Both across the table, and under it.