Trump 2.0 and advertising

It is very hard to speculate on what’s going to happen, but let’s try.

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Trump 2.0 and Advertising

Let’s start with the obvious: It is a fool’s errand to try to predict what is going to happen under a second Trump administration with any certainty. Trump, the person, is prone to whims and does not seem to have a consistent policy point of view. Trump, the administration, intends to radically change the nature of the Federal workforce and bureaucracy which could make his policies take effect in ways that were previously unexpected.

We really don’t know anything. But this newsletter doesn’t write itself (maybe soon!), so I’m going to give it a try and think about likely first- and second-order effects on the advertising business.

M&A Revival, but with Caveats

The easy prediction from every business publication this week is the expected revival in M&A activity without big, bad Lina Kahn stopping all the fun. Sure, the market couldn’t be worse than it is now.

How might this play out specifically:

• Don’t expect the big tech giants to start buying. First, they don’t really need to buy anything (in advertising at least) with their $ trillion+ valuations. Second, these companies will still be under the microscope, but for other reasons than “bigness”. Remember, Trump held up the AT&T-Warner deal for over a year just because he doesn’t like CNN — do you really think things are going to get easier for Meta or Alphabet?

• Traditional media M&A is likely to thaw. Local TV, for example, is already an area of speculation.

• Martech becomes a focus instead of ad tech. The rumors this year about Google looking at Hubspot were an early sign. In a world of diminished signals and AI-driven attribution, owning more of the customer’s data is very valuable.

• Crony capitalism is also certainly more likely. The favored companies (Oracle, X) will have much more latitude than the less favored.

TikTok Ban Ignored, Somehow?

Recently on the Monopoly Report podcast we had Megan Gray talk about the complexities of the TikTok ban (listen). The ban is supposed to be decided by a three-judge trial on January 19th, a day before Trump takes office! So much drama. (The Times has a good article too)

The politics of the TikTok ban are dizzying:

• Trump doesn’t want to ban it for fear of alienating the youth.

• Many Republicans (and some Dems) want to ban it to seem hard on China.

• Elon Musk is likely going to be Trump’s voice on tech, and he both wants to appease China (so he can sell cars) but also competes with TikTok for social media $$.

• Everyone hates Meta, and a TikTok bad is obviously good for Zuck and team.

• Based on the way the bill is written, the administration has to carry out the plans to ban the app — there’s no option to just call a “mulligan.”

Everyone seems to think that the Trump administration is just going to muddle by and let TikTok continue even if the law says otherwise. But how, exactly? It’s a law, that was passed by Congress and signed by Biden!

Google’s Antitrust Woes Get Worse

There’s an emerging consensus among the press and the Washington-types that Trump is good for Google’s antitrust woes. I strongly disagree. There are two arguments being pushed about why the new administration might not be as aggressive on a Google break-up:

1. Trump himself said something pretty vague on the topic a couple of weeks ago (Reuters)

2. “Career DOJ lawyers” will want to wrap this up in some way before being sent to the gulag.

Both of these arguments seem facile to me. First, as we know, what Trump randomly says is totally irrelevant to what he actually does. Odds are someone close to him told him to say this a couple minutes before his speech and he just repeated it. Second, the idea that these career DOJ lawyers are still going to have a job or any influence on January 21st seems like a best case scenario.

Here’s the arguments why things are not good at all for the folks in Mountain View:

1. Google has literally zero allies. Everyone hates them — from the liberals who think they radicalize the youth to the conservatives who think they stifle free speech, to the anti-big business types in-between. It is truly a bipartisan issue to hate Google.

2. In particular, the Republicans really hate Google and think of the company as a bastion of liberal elitism that skews the news in favor of “woke” and liberal ideology. This election cycle didn’t change this perception at all. If the R’s keep the House we’ll hear a lot out of Jim Jordan (example from a week ago).

3. Elon is not a fan.

4. There is a bi-partisan bill called the America Act that would break up Google. This could be a lot faster than a multi-year appeals process of the two Federal cases.

5. There is also an Texas state antitrust case that, if anything, will be a lot more aggressive in pursuit of a break-up than the Federal case and is being tried by an East Texas (read: anti-business) jury.

So basically DFP is going to be run by Larry Ellison.

X is a Bargaining Chip

The crony capitalism elite came out hot, with Tweets showing their intentions:

Not content to destroy GARM, and maybe the WFA as collateral damage, the “free speech” brigade seems intent on brow beating the advertising community into subsidizing their questionable opinions and investments.

I don’t think any amount of political heat will overcome the deeply unsafe advertising environment of X, though there’s probably never been an easier opportunity for brands to curry favor with the government than blowing a couple hundred grand on some ineffectual ads on the platform.

The slightly more interesting speculation is whether Elon will use his political good fortunes to bail out his underwater investment. A reverse-merger into Truth Social to go public is a viable play and would personally enrich our new Commander-and-Chief. As would be some involvement with the TikTok scenario.

Privacy Bill not Happening

I just assume the new administration won’t pursue popular legislation that would make things better for Americans. But neither did the last, so what do I know?

Happy to hear everyone else’s totally normal, demure opinions on these matters. DMs are open.

Reading list

• DV finds audio ad fraud scheme (link)

• IAS in discussions with KKR (link)

• United x Starlink (link)

• Google offering curation (link)

• IAS announces Google curation (link)