What's Next, Now: July 2023
This month, our crystal ball predicts ESG disenchantment, rising AI anxiety, broken barriers in sports sponsorship, and more.
Earlier this year, we predicted shifts in the conversation around ESG, including the rise of green-hushing and a growing anti-ESG movement. Now, the movement is continuing to grow — enough that some brands are going back on ESG commitments altogether.
Amazon recently backed out of a commitment to make 50% of its shipments net zero by 2030. The company is still sticking to its pledge to hit net zero across all its operations by 2040. But the loss of a specific pledge to decarbonize its shipments means Amazon is free to continue to build its massive fleet dedicated to ultrafast delivery — an asset that draws millions of consumers to its Prime subscription and emits millions of tons of greenhouse gasses each year.
For most brands, though, it's more of a gradual breakup. A recent survey from Google found that executives are deprioritizing ESG. While sustainability ranked as priority number one in 2022, it fell to third in 2023. The number of sustainability initiatives that have moved beyond the planning phase also shrunk 8%. In total, 6% of companies had no ESG strategy in place and no plans to start one, a 1% bump up from last year.
Though brands may be moving away from sustainability as a focus, consumers are moving in the opposite direction. In Google’s survey, 85% of executives said consumers and clients are becoming more vocal about their preference to engage with sustainable brands. Because of this mounting pressure, executives are playing a little fast and loose with their own ESG data — 59% of executives admitted to overstating or inaccurately representing their own sustainability activities. There is an opportunity for brands that remain steadfast in their commitment to stand out among competitors.
With layoffs plaguing the news industry the last several years, it’s no secret news media companies are strapped for cash, especially digital publishers. But a legislative movement is emerging that could offer relief in the form of a possible government mandate requiring social media companies to provide compensation for the news they use.
In the U.S., California is leading the way. The proposed California Journalism Preservation Act would tax the advertising profits platforms earn from distributing news articles and funnel that money back to local newsrooms. Similar laws have been passed in Australia and Canada, and the U.S. federal government is also considering a version of the bill.
While the moves could be a boon for the hurting industry, social media companies are less than thrilled. In response to the bill being passed in Canada, Meta pulled all news content from its platforms in the country. Though Google released its own product to pay publishers in the U.S. this year, it has also removed access to news on its platforms in Canada. Both threaten to do the same in California if the act passes.
Meta’s global pullback from news is already impacting consumption rates on social media. According to a new report from Reuters, the portion of regular news viewers on Facebook has fallen 14% from its peak in 2016, and growth in news consumption on video platforms like TikTok and Instagram Reels has not grown fast enough to offset the drop. Rising news avoidance is also contributing to shrinking engagement on social media.
While some platforms are pulling back, Twitter is leaning into a different strategy — becoming a news publisher itself. Some brands and public figures are turning to Twitter Spaces to host live news announcements, like GM and presidential hopeful Ron DeSantis. Twitter is also playing host to broadcast news shows, including one from recently fired Fox News host Tucker Carlson. CEO Elon Musk is hoping other ex-cable broadcasters will follow Carlson’s lead.
The digital news industry is at a crossroads. While a cash boost from government action could be a Band-Aid, the resulting pushback from social media companies would require widespread innovation to maintain relevance.
AI anxiety is real. With nearly 4,000 people losing their jobs in May citing AI as the cause, it’s undeniable that this rapidly adopted technology is hard to ignore in the workplace. Coupled with financial uncertainty that’s causing companies to consolidate and cut costs where possible, this shiny new platform looks very promising. In fact, recent findings from Indeed revealed generative AI-related job postings in the U.S. jumped 20%.
Over the past three months, tech companies including Amazon, Box, Cisco, Salesforce, and Oracle have all unveiled plans for generative AI products for business use. Those features include writing code, analyzing documents, summarizing meetings, and more. Tech industry funding has dropped in recent years after a boom in 2021, but the rollout of this new technology has revived the lull. In the first half of 2023, AI made up nearly a fifth of the global VC funding, gaining $25 billion.
There is no doubt AI will be an integral part of the future of work, so companies need to embrace the ways it can help their organizations, and mitigate ways it can hurt them. Although there has been a flurry of generative AI products hitting the market, this technology is still very new and comes with its own set of risks that need to be considered before widespread adoption.
Lionel Messi, one of the greatest soccer players of all time, is making the move from Paris Saint-Germain to Major League Soccer’s Inter Miami — to great global fanfare, especially here in the U.S. This will be Messi’s first time playing outside of Europe since 2000. His new home country is giving him a very warm welcome, as witnessed by secondary ticket sales increasing nearly 28 times since the announcement. But that’s not all that’s new. As part of his move to the league, Messi will receive a cut of revenue from new subscribers to Apple TV's MLS Season Pass streaming service, which exclusively hosts all MLS games. A deal like this has never been made before — and it could change sponsorships of the future.
The sports business world doesn’t see game-changing shake-ups that often. But another recent sports story could also have a significant ripple effect on how money moves in sports. Golf fans were shocked when the sovereign wealth fund of Saudi Arabia launched LIV Golf in 2021, luring several big names from the PGA Tour with the promise of major paychecks. Then, less than two years later, the golf world was shaken again when the PGA Tour agreed to merge with LIV Golf. The merger could mean serious $$$ for golfers — but it could also mean the loss of sponsorships, with brands hesitant to back members of a league mired in human rights abuses and currently under investigation by the U.S. Senate. The question of the LPGA adds another wrinkle into the mix — so far, the women have been completely left out of the deal, but some are willing to make the move if offered.
The world of sports sponsorships is changing. The pool of athletes is increasing — new NCAA rules have made it possible for college athletes to sign sponsorship deals, and women’s sports are becoming an increasingly lucrative option for brands. And brands have a growing list of variables to consider. With Messi debuting his first-of-its-kind deal with Apple, will the asks from athletes begin to creep up? And as Saudi Arabia continues to insert itself into the sports market, what new reputational concerns will brands have to weigh before signing sponsorship deals?
For years, Reddit users have been able to browse, post, and comment on Reddit forums via third-party apps like Apollo. Now, however, Reddit is looking to charge third-party apps millions of dollars to continue accessing its application programming interface (API), leading some of the top third-party apps to announce they would be shutting down due to an inability to front the exorbitant costs. In response to the announcement, thousands of Reddit forums went dark in protest. The voluntary blackout, which included more than two dozen subreddits with at least 10 million subscribers, was one of the largest user-driven protests to hit the platform.
Why are Redditors so upset? Many users detest the proprietary Reddit app, calling it cumbersome, buggy, and inferior. They prefer to engage with Reddit through third-party apps, which need access to the API in order to run. Unlike other social media platforms that utilize staff to establish norms and uphold policies, Reddit has been operated by a network of unpaid moderators. The new API charges are forcing third-party app developers to shut down, effectively blocking access to the Reddit content for the volunteers who use these third-party apps to maintain subreddits. For Reddit and potential future shareholders, the value of Reddit derives from the infrastructure the site provides, but for moderators and developers, the value comes from the user-led moderation of the site's forums.
Reddit’s controversial move is just one part of a larger trend among social media platforms, threatening to impact how the modern internet operates. APIs allow applications to access information and communicate with one another — which allow many, such as developers and social media marketers, to do their jobs. The end of free or affordable access to APIs comes on the heels of years of mounting public skepticism of large technology platforms that collect and share personal information. Earlier this year, Elon Musk decided to end Twitter's free API access, leading to outcry about the transparency and accessibility of the app.
Threads is the latest Twitter competitor on everyone’s lips (and phones). Will it be the next TikTok or will it fade out like Clubhouse? While the platform amassed 100 million users in just five days (faster than ChatGPT!), engagement is already slowing.
The actors' union SAG–AFTRA joined the writers’ union on strike — the first time both groups have been on strike simultaneously since the 1960s. The use of AI has been cited as a concern by both unions. Will sports content fill the void writers and actors leave in their wake?
The Women's World Cup kicks off July 20th, hosted in New Zealand and Australia. As more and more people tune in to women’s sports, we’ll be watching how brands come out to play for the biggest women’s sports event of them all.
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