The Prof G Pod with Scott Galloway - Office Hours: Why Don’t Companies Advertise on Explicit Sites? How to Negotiate Stock Options with an Employer, and How Scott Built a Public Speaking Career

Episode Date: January 3, 2024

Scott explores the potential for advertisers to promote their products on less favorable platforms such as pornography sites. He then discusses how to negotiate stock options with an employer. He wraps up with advice to a listener seeking to jumpstart their public speaking career, sharing insights from his own personal experience.  Music: https://www.davidcuttermusic.com / @dcuttermusic Learn more about your ad choices. Visit podcastchoices.com/adchoices

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NMLS 1617539. Welcome to the PropG Pod's Office Hours. This is the part of the show where we answer your questions about business, big tech, entrepreneurship, and whatever else is on your mind. If you'd like to submit a question, please email a voice recording to officehoursatpropgmedia.com. Again, that's officehoursatprofgmedia.com. First question. Hey, Prof G. This is Nathan from Seattle. Huge fan of the podcast. The question is, do you think there's potentially an opportunity for online advertisers to advertise on less desirable space? And the immediate example that comes to mind for me is like explicit websites. Like I would think, you know, the big guys, Pete, Procter and Gamble,

or, you know, I don't know who makes Trojan, but they could be advertising on those websites, but it seems like they don't. And I was wondering, is that a missed opportunity or are they smart and it's just like stupid? Or is the risk so large the big guys could dilute the brand whereby it's maybe an opportunity for like sort of a niche brand to come up and be advertising on those websites? And maybe have an economic advantage there whereby their CPMs are lower, so their acquisition's lower. And that's maybe an interesting way to acquire customers. Anyways, that's all I got. Thanks for the pod and keep killing it. Hi, Nathan from Seattle. So some data to get a sense of the advertising landscape. According to ad agency Magna Global, global ad spending is expected to grow by 7.2% year-on-year, totaling $914 billion. Jesus, it's up 7%. I wonder if that, well, I guess that's inflation, right? Digital media is

forecasted to lead ad spend growth. In 2023, Magna found that keyword search continues to be popular, generating $300 billion worldwide in ad spending. Keyword search, huh, I wonder who's in that business. Ad spending on social media, especially meta and TikTok, grew by 15.3%, totaling $182 billion. Ad spending on short-form video platforms, including Twitch and YouTube, grew by 9% to $70 billion. So we continue to see a movement from analog and into digital. Advertisers don't want to be near explicit or controversial content. This is kind of what, this is the story of X after Elon Musk acquired the firm and told advertisers to go fuck themselves. And that's a good strategy. Luke Vescalis, founder and chief executive of

AJL Advisory said that advertisers are, open quote, not coming back, close quote to X, and that there is no advertising value that would offset the reputational risk of not going back on the platform. And in recent weeks, more than 200 advertisers have stopped spending. So the question is, and the reason I bring this up is that does that connote opportunity? If it's a bidding construct or dynamic, which I think it is at Twitter, if there are fewer advertisers bidding, does that mean the people who do bid and win advertising slots on Twitter, does the ROI go up? And that's a reasonable assumption. The problem is you're taking a reputational risk. Now, what most people have found, there's now software

platforms that will take your media budget and allocate it across various digital media companies and then come back to you with metrics on ROI. What most of them have found, quite frankly, and I hate to say this, is nothing matches meta or alphabet. That the reason these companies have grown bigger than entire industries and the reason why meta has two thirds share and Google has 93 percent share of search, both enormous industries in their own right, is because their ad stack, their scale, the data they can collect because everybody is on those platforms, their ability to be amoral and ignore externalities, you know, teen depression, weaponization of elections, you know, I could go on and on, has resulted in these juggernauts that from an advertiser perspective is just unrivaled. So I want to acknowledge that there's probably

some opportunity with the smaller platforms who are seeing an exodus that at some point they will offer deals compelling enough just such that an exodus, that at some point they will offer deals compelling enough just such that they can survive, that the ROI will go up. But time and time again, we keep hoping that the little guys are going to strike back. And what do we find? That most advertisers who are smart, pretty data-driven, end up at kind of one of three toll booths, and that is Amazon, Meta, or Alphabet, and then the emerging fourth, you would probably argue, is TikTok. Thanks for the question. Question number two. Hey, Scott and team. Kevin here from Boston with questions regarding stock options. First, how would you advise evaluating and negotiating options in an offer? How do you

determine what is a quote-un unquote right or fair amount of options you should be getting? For some guardrails, the companies making these offers are anywhere from 500 to 3,000 employees, and I do not have visibility into their cap table. Second, when leaving a company, what things do you suggest looking at in order to decide whether or not to execute the options? Will these variables dictate the percentage of the options you execute, or is it an all or nothing? Thanks in advance for your advice, and don't be afraid to give Ed some more vacation days during the holidays. Never! I definitely suffer from abused child syndrome, and that is I worked around the clock

for a good 10 years, so I expect everyone else to do that, which is probably not the way to approach management. Anyway, according to LinkedIn, there are steps you should take when negotiating stock options with an employer. Know your value, research salary range and stock option practices for your role, industry, and location. Understand how your company assesses the value of its shares, and how it distributes stock options to employees. I think generative AI, quite frankly, I think you should type in the offer. Say, advising me as a world-class mentor or board member, this is my position, this is my salary, this is my relative value to the company, and this is my offer of options. Give the prompt as much information as you can and ask them, does this feel like a good offer?

How should I negotiate? And you'll get interesting things back. I'm not saying it's right. I'm not saying you should follow it, but you'll learn. In addition, just Google, you know, options awards and try and understand it. It's important to understand the vesting schedule. Is it vesting over four years? The exercise price? So, okay, we work for ABC Company. ABC Company just raised money at $500 million valuation. Okay, how many shares are outstanding? There are 5 million shares outstanding. Okay, that means that every share is worth approximately 100 bucks. Where are your shares struck?

The good thing about common shares and options is that they can usually, without creating a taxable event, give you options that are struck at a much lower price. So you're already in the money. So if your options are struck at $50 and you have 1,000 options, then technically they're awarding you $50,000 worth of options. If they're vesting over four years, that's additional compensation of approximately $12,500 per year. Now, over time, they may go up or down in value, but that's how you should be thinking about them as a component of your compensation. As to whether to exercise the shares or not when you leave, you're going to do the same calculus. If your shares are struck at $30 and the company's worth $30, you have a decision to make. You probably wouldn't exercise

them because you might decide you're not making any money and you could take that $30 and go invest in whatever you want. If you think the company at that moment is worth $50 or more and your shares are struck at $30, you should probably write a check, exercise those shares, and then start the clock so that when you sell or they sell, you get long-term capital gains after a year. Now, granted, it's illiquid. So if the shares are trading at about what the exercise price is, I would say don't do it because they're not liquid. But if it's substantially more, then yeah, exercise them. It's very strange. A lot of employees, when they leave, don't exercise their options because people are just so averse or it's just such an unnatural act for them to

write a check to the company. The other thing is, don't be afraid to reach out to somebody, the CFO of the company, a controller of the company, a friend who works in venture capital and say, this is my award. How does it look? What should I be asking for? I generally, generally with young people tell them the place they want to try and negotiate on a job offer or in a performance review when they feel they have some leverage in the company, they feel they're doing well and they feel like the organization likes them, wants to keep them, you know, I would say ask for more equity. Ask for more options,

because that's how you get wealthy. I find at least most people, including myself, will always raise their quality or their standard of living to their salary, because it's money right there in your bank account every two weeks. But that options and equity is a great way of saving money. And if the company gets sold,

you're going to be glad you negotiated for more options. And that a salary is how you live. Options are how you get rich. Thanks for the question. We have one quick break before our final question. Stay with us. Welcome back. Question number three.

Hey, Scott. Huge fan of the show. My name is Ian. I am curious about the public speaking aspect of your career. Did you come up with the idea or did someone come knocking on your door? Anyway, a little bit about me. I'm a man of a certain age who, as Liam Neeson said, has a very particular set of skills, skills that I've acquired over a very long career. I'm a sort of kind of famous voice actor. I've voiced many iconic characters in animation, one in particular that almost every person, especially males under 35, like just loves. So I have a lot of personal experience being in front of audiences and I can speak and I've lived a life. I think you know what

I mean. So my plan is to use my unique position as the original voice of this character to work up sort of a TED Talk presentation highlighting the character's keys to success, which could be used corporately or, you know, motivationally, I guess, while at the same time speaking about some things about my life and career. So here's the thing. Literally everyone in this demographic that I pitched this concept to just loves it. I never get a no or even a question mark. So I want to act on it, but I'm just not sure where to start. Can you help? And from Undisclosed, I'm dying to know. I recognize your voice, but I can't place it.

Boss, you got to send us an email and tell us who these characters are, your voice. You have a wonderful voice. And I'm not surprised that you've been successful with that. So other than voiceovers, I think the people probably think the best career in terms of ROI is speaking. And I get a lot of inquiries. I'd like to develop a side hustle as a speaker. And I try to be very transparent about money. And I think that I'll make $3 million this year from speaking. My peak was 2021 and COVID when I made $5 million because you could do virtuals. I charge $50,000 for a virtual presentation, $100,000 if it's in the city I'm in, London or New York, $150,000 if I have to get on a plane, and if I need a passport, I charge a quarter of a million dollars. And I do about 20 or 25 speaking

gigs a year at an average of about $100,000 to $150,000 a gig. So to be blunt, it's a fucking amazing business. Now, it's not just you decide to be a speaker and start clocking $125,000 per engagement. It's sort of after working my ass off for 25 years, I'm an overnight success. The primary means of getting on the speaking tour is you write a book that resonates with people, and then you do a book tour, and people really like the way you present yourself. And there are event planners from all over the world who are tasked with making Dreamforce or the annual meeting of Adobe or MasterCard and the National Association of EconGrowers making it a great event. And there are people auditing these events looking for good speakers.

And if they see you on stage talking about your book and they think this guy is good, they'll say, how do I reach out to you about speaking? So anyways, back to how you bust into this. I love the idea. I think it's really an interesting idea of talking or using your characters' voices. It would be both entertaining and then trying to incorporate some sort of insight into it. What I would suggest is that you maybe start with a couple of YouTube videos or TikToks, and that's a decent way to develop awareness. I don't know if this lends well to a book, but generally the speaking tour is rife with two people,

famous people, okay, we're gonna have Serena Williams come talk about leadership, and people who've written books and have domain expertise around a specific topic of interest to the audience. And you're sort of neither of those. So I think creating content, showing how funny and entertaining and insightful you can be through this content is a way to start. And then seeing what hopefully what bubbles up.

But it's not like you just decide to be a speaker. But it is one of those things where don't call us, we'll call you. And I would just say every day, get up and try and figure out a way to make content that an event coordinator would find interesting. Sorry, I can't be more specific here. I don't know if there's a silver line or a blue line path to a career in speaking. Thank you for the question. That's all for this episode. If you'd like to submit a question, please email a voice recording to officehoursatproptomedia.com. Again, that's officehoursatproptimedia.com. This episode was produced by Caroline Shagrin, Jennifer Sanchez is our associate producer, and Drew Burrows is our technical director. Thank you for listening to The Prop G Pod from the Vox Media Podcast Network. We will catch you on Saturday for No Mercy, No Malice, as read by George Hahn, and on Monday with our weekly market show.