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June 15 2023 - Economy, AI & Tech

June 15 2023 - Economy, AI & Tech

👋Happy Thursday all. In classic Thursday fashion, we've got a lot to get through– from the economy, to agency rumblings, tech, and our best friend AI. Let's get into it–

Quick Take

  • The Fed holds out on rate hike (for now)  
  • Layoffs come for Sonos
  • Lots of Google/YouTube news spanning AI, Ad Tech & more
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Top Stories

The Federal Reserve Chair, Jerome Powell, announced that rate cuts are still "a couple of years out" during a news conference following the FOMC rate decision. The Fed decided to hold interest rates steady for now but signaled the possibility of two more quarter-point hikes later this year. Powell emphasized the importance of getting inflation down and mentioned that risks to inflation are still on the upside. He also mentioned that the labor market has shown extraordinary resilience. The decision and press conference had a fluctuating impact on stocks, with the S&P 500 remaining largely unchanged.

M&C Saatchi has warned of tough trading conditions, leading to a nearly 20% drop in its shares. The company expects a small decline in like-for-like net revenue for the full year, with the slowdown primarily attributed to its businesses in Australia and Asia, which have been affected by reduced spending from clients in the technology sector. However, M&C Saatchi remains confident in delivering headline growth in profit before tax and operating margin, partly through cost savings. The company's advertising segment accounts for approximately 46% of total net revenue, but other areas such as consultancy continue to perform well. In April, M&C Saatchi stated it anticipated its 2023 profit before tax to be in line with market expectations, following record profits in 2022.

Sonos has announced that it is laying off 7% of its workforce, affecting approximately 130 employees. The company also plans to reduce its real estate footprint in the coming months. The decision comes as Sonos faces soft demand for its range of products, similar to other electronics manufacturers. The company aims to adapt and protect profitability while still investing in its product roadmap for future growth. Sonos CEO Patrick Spence emphasized the priority of providing departing employees with a respectful and compassionate transition and ensuring they have resources for their next steps. The company estimates restructuring and related charges of approximately $11 to $14 million, with the majority being allocated to employee severance and benefits costs.

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Rundown

  • Huge, owned by IPG, has undergone a revamp after an 18-month internal refresh, placing a strong focus on leveraging artificial intelligence (AI) capabilities. The agency has introduced the Living Intelligence Value Engine (LIVE), a platform powered by AI that analyzes both traditional and non-traditional data to uncover consumer insights for clients. LIVE aims to help brands understand audience perceptions and predict consumer behaviors. It can be enhanced by collaborating with other IPG data platforms and generative AI tools such as ChatGPT and Midjourney. Huge has also launched the Creative Capital Index (CCI), an AI-powered tool that assesses the deployment of creativity within organizations. The CCI assigns values to a brand's assets and tracks their impact over time, allowing clients to better understand creative improvement. Huge plans to introduce additional AI-powered tools in the coming years.
  • Google has launched a virtual try-on (VTO) tool powered by AI to enhance the online shopping experience and promote diversity and inclusivity. The tool aims to provide a customizable experience similar to in-store apparel shopping, offering realistic image try-ons with size- and skin-tone-inclusive options. Google's guided refinements allow shoppers to fine-tune product choices using machine learning and visual matching algorithms, helping them find the perfect fit. The VTO tool utilizes Google's Shopping Graph and a process called "diffusion" to generate accurate try-on images. It also features a wider selection of diverse human models, representing different body types, races, and skin tones, to enable more informed shopping choices.
  • The European Commission has sent a formal statement of objections to Google for suspected anti-competitive conduct in its adtech business, which could result in the breaking up of the tech giant's adtech empire. The investigation has found that Google appears to have abused dominant positions in both the buy and sell sides of the adtech market by unfairly favoring its own tools over rivals, resulting in intermediating ad tools favoring its own ads in matching auctions and squeezing competitors.
  • A study from consumer research platform Collage Group found that one-third of Gen Z participants prioritize influencer recommendations when deciding whether to buy from a clothing brand and 21% said influencer inclusion in brand-sponsored content could sway them to try a new brand. The study also shows that sustainability is a key factor for Gen Z consumers in choosing clothing brands.  
  • Netflix announced that it will be opening a pop-up restaurant called Netflix Bites featuring chefs from various cooking series like Iron Chef, Nailed It!, and Chef's Table. It will open on June 30 in Los Angeles and be open daily from 5-10 p.m. PT.
  • New public market data indicates that software stocks are rising to their highest points so far this year, bringing some relief for tech companies. Investors think public software companies are worth more per dollar of revenue in aggregate, which will lift some pressure from startups struggling to raise new capital at attractive prices or harmonize legacy private-market companies' valuations with their hoped-for IPOs.
  • Twitter is being evicted from its Boulder office due to unpaid rent, owed to the landlord for around three months. A judge has signed the order to evict Twitter from the Boulder office where the company employed 300 people before layoffs, resignations and other firings brought the number down. The landlord who owns Twitter's offices was provided a $968,000 letter of credit, which ran out in March.
  • Verizon is partnering with Snap to provide augmented reality experiences to attendees at music festivals this summer through Snap's AR Mirrors. Verizon debuted the AR Mirrors at Governors Ball and will bring the technology to the Bonnaroo Music & Arts Festival, allowing attendees to try custom augmented reality lenses and receive a free three-month subscription to Snapchat+. This partnership makes Verizon the first telco partner for Snap's AR Enterprise Solutions division and the first telco partner to launch an AR Mirror campaign.
  • YouTube is offering free services from its internal consultancy, Creative Works, to advertisers and agencies that sign a substantial upfront agreement with the company. Advertisers who work with Creative Works will gain access to a team of strategists, producers, and directors who will help them create, test, and analyze the results of their YouTube campaigns. The team will also provide guidance on using Google AI tools and developing campaigns for YouTube's various platforms. The offer aims to assist clients in improving their media strategies and focusing more attention on creative development. Creative Works has already collaborated with over 150 advertisers, including Volvo, eBay, and Dove, to create successful campaigns on YouTube. The specific advertisers that have taken advantage of the offer were not disclosed.
  • Google may have an advantage in developing more sophisticated AI models due to its ownership of YouTube, which provides a rich source of data including imagery, audio, and text transcripts. Google's researchers have reportedly used YouTube to develop its upcoming large-language model, Gemini. The company's ownership of YouTube, which grants it access to complete video data, gives it an edge over rivals that scrape videos for data. The use of YouTube content can enhance Google's language understanding capabilities and enable the integration of video and audio into AI models, potentially leading to more realistic conversational responses and the development of text-to-video software.
  • John Musker, known for directing Disney's beloved animated features such as "Aladdin" and "Moana," will debut his new four-minute short film, "I'm Hip," at the Annecy Festival in France. This is the first time Musker has animated in 40 years, and the film features caricatures of his friends, family, and colleagues from his 40+ year career in animation, with each scene inspired by a story from Musker's animation life. Production on the short began just before the pandemic and premiered last month at a screening in Beverly Hills.
  • The Martin Agency has announced the launch of Martin Entertainment, a venture headed by former Netflix executive Alanna Strauss that will focus on evolving how and where brands connect with consumers through premium storytelling in various content mediums. Strauss will lead Martin's Cultural Impact Lab, focusing on adding entertainment to its cultural PR, activation, social, and influencer capabilities.
  • The European Parliament has approved draft legislation that would establish one of the world's first laws governing AI, aiming to set a global standard for the technology, from drones to AI-generated videos. The law includes a ban on the use of live facial recognition by police in public places but falls short of a total ban on biometrics, which European leaders are expected to push back on because police forces across the continent want to utilize the potential to recognize criminals.
  • Uber Eats has partnered with Activision Blizzard to create "Taste the Adventure," a partnership that includes a brand new "in-game" food courier service called "Orderyn" for World of Warcraft gamers. This first-ever service will deliver restaurant-style food to players in-game, and with each in-game order, gamers will receive a discount code for Uber Eats. The partnership also includes e-CRM, digital display, and a social campaign.
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Published by:

Joe Nash

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