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Trade Desk Downgraded as Digital Advertising Faces Changes; Inside the Manhattan Project of Snacks; Meta Settles AI Defamation Lawsuit
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Welcome back. Today, investors adjust their expectations for a major ad tech firm; rival food companies team up on a big swing for Gen Z shoppers; and Robby Starbuck will advise Meta on political bias in AI.
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Trade Desk’s revenue guidance for the third quarter indicates lower growth rates ahead. Photo: Pavlo Gonchar/Zuma Press
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Shares of Trade Desk plunged more than 38% Friday, a selloff that suggests investors are reassessing some of their predictions about online advertising and its major players, Patrick Coffee writes.
The ad tech firm on Thursday reported a 19% revenue jump, slightly topping analysts’ expectations. But Trade Desk is facing longer-term challenges.
It can’t realistically maintain that rate for the long term, said Brian Wieser, founder of ad industry consulting firm Madison and Wall.
Its growth also remains too modest to justify its outsize valuation, analysts with MoffettNathanson and Bank of America said in separate notes downgrading the stock to sell and underperform, respectively.
Amazon’s threat is growing, especially in selling commercials on connected TV, Trade Desk’s biggest source of growth, MoffettNathanson said.
And Trade Desk’s business offering ad inventory from the open web could be hurt by AI search, which is already reducing traffic to news sites.
Related: When to ditch search for AI chatbots’ deep research mode. [WSJ]
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Content from our sponsor: Deloitte
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Modern Personalization Demands Trust, Tech, and Collaboration
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To tap into the potential of personalization, leading brands are empowering customers to control their data, integrating AI into tech stacks, and collaborating across the enterprise. Read More
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The new Oreo includes finely ground Oreo crumbs in a Reese's peanut butter filling. The white top half of the new Reese’s cup mimics Oreo’s vanilla creme filling. Photo: Elizabeth Renstrom for WSJ
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Creating the Oreos-Reese’s mashups coming soon from Mondelez and Hershey wasn’t as simple as it might sound, Jesse Newman reports in a deep look at the years-long process.
The food rivals hoped their unusual collaboration would be a supermarket sensation, appealing to younger consumers who like brand tie-ups and more complex food textures and flavors. But they also needed to maintain their brands’ individual identities—and keep their trade-secret formulas safe from each other.
Executives and food scientists met in secret and spoke in code, keeping knowledge of the effort tight to prevent leaks. Lawyers drew up intellectual-property agreements and contracts.
And each company had to sign off on the other’s product, sometimes making product-sampling trips to each other’s offices, but never entering each competitor’s off-limits R&D lab.
The results of the snack diplomacy are slated to hit store shelves this fall.
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Anti-DEI cruasader Robby Starbuck will give Meta advice on fighting what he and the company called political bias in its AI tools. Photo: Sean Smith for WSJ; Godofredo A. Vásquez/AP
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Meta Platforms has settled a defamation lawsuit with conservative activist Robby Starbuck, who alleged the company’s AI chatbot falsely asserted he participated in the Jan. 6 Capitol riot, Joseph De Avila writes.
Starbuck has gained attention for successfully wielding the threat of consumer boycotts against DEI policies at companies including Tractor Supply, Ford, Jack Daniel’s maker Brown-Forman and Harley-Davidson.
A Harley dealer in Vermont last summer posted a screenshot on X seeming to show Meta’s AI saying Starbuck was at the riot and linked to QAnon.
Starbuck will now advise Meta on curbing what they describe as political bias in its AI tools.
“Since engaging on these important issues with Robby, Meta has made tremendous strides to improve the accuracy of Meta AI and mitigate ideological and political bias,” Meta and Starbuck said in a statement.
Other terms weren’t disclosed. Starbuck originally sought over $5 million.
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“It feels different and stronger than the kinds of attachment people have had to previous kinds of technology.”
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— OpenAI CEO Sam Altman on the “attachment some people have to specific AI models” you “might be noticing” after the company debuted GPT-5 and removed access to earlier models. “Suddenly deprecating old models that users depended on in their workflows was a mistake,” Altman said Sunday on X.
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S4 Capital, founded by Martin Sorrell after his exit from ad giant WPP, said it received a proposal from the marketing group MSQ Partners. Photo: Harry Murphy/Sportsfile/Getty Images
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Martin Sorrell’s S4 Capital said it was in talks with One Equity Partners’ MSQ about a potential tie-up. [WSJ]
AI optimization may not be all that has been promised. [Ad Age]
A guide to the AI chatbots that Walmart and other retailers offer consumers and employees. [Modern Retail]
Papa Johns’ new marketing emphasis on its pizza as opposed to sides and sandwiches is paying off with a sales rebound. [Restaurant Business]
“South Park” ratings rose in the second episode of its new season following wide coverage of a premiere lambasting President Trump. [THR]
Big companies say they remain committed to marketing even as new tariffs take hold. [Adweek]
Jaguar meant to get attention with its widely criticized rebrand video, according to an executive, but the automaker was surprised by the size of the reaction. [Uncensored CMO podcast]
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