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Marcus Johnson: [00:00:00] Atmosphere TV is the largest streaming TV platform purpose-built for shared social spaces like bars, restaurants, gyms, and airports. Atmosphere is the creator of CHIVE TV and over 30 mesmerizing audio optional channels that entertain over 150 million monthly viewers. Built for business, made for fun, Atmosphere TV

Hey, gang. It's Friday, October 23rd. Drew, Zach, and listeners, welcome into Behind the Numbers, an EMARKETER podcast made possible by Atmosphere TV. I'm Marcus, and joining me for today's conversation we have two of our senior forecasting analysts. One of them lives in Nashville, Drew Spink joins the show.

Drew Spink: Happy Friday, Marcus. Glad to be here.

Marcus Johnson: Hey, fella. Thank you for being here. And over in Utah, Mr. Zach Goldner.

Zach Goldner: Howdy ho.

Come on now. It's Friday.

Marcus Johnson: Today's fact

How Nashville became the country music capital [00:01:00] of the world. This one just for you, Drew. Ooh. So maybe you guys know this story, but, um, I, as a Brit, didn't know it, even though I've been there a bunch. Um, so this is how it happened. In 1925, Nashville's radio station, WSM, began broadcasting, and on November 28th of that year, it aired a live country music program called the WSM Barn Dance.

Have you guys heard of this?

Zach Goldner: Never.

Marcus Johnson: Okay. Drew has, yeah. Um, so people across the region could listen to musicians playing old time country music right in their homes. Uh, this helped Nashville's music reach audiences far beyond Tennessee. And in 1927, radio announcer George D. Hay began calling the WSM Barn Dance the Grand Ole Opry, which people might be more familiar with.

Uh, the show became a huge attraction featuring singers, fiddlers, comedians, and other performers. In, uh, '39, 1939, it began broadcasting nationally on NBC Radio, [00:02:00] bringing country music to an even larger audience. Um, people like Hank Williams, Patsy Cline helped turn Nashville into a center for country music.

And in 1950, WSM announcer David Cobb, uh, was credited with giving Nashville the nickname Music City, USA

Zach Goldner: So this all came before Taylor Swift

Marcus Johnson: Wow. Yeah. I d- I didn't know that.

Drew Spink: It did. And that radio show's still going on to

Marcus Johnson: this- Yes.

Drew Spink: Yeah ... so it's the longest running radio show in American history.

Marcus Johnson: Yeah.

The Gr- Grand Ole Opry just turned 100, um- Yep ... and is still, uh, still running to this day. Remarkable. Uh, anyway, today's real topic, beyond attention, can intent fuel the next wave of ad spending growth?

"The attention economy is ending. The intent economy is taking over," writes Dr. Eric, uh, Joachimsthalner. Uh, he is founder and CEO of brand consultancy the Vivaldi Group. [00:03:00] He notes that for two decades the internet ran on attention. Brands bought impressions, platforms sold reach, and a handful of companies, Google, Meta, Amazon, capture two-thirds of all digital ad spend.

But the model is breaking. Customer acquisition costs, uh, keep rising, margins keep shrinking, funnels leak, and consumers are tired of interruption and clutter. The attention architecture has reached its limit. He argues that AI is forcing a new architecture, one built on intent, not impressions. A person expresses a goal, an agent interprets it, acts on it, and completes the task, often without a click.

Discovery, evaluation, and purchase collapse into a single moment, the interaction field. Value coming from interactions, not interruptions. In the attention world, platforms extracted value. In the intent world, companies must create value at the exact moment of need. Uh, he says you no longer fight for reach, but what are you fighting for instead?

Drew, I'll start with you. What is the most interesting part of this shift in the ad wars from in- attention [00:04:00] to intent?

Drew Spink: So I, I think that there's, the core point that is being made in this article is that it is shifting, but it, it's f- it's framed in a way that it's, like, this is happening now, and there's basically no, uh, company earnings or trends that we have seen to back that up now.

Mm. Maybe this is- Mm ... a 2028- Interesting ... onwards- Mm-hmm ... problem. But so specifically what they're talking about in terms of intention of purchase, that's a search ad, basically. Like, this doesn't apply to any display ads, any social media or anything. Those are still kind of wide cast nets that are gonna be appearing in feeds or during- Mm

commercial breaks on CTV, where the goal is still to grab the consumer's attention. But within the search ads, I mean, Google has ramped up their AI overview spending, and to that point, the intent does matter. And but it, it's shifting more from, like, towards a, um- Like an SEO, GEO thing

Marcus Johnson: Mm-hmm. Mm-hmm

Drew Spink: It's gonna be really important of what brand [00:05:00] shows up when somebody is searching a specific, specific search question in that bar.

Marcus Johnson: Yeah. Yeah.

Drew Spink: Yeah. And we're not even- So we haven't even touched more than 50% of the entire advertising economy in the first place. And Meta, more than anybody else, has seen astronomical growth this year from their display ads. So it's- Yeah ... this is assuming that there's entrenched behavior that is changing, and that the only way to sell advertising to consumers is just through intent-based ads, like through a chatbot.

And Google's making the bet that people are just gonna keep using Google because that process is, they kinda own it already.

Marcus Johnson: Mm-hmm.

Drew Spink: And they're launching their own ads to do it. They're just shaping it into this thing.

Marcus Johnson: Yeah, Zach, there was an Axios article that, um, had the line, "A slew of new products announced from Advertising Week show how quickly the ad economy is shifting from selling attention to monetizing what consumers want next."

What do you make of this shift from attention to intent?

Zach Goldner: I mean, I, I'm [00:06:00] fully agreeing here with Drew- Mm ... on this. I, I don't fully agree with what the article has to say. I think it's premature to say that a shift is occurring. Maybe we're at the onset of the shift-

Marcus Johnson: Mm ...

Zach Goldner: but where ad dollars are going right now, it is still going towards attention.

Marcus Johnson: Mm-hmm.

Zach Goldner: Uh, we're living in the age of brain rot. We're living in the age of iPad kids who are now becoming adults. We're also living in the age where parents are living on reels and not looking at their kids as they're playing around the playground. So I think if you at- were to actually look at it, and I'm gonna bring up our own time spent numbers-

Marcus Johnson: Mm

Zach Goldner: we have adults that are spending upwards of nine and a half hours of time with digital media on a daily basis. But I think when you look at the game of how advertisers reach the audience, it still is that engagement. If there's nine hours being spent on digital media, that number is still e- extremely high, and companies are going to really be vying for those numbers.

Marcus Johnson: Mm-hmm.

Zach Goldner: So if you can keep [00:07:00] engagement and improve monetization, that's the golden zone, but you're not going to see a ChatGPT immediately go ahead and, and pull in all those ad dollars at this time.

Marcus Johnson: Mm.

Drew Spink: To the point of attention versus intent, people aren't- people that are spending nine and a half hours a day on digital media, their intent is not shopping.

Marcus Johnson: Mm-hmm.

Drew Spink: Maybe a s- a small amount, but it- the majority of it is rotting on the couch- Yeah ... or on their phone, like

Marcus Johnson: Andrew

Drew Spink: said.

Marcus Johnson: Yeah. Yeah, I think this article is, um, this, I, I assume is, is, is saying this will be the future, um, but it, it's not now. Um, and if any of it is now, it's, you know, a fraction of a percent in terms of, uh, the attention part of it.

And, um, i- in, in the piece he was talking about value being created through resolutions and outcomes, not just salience being the best answer- Mm ... um, not the, um, the loudest brand. Um, that's definitely not the case right now. There was [00:08:00] another, uh, line in the piece that I thought was really interesting, which is what are- which is a question I think people are gonna have to start to, um, ask themselves and figure out the answer to, which is, and, and the sooner the better, 'cause I think it's a really important and interesting and tough one.

What are the best answers made of? You know, when someone's asking a question like what, what does the best answer look like? Is it data? Is it utility? Is it trust? Is it speed? Is it something else? And what is the role of brands? How can they still matter? What is g- what are people going to prioritize when they're thinking of the best answers that I could possibly get back?

Zach Goldner: The, the way I see that question is I think the answer we've always been told in marketing, the best trust is word of mouth. Like, you, you trust your peers.

Marcus Johnson: Mm.

Zach Goldner: And I do see that there's a lot of trust with AI. We're, we're blindly trusting what a chatbot tells us, and I do see that as a really strong marketing tool for these companies- Mm

moving forward. But as we do talk about ad dollars, I don't [00:09:00] see that these companies are really- maximizing that, uh, under the scope at the moment until, like your AI chatbot, uh, might eventually be able to, to banter with you or be your AI girlfriend at some point. Maybe s- be able to sell you ads through that and keep you engaged, uh, through that focus.

Uh, but I still think that we're a little bit away from there. Mm-hmm.

Drew Spink: And I think that those companies are gonna have to show tremendous value in this to take these ad dollars away from Google, for example- Yes. Yeah ... who's offering basically the same thing on an already established ecosystem.

Marcus Johnson: Mm-hmm. Um, advertising seems to be holding up, uh, pretty well, uh, at least so far.

Recent Wall Street Journal piece, uh, from Nat Ives discussing why ad forecasts keep defying gravity. He explains that ad spending in the US will grow an estimated 12%, just over, in 2026, um, according to revised numbers from the IAB. That's up from a January forecast of nine and [00:10:00] a half percent growth. He points to stronger than expected advertising around events like the Winter Olympics and the FIFA World Cup, with folks reporting less concern than in January about macroeconomic headwinds affecting ad investment, and also in anticipation, uh, uh, for midterm campaign spending b- uh, growing.

Uh, a few other f- numbers here. We had, uh, WPPP Media, they increased, uh, global and US predictions in June, pointing to advertising by AI companies and traditional businesses deploying AI, uh, providing a powerful countervailing force to external economic headwinds. And one last one, Madison & Wall did the same, uh, upward revision, calling out AI, the longer, more watched and, and, and hydration break, um, uh, World Cup, and consumer spending among higher income leg of the K-shaped economy.

Uh, gents, we're gonna blame pie for this one, which is where you have to... Or slice the pie as it was, uh, is newly called, creating a pie chart of reasons as to why something's happening. Um, Drew, I'll start with [00:11:00] you. Uh, when you look at our ad spending forecasts, um, do we also think that ad spending is defying gravity?

If yes, why? If not, why not?

Drew Spink: Um, yeah. So I, I kind of boiled this down to I think five reasons that I could come up with. Mm-hmm. Many of them were mentioned in this article already. Um, the easy ones being just kind of the tent poles up for the year on the World Cup and the midterms. Um, and then just AI boosted ad engines from like Meta and Google making the process more- Mm efficient in the first place.

The additional pieces I had were, um, there's been record corporate profits, so they have excess budgets that they're looking to kind of spend- Good point ... and advertise with.

Zach Goldner: Mm-hmm.

Drew Spink: There is additional sales pressure because even though there is excess profits on the corporate end, the consumer is getting pinched even harder with, so they're being more picky on what they're choosing to buy.

So there's additional pressure from sales teams to make more sales to more advertising.

Marcus Johnson: Mm-hmm.

Drew Spink: And then [00:12:00] additionally, the tariff refunds that have been mentioned that are going back to corporations, and we should see those additional excess budgets into 2027. So even though there aren't the tentpoles that are lifting up, um, necessarily demand from, like, the World Cup in the midterms, there will just be a lot of money in the corporate economy to be spent on advertising So I just think that the numbers are gonna stay high.

Marcus Johnson: Yeah. Zach

Drew Spink: It may extend to next year for those reasons.

Marcus Johnson: Yeah. Zach, what does your pie chart look like?

Zach Goldner: Yeah. Uh, well, first of all, uh, Drew and I th- I think, tend to think, uh, quite a bit alike, uh, considering we work on the same forecast. I do have some of those same points as him. Uh, but I do think that we can actually put a number to those, uh, flagpole events.

Okay. And I just wanna first quickly touch on that. So this year was the biggest ad spending year ever for a FIFA World Cup. Uh, we have our inaugural [00:13:00] forecast where we go ahead and break 'em out. In 2026, we have FIFA World Cup spending at $1.25 billion. It has, uh, multiplied by four times versus what we had it in 2022, so a lot of that is based on it being in the US.

But that-

Marcus Johnson: Mm ...

Zach Goldner: um, that spending did not exist last year. Mm-hmm. So you can, uh, contribute that directly to spending this year. And also with politics, we have the midterms coming up. This is gonna be a very highly, uh, contested year. You're gonna see a lot of advertisements both on TV and digital, and our forecast for that has that at roughly $11.5 billion.

So both of those are absolutely massive. Yep. So I'll call that one part, even though I don't actually have that as my allocations in this pie chart.

Marcus Johnson: Mm-hmm.

Zach Goldner: My breakdown is I have 60% of it being allocated towards AI. I'm gonna talk- Wow ... all about digital here. So 60% AI, [00:14:00] 30% I'm gonna go ahead and say it is, uh, AI's impact.

Uh, so beyond the hype of AI, uh, we're seeing that AI is making more advertising more efficient. You're seeing better CPMs, and with that, companies are establishing more of their budgets because their performance gains have been real. The other 30% there I think goes to the AI hype. There is a wave of new companies that are entering into the space fighting for attention, um, and there's no better way to announce your AI startup, uh, than with a star- a Super Bowl ad or a subway cart that's wrapped in a ChatGPT that you've never heard of.

Um, and at this rate, you'll, you'll see an AI company that'll give you a way to talk to your dog- Mm-hmm ... and I'll eat up advertising dollars too.

Marcus Johnson: So that 60% is 30% AI hype, 30% AI efficiencies, and that makes up the 60?

Zach Goldner: Yes.

Marcus Johnson: Okay.

Zach Goldner: Yes, yes. That's why you're seeing so much of a gain towards meta ads- Mm-hmm ... and, uh, r- reasons to that.

It's not just ad load in- [00:15:00] increasing itself. Uh, however, ad load is increasing. I'd give 10% on that to ad loads. Uh, digital platforms are finding ways to really flood the zone, uh, flood, uh, flood their impact. If you go look at Instagram Reels, you'll have pretty much, like, two ads per, uh, story that you're swiping through.

So they're really increasing the load there Um, the next bit I have here is I think that 20% goes on the wanna bet on that category, where I think that we're seeing one of the biggest industries that have been flooding, uh, advertising has been with prediction markets and with, with sports markets as well.

And then I agree with Drew, I think that a sneaky addition here is 10% going towards, uh, tariff reimbursements. Mm. Because first half of the, the tariffs that were implemented, uh, this last year have been knocked down by Supreme Court. I think that we're going to see some adver- [00:16:00] um, some companies, multinational companies, go ahead and decide to put some of the additional dollars they have in their, uh, bank account towards advertising, uh, this year.

Marcus Johnson: Really quickly before we move on to, uh, the last question, Drew. With the total media ad spend, we have forecast, um, this year we expect it to be just under 16% for the US, um, and then dropping to just above nine for next year. Um, digital going from 19% this year to 13% next year. In these most recent revisions, did next year's number or even this year's number go up or down at all, or have we been pretty, uh, consistent in terms of what we're seeing, um, with our growth rates?

Drew Spink: It's gone up. Okay. Every, every time we've revised it this year, it's gone up. Um-

Marcus Johnson: Okay.

Drew Spink: Wow ... Google and- Google, Amazon, and Meta have beat Zach and I's expectations almost every single quarter, and that's with us even staying on the bullish end of what we thought was even possible.

Marcus Johnson: Wow,

Drew Spink: okay. I think Meta in particular really [00:17:00] kind of blew that out of the water.

But on Google's end, I can speak for the search. I, I think that I was continually surprised that they hadn't reached a ceiling for search ads, but those are the AI efficiencies and the new AI advertising placements that they've been able to offer and continue to expand that just in that offering in general.

So.

Marcus Johnson: Yeah. All right, so their top line, um, Zach, I'll start with you for this one. What was one of the most unexpected findings from our most, uh, most recent US ad spending forecast update? Any, any stories in there that really kind of leapt off the screen?

Zach Goldner: So first I'll talk a little bit about what's happening all around us.

Mm-hmm. Uh, Drew and I are talking about our forecast has gone up pretty much every quarter. And then as we look at it, we have been one of the most bullish research firms out there. It, it hasn't mattered the impact of tariffs. All these macroeconomic events have not slowed down the progress of [00:18:00] advertising.

My story here that I wanna call out is that of Meta. Uh, so Meta controls about three-fourths of all social network advertising dollars. If we would've looked at this two years earlier, we would've expected- uh, Meta next year to bring in $230 billion roughly. Now we're expecting that to be $300 billion.

So that's gone up $70 billion in two years worth of forecast. Uh, so I just wanna put in how much Meta is actually growing. So we have continued to revise our, uh, forecast for Meta upwards. Uh, but in 2026 alone, we've seen that Meta is going to bring in $52 billion of incremental ad revenue versus that of 2025.

So that is $52 billion, and I wanna explain that in a worldwide expense of how much that is. Um, so Pinterest, that's generated over $25 billion [00:19:00] combined over its history. So it's more money in one year than Pinterest has brought in alone. Same with that of Snapchat. Now let's bring up some of the biggest, uh, social network players like X, Snapchat, Reddit, Pinterest, and LinkedIn.

If we were to combine all of their ad revenues last year, that brings us roughly $24, uh, billion. So that means that Meta last year brought an incremental amount double that of what all those social network platforms I just mentioned brought in last year. That's just a one-year gain of how much advertising revenue that they've been able to increase upon what's already a staggering amount.

So it, it really is pretty mind-blowing of how one company that's already so big continues to gain on that as well. Yeah. Next year it'll gain another $48 billion in ad revenues

Marcus Johnson: Despite the [00:20:00] macro and economic headwinds, despite the social media addiction trials, despite, um, a bit of a rough rebrand to- Yeah

uh, from, uh, pivot away from the metaverse. Uh, wow, it's a fascinating story. Drew, how about you?

Drew Spink: So I was actually, I was gonna talk about a story about OpenAI's potential revenue, but actually given- Mm-hmm ... what Zach just talked about of Meta being one of the biggest player in the walled garden in general, I think I'm gonna shift my story just to talk about that- Cool

of walled garden versus open web-

Marcus Johnson: Yeah ...

Drew Spink: expansion in the first place. Because just between Google, um, Meta adding 70 billion and, or 57 in incremental, plus what Google's doing, plus what Amazon's doing, 100 billion roughly just to those three players. They're just continuing to shrink the open web and-

Marcus Johnson: Mm

Drew Spink: the, I think this year was actually the first time that the value prop for the ad tech players was starting to get pinched. So The Trade Desk this year is expected to decline in revenue. It's the first [00:21:00] time they missed their earnings, and their whole proposition was that there's still a ton of opportunity on the open web.

But just seeing how Google has consolidated everything into their AI overviews, and they're actually hurting their own revenue of what they're sending to the remaining open web in the process of just consolidating it into search. Um- But it's, it's, this towel is just gonna continue to get wrung out of everybody just m- moving towards these formats.

Oh, the... Sorry, the other thing with The Trade Desk too is that Amazon's DSP offered basically no fees at all, 1% fees, where the normal TTD take rate was in double digits. So forcing all of their competition to lower all their profit margin isn't exactly good for business either. So the, the whole open web economy is going to continue to, [00:22:00] to take a hit-

Marcus Johnson: Yeah

Drew Spink: at the expense of the big AI players and the big walled gardens-

Marcus Johnson: Yeah ...

Drew Spink: obviously.

Marcus Johnson: Some fascinating stories, uh, going on beneath the surface of the top line numbers, um, as ad spending continues, uh, to, um, uh, grow at, at close to, uh, if not double digit numbers, uh, despite being as big as it is. Uh, that's all we got time for, Jess.

Let's go through some key takeaways for today's episode. I think three for this one. Uh, attention is still the key metric for the foreseeable future, but eventually everyone is going to have to ask themselves what are the best answers made of. Uh, second, ad forecasts keep defying gravity because of a couple of things, AI efficiencies, uh, AI companies and prediction market companies spending tons of money on ads, and the 2026 tentpole events, the World Cup, the Olympics, and the US midterms helping out.

And then, uh, third, in 2025, we expected Meta to bring in $227 billion. Uh, by 2027, [00:23:00] we've since revised that up by 70, seven zero, billion dollars to just under 300 billion. All right, gang, uh, thank you so much to my guests today. Thank you to Drew.

Drew Spink: Yes, thank you, Marcus.

Marcus Johnson: And to Zach. Appreciate you having me on.

And, uh, Danny, uh, on the production crew helping us out with this one today. Thanks to everyone for listening in to Behind the Numbers, an EMARKETER Podcast, made possible by Atmosphere TV. We'll be back on Monday, but until then, have the happiest of weekends.