Olivia: Alright Jackson, I'm going to say the title of a book, and you have to give me your gut-reaction, roasting one-liner. Ready? Frenemies: The Epic Disruption of the Ad Business. Jackson: Okay... 'Frenemies.' Sounds like a reality TV show about middle schoolers, but with a two-trillion-dollar budget. Olivia: That is... shockingly accurate. And that's exactly what we're getting into today. We're diving into Frenemies: The Epic Disruption of the Ad Business (and Everything Else) by Ken Auletta. Jackson: Ah, Ken Auletta. The guy who knows where all the bodies are buried in the media world. Olivia: Exactly. Auletta is the perfect person to write this—he's been the premier media critic at The New Yorker for decades, famous for his deep dives into industries on the brink of chaos. He’s tackled Wall Street, network television, Google... and now, the ad world. Jackson: And this book got some really interesting reactions. People in the industry see it as essential reading, but for outsiders, the reviews are a bit more mixed, calling it everything from a brilliant exposé to high-level gossip. Which I think makes it even more fun to unpack. Olivia: It’s the best kind of gossip—the kind that explains why your phone is listening to you. And the drama, the chaos, it all starts with one explosive moment. A single speech that basically set the entire industry on fire.

Jackson: Wait, a speech? I picture the ad world as this slick, behind-the-scenes operation. Not guys giving speeches that cause mass panic. Olivia: That’s what makes it so cinematic. The book opens at this big industry conference hosted by the Association of National Advertisers, the ANA. This is where all the big clients—Procter & Gamble, Unilever, all the companies with massive ad budgets—get together. The mood is already tense. Clients are feeling like they're overpaying their agencies and not getting enough in return. Jackson: The classic "you charge how much for a logo?" conversation, but on a global scale. Olivia: Precisely. So onto the stage walks this guy, Jon Mandel. He’s a former big-shot agency CEO, a total industry insider. And instead of giving the usual boring keynote, he drops a bomb. He looks out at this room full of clients and basically says, "Your agencies are robbing you blind." Jackson: Hold on. So one guy, in one speech, basically accused the entire industry of being a giant kickback scheme? In front of all their biggest clients? That takes some serious nerve. Olivia: It was seismic. He accused the major advertising holding companies—these giant conglomerates that own most of the ad agencies—of running pervasive, systemic kickback schemes. He called it "criminal extortion." Jackson: Okay, you have to break down what a "kickback" even means here. I'm picturing briefcases of cash being exchanged in a dark alley. Olivia: It’s a little more sophisticated than that, but not by much. Essentially, an agency is supposed to buy ad space for its client—say, a Super Bowl commercial for Coke. The agency's job is to get the best price. But Mandel alleged that media companies, like the TV networks, were secretly giving the agencies "rebates" or "kickbacks" for spending client money with them. This could be cash, or free ad space that the agency could then resell. Jackson: So it's like if your real estate agent, who's supposed to get you the best deal on a house, was secretly getting a huge bonus from the seller for convincing you to pay more. Their loyalty isn't to you anymore. Olivia: That's the perfect analogy. The agencies were supposed to be acting in their clients' best interest, but these secret deals meant they were incentivized to spend client money with whoever gave them the best kickback, not whoever offered the best value for the client. Mandel estimated it was a "nine-figure" problem. Jackson: Wow. And what was the reaction in the room? Stunned silence? People flipping tables? Olivia: The CEO of the ANA, Bob Liodice, who was sitting in the front row, was quoted as saying it was "fascinating and frightening." The book describes this as the match that lit the fuse on a "perfect storm." You had clients already anxious about costs, you had the rise of digital ads that nobody fully understood, and now you have this public accusation of widespread corruption. Jackson: It sounds like the trust that held the whole system together just evaporated in an instant. Olivia: Completely. The ANA launched a massive investigation. Clients started demanding audits. Decades-long relationships between brands and their agencies were shattered. It created this massive power vacuum and a crisis of faith. And in any crisis, there are always people who know how to profit from the chaos. Jackson: And that feels like the perfect moment for someone new to step in and take over. When the old kings are fighting, the opportunists come out to play.

Olivia: Exactly. And this is where Auletta's "Frenemies" concept really comes to life. The old advertising world, the "Mad Men" era of Don Draper, was built on creativity and long-term relationships. But that world was already dying. The new world is dominated by two new types of players: the "Math Men" and the "Matchmakers." Jackson: Okay, "Math Men" I get. That’s Google and Facebook, right? The ones with all the data and the algorithms. They replaced the three-martini lunch with a server farm. Olivia: Correct. They have the direct line to the consumer. They know what you search for, who your friends are, what you 'like'. They can target you with a precision the Mad Men could only dream of. They are both essential partners for the ad agencies—because that's where the audience is—and their biggest existential threat, because they could cut the agencies out entirely. They are the ultimate frenemy. Jackson: But what's a "Matchmaker"? Olivia: This is one of the most fascinating parts of the book. Auletta profiles this one guy, Michael Kassan, who is the embodiment of the Matchmaker. He runs a consulting firm called MediaLink, and his entire business is built on the industry's insecurity and confusion. Jackson: So he's like the ultimate Hollywood agent, but for the entire advertising world? He connects the insecure movie stars—the brands—with the temperamental directors—the agencies—and the new tech billionaires who own the studios—Google and Facebook? Olivia: That's a brilliant way to put it. He's the guy everyone calls when they don't know who to trust. When a huge company like Unilever wants to review its billion-dollar ad account, they call Kassan to run the process. He knows everyone, he goes to all the parties, he's like a human LinkedIn for the most powerful people in media. Auletta tells this incredible story about him to show his character. Jackson: Oh, I'm ready for the gossip. Lay it on me. Olivia: Kassan is at a dinner meeting with a very senior executive from AT&T, a major client. He's known for carrying multiple phones for different carriers. During the dinner, his phone rings, and he accidentally pulls out a Verizon phone. The AT&T exec just glares at him. Jackson: Ouch. That's a bad look. What did he do? Olivia: Without missing a beat, Kassan stands up, throws the Verizon phone on the floor, and smashes it to pieces with his heel. The executive smiled, and it became a bonding moment. That's Kassan. He's a showman who understands that in a world of broken trust, personal relationships and grand gestures are everything. He thrives on being the neutral party, the "Switzerland" in the middle of all these wars. Jackson: But is he really neutral? Or is he just playing all sides? The book's title is Frenemies, after all. It seems like he's the ultimate frenemy, profiting from everyone's paranoia. Olivia: That's the billion-dollar question the book poses. He's providing what he calls "adult supervision" in a chaotic industry. But he also represents competing clients, which raises all sorts of conflict-of-interest questions. He's a symptom of the new power structure. Power is no longer just about having the best creative idea. It's about who controls the data, and who can navigate the increasingly complex relationships between all these giant, competing frenemies. Jackson: It’s wild. The whole business model seems to have shifted from selling products to selling access and information. But it feels like we're missing one key player in this whole drama. Olivia: Who's that? Jackson: Us. The people actually seeing the ads. Where do we fit into this picture?

Olivia: That's the final, and maybe most important, piece of the puzzle. The biggest frenemy in this whole story isn't Google or a rival agency. It's the person they're all trying to reach: the consumer. Jackson: How so? We're just trying to live our lives. Olivia: But we're not passive anymore. Auletta points to this incredible, and frankly depressing, study that found the average human attention span is now eight seconds. A goldfish has an attention span of nine seconds. Jackson: Wait, are you serious? We've officially been beaten by a goldfish? That explains... a lot about my ability to finish a TV show. Olivia: It explains everything about modern media consumption! We're distracted, we're impatient, and we have zero tolerance for being interrupted. And that has led to the rise of the advertising industry's greatest nightmare: the ad blocker. Jackson: I am so guilty of this. I have ad blockers on everything. I pay for premium services on YouTube and Spotify just to avoid ads. Am I... am I the villain in this story? Olivia: You're the disruptor! You, and hundreds of millions of people like you, are actively rejecting the fundamental bargain of the internet. For decades, the deal was: you get free content—news, videos, social media—and in exchange, you watch some ads. But now, consumers are saying, "No, thanks. I'll take the free stuff, but I'm blocking the ads." Jackson: Well, when you put it like that, it does sound a bit selfish. But ads have become so intrusive! They pop up, they autoplay with sound, they track you across the internet. It feels like self-defense. Olivia: The industry knows this. They know they've pushed too far. But this consumer rebellion is an existential threat. If advertising revenue dries up, how does all that "free" content get paid for? This is why you see the rise of things like "native advertising" or "branded content." Jackson: You mean those articles that look like real news stories but are secretly sponsored by a car company? Olivia: Exactly. It's an attempt to create ads that don't feel like ads, to sneak past our defenses. The book quotes Michael Kassan saying, "Nirvana is when you can’t tell the difference between the content and the advertising." Jackson: That's a terrifying definition of nirvana. It feels like the whole industry is in this massive, panicked scramble. They're fighting each other, they're fighting the tech giants, and they're fighting their own audience. It sounds completely unsustainable. Olivia: That's the core question Auletta leaves us with. The old world of the Mad Men is gone. The new world of the Math Men is powerful but also fragile and, as we've seen, not always trustworthy. The consumer holds more power than ever but might be inadvertently dismantling the economic model that funds the content they love. The entire ecosystem is a web of frenemies, and it's not clear if they're going to find a way to work together or just tear each other apart.

Jackson: So when you pull it all together, what's the big takeaway from Frenemies? It feels like more than just a story about advertising. Olivia: It really is. You have this internal implosion of trust from the kickback scandal, an external attack from new tech giants who are rewriting the rules, and a rebellion from the audience itself. Auletta's book isn't just about the ad business; it's a powerful case study in what happens when any powerful, established industry fails to see that the world has fundamentally changed around it. It's a story about power, paranoia, and the desperate search for relevance in an age of epic disruption. Jackson: It makes you look at every ad you see differently. The next time you get a perfectly targeted ad on Instagram for something you were just thinking about, you're not just a consumer; you're a player in this massive, chaotic game of 'frenemies.' You're the prize they're all fighting over. Olivia: And you're also the one with the power to just... turn it all off. That's the tension that defines our modern media world. So, we're curious to hear from our listeners. What's the most intrusive, or surprisingly clever, ad you've seen lately? The one that made you feel like they were reading your mind? Let us know on our socials, we'd love to hear your stories. Jackson: This is Aibrary, signing off.