Sunday thoughts: are you asking the right questions?

We often focus on working hard to find the right answers, but sometimes the questions are more important.

Ai is teaching us this.

Technology is now able to find all the right answers for us. So, asking the right questions has become key to solving complex problems. Think of ChatGPT. Its answers are just as good as your prompts.

Harvard Business Review suggests we ask five types of questions to improve our problem-solving and leadership skills.

1. Investigative questions: Why?
   Ask a series of “why” and “how” questions. Something like the infamous Toyota “Five Whys”.
   A vehicle is broken. Why? How?
   The battery is dad. Why?
   The alternator doesn’t work. Why? and so on..
2. Speculative questions: What if? What else?
   During the 2017 America's Cup, Team New Zealand decided to pedal stationary bikes to generate power for the vessel's hydraulics, instead of the traditional method of turning handles.
   What if we used leg power instead of arm power?
   We generate more power, but we can’t move around the boat.
   So, what else could a pedal system allow?
   It frees up crew’s hands, which can be used for other tasks.
   Teammates could operate the hydraulics by hand while pedaling simultaneously.
   This unusual innovation led the team to win the cup.
3. Productive questions: Now what?
   Once the problem has been deeply understood, now what?
4. Interpretive questions: So, What…?
   So, what happens if this trend continues? So, what opportunities does that idea open up?
   This set of questions is particularly useful when the problem or opportunity is clear, but the context remains uncertain. It broadens the scope of our investigation and can reveal previously overlooked aspects.
5. Subjective questions: What’s unsaid?
   This is arguably the most important question of all.
   What is between the lines? What is that we still can’t see?
   In 1997, British Airways sought to modernise its image by replacing the traditional British colours on its planes' tail fins with ethnic designs created by artists from around the world.
   What was unsaid?
   Business customers, the airline's most profitable segment, strongly valued the national branding and disliked the change so much that many switched to other carriers.
   Even Richard Branson weighed in on the change, announcing that his Virgin planes would proudly “fly the flag.”
   BA’s new designs were withdrawn two years later.

And you, are you taking the time to ask questions and listen, or you rush to find answers?

Google is officially a monopoly.

The US Department of Justice came to this conclusion last week ending a landmark antitrust case. Google’s obscenely high market share and the $20bn it pays Apple annually to be the default search engine on Safari were the key elements of the trial. Now the problem is what to do about it.

The EU came first in sanctioning Google for its anti-competitive practices. Its recent Digital Markets Acts forced Google to let users choose their default search engine on Android phones. Some argue that the EU ruling did little harm to Google’s dominant position, and the same will be true for any enforcement following the US DoJ sentence.

Hard to disagree. However, something it is indeed changing.

Google search engine market share on desktop in Europe has declined consistently since 2022. According to Statcounter, it was 85.4% in January 2022 and 79.4% in July 2024. On mobile, the decline is less severe, but still visible. From 96.7% in January 2022 to 95.9% in July 2024. The same trend is seen in the US. From 79.8% in January 2022, to 74.2% in July 2024 on desktop. Bing is eating Google’s lunch, growing its market share from 12% in January 2022 to 18% in July 2024.

But in my opinion the biggest disruption is yet to be seen and will come from Ai search engines like Perplexity, You.com and soon SearchGPT.

OpenAi even partnered with Apple to power the native iPhone’s Ai capabilities, potentially jeopardising the multi-billion dollar deal between Google and Apple. If iPhone users will get all the answers natively from Apple Intelligence, why would they even use a search engine?

It could be that the DoJ won’t even need to take any action as new competitors are coming for Google already.

In any case, let’s never forget that American Big Tech companies are first of all an intelligence and power-holding asset for the US government. This is also why it took so long for regulators to even start looking into a potential Google’s monopoly.

Bitcoin is just another tech stock.

Financial markets were very volatile last week. Technology stocks in particular, saw movements as large as double-digit percentages in a single day.

Tech companies' stocks are prone to volatility because, unlike more traditional companies, they are more exposed to crises and fluctuating consumer sentiment.

How to edge against crises and fickle consumer sentiment?

Some say Bitcoin is the answer.

Data shows it’s not!

By analysing Bitcoin prices over the past 5 years, we see that it moves in the same direction as the tech-heavy Nasdaq Composite index. The two assets have a correlation coefficient of 0.9, indicating a strong positive correlation.

Not only do they move in the same direction (up or down), but every time the Nasdaq moves, Bitcoin moves faster!

Bitcoin amplifies tech stocks movement.

After being disregarded as a challenger to traditional fiat currencies (no real use cases), Bitcoin was eventually dubbed "digital gold." This definition implies that Bitcoin, as an asset, should be compared to gold: something durable, relatively liquid, in limited supply, and stable over time.

Gold has traditionally served as a hedge against economic uncertainty and inflation. While its value generally follows the stock markets, it shows significantly less volatility, making it the perfect "safe-haven” asset.

If Bitcoin was actually the digital gold, than it should show a similar behaviour. It doesn’t!

By analysing its rolling 30-day standard deviation for the past 5 years, we can see that it goes up to 3 times its mean, while Gold and the Nasdaq don’t even get to 0.1 the value of their respective mean. This shows that Bitcoin is extremely more volatile.

So, Bitcoin is definitely not stable. However, like gold, it is relatively liquid and in limited supply. The problem is, both liquidity and supply are guaranteed by a distributed system of servers, or “mining rigs,” that require enormous amounts of energy and space to operate. This makes Bitcoin “production” vulnerable to geopolitics, to the point of causing “migrations” of “miners” to countries with cheaper energy and looser regulations.

Also, the efficiency and reliability of the rigs is highly dependent on technology.

Reliance on technology and sensitivity to geopolitics and markets is the same recipe as tech stocks.

If you consider that Bitcoin demand is only based on an almost-religious belief in its algorithm, it becomes an extremely speculative and risky tech stock.

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PS.

All charts and analysis was done with Chat-GPT4o. Great use case for Ai!

LLMs are the future, but the future takes a while to come.

Revolutionary digital products like eCommerce, the iPhone, and the cloud took decades to reach critical mass.

• eCommerce now represents 20% of retail in the US. But it started in the ’90s, it took a while!
• The iPhone didn’t take off until late 2011, despite being introduced in 2007. The iPod took even longer, peaking around 2008 after its 2002 debut.
• Cloud computing, the norm for every modern online business, still only covers about a third of its addressable enterprise market, 20+ years after being first introduced.

ChatGPT was probably the fastest-growing online application in history, reaching 100m users in just two months. However, it seems many of those users actually left.

Even at the enterprise level, there seem to be more hashtag#Ai pilots and experiments but fewer actual implementations.

The reality is, it’s still unclear what we should use Ai for. It lacks a definitive product.

For example, I love ChatGPT and use it regularly, but mostly I use Custom GPTs. So, what am I really using, ChatGPT or its apps?

It's like asking, "am I using the App Store, or rather Instagram, Gmail, or weather apps?"

Is Ai just a “platform” and we still need to build products around it? Maybe.

Although, in some fields like hashtag#marketing and coding, a versatile tool like ChatGPT proves to be useful. As a digital marketer, I can use the same tool and subscription to create and edit images, maybe videos soon, ad copy, analyse campaign data and write lines of code when needed.

Maybe Ai is more of a marketing revolution than a tech one!

The time has come I should talk about Taylor Swift!

Unless you’ve lived under a rock for the past 15 years or more, you must have heard of Taylor Swift. She’s omnipresent, from music charts to a stadium near you and even mentioned on relevant business publications.

Her "Eras Tour" is on track to become the highest-grossing tour in history, and it's already one of the largest pop culture phenomena since, maybe the Beatles?

She's definitely at her peak, 18 years after releasing her first album, and is probably the biggest pop star alive.

Yet, can you name five Taylor Swift’s songs?

If you managed to do so, it’s likely that at least two or three out of your five are among the top 8 most viewed on her YouTube channel.

What do these eight songs have in common?

1. They’re old. They were all released between 2012 and 2017.
2. Four out of eight come from one album, “1989”, released in 2014. Blank Space, Shake It Off, Bad Blood and Style were all part of “1989”.

It is hard to evaluate what is the most successful song or album by a recording artist, but YouTube views and official album sales figures can help.

"Blank Space”, from the album "1989", is Swift's most viewed video on YouTube. "1989" is her best-selling album with 10.6 million units sold worldwide.

Even in my mind, "1989" is likely her most popular album, with hits I can still sing along to.

Google Trends confirms that until recently, the "1989" era was the most popular. After 2014, the trend declines consistently for several years, only to recover around spring 2023 when the Eras Tour began.

The trend shown above mirrors the one in the previous chart about album sales. After "1989", both album sales and “popularity” declined.

The Economist even argues that in 2019, Ms. Swift was just a couple of (weak) albums away from a Las Vegas residency, the infamous musicians’ grave.

Then something changed.

During the pandemic Swift was exceptionally productive. While she would normally release an album every two or three years, since 2020 she has released four original albums, plus four re-recordings. Her last album’s special edition, “The Tortured Poets Department: Anthology” features as many as 31 tracks!

However, can you name one or more of these songs? Unless you're a Swiftie, there aren't many chances you can. I can't.

This brings me to the main point of this article.

Taylor Swift’s latest success spike, which we can easily dub “Swiftmania”, has little to do with music and more to do with savvy commercial acumen and ruthless business practices.

Her business skills are well known in the industry. You might even hear economists discussing "Swiftonomics", "Taylornomics", or "Swift Inc", to describe the characteristics of her incredible commercial success.

Like many successful CEOs she performed a turnaround during the pandemic.

After massive hits like "Shake It Off" and "Blank Space", Swift didn't manage to replicate the same success with her following albums, "Reputation" and "Lover".

I remember I was working for the largest book and music retailer in Ireland at the time Reputation was released in 2017 and word spread among colleagues that Taylor Swift’s new album + magazine + special edition would have made our Christmas. Not only this didn’t happen, but the bestsellers of that season were a book about the Irish Revolution and a book about Trump. Very far from anything Taylor-related.

I'm sure Swift's releases are now among my former employer's bestsellers.

So what happened?

As often occurs in business, and especially in politics, she played the victim. She went even further by specifically portraying herself as a woman victim in a male-dominated music industry. This resonated strongly in the post-pandemic world, especially among her mostly young female fans.

What was she the victim of?

When a record label or any other investor finances the production of an album (which can be very expensive, costing up to hundreds of thousands of dollars), they usually keep ownership of the master recordings. Master recordings are the actual recordings of the songs, not to be confused with the songs themselves, whose ownership and copyright is regulated differently.

Like a venture capitalist in tech, a record label takes the risk of producing a debut album and keeps a stake in it (either full or partial ownership of the recordings) to profit from its potential success. It’s common practice.

That is what Big Machine Records did in the early 2000s when it produced and promoted Taylor’s first six albums.

The problem is that the owner of a master recording can do almost anything with it, as long as it doesn’t harm the artist, in case the two entities don’t match. They can resell it like any other asset. Recent history is full of examples: Bruce Springsteen, Katy Perry, and Justin Bieber all sold their stake in their master recordings to cash in millions.

On June 30th, 2019 it was announced that Big Machine Records and its music catalogue was sold to a fund owned by Scooter Braun, a successful music entrepreneur who discovered and launched Justin Bieber.

Taylor strongly disliked Braun, she called him a “bully”. She couldn’t stand the fact that he owned her recordings. Therefore, she wanted them back.

Now, it’s common for successful artists to eventually buy their masters back when they can finally afford them. Rihanna did so in 2016 and Dua Lipa in 2023, just to mention some fellow pop stars. But neither of them made a PR case out of it. Probably because they managed to finalise the purchase, while Swift never has.

Taylor publicly complained in 2019 that Big Machine, and later Braun, refused to sell her the masters. The real story seems to be more complex, as explained by The Economist.

Big Machine offered Swift a renewal of their contract, which was due to expire in 2018. The new terms would have signed Swift for several years and given her ownership of her first six albums’ masters in return. She didn’t find the deal fair and left the label instead, thereby giving up the chance to regain ownership of her catalogue.

Subsequently, Braun reportedly offered Swift her masters for $300 million. She apparently declined, possibly because she couldn’t afford it at the time.

Swift is now a billionaire, especially thanks to her "Eras Tour," but in 2019 her net worth was estimated to be around $325 million. It has skyrocketed since then.

She would go on TV shows to explain how she was a victim of this situation, often hinting at a dark, male-dominated music industry. She would use terms like "bully," "aggression," and "strip of life’s work" (similar to stripping of clothes, I guess). Not by coincidence, the years 2018-2020 were also the peak of the Me Too movement. She managed to control the narrative at the right time and guide her fans in her favour.

The same happened several other times when she showed ruthless business behaviour but always kept the fans on her side, turning them against others.

For example, her Eras Tour tickets are extremely high-priced, with people reportedly paying several hundred dollars/euros for regular tickets and even thousands for second-hand ones. Such high prices are also determined by the practice of dynamic pricing, which is very common for airlines but definitely not common for live events. Swift was certainly happy to use dynamic pricing and to set a high floor price. She also decided to sell as many tickets as possible in one go in autumn 2022 to make a big splash and secure some sold-out shows in advance. This caused Ticketmaster to go down due to high demand, leaving many fans stranded. In both instances, she managed to divert fans’ anger towards Ticketmaster, which they saw as a monopolist taking advantage of them. In fact, it might have been the opposite.

Because of dynamic pricing, it’s hard to establish the average price paid for an Eras Tour ticket, but estimates from Bloomberg say it’s around $250, one of the highest ticket prices among pop star peers.

Even before the Eras Tour, Taylor's shows were already among the priciest, as Bloomberg reports.

In early 2024, when Universal Music Group, Swift’s current label, fell out with TikTok over royalty payments, all of Universal’s songs were removed from the social media platform.

But Taylor was planning to release her “The Tortured Poets Department” album soon and couldn’t afford to be left out of TikTok, today's biggest music promotion machine.

Thanks to her bargaining power, she could bypass the Universal boycott and bring her music back to TikTok shortly after the ban. Other Universal artists like Ariana Grande had to wait another month for the dispute to be resolved.

Wasn't she the paladin of artists justice?

Universal boycotted TikTok because of low royalty payments (which is bad for artists too), the same reason why Swift boycotted Spotify in 2014 and removed all her catalogue from the streaming platform. (brought it back in 2017)

I have nothing against resolute business practices, but this doesn't align with the image the pop star projects to her fans.

Her business "ruthlessness" seems to date back to her early days, when her father, a Merrill Lynch veteran banker, was managing her career.

Daniel Dymtrow, who previously managed Britney Spears, discovered Swift and started working with her in 2003. He was instrumental in her success and negotiated the deal with Big Machine Records, which produced and released her first six albums, including the “1989” hits.

Taylor’s father reportedly wrote Dymtrow in an email: “I always tell you but thank you so much for making our lives magical. We wouldn’t be in Nashville if it wasn’t for you.” However, he left him stranded with pennies once the deal with Big Machine was done, apparently scheming behind his back with Borchetta, Big Machine owner. Swift's father reportedly wrote to Borchetta: “Enough with the Dymtrow. You asked me to break both his legs, wrap him in chains and throw him in the lake. I did.”

Dymtrow eventually sued the Swifts for “unjust enrichment” and settled out of court. God knows how much he was paid to settle.

Now that I've stated the facts, I want to express my personal views.

Taylor Swift's music career peaked in 2014 with her “1989” album, which contained some undisputed great pop hits. However, after that, there wasn't much else. The other day, I listened to her latest albums and struggled to tell when one song was ending and a new one was starting. I believe her business acumen makes up for a lack of musical inventiveness. I would add that her business skills also make up for a lack of vocal talent compared to colleagues like Ariana Grande, Rihanna, Beyonce, or even Katy Perry. This shouldn't surprise. Madonna before her also wasn't known to be a great singer. However, Madonna unlike Taylor, was able to artistically evolve and explore new creative solutions and sounds with each album until at least her late 40s. This can hardly be said of Swift, who, with some exceptions, has been playing the same song for almost 20 years. When the formula works, why change it, just like CocaCola.

Also, the fact that she plays the role of a female hero is ironic.

“Looking for a man in finance, 6’5’, blue eyes.” Taylor is the female equivalent of that. Tall, long blonde hair, bright blue eyes, white upper-class American. She had romantic relationships with tens of famous handsome celebrities, from Harry Styles to John Mayer. Can she be more stereotypical than that?

And yet, her current public image embodies women's struggles and uniqueness. She empowers them to live on their own terms, which, ironically, also means spending hundreds of dollars to see her shows.

It is this exact image, carefully strategised with marketing craft, that made her turnaround possible and turned her into the huge star and billionaire she is today.

But I have to give her credit for one thing: she’s the first female billionaire who made her fortune solely from music. Rihanna is also a billionaire but made most of her fortune from her beauty business rather than from music. I think it's a great achievement that should be celebrated by music fans like myself.

On the other hand, you might see the glass as half-empty by saying that if this is how you make it in music, then I prefer the likes of Rihanna, who retired from music before it was too late.

PS.

I’m clearly a Rihanna, Madonna and now Ariana fan, some views might be biased :)

This week, Amazon turns 30. What a ride it's been since the first book was delivered in 1994!

Its 30s look bright, but not without threats and challenges.

Opportunities

Ads

• Amazon’s advertising business is the third-largest in the world, behind Google and Meta. It represents only 8% of total revenue but is estimated to have gross margins of 40%, much higher than the slim margins of the retail business and even higher than AWS. It’s also the fastest growing segment.
• In January, Amazon Prime Video started showing ads to viewers in the US, UK, Canada, and Germany. It is estimated that only one in seven Prime users will upgrade to the more expensive ad-free tier.
  This leaves around 260 million Prime members as potential viewers of ads!
• To attract even more viewers, Amazon is signing multi-billion dollar deals with MrBeast, the NBA, and the NFL.

AWS (Amazon Web Services)

Since the Ai frenzy, it’s been a boom time for cloud computing. AWS's strength lies not only in its high-spending customer base but also in internal synergies. Thanks to AWS, Amazon can develop innovative Ai applications for its retail and ad business, giving it an even greater advantage over retail competitors.

Threats

Competition

Yes, even giants like Amazon have competition.

• Google, Meta, and more recently TikTok, are trying to break into the ecommerce business. The opportunity is huge, with one in five shoppers starting their purchase journey on social media, but only 7% completing it there. Statista estimates global social commerce to grow threefold from now to 2028!
• Walmart, the world’s largest retailer, is pushing its advertising business and exploring TV commerce with its recent acquisition of VIZIO.
• On the Ai front, Microsoft is clearly in the lead thanks to its partnership with OpenAI.

Regulatory Concerns

By bundling more services, Amazon might attract the attention of competition regulators.

Last year, America’s Federal Trade Commission (FTC) filed a lawsuit against it, although this had little impact on the share price or investor sentiment, for now.

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Looking forward to the next decade!

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Major record labels are suing Ai music companies Suno and Udio for copyright infringement.

Only last week, I posted a song on Linkedin I made with Suno, and in the comments, we were discussing this very topic. It was just a matter of time before lawsuits started.

It’s been a busy month for lawyers since also Perplexity, my favorite Ai search engine, was recently accused of “ripping off” others’ work without proper attribution or permission.

Nothing of this is new.

In the early 2000s, when music peer-to-peer sharing peaked, record labels sued everyone, from tech companies to end users. It seems it didn’t work out, and a new industry emerged: online music streaming.

I don't see how this time can be different.

At the end of the day, Ai doesn't do anything that a human couldn't also do.

To use Benedict Evans' words, Ai is just "infinite interns" at your disposal.

Even human musicians create music based on their experience and taste, developed after years of listening to and learning from others' music.

The new problem, though, is scale.

Thanks to Ai tools, it's now much easier and faster to create original music. This will inevitably have a significant impact on the music industry. But it's not about copyright; it's about the inflated music supply and competition. More songs on Spotify mean more people to share the revenue with.

Like everything else in the world of Ai, good quality work will remain and continue to be made by humans. However, low-quality work will easily be replaced.

I just read the news about a major label signing the "artist" behind "Looking for a Man in Finance." If signing viral 19-second sounds is labels' strategy for the future, then yes, I'm not surprised they're scared of Ai!

Sunday thoughts: what is “othering”?

Othering is when we identify other groups of people as not fitting in with our own group. It’s literally us and the “others”.

It's often used with a negative connotation of "us vs them". It can be about skin colour, nationality, gender orientation, religion, age, and more. For example, locals vs immigrants, white vs black, Christians vs Muslims, etc.

Although some forms of “othering” have always existed, for example the ones mentioned above, I now see there are newer, more subtle forms of “othering” that seriously concern me.

The conservative vs liberal debate is gaining momentum in Europe and the US reaching violent tipping points. This time it’s “us vs them” all within the “us”.

White American/European conservatives are violently infuriated against their liberal counterparts, and vice versa. What used to be just a political opinion is becoming a dangerous ideology that goes beyond the typical forms of "othering" described above.

A conservative American might get along with a conservative Eastern European, for example, although far in geography, culture and religion. Similarly, a young hard-right Gen Z will likely get along with a 90-year-old former fascist, despite having little else in common.

Both sides are going to extremes, claiming only they are right while everyone else is wrong. Social media is obviously a great catalyst for this.

I was reading some articles about this and how it impacts the world of work and business.

Customers, employees, and stakeholders are increasingly angry and expect companies to always take a side in political and social matters. It’s not possible to stay neutral or simply avoid the debate.

Disney faced trouble for staying silent regarding Florida’s “Don't Say Gay” bill in 2022. Coca-Cola and Delta Air Lines had similar problems for not promptly condemning Georgia's restrictive voting rights bills in 2021.

It’s not up to me to judge these companies’ actions, but one thing is certain: the debate is increasingly polarised, either-or, right or wrong, often reduced to a simple dichotomy instead of informed analysis. Also, the level of violence and outrage is rising.

How can companies, managers, and employees navigate all of this?
I wish I knew!

Sunday thoughts: are you an early bird or a night owl?

I certainly identify more with the latter category.

Today's work reality is that our days are often disrupted by short, yet frequent online calls and urgent requests from bosses, stakeholders and clients.
The only time to get actual work done is either early in the morning or late in the evening.

The issue is, to get work done before everyone else starts their day, typically around 8:30-9am, you'll need to wake up no later than 6am. However, you'll likely still need to remain online until at least 5pm. You’ll probably end up just working more hours.

To wake up that early, you need to be asleep by 10pm at the latest, which means you should be ready for bed by around 9.30pm. You’ll soon find out there’s not much time left after work!

Not to mention networking events or casual drinks with colleagues, which are very important for your career but often take place after 6pm.

Additionally, starting early might force you to hurry before the morning meetings kick in, keeping an eye on the clock in a race against time. This would certainly cause me anxiety!

Rather, I prefer to wait until everyone else leaves the office, allowing me to focus at my own pace, without needing to watch the clock. I feel relaxed and that's when I'm most creative. I've always found the best solutions to complex problems during these moments.

Also, if you start at 6am, you may end up working longer each day. However, if you start at a normal time, you have the choice to just occasionally stay late.

I recently discovered the Goldilocks principle.

This principle is derived from the children's tale "Goldilocks and the Three Bears". In the story, Goldilocks prefers porridge that is neither too hot nor too cold, but “just right”. This concept is even used in astronomy to describe Earth's ideal distance from the sun, which allows it to support life with its "just right" temperature.

This principle is also known as the "rule of three", where the third option is often the best. Think of SaaS pricing models for example, where out of three options, one is usually “recommended”.

So it's not about being an early bird or a night owl, but rather finding a balance in the middle, the third option.
I think we should stop celebrating the 5am club or be impressed by who stays in the office until midnight.

At the end of the day, ever wondered why most workplaces operate from 9 to 5?

What do Uber, Marriott, United Airlines, Chase and Walmart have in common? They're all launching the same new product: you! 😱

These companies use their customers' data to display personalised ads, essentially selling this information to advertisers.‍

Uber sells premium placements to restaurants advertising their menu on the Uber Eats app.‍

Marriott is planning to use its customers’ loyalty data to show personalised ads on its website and even on in-room TV screens.‍

United Airlines will do the same on in-flight seats screens.‍

Chase, the retail arm of JPMorgan, will leverage its customers’ spending behaviour to show personalised deals and discounts from third-party retailers and partners. Thanks to its credit cards, it can directly attribute a customer's purchase to a specific deal or ad. This is extremely valuable for advertisers, eager to prove their value to their bosses and shareholders. Commercial banks showing discounts and deals from retailers is nothing new. But the programmatic use of customers’ data is!‍

Walmart is building an enormous and extremely profitable ad business, catching up with its nemesis Amazon.

While advertising currently represents just roughly 0.5% of Walmart's revenue, it already accounts for 7.5% of its gross profit. It is estimated to contribute 13% of the profit by 2026. Unsurprisingly, selling ads has a much higher margin than physical products; especially when you already own the customers and the ad inventory!

The retail giant is building its ad business in three main areas:

1. Website and app.
   ‍Walmart displays ads from manufacturers and third-party sellers on its website and app. Purchases are directly tracked and easily attributed to ad clicks. The power of first-party environments!I
   n fact, Walmart appears to be doing a good job in delivering returns to advertisers. Typically, advertisers get about $6 in return for every ad dollar spent on Amazon or Instacart, compared to over $7 on Walmart ads.‍
2. Video and TV.
   In February 2024, Walmart acquired the TV manufacturer Vizio. The goal is to connect with potential customers on yet another device beyond desktops and smartphones. With the rise of “shoppable TV”, Walmart aims to own the full digital journey from discovery to purchase. It even coined the term “rom-commerce”! In the near future we’ll watch TV series stuffed with shoppable products and will buy directly from our remote.‍
3. Physical stores.
   Unlike Amazon, Walmart owns a billion square feet of physical retail space. This is the largest yet still relatively unexplored opportunity for advertising! In-store digital screens, audio announcements and product placements are excellent places to show ads. The challenge is ensuring a measurable return for advertisers. The solution appears to involve linking credit cards used for in-store purchases to users' online accounts, thereby merging the online and offline experiences.

With third-party cookies going away, the online advertising industry is re-shaping towards the use of first-party data. Retailers and consumer companies own a lot of first party data! Think of Chase with your credit card transaction history or Walmart with all your purchase preferences. It's only logical that they're now looking to monetise this data.

This new type of advertising is called retail media, when it involves retailers, or merchant media when it involves a broader range of businesses like the ones mentioned above.

Will the big tech companies lose relevance in the online ads market? Hard to tell, but one this is certain: this is the beginning of a whole new era in advertising!