America or Bust

Plus: Sorry Big Tech, what’s old is new for advertisers ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

November 25, 2022

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TOGETHER WITH

Good morning.

Many of you will have done battle yesterday with turkey food comas, but some of our Woburn, Massachusetts-based readers may have had to fight off actual turkeys. Massachusetts’ wild turkey population has ballooned since the 1970s and some of the town’s birds are becoming obstinate, with locals laying the blame at the claws of a particular male nicknamed “Kevin.” One Woburn local told The Guardian Kevin eggs on the females and can “kick pretty good.”

As we head into December we can only pray the reindeer don’t get any ideas.

Morning Brief

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Retail is the new Facebook.

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Everywhere around Europe they’re coming to America.

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Beckham is back in the mix at Manchester United.

Retail

Retailers Are Having An Advertising Goldrush

In the latest, cruelest indignity to Big Tech, advertisers are flocking to brick-and-mortar retailers. So watch your back, Zuck, Walmart’s on your tail, too.

Major retailers are piling into the advertising game, according to a recent report from the Financial Times, with traditional retailers cottoning to the marketing potential their sales platforms hold. As the good witch told Dorothy in the Wizard of Oz, they’ve had the power all along. While retail advertising is still a ways behind the more familiar digital ads market of social media, it’s slated to grow five times faster this year.

Amazonomics

Amazon was the first e-retailer to truly grasp the advertising power of its platform, given the troves of data it could amass about its customers. Its site also offered an opportunity to advertise items without making it look like an ad, allowing marketers to pay for their products to be displayed prominently on particular search pages — eliminating customer annoyance at intrusive pop-up or banner ads. Amazon makes more cheddar off its ads business than it does off Prime subscriptions as well as sales from its stores including Whole Foods, the grocery chain it bought in 2017 for $13.7 billion.

Now other retailers have twigged they can do the same. Data from eMarketer shared with the FT showed spending on retail media advertising in the US is up 20% from last year, and Walmart said its ads business is both faster-growing and more profitable than its retail business. The US isn’t the only place where retailers are cashing in on ads:

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UK supermarkets have introduced Costco-style loyalty schemes where customers agree to hand over their purchasing data in exchange for lower prices in-store. That data is then used to personalize future ads so the supermarket isn’t trying to sell them what they just bought — a welcome change for digital shoppers accustomed to seeing the item they already own marketed to them again and again on the side of websites.

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With the digital ads market looking disturbingly soft, retailers are poised to scoop up spooked advertisers. “Many of our clients are shifting ad dollars to retailers that they had been spending with Facebook and other online media platforms,” one retail advertising expert told the FT.

With Great Data…: Poaching Facebook’s ad dollars means inheriting some of its challenges, too – like privacy headaches. Retailers amass first-person data about customers rather than tracking them around the internet for third-party data like Meta and Google, but even first-person data can be highly sensitive as shopping habits can reveal private information. Retailers are going to have to ringfence data if they don’t want to end up in the same data-creep camp as Big Tech.

International Business

The EU Struggles to Hold onto Homegrown Businesses

(Photo credit: Markus Spiske/Unsplash)

Perhaps not since the 19th Century has the Old World looked so longingly at the New World.

Business confidence among European CEOs has plummeted to an all-time low, according to a new survey from the European Round Table for Industry. And hundreds of billions in free money might soon have those same CEOs singing God Bless America.

Party in the USA

Facing growing inflation, perpetual supply chain issues, and rising energy costs due to Russia’s war in Ukraine, European businesses are fatigued. One-third of the continent’s largest industrial companies plan to scale back or halt production soon, and many expect a deep recession will last for another year and a half. “We are still at real risk of a wave of deindustrialisation, as ongoing high energy costs undermine the global competitiveness of European production sites,” said Martin Brudermüller, CEO of BASF, the world’s largest chemical producer.

The situation is slightly sunnier stateside, where many business leaders foresee a more shallow and short-lived economic downturn. Plus, the Inflation Reduction Act and its $369 billion in tax credits to renewable energy companies that make products like solar panels and electric vehicles are convincing European businesses to ditch the homeland and set up shop on American soil. The result? A new wave of European industry brain-drain:

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The Biden Administration’s incentives would subsidize a factory in America by about $600-$800 million, Swedish battery maker Northvolt told the Financial Times. That compares to just $160 million in incentives on the table from Germany. Deutschland’s economy minister, Robert Habeck, described the US support as “excessive” and “hoovering up investments from Europe.”

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Spanish energy company Iberdrola is increasing US investment to almost half of its global total from 2023-25, compared with 23% in the EU. Ignacio Galán, executive chair, told the FT that the US was now a “very much” more appealing place to invest.

Chip on Your Shoulder: The US-China chip war has become a global conflict. On Wednesday, the EU advanced a $44 billion plan to become a semiconductor hub starting next year. The chips, which help power everything from cars, to phones, to medical equipment, have been in short supply since the pandemic started in 2020, and nations are racing to be the next major producer of the tiny tech – if only to avoid dependencies and supply chain woes. The EU plans to manufacture 20% of the world’s chips by 2030. Groups like Intel, GlobalFoundries, and Infineon have already announced new chip sites in Europe. It appears the region’s chip game will soon no longer be small potatoes.

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Sport

David Beckham Could Help Buy Manchester United

Posh and Becks and banks.

David Beckham is open to talks with potential bidders for his old club Manchester United, sources told the Financial Times. Man U’s current owners are an American family called the Glazers, and during their 17-year tenure they have done little to ingratiate themselves with the fans, thousands of whom staged a major protest against the ownership in August.

Spend It Like Beckham

US business tycoon Malcolm Glazer bought Man U in 2005 for £750 million. That deal was primarily financed through loans against the club’s assets, meaning Man U took on £500 million in debt. Glazer died in 2014, but he had already loaded the club’s board with his children (can you hear the Succession theme-tune playing?).

Beckham doesn’t have the funds to buy the club himself, but he can join forces with potential bidders to give them an edge. Exactly how much Man U might go for remains up in the air:

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The Glazers have valued the club at up to £7 billion. It’s an ambitious figure given it was most recently valued at £3.75 billion, but the sale of fellow Premier League club Chelsea for £4.25 billion in May gives them some leverage.

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One banking source told The FT the club could fetch the desired price, but football finance experts were more skeptical saying even £4 billion would be pushing it given the club failed to make a profit last year.

The Shadow of Qatar: Beckham’s UK PR is currently a bit of a mess. Although he features in a highly-publicized and heart-warming Disney+ documentary called Save Our Squad, he has also received fierce backlash for his partnership with Qatar, promoting the country amid its various World Cup controversies. Criticism was stoked by UK comedian Joe Lycett, who pretended to shred £10,000 in protest. It later transpired Lycett had played a trick, and instead donated the money to LGBTQ+ charities — a pretty clever tactical dive.

Extra Upside

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The city of Cincinnati sells rail line for $1.6 billion.

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The European Space Agency is sending the first disabled astronaut — a former Paralympian — to space.

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Just For Fun

Going in for Thanksgiving Leftovers.

Handiwork.

Have a great weekend!

Written by Isobel Hamilton and Griffin Kelly.

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