came out and i finished the other book so i read everything including a little light romance. >> booktv wants to know what you are reading. good evening, everybody. hello, hello. good evening. i am not mike, that's okay, i am for c-span but not for hugh. this is just one of the many author events that the scheduled to bring you up close with artists and writers. we appreciate the patronage and

support as we continue the mission of connecting the community at large. tonight we are thrilled to host the author of frenemies. other books include three blind mice, world war 3.0 and google and naming him the premier media critic the journalism review cited no other reporter has covered the new communications revolution is thoroughly. his new book is an intimate and profound reckoning with the changes in the 2 trillion-dollar global advertising and marketing business from the perspective of its most powerful players. he's joined in conversation with the chief officers of the publicist chris and has more than three decades of global advertisement and marketing experience. he's written for or has been featured in a host of outlets

including fortune, fast company, msnbc and context. a couple things about format. please wait until c-span has gotten a microphone over to you so everyone can hear your question. we will have a book signing that entitles you to a copy if we do have extra bucks as well as -- if we can go front row first, that will work well getting you up to the front to get your book signed. that's all i have for you. thanks so much for being here. let's begin. [applause] thank you everybody for coming. can you hear us?

let's begin by talking about how you decided that this was supposed to be the particular topic you're writing the next about to cover the introduction and the media i said i really had to spend any time in the advertising marketing world and yet if you think about it, they are the money, the bank pretty much is the media. 97% of facebook, 97% of google without the dollars are newspapers much of tv would collapse. magazines, the internet.

let me follow and learn a little bit about the people who live on this advertising market including this guy sitting across from us and that is what i set out to do. when you read the book you will recognize that it looks at the industry from lots of different perspectives. what are some of the things that surprised you from the time that you started the time that you entered the process? >> i was surprised how much was in the marketing advertising business. i covered disruption including some of my previous books how google, for instance has disrupted so much of media when i did the book of the televisioe television networks which came out in 91 they were being

disrupted by the new technology which was able at the time and you could feel the disruption and fear that exists. i think it is happening in a much more accelerated rate than i had anticipated and as you see with all kinds of disruption or i seen when i reported on disruption, but fear, that anxiety level is very intense among the people in the world. i -- many of the ads that i would watch more closely i would need more disdain for then i did before. the famous coca-cola ad that ends with a madman episode, the children on the hill singing the song. every time i watch that ad i get goosebumps and yet i hate it and so my head and my heart are at

war with each other because it doesn't tell you anything about coca-cola so i feel manipulated by it. some of the ads for volkswagen -- there's brilliant ads over the years but a lot of them i am not as enamored of. the privacy issue in the world of advertising moving towards, we have to figure out ways to reach people and personalized ads. that elevates the privacy issue. when i learned how much they actually do know about us and what that triggers for the privacy concern, that was another thing that surprised me.

>> when you were writing that you changed from the journal title to what it was called. >> i don't even remember the original one. >> it is what you are virtually working with when you started a frenemies. can you explain who was the biggest frenemies? >> it is a term popularized by martin ferrero who was just forced out of ahead of the largest television company. when you do a search where it began again with walter in 1948. he was talking about how the soviet union was a frenemies of the united states. when you look at the advertising world, one of the ways it is being disrupted is a series of

frenemies that is to say to people, the publishers of you so your ad to basically say i want to buy your ad and "the chicago tribune" etc., increasingly they become advertising agencies and try to bypass the agency and code to decline. they become advertising agencies it's increasingly saying we have to get into the advertising business and become a new competitor. google and facebook they are increasingly going directly to the client and disrupting the agency business.

has a question that was asked the biggest frenemies is the public. this device transforms the world we live in. it is the most personal device as much as your purse or wallet. suddenly a it becomes annoying which is why 20% of americans have an ad blocker on their phone. if you think of how little we like advertising in general,

look at if you record a program on your television set, according to nielsen, 55% of the people that recorded program. when you think about it, the biggest is the public into the publiand thepublic is and how ww through these various technologies including abbott walker's. you have some emotions you signed with the people in our business. one of them was insecurity. can you talk about that? >> it is generally true that if your business is being disrupted

and you are aware that if you are conscious, you are insecure and full of anxiety. those in the legacy businesses that were being disrupted there were two types of people, one is the person that leans back and says whoa is me, digital is a real problem and we've got to figure out what is hurting my business and i'm not sure what to do with it and then the other person leans forward and basically says the problem is an opportunity to. i'm going to figure out some other way to reach people.

that is like what russia does every day in leaning forward and so one of the reasons i chose this as my major character in the book including the former head of the wt p. and cbs trying to figure out the legacy business. michael started a company called media link and he's a consultant and everyone hires him. agencies hire him, publishing, google and facebook. people hire him in part because they are insecure and full of anxiety and he gives them a sense of security.

you wan want to meet facebook pe to talk with theand talk with tp meetings. he does that and he becomes this character because he literally is someone that has covered politics when i was younger. he's a power broker when one of the prospective clients says why should i trust you, you kiss everybody. he said that if you want a really good kisser, you hired me. [laughter] >> you talked about how fast the industry is being disrupted. we had the chance of speaking to each other at different events two weeks ago. one of the questions if you look at the book about half the characters in the book since he started writing the book have lost their jobs. they've lost their jobs and have been redesigned to.

by 25 to 30% but i like to say half. the key question i asked have you retained an outdated book. can you talk about that? >> one of the reviews said that as well. my answer is no because this is a book about change and it is only natural people would be gone and life goes on. it doesn't change the fact that he started the most successful holding co. 33 years ago. he is a star figure in the advertising world and that doesn't change the fact that he was ousted from his job or another character who was the head of the largest media agency

that stepped down and i predicted that he would. but i don't think the people leaving date the book although some people do. one prospective looking at the book that i would like you to comment on, a book that started advertising and marketing the way that i encourage people to read it is that it affects all industries because to a great extent, many of the characters they will forget. >> ' >> theme of martin's who founded the holding company but by a wire and plastic company as a shell company over the last 25, 30 years has formed this huge

operation. he doesn't have the job. the person that actually created the most important media operation in the world retired which was predicted. a major character in the book since then we've had cambridge analytic and an entire section on the comstock. if a look a i look at it again d basically said he's too smart. i'm about to lose my job, too. everybody in the industry regardless of what it is.

one of the things that is big in this world is how some of this which is the advertising money changes but we see and potentially could have impacted who got elected. number two is to do we trust when in reality i can no what you'ryou are thinking of privacr no privacy. and what is the role of the free press if they are either owned by people who can afford funding the press.

it's how he invented some of the truisms that we associate with. one is advertising is so important he did little advertising on the victory march and two is how hard it is to get the free press. he succeeded in getting free press and it's a bad commentary giving much too much press attention and if you were one of the teen or 19 you would be enraged at how much coverage so that was interesting. and tha then obviously his abily to target was much better. he knew about wisconsin and michigan and for reasons that are still inexplicable to me, they didn't visit those states. so abandoning the conventional wisdom and she of course thought

that it would help you but it just reinforced the argument that he was making against her. and i say all that have no sympathy for donald trump, but nevertheless, he outdid her own death. when i think about rich people owning the media, one of the problems of somebody that covers the media and has for a long period of time, most newspapers are dying and they will continue to. they don't have any other holdings right now. they are doing okay. they are making money but not a lot. they have a great family that cares passionately about the

news business unlike david bancroft who owned "the wall street journal" and sold it at some point as the family gets bigger and the dividends dry out, what happens to "the new york times." i worry about that. we know what happened to the "washington post." they said we can't sustain the post. they found something of a greatt job and a great editor allowing him to go harder and put more money not just onions and beef, they fired reporters into the refilling of jobs and he's supporting it. that is one of several different models of. when a look at the newspaper

world come at the digital subscription is up to 2 million right now. great. but that isn't where they make their money. they make their money from the print newspaper. one of the problems in the world they will cite two facts that illustrates the fundamental economic problems at a paper like "the new york times." people will read the printed newspaper and spend 34 minutes on average reading "the new york times." that's a lot. people who read "the new york times" online spent 35 minutes a month. so if you are an advertiser and say people can't spend a lot of time with my ad so therefore i will pay roughly ten to 15% for the same as i paid for in the print. so that is a basic problem.

they get it out of that problem because they have a leadership and can increase a subscription, sthesubscription, so can the new yorker and the financial times and the economist. it is a part of the dilemma that we have and i worry about that because who is going to cover the local government and keep politicians honest. the future of content and privacy. >> one of the things they do is strategize and think about the future. they say in order to reach people particularly on their cell phone that can feel like an

ad or introduction. introduction. it has to feel personal, like the surface of some kind to them and because we know so much about you, we have all this data we can personalize it. so, you are walking. we can follow where you are geographically. you are about two blocks away from a department store where you bought a sports jacket. if you walk two blocks to the store today we will give you 20% off on your next jacket. how is he going to respond to that? is he going to say that is a bargain for me or is he going to say how did you know so much about me? but the basic question. what you are dealing with is the more you can target the more privacy goes down. the more privacy goes up, the more the target goes down and

that is one of the dilemma and the question then becomes is there a point at which the government says the leave to intervene and create some privacy moves here and something that everybody in the business and i'm talking about the clients, all of the advertising organizations. they don't want that to happen. basically you have to opt in as a citizen for them to have data. they like more of the current system which is you have to opt out. that takes a lot of work.

pour yourself a stiff drink or whatever, alcohol or nonalcoholic choice, go on google and then the tab basically gives you for history including for instance when i looked at m at at mine it coulde if a city that i've been to the last ten years each day in which hotel i stayed at. it tracks every single thing you do. every e-mail, place you walk because your mobile phone is sending that information continuously. that can either be creepy or it can be good if you have alzheimer's. i don't know. [laughter] but it's sort of a thought.

when you look at the trust crisis, can you talk about trust? >> there was someone by the name of john and no who gave a speech in march of 2015 before the ama which is the client side of business. all of the others were guilty of hiding the way they make their money from their clients. that is to say they will buy time from the publisher and either buy it in advance and sell it at a higher price to the client later or they would buy it and say if you sell me this,

i will give you a cut rate meaning they both take money under the table. and his claim launched an investigation which the detective agency he and his son began an investigation and essentially it helped unleash a series of agency reviews where the client side we better take a look at the agency where they are doing this to us and maybe we will have a review handbook for a new agency. when they mention the trust issue, that became a way of crystallizing the issue that existed and this is us and so not only are you now dealing

with frenemies, but the level of mistrust. my agency is no longer my partner they are my competitor. what are they doing under the table keeping from me and beth became a way of writing about that and about the accelerated disruption of the business and introducing my main character who is conducting these reviews for the client? who is sitting there as they are listening to the agency? what is he whispering in the ear of the client. so they gave enormous power which he exploited very well.

when you started writing this book you had a particular mindset of things like advertising into the industry and its importance and whether there was a future. i feel more strongly that one of the things i was interviewed on which is a big advertising agency called her eyes and gave horizon and i said to him i'm not a cheerleader, i'm a journalist. if you think about it i am celebrating the advertising industry because i'm saying without advertising, it is a

great machine for the media and without advertising match o muce media world by and then there's those who will come along and say we will do subscriptions. we will rely on those to replace advertising. the one thing hillary clinton and donald trump agreed on in the presidential campaign is that the american middle-class and working-class, the ball to the american federation of their income has been frozen for the last decade. .. >> that cbs and nbc will no longer be free?

that's insane. people cannot afford it. advertising is essential. in that sense, i am celebrating advertising. i just think a lot of the ads are not good. they're very manipulative. when i see a good ad, it is great. >> so we look for questions. when you look at this book and since i have read it but not written it, i've read it a couple of times but one is because i had a chance to look at it as i was getting ready. this is the story about the future of probably society in a strange way. in this book. this is the things that are funding that use contents, and services are increasingly driven

by advertising dollars and marketing dollars. if you look at advertising and marketing dollars we could get a lot of information which is a $1.5 trillion united states industry. 1.5 trillion. that 1.5 trillion is funding things that we know which we basically don't know. that could swing a bunch of society. when we think about ai and i ot. that is being funded by advertising. one of the reasons your amazon" is so cheap is because it's being funded by advertising. if that disappeared there it be a lot of weird stuff. we have to find better people, that's what the book ends up saying.

>> i would just add to that, which is that if you go back, if you are a communist or socialist nation, you generally don't have advertising. so how does the consumer find out about where to buy things and what things that might be available out there. advertising is an essential link between buyer and seller. so, doesn't just support media, and facebook and google, it supports a free enterprise system. and in that sense it is fundamental. >> so we ready for questions, i think -- >> behind you. >> you said that in the last comment in january i noticed there were no bulletin boards --

i asked our guy why? he said, because the government is not society to become a consumer society. they do not want the people to want things. i thought that was interesting. >> that is in excess of advertising. it encourages people to buy things they may not me. it's one of the reasons why socialist economies countries discourage advertising, they thought it encourages wrongful behavior and consumption. >> i want to make an observation and have either one of you reacts. i need a little bit of her runway, it ties into some common. advertising rests on the premise of consumption. exclude medical advertising. so were talking about consumption. to get people to consume they

have to do two things, they have to have the economic wherewithal to consume, and they have to have the desire. we know due to income inequality, and we touched on this little bit, fewer people have the ability to consume. your point about the prescription. few people have the ability to consume. on top of that with climate change, people are thinking about you even want to consume? maybe i don't want to be a consumer. maybe i just want to take a profile. when i conflate these things i think that's a big x essential threat to the advertising industry. it is based on consumption. if we cannot consume we cannot afford to consume. we don't want to consume. what are the implications, for the advertising? >> credit card debt. people look at the growth of credit card debt.

people are consuming even if they shouldn't. >> so i went to the university of chicago. the university of chicago defined advertising is the economics of choice. which what was interesting is so if someone cuba makes a choice, you will have no choice. my basically belief is that when somebody decides, reality is that you have to have choices. i look at it as economics of information. one of the key things that is happening, as it may not be about consumption, it might be about advertising about not consuming. for instance the ad council is working on things from love has no barrier, smokey the bear and things like that. the big thing they're currently

working on his climate change. the problem with climate change is theoretical. there has been no emotion about it because it is basically been scientists and politicians talking about what's real. now to put advertising behind it amazing things happen. one of the things that true -- and i came from the agency that created the marble cowboy. what drove advertising down for cigarettes down was advertising. it was basically that only full smoked. that was the advertising. so it could be for consumption and anything could happen, my belief is that when you make a

decision at a global level that something is good or bad and take that away from people, you are likely to end up with something very strange like north korea. >> this is a less sophisticated question, i work for a consumer products company for many years, i am one of those people who watches ads. when my question is, what you predict is going to happen to the super bowl advertising strategy on television in the future. >> the argument about super bowl ads is that those are some of the few advertisements that people watch. i think most are awful. nevertheless, they spend five

and have million dollars for 32nd spot. eventually, and i think rashad would agree, television advertising will decline. it is then predicted that it has been a surprised it has not declined faster. but, it will. if you think about why, people have many more choices, the money and advertising dollars are spread out. people start questioning whether those 32nd answer really effective. but, live events tented attract big dollars. people are watching them more intensely. they are not recording them and skipping ends later. >> the super bowl thing maybe think of something else. but, the publicist have agencies in sweden, i think and in a

number of countries that are socialist and pretty strongly socialist. i'm just curious because how is it handled, it's almost pretrade like there's cuba and in the united states but there's these other countries that are socialist, they do have major businesses there and they have a lot of consumers. how do publicists handle those countries? >> the difference between cuban sweden, sweetness socialist but democratic. cuba is one-man rule who decides or two men, or whatever but they decide what it is. the reality is, the world's biggest advertising market today on the world's biggest consumption market, whether automobiles, movies or anything is a little country called china.

to giving idea, the reason why you would never see a chinese villain in a hollywood movie is that with out them actually deciding is the chinese who went in and save them. the chinese read this in l.a. >> they just killed the hbo, what's his name the sunday night comedy show on hbo. >> john oliver. >> so the reality is, socialist governments and communist governments are not anti- consumption, in fact, they like consumption because the idea will distract you with these things so you don't have to worry about other things. >> they must feel like they need to have more control over messages that are out there.

>> there free enterprise, but the control that we have to worry about is not them. i believe the control we have to worry about is the people who control the data. >> in the future, it's basically about the people who control the data. i would be much more concerned about a potential dictator for the world's largest country which happens to have 2 billion people called mark zuckerberg, then i would about anybody else. you have your 32-year-old person who might be brilliant, but -- >> also to add to it, if you think back about mark zuckerberg's attitude toward privacy, he believes that what facebook is about is connecting people and sharing information, privacy is very low. it's been very low is a priority of his scale. >> eric schmidt of google basically said there is no such

thing as privacy, get over it. this is ten or 15 years. but mark zuckerberg had bought every house around him so nobody can look into his house. missing people are very strange. if you don't have privacy can be you. >> one of the few good questions they asked, where you stayed and he refused to answer the question. suddenly privacy is important. >> privacy is good for them individual. the think i remind people of his be careful about what some of these people say, just because

you made billions of dollars in technology doesn't mean you know how to run society. that's what i would be smarter about which is a handful of people. there seven companies in the world that are determining the future of the world, three are chinese and for our american. >> in the united states there more cyst sophisticated than the u.s. companies, google, facebook, amazon, and apple here's. >> you don't put microsoft in the? >> microsoft much less. >> but the reason is, in effect, microsoft is about making tools. is basically about making tools, the other companies are driven by advertising, not apple, the apple issue is little different, apple is that they're going to go out of their way to try to

eliminate the free stuff you get from google. because, google's advertising funds android which basically troubles them. outside of the united states and some rich places, it's an android world. the reason i carry an android and an apple phone is that it's an android world outside of the united states. most people cannot afford apple. >> you quoted an executive marketing executive at procter & gamble saying that when we partner with that agencies we get great advertising. otherwise we get crap. is that fading? is it gone? to come back. >> clearly it is fading, or faded. mark richards, the head of -- a proctoring.

that that is a view that is music to the years of the agency world. but, it is not a prevalent view. challenge me if you would on this, i think the level of suspicion and wariness and sense of enemies is very vivid. >> very quickly, building on the real challenge that marking others face is that the large advertising of the past are dime businesses. it's not a growth business. and to a great extent, if you look at it, p&g may have missed the fact that it wasn't what they built, like as manufacturing you're going to spend millions of dollars and drag your products and i got distribution and economic scale,

well, the dollar shave club took away without advertising. yet, when you think about ads, you should only think about the ads you see, the single most powerful ad it, is word-of-mouth. dustin through social media. very powerful added sampling. that is what is happening. some of these companies, they missed the customer behavior. part of that is as they stopped using new media. they only used old media. i started using the new media. i thing was this sucks to use for the must be supplemented. that's what we need to think

about. the reality when everybody's down on advertising. >> i don't know about me. >> everybody calls us dinosaurs the call us cockroaches. that's one of the chapters. >> the whole ideas that dinosaurs die, cockroaches outlive everybody by screen round. that's what we all have to do is people. >> i would like to ask you about the future, having read your book it seems like you spend a lot of time saying that the agencies were gone or on the way out or facing great changes in

the better figure out what's gonna go next. and they are smart people, and they are the people that really bring good and important information out into the world. they're the most interesting people often. who had big views and little views at the same time. just aside point about things like money, it is just what separates us from other animals is that we have imagination and we can all agree on some strange concept like money and say this is something and we all agree, this is something. but in fact it is in anything at all other than what we agree, religion, government, a lot of things like that.

they hold together when we agree they hold together. for the 70 years. >> they would say that should think. i'm asking about the future. when i read the book what you did was condensed until a story the first years of advertising. then you talked about this difficult time or in were moving around in the future is unsure. what is your guess about what is next. >> i did about 450 interviews over the few years i reported the book. when i would go into someone's office with my recorder and notepad and i would ask them about the future, when someone

said to me, this is what is going to be like in five years, it's like when you talk with a stockbroker and though say let me tell you what is going to be hot next year you to now and say this is a fool. this is there again. so, i would want to pick up my stuff and sneak out of the office. i don't know what the future is, i'm not arrogant enough to project what it will be in five years. i know this, that one of the reasons why companies get into trouble like the clayton christiansen's innovative dilemma said basically you have an existing business that generates money, take cbs, one

of the characters in the books is cbs, they make more money today than they did ten years ago. there advertising revenues are less than they were. it's about 46 or 47%. but they have new revenue streams. cable companies pay them retransmission consent. rules were suspended so they were allowed to own and sell things. digital companies like netflix and amazon that they can sell too. last year they generated $250 million clear prophet of selling the library of programming to netflix. so in the short run they're doing well in the long run, it

ignites the dilemma. they're basically holding up their competition. that's only the problem when your legacy business, you protect what you have now and think short term. i don't want to divert too much money to this digital realm when i make money from the old room. that's always a problem when you look at companies. oftentimes most of these people are managers, not owners will not be there in five or six years. so they make sure these decisions are counterproductive. >> you may not make a prediction but you could be hopeful and aside from the times or the new yorker the post, who defined admirable. who do you want to see around and doing something sustainable?

>> i am on by with the washington post and the new york times does journalistically in the weather chewing on donald trump's leg. i admire that greatly. cnn, which has amazing people doing reporting their comey of tough and interesting questions. these are really smart good people who are fearless. but when i watch cnn it's all trump i worry that they're reinforcing the view of the pro- trump people that are out to get trump. that's just too much. even though so much of it is

entrepreneurial. i admire a lot of what's going on today. i -- there's a character in my book who is the founder of rga. said bob is a guy who wants to work on this motorcycle has long hair wears a black cat. he's reinventing the agency. they don't do traditional advertising. i think he is amazing guy. he is a venture capital, they get a piece of the company, they do design work, he does a lot of really wonderful -- another really inventive great guy, there's a lot of people like that that are extraordinary.

i'm interested in the fellow that took over lester is doing. he has a different vision and how will that work out? i'm curious. >> let's ask the question in the center, then we can have independent questions, i want to make sure there's time to sign books before we have to leave. >> i hate to end on a downer, you mentioned that advertising is the economics of choice, yet the companies you mentioned were social media companies which you linked as harnessing the power of people's personal opinions, making that like one person tell another. >> given that and the

experimental tendencies, how do not see us falling into the legacy company category. how do not see us falling into a techno- authoritarianism either from china or capitalism. >> at the heart of it you have to believe in a couple of things. i believe in and they may not be true. the first, i believe that technology eventually empowers the individual. yes, the individual can be manipulated to figure out what was going on.

i know how to use google against it. i'm not so stupid. i believe technology is empowering individuals more than empowering states. the the same technology but now we have that. technology allows -- to be non- goliath. the second which is extremely important is i would not predict the future. but i refuse to predict. one thing i will predict is that it will not be like what we project. >> i'm gonna follow that? so now i'm going to have a book signing, how do we do this? is there sequence.

[applause] >> we need to get a range. >> book tv recently visited capitol hill test members of congress what they're reading the summer. >> it just finish reading this book called the sympathizer who is a vietnamese refugee is a perfect to read about in his second book is a remarkable books that capture the complexity of someone's life.

they do a good job of capturing both pieces of that. those are front and center for me. >> book to be wants to know what you are reading. send us your summer reading lissette book tv. book tv on c-span2. television for serious readers. >> welcome to the book launch for the most recent book. we're pleased to have you here on this rainy evening. i'm julie, for selling books tonight please support him as an author by buying a book afterwards. they have gold stickers on it, very fancy. thank you to c-span book tv for being here tonight. it's going to be in the