💎 The Deal is forever

Curated and written by Jon Kallus

🔽 Cocoa prices. They’re through the roof. Candy makers will need to get creative »»

🔽 Traffic to California restaurants since April. America’s most populous state increased its minimum wage that month »»

💬 “If my siblings are happy, then my mom was happy, then I was happy.” What your sibling birth order does (and doesn’t) explain »»

🛫 Hollywood director Ridley Scott has turned 3 French farmhouses on his Provençal wine estate into 3 artful, design-led, holiday homes for rent »»

👗 Fasten your chain belts, boho jewellery is back »» Also: Forget AirPods: wired headphones are fashion »»

🤖 Here’s how Apple’s AI model tries to keep your data private »»

Our LinkedIn ghostwriting service for busy Founders is here. LinkedIn can be a time suck. fv/ has cracked the code. Our proven ghostwriting system transforms a single conversation into a month’s worth of high-quality posts, establishing you as the industry expert you are— without lifting a finger. Want a preview? Reply with “LinkedIn” for a complimentary profile audit, so we can talk about a content strategy that will elevate your presence.

Let’s talk about immortality.

Over the years, I’ve written a lot about this thing that I've nicknamed “The Deal.”

The Deal refers to the advertising-supported media business model, and longtime readers know that I don’t believe that The Deal will ever, ever die.

The Deal goes like this: give me what I want for free and, in exchange, I'll bear an ad every now and then.

What I like love about The Deal is the fact that it has powered every media business, from the earliest days of radio, through Google, Facebook, Instagram, and now TikTok today.

OpenAI has outright said that The Deal is coming for ChatGPT, too. (This is something, by the way, that I called back in December 2022, the month that ChatGPT came out.)

NETFLIX HAS ENTERED THE CHAT

Immortal entity that it is, The Deal has evolved in recent years, silently moving from free media like radio and YouTube, to other, less expected places, even ones that swore never to have ads.

One reason for this is because it’s pretty much impossible to build a truly massive media business without selling ads.

None other than Netflix has proved me right on this point.

Check this out, from 2020: “Reed Hastings Explains Why Netflix Won’t Ever Sell Ads”

That explanation didn’t age well. This came out less than 24 months later: “Netflix’s Reed Hastings Admits He Was Wrong About Advertising”

(Sidebar: Two often shared examples of large media businesses that operate without ads are the BBC and HBO. But zoom out: the BBC is financed by the British television watching public, and HBO exists within a much larger media conglomerate, Warner Bros. Discovery. WBD makes more than US$10b annually by selling ads against its programming and IP.)

AMAZON’S IN

But in recent years, The Deal has gotten even more interesting that you might think.

For instance, Amazon is big in to The Deal. Like, really big into it. The trillion dollar retailer has a nifty US$38b annual advertising business, mostly fueled by selling sponsored positions in the search results.

Now, US$38b is a gigantic run rate by any measure. But to truly put that figure into perspective, consider this:

Amazon makes more money from its advertising side hustle than twice the annual revenue of the world’s largest advertising and media agency holding company, WPP.

Read that last paragraph again. 🤯

SO’S UBER

Then there’s Uber.

Many people know that for most of its existence, Uber lost money on every single ride.

Today, the ride sharing giant is finally profitable, but that’s not because the company has finally figured out how to consistently make money off the back of $9 Uber X rides.

It’s because Uber has joined The Deal!

Yes, believe it or not, Uber is on track to make US$1b in advertising revenue this year.

To be clear, unlike Amazon’s advertising business, I’m not talking about restaurants paying to position themselves higher up on your Uber Eats search results.

No, in case you haven’t noticed first hand, Uber now shows display ads in its app.

As The Drum explains, “Journey Ads, debuted in 2022, is Uber’s proprietary advertising platform, embedded within the Uber Rides app, offering display and video ads paired with demographics-based and behavioral targeting, as well as campaign performance measurement.”

Yes, that’s a big ol’ ad in the center of your screen, as you squint at your phone, looking to see how far away from you that little moving car on the map is.

Those ads keep playing during the ride, so when you’re looking down at your phone while you're in the car to check your ETA, you see —yup— another ad. (Devotee of The Deal that I am, this is something that I had wondered for years and years why the company had never put in place. In 2022, they finally did. Well done, Uber.)

CHASE WANTS IN TOO

Now ads have come to your banking app.

Last week, while doing some in depth research for an fv/ LinkedIn ghostwriting client, I happened on something called Chase Media Solutions.

Chase is America’s largest consumer bank, as measured by assets and by number of branches. Chase is present all lower 48 US states, and parent company JP Morgan Chase is actually the world's most valuable financial institution by market cap.

(🇬🇧 Fun fact: Chase also has nice little UK consumer business too: 2m Britons have put some £15b into Chase UK online checking and savings accounts to date.)

All that hasn’t stopped Chase from entering The Deal. Meet Chase Media Solutions. It’s an innovative advertising channel for brands looking to crack the US consumer market.

The idea is this: As a marketer for a large consumer brand looking to increase your US revenue, you get in touch with Chase Media Solutions, tell them what you're looking for in terms of demographics, and what you’re looking to spend, and Chase goes ahead and offers its account holders cashback, or some sort of a special discount if they buy from you by displaying those offers to Chase account holders right inside the banking app.

Aside from the elegant win-win, what I especially like about Chase Media Solutions is that it dovetails with another concept that I've been thinking about when it comes to marketing: the value exchange.

(Credit to longtime fv/ and fv/pro readers Piers and Omara for separately pinging this expression to the front of my mind a while back. I haven’t been able to get it out of my head since.)

Value exchange is a kind of overall governing concept in business, right? I mean, I give you money, and you give me a product or service. 

Done deal. Value has officially been exchanged.

But the concept of value exchange also extends to marketing. I’m personally interested in this because I spent most of my marketing career working with advertising creatives at agencies that instinctively understood that marketing had to provide its audience with some sort of value along with/baked into its message.

This is something that many, if not most, marketers at the top end of the marketing funnel kind of instinctively get.

WAIT, WHAT’S A MARKETING FUNNEL?

For those that aren’t familiar, the “funnel” is basically a metaphor that marketers use to describe the typical or ideal journey that a potential customer goes through —from first hearing of your brand, product or service, all the way “down” to finally making a purchase.

It’s not a perfect tool, and not everyone uses it, but the marketing funnel is an easy-to-follow framework, and it exists to help marketers organize and make sense of all of the different messages they want to or could communicate to all of their different audience segments.

The top end of the funnel is called awareness, and that’s the kind of marketing that most of us are familiar with from an early age:

Big budget TV commercials.

Billboards.

Stadium naming rights, team uniform sponsorships, and funny, brand social media accounts that don’t seem to be directly selling any specific products.

Not to mention mascots like the Michelin Man, Tony the Tiger, the GEICO gecko, Colonel Sanders, and Duolingo’s owl.

These loveable characters, and all of those types of advertising, are extremely effective, long standing brand awareness tools. (That Duolingo owl has actually been around for 13 years, as it happens.)

Most gigantic global ad agencies work on this end of the funnel. The awareness end. They create huge global campaigns, and/or high profile, funny Super Bowl commercials that introduce a big new brand to a large audience, or keep an old brand top of mind.

There’s a reason that people look forward to Super Bowl ads: they reward the time and attention you give them with a bit of entertainment.

^ Value exchange!

Most excellent creative directors and creatives that I worked with at huge ad agencies understood this value exchange implicitly, even if they never would have used that expression to describe it.

In other words, the idea that an ad should entertain you or make you feel smart or make you laugh, or give you something witty and clever in exchange for your attention was kind of baked in to our thought process.

That's a value exchange.

Chase Media Solutions is presenting one of the clearest value exchanges ever, and they’re doing it in a novel new place: present me with a branded offer right inside my banking app, and make it super easy for me to redeem it right there and then.

That’s like awareness, consideration, and conversion in one fell swoop.

Win, win, win.

OK, WHAT’S THE POINT HERE?

As you may have noticed, everything is marketing these days.

Everything.

Not only will it never, ever die, but The Deal today lives in way more media environments, and is embedded in more types of businesses than it ever has before —with even more to come: Your Uber and your banking apps are ad platforms, and soon, ChatGPT will be pitching you products too.

Media and marketing, somehow, is still a major growth industry.

That’s because The Deal will never, ever die.

And you can take that to the bank.

More:

PayPal is building an ad network based on your Venmo data »»

Get a free audit of your profile. Reply to this email with “LinkedIn”. Thanks for reading. If you think someone in your world would enjoy reading this newsletter, please share!