The Chaos Theory

We’ve released the agenda for MarketectureLive. We’re deep-diving on identity, AI, and more.

The Vendor Interview: Overwolf

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Marketecture Podcast: Brett Wilson

Most of our readers will probably remember Brett Wilson as the founder and CEO of TubeMogul, one of the early leaders in digital video advertising. In this week’s pod he joins Ari and Eric to talk about his investment arm, Swift.vc, and what they’re putting their money behind around the intersection of AI an marketing.

The Chaos Theory

By now you’ve probably heard about Maketecture’s upcoming event in New York on March 17th. (If you haven’t bought tickets yet, do so now, like right now). The theme of the event is Thriving in Chaos, which maybe is a little esoteric and insider-y, so let me explain my theory of media chaos and what it means to you.

I’m using the word chaos, not to give props to the short-running but very entertaining show on Netflix starring Jeff Goldblum as Zeus, but rather as short-hand for the ideas behind chaos theory. Namely that the outcomes of our current era of rapid change are essentially unpredictable and likely to be non-linear. This situation we find ourselves in is driven by rapid simultaneous changes to technology and consumer behavior that are largely unprecedented.

In a sense, what I’m saying is that the standard annual “predictions” from industry watchers and pundits are even less relevant this year than usual, since the model of extrapolating today’s trends another 25 or 50% falls over when the underlying assumptions are changing 100%.

Here are some of the forces I see that are driving chaos, and where I think they could deliver the advertising and marketing industry.

AI replaces search, websites, shopping, laptops, phones, etc

OK, maybe not phones.

When Steve Jobs announced the iPhone we all knew it was going to change the world* but I doubt a single person could have predicted it would create Uber and massively disrupt transportation. AI is a similarly transformational technology wave, and we really cannot accurately predict how it will change consumer behavior.

Some questions I like to ask:

• Will your product have a website in five years?

• How will consumers research and buy complex products like cars, and vacations in five years?

• How will consumers entertain themselves in five years?

The first wave of thinking about AI’s impact on consumer discovery is underway. There are a number of “SEO-for-AI” companies in the market, like Bluefish.ai, who will be presenting at MarketectureLive. Getting your brand into AI results is a great step, but really just the tip of the iceberg for how brands and consumers will interact over the coming years.

* Embarrassingly, I believe I published a blog post or gave a quote to Business Insider saying I thought it was going to fail because it didn’t have a keyboard.

Massive changes in digital consumer behavior

I’ve written about the changes in what is generally called the “Open Web” (read: What is the open web, anyway?) and how it is in decline. Nothing really new there, but let’s break down some of the consumer behavior changes that are driving this.

First, there is the inevitable generational change. The generation that grew up on the web, is being replaced by the generation that grew up on their phones. People tend to underestimate the slow and steady behavior changes that are borne out over time, but this one is becoming overwhelming. Most consumers get their news from social sources, and few read the news.

According to the Reuters Institute’s Digital News Report, use of websites for news has dropped 10 percentage points from 2018 through 2023, with all the gains going to social media, and these trends are present globally. The gap by age groups is also striking, with only 24% of young people using the web for news.

Second, the big guys took their toys and went home. Traffic from social sources to news sites declined an estimated 50% (!!) in 2024 alone. Google’s AI answers are likely to have a large negative effect on search traffic. X has specifically said they de-value posts that contain links. All of these changes coming on top of long-term declines in web traffic had already been baked in.

This trend is massive, and adds to the chaotic environment. If you extrapolate a 50% year-over-year decline in traffic, you quickly end up at zero. What does that mean, exactly?

The end of identity

While we all are sick and tired of talking about Chrome cookie deprecation, like the Marvel Cinematic Universe, it keeps coming. Thanos might be dead, but the drama continues.

Why is identity a source of chaos? Because literally no one knows how it going to turn out and what the “new normal” is going to be exactly. Tell me you have confidence in any of the following statements:

• “I’ll be able to use an alternative identifiers for most of my media”

• “The Privacy Sandbox and other PETs should give me an acceptable level of ROAS”

• My media planning and measurement will be roughly the same in two years

• etc.

Tactics for overcoming chaos

Just because we cannot predict the future does not mean we shouldn’t plan for it. The thing that’s changed is the certainty, not the direction.

Reading list

• Nielsen to stop selling panel-only data later this year, will only sell hybrid measurement (link)

• Google launches Meridian open source MMM tool (link)

• Meta crushes earnings (link)

• Google confirms… absolutely nothing on cookies. Only that it will be a one time global user prompt and the industry will have “months” notice (link)

• DeepSeek! Hot takes abound: BOK, Chris Vanderhook, Brett