FOMO is worth more than money, and why big tech is spending big on GenAI

Welcome to CXA's newsletter.

What is this newsletter? It's about marketing, consumer behaviour, AI and will always include useful marketing chart. We're getting this out about once a week.  If that sounds like something you're interested in, please subscribe for free.

In summary:

• Ignore the headlines, people won't leave TikTok and Instagram.
• Nightly news programming is going the way of the dodo.
• Why Big Tech is spending $1 trillion on Generative AI.
• Chart of the week: FOMO with TikTok and Instagram.

Will people really leave Instagram and TikTok if paid to do so? No.

A report published in late 2023 suggesting people would leave Instagram and TikTok if paid is doing the rounds again. The report found that people would rather live in a world without social media, and that they would be OK with leaving social media platforms - Instagram and TikTok specifically but:

• only if they were paid to do so, and
• only if 75% of the people they know or follow does too.

So it isn't going to happen. In fact, we see no reason why social media usage won't do anything but increase over time.

As one CXA newsletter reader told us recently "I found out about Biden stepping down from running for President on the r/therewasanattempt subreddit. That was pretty incredible to us.

15 years ago Biden's announcement would have been 'stop what you're doing and find a TV to watch the news' moment but today people are finding out these world-changing-moments on platforms, and in specialist interests that have nothing to do with politics and are completely separated from a formalised news stream. As it was, even Peter Buttigieg said this week that he and his campaign crew found out about President Biden stepping down at the same time as everyone else - when it was posted on Twitter.

Is the job of the newsreader dead? Probably

Hal Crawford, a news media veteran, has written some excellent analysis of the latest Digital News Report from Canberra University on his substack. From Hal "

Here are seven facts, based on the data:

• Almost everyone uses a mobile phone, and most people use it for news
• Social media is the dominant vehicle for news for young people, while TV fills that role for older people.
• News is being consumed less now that it was in 2016 on all media: TV, websites, social media, radio and print.
• Online news is more politically differentiated and more left-leaning than offline news.
• Women are less interested in news than men, and this difference is big and growing in younger people.
• Video news is still growing in popularity.
• Algorithms are playing a big and growing role in news."

Hal also pulls this wonderful chart from the report which really highlights the shift of news consumption by age group, saying "18-26 year olds (Gen Z) have swung massively towards consumption of news on social media, and their most popular platforms are YouTube and Instagram. Their radio and print consumption is almost non-existent. Within social, Facebook is less dominant than previously."

For marketers, media buyers and ecommerce business owners the questions should be coming thick and fast

• Without nightly news being consumed what anchors advertising in the evening?
• What is nightly TV advertising actually worth anymore?
• Why or when would GenZ and Millennials tune in to watch something on commercial TV and then stay on that channel to consume the Ads?
• Even if GenZ have the TV on, are they really watching or are they thumb-flicking their way through their phone and paying more attention to the Ads on their phone?
• If your target market is the older generation you're probably OK for now, but eventually that market will be displaced with more social media centric consumers.

Big tech AI investment is baffling commentators - it shouldn't.

Big tech is reportedly expected to spend approximately $1 Trillion USD in the coming years on generative AI according to Goldman Sachs. Some commentators are in response baffled and questioning whether the benefit of this investment is going to reap the returns big tech hopes.

As we've noted in our previous newsletter we don't believe consumers will pay for AI directly. This may leave some justifiably thinking there's no revenue model for GenAI, but we don't believe this is accurate. We've also noted that we believe GenAI is somewhere in-between stage 2 - Deceptive and stage 4 - Demonetisation of the 6 D's of disruption.

Reading more about big tech's investment in Generative AI and other AI's we believe their levels of investment may be even simpler than most currently believe. Is GenAI (and other AI) investment a defensive play? Is it the equivalent of 'see we have it, no need to leave us!'

Big Tech after all is no stranger to:

• Copying each other to keep users
• Paying to keep users (Google pays Apple to remain the default search engine on Safari)
• Needing to always show growth

The fact is Generative AI is changing how the world works, from social media posts and short format videos to writing news articles, website writing, formal communications, the writing of scientific papers and much more.

We have no doubt there will be some investment wastage - there always is in new and emerging technology - but ultimately generative AI will find its way into highly valuable areas that organisations and governments will pay for, such as in medicine and healthcare, welfare reform, taxation reform and remediation and much more. 

Chart of the week: FOMO with TikTok and Instagram.