Cryptocurrency companies have had to get used to heavy regulation over the past four years. With President-elect Donald Trump’s return to the White House, they’re hoping for relief – and they’ve spent big to make sure they get it. WSJ reporter Vicky Huang joins host James Rundle to explain what the crypto industry expects from Washington over the next four years. Plus, artificial intelligence is reshaping the way that advertising agencies get paid.
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[00:00:18] Welcome to Tech News Briefing. It's Tuesday, November the 12th. I'm James Rundle for The Wall Street Journal.
[00:00:25] Artificial intelligence has reshaped how the advertising industry produces its work, and now it's changing how agencies charge for it.
[00:00:31] We'll look at how the tech is affecting the industry and what it means for its employees.
[00:00:35] And then, the crypto industry is excited about President-elect Donald Trump's second term,
[00:00:40] and digital currencies have been on a tear in markets, with Bitcoin reaching record highs.
[00:00:44] WSJ reporter Vicky Huang tells us what the industry is hoping to see from a more sympathetic White House.
[00:00:53] But first, ad agencies have historically billed clients for the number of hours employees put into a project rather than the outcome.
[00:01:00] With the advent of generative AI, that's all starting to change, and it could have a profound impact on jobs at agencies of all sizes in the future.
[00:01:09] WSJ reporter Megan Graham joins us now with more.
[00:01:12] Megan, what's happening in the world of ad agencies, and how is AI influencing it?
[00:01:16] Like so many other professions, AI is really changing how quickly and how the work is done in the ad industry.
[00:01:27] So when marketers are buying ads, it was making it easier for them to figure out where the most efficient buys were.
[00:01:34] Now it's coming for the creative side of the business, where it's becoming much more easy and fast to create assets or images.
[00:01:43] So it's really changing how agencies are operating.
[00:01:48] And so now it's starting to change how they charge for that work.
[00:01:52] And how is that change manifesting in terms of what they produce and how they charge?
[00:01:56] Yeah.
[00:01:56] So historically, agencies have used something called rate cards.
[00:02:00] So basically, Megan charges this much per hour because I do this kind of job.
[00:02:05] And if it takes me six hours to do this particular job, that's how marketers, brands have historically paid agencies for the work.
[00:02:15] But that's changing now because if I historically was a copywriter and it took me 30 hours to come up with 100 great potential taglines, I could kind of now do that instantaneously.
[00:02:28] And maybe they're not all going to be great, but it could take me minutes to come up with thousands of iterations of taglines.
[00:02:35] And then I can go through and I can edit those.
[00:02:37] But basically, it's making this happen much more quickly.
[00:02:40] So what agencies are starting to try to offer is let's tell marketers we will charge this much to do this amount of work.
[00:02:50] So, for instance, if a marketer maybe in the past would say we're going to pay our agency 10 hours a week to operate our social media page.
[00:02:59] Now we'll say we want to pay this much for 10 posts on X, 10 Instagram posts, 100 replies.
[00:03:10] They're going in and saying, OK, we want this specific amount of work done and pay for that instead of the hours because the hours just may not work anymore because, you know, it doesn't mean as much in this new world.
[00:03:23] Is there any sense on how this might impact staffing jobs, the overall way in which the industry works?
[00:03:28] WPP is one of the biggest ad holding companies in the world.
[00:03:31] And they, in their annual investor meeting, were talking about this and investors are asking them, what does this mean for the people?
[00:03:40] Are people still necessary in this?
[00:03:42] And the answer that their CEO gave was, look at the movie industry.
[00:03:47] The effects are becoming better.
[00:03:48] Sure, AI is saving some time in some aspects, but we do need people to manage this technology.
[00:03:54] So yes, at a certain point, there's going to be some of these jobs that do not survive this new generation of agencies.
[00:04:02] But in many ways, they need people to manage the technology and also to work with it.
[00:04:07] That was our reporter Megan Graham.
[00:04:09] Coming up, the crypto industry has spent millions of dollars to elect friendly candidates.
[00:04:14] So what is it hoping to get from President-elect Trump and the next Congress?
[00:04:18] That's after the break.
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[00:04:56] The crypto industry has spent millions of dollars in this election cycle,
[00:05:00] supporting candidates in House and Senate races that it feels will help achieve its goals of being regulated differently to Wall Street,
[00:05:06] and with perhaps less scrutiny from financial watchdogs.
[00:05:10] WSJ reporter Vicky Huang tells us that a second term for Trump and the White House could lead to exactly that,
[00:05:15] and the industry is preparing for a major revival.
[00:05:18] Vicky joins us now to talk about what's next for crypto on Capitol Hill.
[00:05:21] Vicky, President-elect Trump has gone back and forth on his crypto views over the years.
[00:05:26] What is his position now as he prepares to enter the White House for a second term?
[00:05:29] President Trump was a Bitcoin skeptic, and he famously said that Bitcoin was a scam against the dollar.
[00:05:38] But earlier this year, he started making a lot of bullish comments about Bitcoin.
[00:05:45] And really, the pivotal moment came over the summer when he attended the annual Bitcoin conference,
[00:05:53] where he made a lot of promises to the crypto industry, including setting up a so-called Bitcoin reserve
[00:06:02] to hold the country's Bitcoin seized from cyber criminals and dark net markets.
[00:06:07] He also promised the crypto industry that he would fire Gary Gensler,
[00:06:13] who is currently the chair of the Securities and Exchange Commission,
[00:06:16] and who has really led the fight to police the crypto sector.
[00:06:22] What does the crypto industry want to see from the White House over the next four years?
[00:06:25] The crypto industry over the past few years have really been asking for a new set of rules that regulate them
[00:06:35] that is different from the rules that regulate Wall Street and stocks and bonds.
[00:06:41] The crypto industry believes that a lot of the cryptocurrencies are commodities instead of securities like stocks and bonds.
[00:06:50] And as a result, they believe that the chief regulator for the industry should be the Commodity Futures Trading Commission,
[00:06:59] the CFTC, instead of the SEC, which has taken a pretty harsh regulatory crackdown on the industry.
[00:07:07] You reported that the crypto industry has sunk millions into this campaign cycle.
[00:07:11] How is this different from how it's operated historically?
[00:07:14] This is really the first election cycle where the crypto industry has really emerged as a sort of industry power
[00:07:24] to really have that money to spend in the elections.
[00:07:28] Overall, a trio of super PACs backed by the crypto industry raised $170 million to target this year's elections.
[00:07:40] And they are mostly Senate and House races.
[00:07:44] So far, their results have been a huge success.
[00:07:48] Most of the candidates in the general election backed by these super PACs have won their races.
[00:07:55] And these new congressmen and senators, young or old, are generally considered to be more friendly and positive about crypto.
[00:08:06] So all of this, a more crypto-friendly president, as well as a more crypto-friendly new congress,
[00:08:14] are considered to usher in this new bullish era for the crypto industry.
[00:08:19] So for the crypto industry spending all this money, what was one of their big wins?
[00:08:24] One of the biggest wins in this race is the victory of Bernie Moreno, who is now the incoming Ohio senator.
[00:08:33] He defeated three-term Ohio Senator Sheryl Brown, who is a chair of the Senate Banking Committee,
[00:08:42] but he is also one of the loudest crypto critics in Congress.
[00:08:47] And Bernie Moreno is one of the candidates that really received strong support from the crypto industry.
[00:08:54] So the three major super political action committees backed by the crypto industry,
[00:09:00] they're called Fairshake and two affiliated super PACs.
[00:09:04] Fairshake spent about $40 million on Bernie Moreno.
[00:09:09] And that money, a lot of it was spent on campaign ads that support him.
[00:09:15] And Bernie Moreno is a very interesting politician as well.
[00:09:20] He's actually not a career politician.
[00:09:22] He was a former car dealer.
[00:09:25] He's also a former blockchain entrepreneur.
[00:09:28] So its efforts were effective.
[00:09:30] Where has this money come from?
[00:09:31] Is it primarily from the cryptocurrency exchanges, from private individuals?
[00:09:34] This huge pile of money is really raised from sort of an A-list of a who's who in the crypto industry,
[00:09:42] including the biggest crypto exchange in the U.S., Coinbase,
[00:09:46] the very powerful venture capital firm, Anderson Horowitz,
[00:09:49] also the traditional finance investment management firm,
[00:09:54] ARK Investment Management,
[00:09:55] and many other sort of prominent figures in the crypto space.
[00:09:59] Not everyone agrees, of course,
[00:10:00] and crypto has had a mixed regulatory record to date.
[00:10:03] What do critics say about its readiness for less and not more rules?
[00:10:07] A lot of critics of the crypto industry,
[00:10:10] they believe that most of the cryptocurrencies and digital assets have no intrinsic value.
[00:10:18] And essentially, it's more of a huge speculative effort that really depends on the number going up.
[00:10:25] And the critics believe that if you don't set strict rules on the crypto industry,
[00:10:32] a lot of these scams and frauds, such as the collapse of FTX that we saw in 2022,
[00:10:37] where billions of customer funds were left,
[00:10:40] that is very likely to repeat if you don't regulate the industry
[00:10:46] and monitor it with strictly implemented rules.
[00:10:49] That was our reporter, Vicky Huang.
[00:10:51] And that's it for Tech News Briefing.
[00:10:53] Today's show was produced by Julie Chang,
[00:10:55] with supervising producer Catherine Milsson.
[00:10:57] I'm James Rundle for The Wall Street Journal.
[00:10:59] We'll be back this afternoon with the TMB Tech Minute.
[00:11:02] Thanks for listening.