Rock Bottom = Good News

0:15 over at Mike's Golf Shop. Come on down here. We buy golf clubs. That's right. We buy golf clubs. We buy golf clubs. We buy golf clubs. We buy golf clubs. We buy golf clubs. It's going to be in my head all day.

0:48 >> Hello everyone. Welcome to another episode of Adtech Ad Talk. We're so glad to have you here with us. I'm Gareth Glazer and I represent the sell side. >> I'm Adam Heimlick. I represent the buy side. Good last night. >> >> How I I got confused about what side I was on there for a minute. Adam, how's your week, buddy? >> It's It's busy. Yeah, that's kind of rough start, but I'm good now. >> Oh, I'm sorry to hear that. Can you talk about the rough start? Is it >> Oh, I was on vacation last I was on vacation last week and some members of my leadership team or maybe my entire leadership team had a big fight while we were away. It's actually good not to be in the big fight for once, not being one of the people having a meltdown. I came back all zan and calm from staring at the ocean and people were worked up, mad at each other. I got to >> settle that down.

1:47 >> It's good that you could come settle it down. That's great because you weren't on a team. You could come in and be like, "All right, we're all going to breathe." And like >> Yeah. >> we're the kind of company that the founders are more likely to melt down than the senior team, right? Like they're the >> they're the cool cats. But, in this instance, there's no, whatever. They had to fight. You know, we're doing hard stuff. Like, it's part of the process.

2:11 Like, if it's if it was easy, everyone would follow us. So, stuff has to be hard. And part of doing things that are really hard over very long periods of time is sometimes you melt down. You lose perspective and get frustrated. Yeah, I I have so many thoughts. I certainly >> Yeah. Well, and I I certainly think that when you're in a startup, too, it can become overbearing to focus on like certain things that aren't going how you would like >> and aren't developing the way that you want them to develop and lose sight of, oh wait, all of these things went right.

2:53 Right. >> >> like >> like these things are all going great. I feel like that's not what occupies your mind. It's like that's cuz when you're in startup mode like you really you're constantly going from fire to fire to fire. That's how it feels. And in reality like for every fire there are 99 not fires. >> yeah and I think the boss you know coming back you you more conscious of it that the boss plays a role of you know creating some illusion of order or control but your your experience as the boss is like my god it's chaos out here like anything like a wave could come and knock this company out right like you're like you have this helpless feeling that no one is helping you and you're on these rough seas but the team h can can more easily fool themselves that somebody is is steering the ship through those waters confidently and that you're not in constant danger. And I think when when the boss is away, then they're more likely to be exposed to that sense of, you know, oh my god, like if we can't solve this problem, we're dead.

3:57 >> Yeah. It's it's founder existential dread. Like >> Yeah. And and every founder has laid in bed at some point >> and stayed awake because of some version of founder existential dread. And most people are shielded from it. Like most people remain like that is that is your job, right? You are there to take the arrows of existential dread so that they don't hit the people who work at your company. >> yeah. >> Right. Yeah. I think I think one of the best things you could do is like to to model like asking for help is to like that's something I do with my leadership team a lot that I hope has sunk in with them. It's like a lot of times I'm like I do not know like does this matter? Is this too hard? you know is this defensible and like let's work it out together because it's too hard for me to do on my own. Like the only way to handle that sort of dread which I would define as awareness of their of failure, awareness of the possibility of failure is to ask for help.

5:00 >> Yeah. And it's I think it's also really good too to like be realistic with everyone about hey this this isn't going the way we want but that's fine. Like this is there there are there are weaknesses that we have chosen to have like as in any business you cannot be strong in everything. You pick the things that you're going to be good at and the making sure that that's like level set with everyone where it's like hey this is the plan. We're doing this this way for this reason and you know these are these are the things that we're going to forgo to do this. it's it's a healthy conversation to have because people get really worked up man.

5:41 they get real worried. >> Let's let's do some state of the industry. give me give me your view of the state of open web publishing here at the end of summer. >> Oh yeah, we were chatting about this earlier >> 26 and then we could do some state of the buy side. >> I would love to do that. So traffic is universally down and everyone needs to know this >> that the publishers who comprise the open web are dealing internally at all moments with declining traffic and it is very very very it's it's past stressful.

6:20 we talk about founder existential dread. Founder existential dread is we're on a little boat in the ocean and there's a hurricane and we're going to fight our way through it, >> right? >> Publisher existential dread is we are on a 150year-old shipping liner that is slowly sinking and we can't get off of it. Like that's how they feel. and it's really hard. Like I've talked to a lot of publishers that are just really disheartened like the there's there is a whole subclass of publishers out there that have like it's like talking to someone who's given up.

6:57 and they just feel helpless, right, with these tides moving around them. And it's really tough. It's really tough for them. I do think that there are a bunch of organizations out there that are trying to help them renew focus on things that that will help them to survive. and I I am a huge believer in this. There's a reason Gamra built a feature for this. The first feature we built was lifetime value tracking was the first thing we built because I had this really like like I what's the word I'm looking for here? I felt strongly I had a lot of conviction.

7:30 That's the word. >> Conviction. That's the word. >> I had a lot of conviction that publishing could be saved by lifetime value tracking. The reason for this is publishing until today was I write content, I get free traffic, I make money. that was publishing on the internet. >> there was no concept of well here's how much money I make per reader, here's how often a reader comes back and here's where my readers come from. That that concept didn't exist.

7:58 >> But just Yeah. Just in subscription models. Yeah. >> Correct. And very very very few publishers had subscription models. They were normally like what's the political one? there's a political one that's subscription only. I forget which one it is, but they have this burgeoning subscription business and they were like, "We are just going to charge money and we are going to be the best thing for >> what?" >> David keeps popping >> popping her up in the middle of the screen. She just was I wasn't ready for it.

8:32 >> I had the wrong one pinned. What? Our assistant is popping up. >> Yeah. she's back and but they they were like, "We're going to write strictly for people who are in the political scene in Washington DC and it's going to be super in the weeds political stuff and we're going to charge for it." And they were wildly successful doing this. other than that though, it was free Google traffic. And I started the LTV business. I first brought that to market four years ago where I started talking to publishers. I can measure your LTV. Does it add value to you? And four years ago, people were like, I don't know what to do with this.

9:05 I know I should be doing this, but I don't know what to do with this. Only now is this just starting to become a topic where I've noticed and actually in some of the partnerships I'm working with local news. So, I'm like real gung-ho in local news. I'm like a believer in local news. Like I when I talk to my my brother-in-law worked for 60 minutes. He was in he was in the news for a really long time. I've like seen the inside of the news. Local news is really important. It's a really lovely thing. It's a lovely service and we need human beings to do it. We can't AI our way through local news. It's not a thing. so local news is starting to lean into this where four years ago it was not a thing. Now publishers know I need to know how much money I make per user. I need to have a strategy to get users back directly. So there are publishers who despair and there's a subsection of publishers who just despair. And you talk to them and they're like it. like we give up.

10:00 Like we're we're cutting staff. Like we're just going to squeeze whatever we can out of this until it until it dies. But there are other publishers who are like, "We're going to figure out a strategy for this. We're going to figure out what to charge for subscriptions. We're going to figure out how much money we make per user. We're going to figure out how to get users in that instead of having people send them to us, we're going to go out and we're going to get them and we're going to figure this out." and that's the that's the that's the bright spot in publishing where publishers are starting to think about that. I do think that most publishers are pretty disillusioned with adtech.

10:32 >> They are they they all feel these people have been promising me the moon forever and I I'm no better off now than I was 5 years ago. So, what is all of this technology all of you are building, what what have you done for me? >> and that's I think that's the other thread that goes through publishers right now is I talk to them and they're like, "Fuck it. Just adtech Get away from me. But yeah, so there is a bright spot.

11:01 Publishers are making investments. We're we're working on some really cool partnerships in the publishing world. I'm really stoked about it, but also like, you know, squeezing blood from a stone, man. I understand that. I >> Any topics besides local news that you feel like there's people who are making strides toward having a sustainable publishing business? >> Well, the gaming publishers are really growing. there and when I say gaming, there are like two breeds of gaming, right?

11:29 There's content about games and content having to do with games and like accessory to games and then there's websites where you actually play games like crazy games. >> all both of these segments are growing and because they don't rely on Google, right? Their their traffic comes from people who play the games or people who are playing games on their website and it's direct type-in traffic. those people know I'm looking for this thing from this gaming website. I'm logging in to buy auctioned virtual goods.

12:03 they're they they're thriving. So I think gaming is a bright spot in publishing. the only other hope for publishing is that most of the damage has occurred. >> You think? >> Yeah. >> I mean the the drops have been pretty significant. Most of my conversations recently have been like yeah things are way down but they're flatlining. and there was a a conversation I had, and maybe we talked about this last week. I forget. will will they will Google ever shut off traffic entirely? And I don't think that they will. I think they're going to play this really nasty game where they're going to AI overview X% and reduce traffic to publishers that way. But they know if they take it down by 90%, publishers are going to start blocking their crawlers because they have no incentive to let them crawl and feed their AI. So they're trying to maintain the status quo of free crawling >> in exchange for sending a little traffic.

12:55 >> I think if you if your business is product reviews, if you have a good product review site and there's good product review sites in almost every category >> and all their content is now, you know, the user wants it in the LLM, the user doesn't want to visit these sites because how many times do you buy auto insurance, right? Like you're not going to be a loyalist at the auto insurance review site. you want to pull it into an LLM when you're buying. So, I feel like that relationship has to change. Like they have to charge the LLM for their review content on a Yeah, they have to >> I totally agree.

13:27 >> I I think that there is going to be a cottage industry of high value information creators. >> Yeah. And the economics there will work themselves out where if you are the best digital camera DSLR reviewer or you are the best reviewer of X type of electronics and you really invest in it, you will have a leg to stand on to negotiate rates with LLM companies to be like, hey, if you want my data in your LLM, which is the best in the biz, you're going to pay for it and you're going to pay me more than I would have made from ads.

14:01 >> and that that shrinks the ad market. Now there's whereas now that's an adup supported business, it won't be unless there's ads on the LLM. >> Yes and no. So most of the most hardcore review businesses actually do not have programmatic ads on them. Or if they do, they have very few. >> They already don't. >> Yeah. And the reason for that is they make most of their money today from affiliate where when they do a review, if you click the link to buy it through them, you they get paid >> and they do not want you clicking anything else on that website other than their affiliate link, right?

14:41 like like they they really want to make sure that if you're reading a review about something, you buy that thing through them and there should be no like there can't be an Amazon ad with a discount for the thing on the screen screaming to you on the side of it like, "Hey, buy this through this ad and you get 20% off." They don't want that. That's bad for them. they make way less money from those banner ads than they do from the affiliate businesses that underpin them. but I think that those those have been nailed. My understanding is those businesses have been destroyed. and the only business line that has emerged is people have started to buy traffic to those pages. So basically a really enterprising media buyer can promote a top 10 list on Facebook and then the user will read the top 10 list and click something and buy and they'll make money through the affiliate sale there. I know that's a that's become quite a large business like hundreds of millions. What about all the open web traffic that's not local news or hard news but falls into the categories like weather, sports, finance updates, like all that all that publishing? Does that >> Yeah.

15:47 >> How does their relationship the LLM go? >> So I work with the big weather guys. they already license their data in large part to a lot of these systems through widgets and through things like that. They already have those relationships built. I don't know if they've cut deals with the LLMs. I think I would I would assume that they would and would and could because they have they do a lot of their so all the weather companies this is like a little known thing. Most of the weather companies get their data from a combination of the NOA so actually it's public data that anyone could access >> and then their own enrichment on top of that to bundle it up and make it parsible and things like that. So the question is >> the chances of rain >> silver nitrate in this guy. it actually is a really >> they report they report higher chances of rain. People don't like the national data because it's too accurate.

16:41 >> Too accurate. Yeah. It's too dead on. >> but I I certainly think that they will continue to exist. Their traffic is the decline is going to come. It's already come. and when you talk to and if you were to ask them right so if you go into Google right now and type in hey what's the weather? Google already tells you in line and they've been doing that for two or three years. >> Yeah. >> So the weather guys, their attitude is, well, if my traffic was going to disappear, it's disappeared already. So the the the people who come to my website now are the ones who >> want to come to my website or come to my app. so I think they stick around.

17:13 Weather, I think sports, yeah, ESPN I don't think is going anywhere. People like to consume things on ESPN. >> Horoscopes is that's that's evergreen content. People >> Yahoo Finance so often. I hit Yahoo Finance multiple times a day to check stock prices. >> Yeah, I find that I can't really I really prefer to consume stock information from Yahoo Finance. Yahoo's traffic is great. Yahoo is huge. People don't understand how big Yahoo is. it is it is an unfathomably large publisher and they they do a good job.

17:45 They're very smart over there. >> >> yeah, publishing gets so much better. Like I, you know, like when you talk about some trying and some not, like I feel like out of the ones who not, like damn they they never tried. Like there's so many sites that are, you know, that could have competed with Yahoo, but they're poorly they're, you know, so poorly laid out compared to Yahoo, right? They're so much less usable for Yahoo and in a 25-y year competition with Yahoo, they never looked at the, you know, they never improved. So, >> you know, there's something to that. I think there's also something to knowing how to get traffic is a really gross game. And this came up in the discussion about agentic optimization, right? Ads for agents.

18:26 >> Yeah. >> the traffic game is dirty. Like the black hat SEO stuff, the things that you would do to get traffic from Google >> Yeah. >> ended up being relatively unrelated to user experience. And that's that's why you have shitty websites that persist so well is because if they were able to figure that out, they didn't have to be good websites. They just had to be good at getting Google to send them traffic. and those two things are not always correlated.

18:53 >> And that's >> Yeah, that's bad. >> It's bad. I mean, it's Google did their best to fight it. They were constantly they were constantly changing their >> power, but they were too powerful. you're too big and they they didn't >> if there was more competition, it would have shaken out better. >> Yeah. Well, because you have you actually say, "Hey, these Google search results are and I'm going to go use another search engine." >> Nobody does that. It's not a thing.

19:18 Still not a thing. Like >> lock themselves in. >> Yeah. How's the buy side, Adam? What's new? >> I I've been We got some RFIs this summer, you know, like we're in year seven of of pitching to agencies. Charles's strategy has always been that we get agency work last after getting mostly big agency work last after doing small agencies, the big independents and a lot of direct to brand. We always thought it'd be hold last because they're not the big drivers of change.

19:48 They're pretty conservative on tech. but I we got a number of and big publishers too, I should say, in this category. So anyway, we're starting to get RFIs after, you know, they've known about us for seven years and it's it's a it's a little disconcerting like sometimes the RFI literally starts like we have decided that our approach to AI adtech will be modular platform independent AIdriven with a focus on incrementality and it's like you're RFIing me like you just gave me my pitch and the only company that fits that description. You're saying you've decided and you've sent the RFI to me and who else? Like what is happening here?

20:28 >> Like why why are we pretending that, you know, we're not pretending like I think the person who sent the RFI might might not know that they're repeating my own pitch back to me. Like it it went through a game of telephone, right? and they're repeat they don't know they're repeating my pitch back to me and asking me for information on on the thing we spent seven years building that they just described that no one else has. So >> I was gonna say >> because they also like when you said that to me too I'm like so do they think that they have this like that they are possessors of this right now cuz I'm I am skeptical that they are >> I think I think they possess the vision and the ideas and they believe they're looking for partners to help support this vision and bring it to life >> and you know and it's not just it's not entirely what Chalice built like their their vision is maybe broader like includes a creative piece or you know something you know pieces that we haven't built a planning tool or a creative tool >> will be in there too. So so they might have some legitimate basis for thinking though there's a lot of overlap in our visions theirs is broader and it makes sense for them to RFI for for other partners but >> I I feel really weird filling these out.

21:49 >> Oh man that's validation. >> just validation. Yeah >> this is just validation. It's like what if we lose? It's like it's like you know like a when the Chich and Chan used to joke that u you know Chich that he got a B in Spanish like you know it's it's like if you don't if you don't succeed in what you're born to do what you grew up doing what does it mean? Well, I think there's >> Yeah, I my my instinct is a lot of people talk a really big game.

22:22 >> Very few people actually do optimization modeling. Very few people. I just don't I just don't think there are many companies out there that do it. >> >> and I I my like naive impression from my like agency conversations is that a lot of them think that they can do it. Yeah. >> And they don't actually do it. And there's a little >> The reason I wrote that long series of essays was because like I just had to like back up and get in the public domain that you do not get there by aggregating data.

22:58 >> Like that is not the path. Like if you're start with like we're the agency, we have the most data. So we have the most optimization. You've already blown it, right? Yeah. >> That's not how it works of optimizing for big clients. Like because you because as I said last week and in the clip I posted, if you aggregate data, then you'll output averages and big clients the reason they're dissatisfied with Google and Meta to the extent they are is because the averages don't work for them because they're trying to do unique things like contrast the other giant competitor. I explained CPG advertising to some friends last night at dinner and like what a bloodbath CPG advertising is like because people don't spend time to think about it because people are so steeped in the startup scene right they're so steeped in DTOC where they're like oh put dollar in get $2 out magic they don't think about well >> that's only when you're growing if you're Coca-Cola and you're next to Pepsi on the shelf what do you do right like how do you how do you measure how do you target how do you think about it.

23:57 It's just a whole different frame of mind. that I do think a lot of these companies are are reaching the scale for like like one of my like college buddies runs HIMS. I think HIMS is probably reaching the point where they're tapping out the size of their market and now they're they're defending >> like they are they're there. >> Yeah. >> There's very few businesses that fit that anymore. Like there was a lot of DTC upstarts 10 years ago, but even that was relatively small. But now snacks are shrinking, over-the-c counter healthcare is maybe stagnant. Beer is shrinking, which is the growing giant through our entire careers or the whole of of you know, liquor and and beer. you know, America is not officially in recession, but a lot of these consumer categories are contracting for the at the same time for the first time in our career. And it's a much it's a much >> different America.

24:54 >> It's a different right, it's a different buying landscape, but a different enterprise buyer landscape when there's not so much growth driven stuff as there was, right? there were like the upstart liquor brands like when I started my career like there were all these upstart credit card and loan companies like that's not happening now like there were so many finance upstarts and like you know like there was auto insurance online was was still new and booming so >> a lot of things have calmed down now the digital landscape looks more like the traditional landscape there's a lot of things that are flat or declining share and the things that are growing are you know dermatology ology, GLP1s, cannabis, gaming.

25:40 >> Yeah. >> sports betting. It's about it. >> I mean, I did you just describe like the collapse of our civilization like in a sentence? >> We want to be skinny. Americ >> we want to play video games and bet on sports. That's that's where we're at. >> I don't know. No, it's where we're at now. It'll change again. >> Well, so I I was at dinner last night with people who work work in healthcare investing.

26:11 >> And one thing that we talked about is how much money goes into bringing a new drug to market. So like one of one of the guys I was out to dinner with is a is a banker who helps bring new drugs to market. So they invest late stage in the life cycle of a drug and he is like, "Do you understand how much money goes into marketing a new drug?" which is a twisted uniquely American thing. Like you this is >> in other countries they're like oh doctors prescribe the drug that you need and millions and and a year of work in naming the drug.

26:43 >> Yeah. Oh yeah that's which you would never guess like >> from these names >> from these names. but it's a huge thing and I talk about HCP marketing and you look at Deep Intent and you look at Lasso and you look at these companies and when you look at job growth, right? Most job growth in the US is in the healthcare sector. Like that's where most of our jobs are coming from. And when so when you list GLP1s, I'm like, yeah, there's GLP1s and there's also all the other drugs. Pharma advertising is is a thing.

27:15 >> It's in ways it's a normalization. I mean it was boom times in digital because you know so many like finance and healthcare and travel were converting to from traditional media. So it looked like a boom from the digital side and now like we've probably taken all we've going to take from traditional and in some ways it's just like a normal economy a normal amount of growth >> but it's also >> it's also but a nice dose of the decline of America.

27:43 >> Yeah. Well, a lot of those CPG advertisers could hide behind organic growth, right? Like if if you don't need to have a particularly robust measurement framework in place if everything is just going up and it's like, well, look, we're spending money and growing. >> Yeah. >> Seems like we're doing pretty good. >> yeah. You know, you know, I I listen to the Trump people a lot, at least the ones on Twitter, the the the MAGA America, and I wonder if they'll ever connect like the policies with growth, like open market, like the factors that drove growth in America for our whole lives were immigration and free trade, right? The two thing then they're against these two things.

28:23 They're against immigration and they want tariffs, anything. And now like the economy is going to slow down. we're not going to see the same growth. prices grow go up and I just wonder I mean I don't tell I don't I don't call them dumb because they're too busy calling me dumb for for to be able to reverse that you know when I get an argument about who's dumb but it does seem like a very big missing connection between you know the pol you know economic policies and economic effects that maybe our our news media could do really a better job of connecting for people. If you're against free trade and immigration, you're kind of against growth.

29:02 >> The problem is free trade has become a a no-go on both sides of the aisle. So no no media no media agency wants to talk about free trade. >> People are mad about free trade but immigr but but inflation is absolute fury. So it's like when are you going to connect these things? When are you going to connect these things? It's like >> things being more expensive unacceptable. >> Yeah. Unacceptable that they're more expensive. God forbid we bring them in cheaper for somewhere else.

29:29 >> How do people think stuff got so cheap? >> There's like people people my age in their 50s who don't realize like TVs and stereos were massively expensive. It would cost multiple it would cost multiple paychecks to buy the the t the chart of the cost of TVs is so astounding. It's astounding. They have become free basically. >> Amazing. >> Yeah. to have TVs and music, you know, to have a record collection. Like you you had to pour your all your money into into your home stereo, your car stereo and music to have a real collection. It's it's all like it's close to free now.

30:11 >> Yep. Oh, there's I pay $10. I listen to as much music as I want to. It's crazy. It's ridiculous. Like I actually I actually am like I don't like it truly and deeply because I think it's bad for a lot of musicians. >> but Maldo with the in the in the chat with a comment for us. It's TVs are free because they were watching you back. Now that's not true but adtech does play a part. It's it's much more because of immigration and free trade than because of advertising.

30:43 >> Yeah. Even though there are actual free TVs, right? Aren't telly's free? >> Yeah. I've been trying to work with them. I don't know what happened with that, but they seem to have a They have a good business. Free TVs because they watch you. >> That's so smart. Why not? >> Yeah, >> I'm being watched by everything. Anyway, this is I'm in this is I'm going to get my auntie. >> Free ad supported is a good model. Yeah, it shouldn't be the only model, but free ad supported media is broadcast TV and weekly newspapers. It's all good stuff.

31:08 >> It is the lifeblood of our society. If everything costs money, it's inherently discriminatory. Like if if certain information people have to pay for, then there are certain segments of our society that just aren't going to get that information. That sucks. Like that's not how it should be. yeah, I love ads. >> That that was a long tangent. But the other kind of RFI RFP I'm getting is for DSP algorithms. So I also get this one that's like >> RFPing for what Chalice did in 2020 2021.

31:38 >> Oh, in in DSP custom algorithms. >> Yeah. And I don't really know how to answer those either. >> >> It's like, yeah, we do. We could do those, but what why is this what you're asking? Are you sure? >> Yeah. Do do you know what you really want here? >> yeah. >> Oh, I have I have two things we can talk about from that. One is I heard DV3 is making changes to their DSP stuff and they're going to allow more things in custom algorithms, but I'm not holding my I'm not holding my breath at all.

32:07 >> what did Yeah, like what >> like additional fields being made available. >> Oh, yeah. For custom bidding. Yes, custom bidding 360 >> custom bidding. The my first complaint was that it was limited >> and that you know you couldn't do anything with with bids. >> And then I have the we had the added complaint that really made us stop using it is it became so fragile. What's it called when that you know any change makes it any change would blow up your performance.

32:34 I think the word is fragile, sensitive or whatever. Like >> yeah, fragile works. >> Like you couldn't really optimize. You you had to like put a script in and leave it alone. >> We're like this is this is stupid. >> They would literally tell you like, yeah, after you change the budget, it might take two or three weeks to normalize. >> I mean, I So I have a call I have a call with Doug today. I do I am I am glad to see new blood in the DSP space that's built around this thesis where >> like ind indicated by the RFIs there is still an appetite for agencies to work with DSPs for reasons and it it is nice to have a new generation of DSPs that is building from the perspective of oh we're just going to make we're going to use artf we're going to use whatever and we're going to be an aggregator of services instead of being a gate and like opinionated deliverer of services.

33:32 It's nice. >> Yeah, I wish Pontiac both >> I wish them well. Yeah, Pontiac I think's position is a little easier because they're they still are closer to a traditional DSP, but to be a modular company and to not, you know, to to need partners to provide full functionality is is tough is a tough road. like the the buyers aren't used to it and it confuses them or upsets them or irritates them or all of that.

34:01 >> I you know I would love to ask AR about the beginnings of beeswax because the beginnings of beeswax this was the pitch. If you were like hey can this thing optimize for me they would go >> no >> no it doesn't optimize it just listens to QPS and targets. and they they like kind of pioneered that. And I think actually their clients early on were not agencies and not even big brands. I think a lot of their clients early on were publishers doing audience extension because they liked the the feed efficiency >> and ad networks.

34:38 >> And ad networks. Yeah. And agencies and brands. This pitch didn't resonate with them. Like it just it it didn't sink. I mean, and this is a long time ago, right? So this is, you know, 10 years ago, but it wasn't, that was not a strong pitch back then. Didn't work. They didn't want the configurability. They just wanted it to work. >> >> yep. And that's what the buyers of Beeswax mostly did with it. but I think I think AR's or the founders of Beeswax ideas were were right and ahead of their time and that they they could have kept going on that route. as a customer it was hard to license beac because they were so committed to the modular model that they wouldn't conform to cost of media pricing right they only would charge on on QPS which is really hard for an agency to do >> it was even hard for chalice when we licensed it because there was a minimum you have to pay whether you used it or not it was like >> oh I remember you're paying like you know >> $25,000 a month for QPS listening if you sp if you don't spend a dime >> I remember those contracts I was I was there real early RTK was in the original beeswax marketing cloud. I remember hearing this.

35:43 >> >> Oh, right. Yeah. It was also the first to have multiple IDs, right? Like you could you could just run beeswax on live ramp IDs and a live ramp workflow which was which was great. It was like really early like auto optimization loops and you know and cookie and cookie free too because everything could be based on live ramp ats. >> Oh, it's cool. >> yeah, shame. Even though it still has its time in the sun, it it was so well positioned and so early that even after being bought by like Comcast, right, where things go to die. Beeswax is acquiring new clients right now. Beeswax is growing in this moment because the the market has just come towards them and >> there's no amount of not investing in it that was going to prevent Beeswax from being successful in 2026 like >> and no one's been able to answer my questions like what did they do with with Stinger like the truly modular like set up an instance of the bidder in the cloud like the you know that was almost yeah Stinger yeah >> what happened is anybody using that >> I have no I I I would assume that they killed it to make things easier because they they killed a lot of things to streamline it, right? Comcast comes in and goes, "No, no, no. Core business.

37:04 This lives >> and >> even the even the bid model APIs were not super well supported last time we were using VWAX around 2022. Like those, you know, great great APIs for custom bid models, but they weren't, you know, they were buggy. >> I have to reach out to them. I I think it's Todd is still there. Yeah, he he was my guy when I worked with Beeswag in 2015. I love him. He's such a nice guy.

37:34 >> Todd's >> great. Old school old school Eric Pero hire. >> yeah, that was a fun time. It's It is interesting. Now, one other thing I think is worth talking about because I got into this on Twitter. I actually got into it with Doug over this one. Did you see that NBC said that Tibula is going to be responsible for all of their programmatic sales efforts? >> Yeah, that's interesting. I didn't I don't know what to make of that. What do you make of that?

37:59 >> So, this is not financial advice, but I personally am taking positions in Tibula right now. >> and I'll tell you why. One is I think they're grotesqually undervalued. Tibula's market cap is about >> it's about a billion dollars. >> No, one billion. >> One billion. Their re revenue last quarter was $485 million. The trade desk's revenue last quarter was $710. >> That's close. >> It's it's it's not that far off. And when you think about the profile of Tibula, Tiboula is making this bet that they're going to take they they were able to make performance work in banners essentially with their widget in the bottom of the content. Well, >> right. instead of standard banners. It's like a it's a the tabula widget is not a standard banner, >> but it's a to the publisher it's the same, right? It's a space.

38:52 >> It's kind of a banner, right? Like you could make a standard banner that looks like a tabula widget really easily. >> so my thesis here >> because it's different they only they could fill it, right? >> Well, the reason only they could fill it is because they kept it a closed loop. >> And I think that is Tiboula's success. Tibula worked because tibula was a closed loop and programmatic doesn't work and hasn't worked for this because there are too many confusing things going on. This is why I started. This is why, you know, all the things that are going on are going on. But I think Tiboula, if there's anyone who's going to make programmatic work, as long as they work with the right data partners to extend their success in the bottom of the content well to the other units on the page, Tiboula could make banners work for performance. and they already have the SMB onboarding infrastructure because we talk about DSPs being bad at selling to SMBs. Tiboula is great at selling to SMBs. They know how to do it.

39:46 It's their their bread and butter. and I think Tiboula is a dark horse. And this deal with NBC just further ensconces that where Tibula was like, >> let's cover why this is interesting to me as someone that committed to driving ad effectiveness is why why are they better at ad effectiveness than than open web providers of their size >> and maybe they're not better than trade desk >> but >> I mean I think it depends on what effectiveness you're talking about but I it's such a good question. I it it has the my founding thesis of gamera was like wait tumula can make postclick performance campaigns work.

40:27 >> I've never seen a >> the easy answer is because they focus on a clickbait ad format. Let's let's be honest like it could be good clickbait but it's always a clickbait. >> But you could run clickbait in a DSP. No one's done that in and printed money. You could run clickbait creatives. They're not going to get blocked by the exchanges. I've seen people try. I don't think I don't think that's enough. I think that there is the there are structural problems in programmatic that make optimization hard. and I think inventory classification is a huge one. I mean, you see it, right? Chalice drives crazy valuedriven results because programmatic is bad at valuing placements. And that's not a problem in Tiboula because Tibula Tabula knows exactly how to value their placements because they're their placements and they have tons of metadata about them and they don't have to get information from anyone else. and I've I've read the white papers by the Tabula.

41:21 >> They don't have to have to win an auction. Nope. And they do a great job of contextualizing. So Tabula has a bunch of IP around how they do contextual and it's they're smart like they are they know what they're doing. and so they create alignment between the creative and the context of the page and then there aren't all these middlemen. There's no supply path. The supply path doesn't exist. It is just tabula. So when Tiboula charges a 35% margin, people go, "Oh geez, that sounds so expensive." But that's all the money that's coming out of the transaction, right? Like there's the 65% of the money is going to the publisher from Tibula.

41:58 and that actually is comparable. >> 65. >> Yeah. 65. So no wonder NBC that's why NBC decided because they could get 65% of the of the cost right >> I'm sure that was a huge part of the pitch they were like when we when we go out and do this for you we are going to take less margin now for programmatic right if they actually have to start selling to DSPs which tabula does do so tabula is also a traffic source inside of exchanges I've seen this recently it started when they bought convert media which was an outstream video company and they started jamming outstream video into pages which I I don't want talk about because it upsets me. But >> like the they do resell this and I think that there is a little bit of risk there because now you have a DSP and the 35% Tiboula fee. So you're creeping up to 50% coming out and it's like I'm not sure that's competitive programmatically. But Tibula's own Realize platform that's not the case. So Realize is their bidder and realize buying programmatic slots on NBC using the information that they have from their content. Well, and in this closed loop I think is going to be real interesting and realize will bid through I'm assuming pre-bid if I >> so it'll buy the other units. I mean that NBC isn't didn't commit to only using the Tiboula custom unit. They'll have regular units too by Tibula.

43:23 >> Correct. >> And that's >> but no one else will be able to bid. No one else will be it'll be like a pre- bid module. No one else will be able to bid into that into those options. Like why would they do that? They'll sell it on exchanges. So Tiboula can pipe the inventory out to DSPs. They have the capability to do it. They'll flip it when they don't want to bid on it or when they do and they'll compete.

43:44 >> Oh, all right. So Tibula doesn't necessarily fill all the ads, but they're the provider. >> You got it. And they have the pipes to do this already. >> This should This should terrify Trade Desk, right? >> I don't understand how Tibula's stock is not taking off like a rocket. I I think this should terrify everyone. I think that if anyone is going to make programmatic work really well on simple performance KPIs like CPC and postclick CPA and postview CPA, it's going to be Tiboula and they're going to be really good at it. And yeah, that's why this is not financial advice, but I personally am like I think this is an undervalued stock. Like holy Like like they they have all the pieces and >> well it would take a lot for them to do enterprise. like we'll see how that goes on NBC. Is NBC going to be all belly fat ads now? Like and >> it's a great question. I certainly think that Tiboula has really struggled to sell to agencies and to to enterprise brands. I think that they that is they they hired against it. They tried to build teams to do it and I think they they were found wanting there. and that was part of the thesis of the TE's Outbrain merger was Teds speaks fluent agency like >> Yeah.

44:55 >> Like fluent >> guarantees. Yeah. >> Yeah. There there's there's probably no better agency salespeople on earth than the TED salespeople. >> >> but yeah, >> they're up there. Oh, I I I'll never forget I'm sure I've told this story before when I was trying to sell RTK to Teeds that was like and we can do all these things to optimize programmatic and they were like why would we do programmatic? That sounds dumb. >> there was a vendor team that once took an entire agency strategy team to to Coachella.

45:34 That's that's they were the best sellers. They got a huge guarantee that year. But yeah, I so I really like this deal. I really like Taboula. we should we should get Singled on here. I'd love to talk to Singola. And I'm I'm really curious about this. >> Yeah, me and Marley were waiting for I told the story. We were waiting for him outside his hotel and we ended up seeing Arthur two minutes after Vibe sold. >> Yeah.

46:00 >> yeah. I mean, he's he's he's a busy guy. but >> had an appointment. >> I hope he's listening. >> I doubt it. >> so, oh, Marley says they're waiting for us. Oh, we got to we got to reach out to him. I think we should have Adam on. He's he's the man. >> Well, we never even got an email from Adam. We just we were talking to his team. As far as we know, he never he never even knew about it. As far as >> Oh, >> as far as we know.

46:31 Yeah. But I'm >> still thinking about this NBC deal. Will we see Will you think we'll see more like this? NBC just says we're going to make more money with these guys than dealing with any SSP even for even their own. No, it was just display. >> Tabula is the master of guarantees. So I am sure >> which guarantee >> that there is >> you mean the guaranteed revenue to the publisher.

47:01 >> They will they will guarantee revenue to NBC. They they will give them a number. >> which is really gutsy, right? >> But they're basically buying access with their balance sheet. >> Tibulo are the kings of doing this. >> We should do this right. We should match up right with your publishers who are ambitious and my buyers when we know there's performance there and we could predict it. We should we should also do guarantees to try to grow grow our set that way.

47:30 >> Yeah, publishers love it because in this uncertain time, right, guaranteed revenue is very very valuable to them. >> we have to come up with the money though, right? You have to actually deliver the money in advance. >> Yeah. As long as you have campaigns on the OTHER SIDE, IT'S VERY >> like if you if you know for this buyer, this campaign works this well. affiliates have been doing this for a bajillion years. They figure out, oh, when I buy this exact ad slot on AOL, this is how much money I this is the ROI, right? This is the conversion rate.

48:01 This is the CTR, all that stuff. And AOL goes to them. Well, you're going to have to pay us at least $400,000. But if you pay us $400,000 a month, this is the rate you get for this ad slot. And the affiliates will they'll do it. They'll be like, "All right, let's go. You got your $400,000 guaranteed." >> Yeah. I don't have that. We don't have that kind of cash flow. We don't we don't take the media money.

48:20 >> Yeah. I mean it's like you know the agencies do it like it's like a bank. So we would I would team up with an agency to achieve this what Tibula has achieved. But again it's like I'm saying like >> it's easier to do it yourself. Right. If you really want to close a loop then this kind of overlord method of controlling all the pieces is much easier than trying to do it in a fair auctioned environment with multiple partners. I am telling you they are they have the and here's the thing there are some things that they are not good at but they have chess pieces on the board that are unappreciated like >> so steelman Jeff's case >> if if Jeff Green is saying you know the open web is valuable for society and you know we're committed to monetizing this like this is this is what hits me like if tabula can monetize it better than companies like ours and tradees And you know then you know what's >> different sectors of the market though right Jeff's most recent case like I I said on the last show it sounds a lot like Chalice's pitch and I happened to buy it right like like that makes sense to me like big big brands have very unique needs they have enough critical scale that they need to operate on their own data they don't need pulled things and in his most recent press. He talks about that Trade Desk is going to cater to them. Like that's that's what he said pretty explicitly, right?

49:52 >> But but this NBC deal, that's what I'm saying. Like if it doesn't work for publishers, it all falls apart. And NBC switching from an open web display publisher to a tabula display publisher seems like counter evidence to like even if what me, you want to be true, if NBC is better off with Tibula, then >> Well, I think that Tiboula has to open this up. they have to be selling those display units also programmatically. >> So the trade desk money will flow to NBC still. It will just flow through Tiboula.

50:23 >> and that's and Tiboula in closing that loop. It starts to look a lot more like Google right there. They insert themselves using their endemic demand >> and oh this is kind of like open ads too. So this like the trade desk thought this way. >> How do they have endemic demand? all of their SMBs, all the SMBs who log into Tibula to set up their performance campaigns. >> That's that's Tabula's endemic. and that's enough, right? That's a lot. They can make guarantees based on that. They know what works. They know what doesn't work. And then they supplement it with programmatic. now, Trade Desk could refuse to play ball. Trade desk could say, "We're not going to buy through Tibula's thing." I don't think they would do that because they want to buy NBC.

51:04 >> It's just another SSP. Yeah. >> Yeah. It's just another SSP. I don't know why they would care, but I think that's the the answer will be monetization is a combination of Tibula's SMB stuff and the premium brand direct that comes from TTD and Chalice on the top of it. and Tabula just uses this moment to insert themselves into a very advantageous spot. >> yeah, it's like saying it's like Jeff says, it's it's it's always a buyer market in media because there's so many sites.

51:34 >> You got it. It's and now I I do know Tiboula and I know that for performance buying most performance comes from a laundry list of a dozen websites and I'm sure that's why they locked up NBC. NBC is is on that laundry list. >> and then the other one the other two that are on that laundry list everyone like the the age-old Tiboula deals MSN and Yahoo. well one one was oper and one was tibula but that was they they know the economics of those websites really really well so they were willing to shell out cash in advance.

52:14 >> didn't didn't Microsoft didn't MSN have a different version was was tabula a big Microsoft partner because I thought Microsoft had their own they developed something with media.net around their own >> MSN might have they might have at some point but I think the tabula dollars won out in the end. You could certainly buy MSN on Tibula. That was a thing >> and MSN was big, right? MSN is like has different partners in different places even though I don't know who runs things over there now. But but I certainly say I think your statement about should people be terrified of Tiboula, >> they should certainly be aware of it.

52:47 And this is what I I chatted with Doug about this because Doug was like what like like he called it what is it like bait at the end of articles? something buckets like chum buckets at the end of the article is what he he was like and because in his mind Tibula was a chum bucket company and I was like wait no >> they have all of these pieces man this is not just a chum bucket company like >> like file them away in that in your brain at your own risk like that's that's a dangerous way to think about them they will >> Doug a couple of times let's say who who it is Doug Lauratano the founder of tpple DSP >> he was at an ad exchanger This week he got interviewed on the Open Market podcast where I guess me and you were banned and he and he's got a new DSP. He's a good guy.

53:38 >> Yeah, he's a more media guy. I >> I I've always liked the media folks and I I met them through him. >> or >> maybe they'll sponsor us. >> Oh, that's not a bad >> I haven't asked for a sponsor in a while. >> Yeah, I'll I'll flip that to Khan. I like that. >> I I'm not going to talk about Tony's post. We can we can lay off. I do I I did get into it on Twitter about Agentic.

54:11 And I think that I can describe how I feel about Agentic in like two sentences now, which is don't tell publishers to build stuff until you know it's going to make them more money. Like until that's the case, these are all battles occurring over standards that are like, you know, >> angels fighting in heaven. Like I I described it on Twitter as like people fighting for real estate on the moon. >> I challenged Swivel. You're friends with that guy, right?

54:39 >> Well, Joe, I know Joe. >> Yeah. I I I don't know. I don't know if it was Joe's who's ever operating the swivel account with the question I always have for ADCP because it's always being promoted by middleware and it's like what do you docp is a way for buyers and sellers to connect agentically what are you guys doing so I just asked and he was like we're helping publishers and we're making them more money so I was like okay but the it seems like adp is a protocol for buyers and sellers to interact without you so that's my I don't know what do you I too am confused by this. I >> I would like a straight answer.

55:19 >> Well, so Swivel's business model was originally at operations automation which lends itself very well to adp, right? Like cuz they and they were super CTV focused. So they were built on top of Spring Serve because they're exerve guys and a few other like CTV ad servers. And the one place where I think like agentto agent stuff could like do okay is CTV because CTV is so price fragmented that auction efficiency doesn't really exist yet. but I I too am confused about why the ad server is not the efficient place for the seller agent to live. yeah, >> why do you and where there's buy side adoption or people be where a buyer would be like I want to buy a gentically let me reach out to scope 3 and swivel and samba TV is like no why you reach out to your publisher partners like >> yeah I I I I definitely think that there is a really confusing component of this that I I would like to have explained by the way which is why do you need an aggregation point in the middle why do you not have a swarm of publishers who define these things and define their packages because right now that's what you do in scope 3, right? In scope 3, a publisher builds their packages and then those get farmed out supposedly to advertisers. And I've I've heard of, you know, at least one campaign has come through, >> right? Multiple standards do not serve anyone. It's like >> and that's that's what gets me about this. It's like just Well, to be fair, the the way that this gets solved is buyers >> No, sorry. I'm on the call.

57:00 >> I I think that the the way that this gets fixed is a buyer goes I want to buy aically I am using this standard publishers sign up for this organization and service >> it hasn't happened yet right it definitely has not happened >> doesn't happen I just haven't seen that that's that is the wellspring from with that business line could flow forth is a buyer >> I've been to an SCP meeting but I've been to IAB standards meetings and they are full of big hold co- buyers So publishers, please be aware of that.

57:33 >> So the big hold buyers, are are they not coming out and saying we're going to do this or are they just there to listen? Like that's what confuses me about these. >> They claim they claim they're doing this. It's the vision. They claim they're going to be buying aically at scale. Yes. I mean, I have seen startups that have built really cool agentic interfaces that take media plans and turn them into traffic campaigns, and I love that. I'm like, that is what like if Claude can't do that on his own, which you know, I'm not technically qualified to assess.

58:08 >> that's that that business makes so much sense to me. Like, let me make your life really easy. Let me set up your campaigns for you and then monitor them and then make budget reallocations based on performance. Awesome. >> Agency, it's totally going to be able to do that. People are already doing that with cloud. Yeah. So if it and yeah to the extent the agencies they think they're going to compete with cloud at that it's not going to go well.

58:31 >> That's that is also what my CTO says >> is also what he said. >> You're going to have to do more to wrap it back to the beginning. There's a lot of pain in the route to adding value. And you know, if the if your builds don't include millions of wasted dollars and people melting down now and then, it's probably not hard enough. >> Yeah, that's a fair point. >> Yeah. And that's that's very tough for agencies, right? It's not how they want things to go.

59:02 >> Yeah. I mean, building software is hard. Like it is a painful process. >> Yeah. >> You build things that people don't need. >> You build things that people do need. And >> they don't need it by the time you're done. >> They don't need it by the time you're done. Priority shift. That's That's the thing. >> It's fun out there. And And you know what? In all of these like turbulent times, I my big hope and my big takeaway is that I think a lot of the traffic loss is slowing down.

59:32 >> I think we're hitting the very plateau. I think we're through the worst of it. >> And now we just need to figure out how to reimagine businesses. Like we should think about this not as a time to relax. We should think about it as a time to okay, how do we reinvent these open web businesses so that they are hardened against the next wave of disruption comes? >> Exly. I mean yeah that's rock bottom is good news. If how much and how much traffic is what 30 40% more >> there's a ton of traffic out there.

60:06 >> How much was lost though at the end? >> Oh yeah I mean people think around 50%. It's a number. >> I think the big buy side I think the agency world is into is looking at something like 50% contraction over the next couple years like hasn't happened yet. And that's why I think I'm seeing such confusing RFIs and RFPs. Like it's it's you know they might be you know not on a ship that's going down but launching in riding in the Titanic with no idea that they're never going to arrive where they're going. I see a lot of that like a lot of denial. Yeah, I see a lot I see a lot of denial in the in the buyer space and the the trend toward in-housing has been building for years and I think it's about to accelerate because of AI and that it's going to be it's going to be painful in big buying organizations.

60:59 >> I mean it is crazy to me. Yeah. Cheers. the notion that a company that spends $500 million a year on ads is going to pay a percentage of that to someone else to do their ads. >> We have to wrap it up. I have a one o'clock. We're off next week. So, >> happy we'll do this in two weeks. Not doing news. Thank you. >> Let's skip news. We can wrap it. Thank you for joining everybody. We'll see you guys at the end of the summer.

61:32 >> In September. the end of the summer, Labor Day. >> Darn. That's the >> Yo, the crowd is back. The lights are dim. Front rows buzzing. It's about to begin. Ad talk. They're taking the stage. Adam and Gareth on a knowledge rampage. >> Tech talk. It's a live Q&A. Buy side, sell side, clearing the way. CEO spitting truth. No delay.

62:03 >>