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AdExchanger
Context(ual) Switching, With Viant CEO Tim Vanderhook
01:00:51
Viant is on an M&A tear, with two acquisitions – IRIS.TV followed by lockr – in less than six months. Although the rationale behind these deals might be obvious to ad tech insiders, Wall Street investors speak a different language, one that...
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- [00:00]
Tim Vanderhoek
Foreign welcome to Ad Exchanger Talks, the podcast devoted to examining the issues and trends in advertising and marketing technology that.
- [00:20]
Alison Schiff
Matter most to you.
- [00:24]
Sarah Sluss
This episode is brought to you by Mutinex. Pioneers in AI Powered Market Mix Made Modeling get fast answers to hard questions with Mutinex, your growth co pilot. Ask for a demo at Mutinex Co. That's M U T I N E X Co.
- [00:51]
Alison Schiff
I'm Alison Schiff and you're either listening to Ad Exchanger Talks or watching and listening to AT Exchanger Talks. We very recently started recording video alongside audio for our podcast, so thank you for consuming our media using multiple of your senses. My guest this week is Tim Vanderhoek, CEO and co founder of Vayant, a DSP with roots going all the way back to 1999. We'll trip down memory lane and look ahead at the future, including predictions for how AI will transform. Actually already is transforming the programmatic landscape and the ongoing rise of ctv. We'll also talk about changes in the DSP landscape and innovations to come. But before we get started, the celebration of the year is almost here. The 2025 Top Women in Media and Ad Tech Awards. Whether you're one of this year's incredible honorees or a proud supporter, don't wait to confirm your place at the event where we shine a spotlight on the boldest, brightest and most badass women in media and marketing. You'll join industry leaders, rising stars and change makers for an unforgettable evening of celebration, storytelling and connection. Let's honor the work, the impact and the future of women in our industry together. Podcast listeners, you get $50 off the price of your ticket when you use the code womenrock all one word in caps at checkout. Hope to see you there. Hey Tim, welcome to the podcast.
- [02:18]
Tim Vanderhoek
Great to be here, Alison.
- [02:21]
Alison Schiff
So I usually start out by asking guests to share one thing about themselves that not a lot of other people already know. But I'm going to bring up a whole bunch of things that some people might know. But I just want to draw a few connections because it's been a very interesting road for you. So just bear with me while I rattle some of it off. But last summer I was chatting with you and your brother Chris for this catch up Q and A on Vayant. And you mentioned in passing, just in passing, that the two of you, together with your other brother Russell, had founded Zumo, the video streaming service which started as an early fast channel that charter acquired in 2022. But I knew about the acquisition. I did not Know that you guys founded it, and that was in 2011, which was the same year that you and Chris And Russell acquired MySpace from News Corps. And that was through your ad network, Specific Media, and you did it in partnership with Justin Timberlake. Like, these are all wild details. And like, Specific Media rebranded to Viant in 2015. And then time Inc. Acquired Vyant and Meredith acquired Time Inc. And so for a time, Meredith owned MySpace. And then somewhere in the middle there, you guys bought Adelphic, which was a DSP that we used to write about quite a lot. And then in 2019, Meredith sponsored off Vayant and you became independent again and you went public in 2021. But what's fascinating to me about all of this is that Vyant still owns MySpace, right? Is that right?
- [03:53]
Tim Vanderhoek
That's right. We're still the owner of MySpace. Yeah, we've been. We obviously don't have a lot of resources focused on MySpace any longer, but certainly the name and the fact that it was the world's largest website at once, and not many, not many brands out there can say that they were the world's largest website. It always gets brought up in conversation. It's an interesting data point about Chris and I, that we've been the owners since 2011.
- [04:18]
Alison Schiff
What is it today, though?
- [04:21]
Tim Vanderhoek
It's the same as when we stopped investing in it. So it's a social network for media and entertainment. There's less social networking, more content consumption. But I would say I looked at the traffic flows of MySpace, I don't know, maybe six months ago, and about 70% of the traffic is people looking at old photos that really only exist and hosted by MySpace. So I would say photo viewing of that time period, that 2003 to 2012 era, there's 15 billion photos that were probably only uploaded to MySpace that a lot of people come back and look at, but we don't have. It's actually not related to advertising at all. There's no ads on MySpace. We just are the holders of that asset, is how I would describe it.
- [05:07]
Alison Schiff
The lure of nostalgia is great. When we finish recording, I'm going straight to find my old photos. I'm so curious now because I, of course, had a MySpace page back in 2003.
- [05:18]
Tim Vanderhoek
MySpace T shirt, nostalgia. Yeah.
- [05:22]
Alison Schiff
So I have to tell you something really wild, though, because while I was researching that whole timeline of your ad tech adventures to make sure that I was right and everything was in order, I just wanted to remind myself what specific media was, because it's been, you know, a Long time. And so I googled Specific Media in quotes and then Ad Exchanger in quotes in one search query. And the AI overview from Gemini supplied the wrongest answer. I mean, like, so wrong. I have to read it to you. Ad Exchanger. Ad Exchanger is a news and media platform that focuses on the programmatic advertising industry. Specific Media is an ad network that was acquired by ad exchanger in 2011. Current, current status. Specific Media is no longer an active company as it was acquired and integrated into Ad Exchanger's operations.
- [06:13]
Tim Vanderhoek
Amazing. That's why we get such good press coverage, obviously, right?
- [06:19]
Alison Schiff
Because we own you. I mean, it's just wild to me.
- [06:22]
Tim Vanderhoek
Hallucinations are real.
- [06:24]
Alison Schiff
Well, tell me though, why did you sell to Ad Exchanger? It's kind of an interesting deal.
- [06:28]
Tim Vanderhoek
It was all about the coverage. We knew that positive press would translate into credibility.
- [06:34]
Alison Schiff
The fact that that was an actual search result was like a gift to me because it's the perfect segue into talking about AI. Because Vyant has made and is making a really big investment in AI last year, and we covered it, of course, because we own you. You launched a tool called Chat with Data, which, as the name pretty much says, allows advertisers to, like, ask questions of their data using generative AI. And then since then, it's become one component of this broader tool called Vyant AI that automates the whole media buying process from bidding, measurement, optimization, the whole spiel. You hear a lot of people say a lot of stuff about AI. It's either paving the path toward our own demise or it's some kind of magical solution for all the things. And it's obviously neither of those. So what is Vyant's AI strategy? Just briefly, and then more broadly, what would you say is the future of AI in programmatic and not one extreme or the other? I think it really is somewhere in the middle.
- [07:43]
Tim Vanderhoek
Yeah. Well, let's talk about Viant first, because that's an easier one. We view the future as one about autonomous advertising. We want to offer a platform that helps you go from zero to having an ad campaign live very, very quickly, that's on target, has the right audiences, everything is relevant. And so we're applying AI towards this vision of autonomous advertising. We want to generate the campaign strategy, you give us the goal that you want to achieve as the marketer, and maybe two other pieces of information. And we want to take that from strategy to media plan, all data driven, to building the shells in our dsp, to being able to launch it live and I would say that the history of DSPs in general, or programmatic advertising was one of the operators wanted a lot of knobs and levers. And you can see in the traditional DSPs like DB360 or the trade Desk, there's many, many knobs and levers. We are trying to basically just deliver the outcome the marketer is looking for, but doing it in a more transparent way to show you where your ad is going to show up, what time of day it's going to show up, the frequency, all the things marketers want to know about their campaign. We're trying to make a more of a transparent AI so they can understand where their ads will actually be in market. So we're applying AI across the entirety of that process, of the advertising process to help the buyer of an ad go from 0 to 90% very, very quickly in a minute, and then use that human intuition and expertise to actually launch the campaign. And so I would say like a big difference of US versus traditional DSPs. If you look at the traditional DSPs that everyone uses, they're for pilots, you got to get certified. There's lots of knowledge you need to have and training to actually go through before you're going to spend a lot of money. When I look at Vyant and what Viant AI is doing, it's autopilot. And so it doesn't take that specialized training. And I think at the, at the highest level, that's where I think programmatic advertising is going, is more towards autopilot and less towards specialized training and expertise on a tool.
- [10:06]
Alison Schiff
Where is the innovation needed though? Because I get a lot of pitches, so many pitches, companies saying they can do basically everything. And it kind of feels a little spurious to me. And sometimes it doesn't actually feel like innovation, it just feels like they're adding AI to the end of whatever they're talking about.
- [10:26]
Tim Vanderhoek
Certainly everyone has done that as well. That's why when we divine AI, we didn't want to do a press release, we released it through social with a live demo of what its capabilities are, because we felt like that it's, it's much more real. You know, everybody, everybody is trying to figure out how to use AI effectively in their business and really what's the enemy that we need to solve for? It's time and complexity and AI is going to be good at helping us do things faster and very complex things like sequential targeting, cross channel, that's a lot of tagging and all types of things that have to go in. So I Think there's a big focus on automation, as it rightfully should, because these are complex and there's a lot of workflows. And I think whoever solves automation is going to get big productivity boosts that the same team can do way more, and you'll be able to grow your business. So to me, I think a lot of innovation is around automation, which is why everyone's talking about AI. But when I think a little bit farther into the future and it will use AI, I think the biggest need for innovation and what's great, Chris and I have done this now for a little more than two and a half decades. And the cool part about doing something that long is, is the rule comes out of all things that are old become new again, but better refined and more innovative. So one area that in the industry that people have paid, I love that. I love it. One area that we paid a lot of attention to historically and there was a lot of investment, venture investment, and none of it really worked out was dynamic creative optimization. And I think in ad tech and programmatic, we spend a lot of time in the pipes, media buying the price we're going to pay, the who's going to see the ad and where it's going to show up. But none of that is actually the ad being shown to the consumer. And I think just in general, the area of creative is that next frontier for technology companies to attack. How do we improve the current process of creative development to putting it in front of consumers? Is there a way to do that at scale better, more persuasive, driving, higher engagement? And there's so many, like we're not even scratching the surface yet. But AI is going to play a huge role in that hyper personalization of the ads. You know, all things DCO of the past that everyone kind of knows, but I bet modified and innovated on because usually the past leads to the future, because everyone studies what worked, what didn't work, and then figure out how to innovate in the areas of what wasn't good about DCO and how could we do that? So Chris and I spend a lot of brain power on the creative side of life right now, even though we're not even close. But there's a lot of thought that goes in there. And you can see creative being the next great frontier in my mind.
- [13:28]
Alison Schiff
And for anyone who's just listening on audio, Tim referenced my cat, who came into frame because we're also recording video here. Mermaid's first appearance. Well, let's talk a little bit more about dco because it seems like, and I'm going to parrot something that Jay Friedman from Goodway Group said to me recently, that when you have the ability to create tons and tons of creative, it weirdly will raise the bar for what counts as excellent creative because you're automating the process of all the grunt creative. There's not always going to be a big idea. There's just going to be a lot of banner ads and a lot of like basic creative and, you know, whatever the next generation of banners are, right? I mean, just fancy banners. So you have all of that stuff automated and then the bar is raised for what counts as really, really good. That seems like a very optimistic perspective. I don't think it's wrong necessarily, but I'm curious what you think of it.
- [14:29]
Tim Vanderhoek
I think he's probably right. With AI, the ability to generate a new idea, test that new idea, how does it do relative to the results of historical creative and drop in old historical creative? So you can kind of move the mean or the median up into the right pretty consistently. You know, I think of more simple things. Like to me, when I think of generating a banner ad for every human on every site, I mean, you start getting into the matrix of how many ads. It's hard to process that. But I think of simple things a little more simplistic on the consumer journey on the path to purchase, which is 1 million different paths at this point in there. Just understanding that if an AI can know that this person saw our 30 second TV spot which introduced our new vehicle, uh, let's say knowing that the next ad should have a sequential message. No, having the knowledge that we know this person saw this ad and got the message, number one, let's deliver them on why we're number one on safety or horsepower or whatever it may be. I even think of just having the AI aware that, you know, this consumer already saw message A, let's move them down the funnel into message B, into message C and try and get into the consideration set. I think sequential messaging will be like a first application, localized messaging, like everyone talks about weather patterns, but just knowing that I'm in Newport Beach, California or New York, New York, that does matter a lot to the creative being relevant to me. And I think even these signals, there's new signals that are going to come in to generate a creative that's relevant to the end user.
- [16:15]
Alison Schiff
And I've been asking this question of a lot of people that come on the podcast and also just in general, but what AI tools are you Using for yourself personally?
- [16:23]
Tim Vanderhoek
Oh, too many to even count. I play a lot with Runway when I'm doing video image generation. I found that to be really good. Flux is another free version of one. When we're playing with image generation for words, ChatGPT is the best. If you're coming up with text, it's actually the best writing programmatic or writing software code. We found Anthropic Claude Sonnet to be top notch but then you know, Chad GB OpenAI rolls out another version and it's really good too. So it's almost hard to keep up. I think where you get differentiation is the LLMs. I think if you fast forward 10 years the LLMs are probably similar in performance to each other. You might have a leader early, but they eventually get caught up. Like Deep SEQ was a good example of that. And I think what you're going to see from the foundational models is they're going to build ancillary services around their LLM that makes using AI in your organization easier. And that's the real battle I think for the LLMs in the long run of OpenAI versus anthropic is the ecosystem that's coming around it. But just when I think it's all about the peripheral tools, MCP comes out and now everyone can kind of be interoperable with each other in the AI world and mcps, it's kind of like having an API or a self healing API is how I would describe it. So tools can interact with each other. But this is what's so frustrating and so exciting about AI is every day you wake up it's like things changed again. So some things effort you put in might be wasted because there's a really good tool for that now. But the learning carries forward for all those of us that are deep into it. So I use so many AI tools it's probably hard inside of our organization we use gong. Their AI tools are phenomenal for sales, execution for marketing, hearing what customers are doing quickly summarizing what are the top three requests, things like that. You're seeing AI just get flooded throughout orgs. But what's the goal? We all have limited time, business is complex. If we can reduce those two things using tools, I think everyone's going to have more productivity.
- [18:39]
Alison Schiff
So I want to change gears a little bit before we hit our break and talk about Vayant's M&A strategy because you did two deals in rather close secession recently. You bought Iris TV in November of last year and then Locker in March. And I'm sure our listeners know, but Iris is an AI powered video platform, specializes in contextual CTV targeting and measurement and Locker helps publishers collect and use their own data for digital advertising. I mean there's more to it than that for both of them, but those are just quick, quick summaries. Those are my AI overviews except I'm a human and thank you. And AdExchanger acquired both of them because Ad Exchanger owns specific media. What's the latest you can share on the integration process and then how these two are fitting in to what you're building at Vayant and to the broader strategy?
- [19:35]
Tim Vanderhoek
Yeah, well, what Vyant is focused on over 45% of the ad spend through our DSP Hits Connected Television. So we're as a percentage of ad spend on the platform. That's probably the highest percentage of the total spend that goes to CCTV amongst most DSPs out there. And we do it because we are the founders of Zumo, like you talked about and we understand the plumbing of CTV really well and we built integrations there early. But we acquired Iris to really solve what the buyers of advertising are looking for. They want to know what content is their ad showing up in. And Iris solves that problem for the marketers there. What I think this is what most people don't know who aren't in the advertising space or CTV heavily in linear tv. The way that media planners and buyers work is you buy the network and you buy the show and you slot your ad in the show. That makes sense when that money shifts from linear to streaming as consumers migrate. In the streaming world, you buy the app, you don't buy the show, you only are buying Hulu or Paramount or whatever. The actual app is almost the equivalent to the network. But within Hulu it might be the NFL Live or it could be the Kardashians. And marketers really want to know what content is my ad showing up in. And Iris does that in many, many ways from contextual understanding frame by frame, what the video's about and then creating contextual categories, brand suitability, like is there nudity in the video or not? A lot of brands don't want their ad to show up if there is nudity and some might want to. So in the end there it's about providing more data about the content. We think Vyant with Iris integrated is the most content aware DSP to buy CTV ads and that's a big focus for Vyant. So Iris does a lot at helping us understand what is the content. Next to my ad and that's been a big, big request and we are continuing to scale that. So Iris was in about 1 out of 10 AD requests in CTV when we acquired it and we have now doubled that since the acquisition and continue to scale. Iris ID being carried. So most recently Paramount agreed to carry the Iris ID which enables all this new data for exploration, let's call it that around sentiment, tone and brand suitability in ctv. So we're very, very excited about it. Marketers are very excited about it, Content owners are very excited about it. It's really a win win of generating new data in CTV that can help the buyer be more efficient and help the publisher make more money from the ad slot itself by providing new data and signal that's there and it's not. It's content related data, not identity related data. Which leads me to the next acquisition that you mentioned, Locker. And what does Locker do? If a user logs into an email, it matches that email to all the alt IDs available into the market. UID 2, my competitor, the Trade Desk, our household ID, Yahoo Connect ID, ID 5, ramp ID, all those that are out there. And so that way A publisher does one integration and can unlock 15 or 20 different ID providers at once and help power their business. And to me, identity infrastructure is still very important for where we have to go into the future. Cookies still work in some pockets, emails work in other pockets. Things like fast channels don't have authentication. How do we unify identity in the future? And I think Locker is a big investment for us to help yes ourselves, but the whole ecosystem actually operate and make passing some version of an identity that the buy side and the sell side can coalesce on. Whether it's provider A or provider B, we don't really care. We just want to provide that identity infrastructure to try and make the open web ecosystem have less friction. Without locker, all 15 providers have to wait in line to get integrated by the engineers of that content owner in CTV as an example. And every company has the same problem, which is I prioritize my engineering resources. I can do X integrations this month and you stack rank them. And so innovation slows down because you got to go one by one through 15 integrations. We think it's a lot easier if you do one and light up everybody overnight.
- [24:30]
Alison Schiff
So one more quickie before we hit our break. Actually, do investors get it? I asked because some investors seemed like a little bemused on the earnings call. Even though we've been writing about Locker for years at Ad Exchanger and We know, Keith, but it seemed like a few investors were like, wait, what is this thing? Like what?
- [24:49]
Tim Vanderhoek
Yeah, investors get it over time. It does take them. That was the first time they had ever heard of Locker. Because they're public company investors. Locker is a smaller startup. It would make sense that they don't know about Locker. I think from what most people don't understand when you run a public company, the difference is, as the CEO of the public company, I have to context switch all the time. And if I'm talking to you, which is an industry participant or a client or an agency or whatever it is, we would talk about Locker in one way. All investor questioning is around how much did you pay for it? And how is this going to translate into future revenue and profits greater than you had before? And so every line of questioning is all translated into financial results for me as an investor. So we context switch and have to answer certain questions on earnings calls differently than if I were being interviewed with you about the opportunity of unlocking identity for everybody, not just for ourselves.
- [25:52]
Alison Schiff
Fair enough. Different kinds of nerds.
- [25:54]
Tim Vanderhoek
Yeah, absolutely. Absolutely.
- [25:56]
Alison Schiff
All right, we're going to take a quick break and when we're back, we'll talk a little about the trade desk, your main competitor or one of your main competitors, and also the changing DSP landscape. A bit more about ctv, of course, so stick with us.
- [26:15]
Henry Innes
Foreign.
- [26:22]
Sarah Sluss
Hello, I'm Sarah Sluss, executive editor of AdExchanger, and I'm here with Henry Innes, the co founder and global CEO of Mutinex. With a focus on driving product development. Henry leads the Mutinex product vision. He's obsessed with what's next for customers with a background in software engineering, marketing strategy, works with a lot of the world's largest brands. Welcome, Henry. Let's dive right in. Every organization talks about being very data driven in their marketing, but a lot of them struggle to get there. What's holding them back, in your opinion?
- [26:59]
Henry Innes
I think the number one problem and issue holding any organization back is the cost of asking a question. So if you think about the cost of an organization asking a question, when a CMO goes to ask that question, what tends to happen is a cascade of things happen. People look at various platforms, they look at various sources of truth, they wrangle that together in a presentation, and it takes weeks and weeks and weeks and arguably cost millions and millions of dollars. So the number one way to solve that is to build systems and processes that go beyond just aggregating and building models around data analytics, but are able to deliver Answers to complex questions quickly, immediately and without cost. And if you can start to solve that problem, that allows you to answer more questions. When you can answer more questions, you can become more data driven.
- [27:48]
Sarah Sluss
So there's a lot of analytics tools out there now. Why isn't it that the tools are solving the problem?
- [27:56]
Henry Innes
Well, I think if you have a bunch of data scientists building tools for other data scientists, it becomes ridiculously hard to build something workable for actual organizations and users. So I'd say that's probably the first thing. I think ultimately it's because we're all focused on the wrong thing. You know, we're focused on more data, not, not good answers. And you know, and I think ultimately every data product focuses on generating more and more data for organizations, which adds more and more cost to organizations. When you have more and more cost organizations being added from more data, what ultimately happens is they get overwhelmed. How many times have we seen analytics platforms being added in only for new teams to spring up around them, new owners to spring up around them, and them not to be integrated into the business? So we focus very much on ignoring the data problem. And in fact, you know, we know organizations don't want more data, they want less data crafted to better answers. And so ultimately that's, that's what we.
- [28:55]
Sarah Sluss
Shoot for, less data crafted to better answers. I really like that as a North Star. How do, how do you fix this answers problem?
- [29:06]
Henry Innes
Well, the first thing is to acknowledge that no one wakes up in the morning wanting to buy a market mix model. Everyone wakes up kind of, you know, going, I have a problem. What's the data? I need to understand to answer that question. And so that is the product that you're ultimately trying to build. You're trying to build answers platforms, you're not trying to build market mix modeling platforms. The entire framing of the MMM industry around models betrays the fact that it's not a customer centric or focused industry. And so I think if you start to change that fundamentally and start to go, okay, how do we get really good answers? Where we have very fast models that we know are very accurate and have extreme granularity so that we can actually select the right components that matter to analyze a problem, rather than providing very high level generic answers with lots of strategic waffle to justify those answers, then we start to get to a much better place.
- [30:03]
Sarah Sluss
So I hear you alluding to what you're building at Mutinex. How does your team tackle this challenge? Give us a little more detail.
- [30:12]
Henry Innes
So we tackle the challenge firstly by you know, making data ingestion very easy. You know, if you, if you can't take in unstructured data, if you have to spend weeks and weeks in data, it's impossible to get to a good answer quickly. We then focus on having models that run really fast in a very generalized fashion. The reason why is that means those models are not biased by analysts and they also stand up over time and they're more robustly tested across different environments and scenarios. And that means they're more reliable for forecasting, they're better in parameter recovery, they're better in holdout testing, which are objective tests that you can run. And finally, we then build usable interfaces that sit over those generalized models that select the right answers with the right level of granularity to present the information that a user needs, rather than forcing the user to consume lots of data that they don't need.
- [31:08]
Sarah Sluss
Well, I like this approach. It's very thoughtful of what people need versus just trying to maybe push another tool for the sake of a tool. As we were talking about early in the conversation, thanks for coming on the podcast, Henry, and thank you to mutinext for supporting our podcast.
- [31:27]
Henry Innes
Thanks.
- [31:44]
Alison Schiff
All right, we're back and I want to talk about take rate, if you don't mind.
- [31:50]
Tim Vanderhoek
Sure.
- [31:50]
Alison Schiff
Do you guys sell or charge an upsell fee for identity products like the Household id, Iris id? Like do they boost the take rate? Are they baked in? How does that work?
- [32:02]
Tim Vanderhoek
They're baked in. There's third party providers like Ramp id, of course those are charged. We have to pay for those. But yeah, it really depends. In our dsp, people could be doing two things. They could be doing device level tactics or they could be doing household level tactics. And they all require different data segments. But you came in and select the cross device graph. No, the charge, there is nothing. If you upload your first party data, there's no charge. If you're using a cross device function, then yeah, or sorry, cross channel function. Usually there is a charge here. So it just depends the tactic being executed.
- [32:42]
Alison Schiff
Okay, got it. And I want to bring up this story that our senior editor James Hercher wrote. It was kind of spicy a few weeks back, had a killer headline as CTV blooms. It's Knives out for the Trade Desks Take Rate. Which is about how as CTV grows, there's been like more scrutiny of the trade desks take Rate. And they actively promote the fact that, you know, they have a lowish and reasonable take rate. But like, even so, CTV publishers out there, they're questioning whether it's justified. You know CTV is maturing, there's more competition like you mentioned during the first half. CTV is now well over 40% of Viens business. So that's just a lead in to asking how you guys compete with the trade desk because they are the second largest DSP after Google. Of course there's a wide gulf between Google, it's like Google many, many, many miles Trade desk and then everybody else.
- [33:38]
Tim Vanderhoek
And another wide goal from the trade desk to us. Yeah certainly I, you know take rates in our business have been pretty stable. I think the one thing with the trade desk that's different than us is some of their customers are absolutely massive which is like Procter and Gamble or Unilever. You know these massive. And so you have to think that they have a discounted take rate based on the scale of their business. And I think a lot of those complaints that you hear are mid market style customers. So if the, you know, if your average take rate is 20% or whatever it is and you have very large customers that are much lower than 20% well that means on the other side the smaller customers are probably paying a higher rate than the 20% average. So I think those complaints are generally in that mid market. But at the same time the trade desk is eating Google's lunch. In the end if you're an unhappy customer on DV360 or you read the antitrust documents and you no longer trust Google, the trade Desk is generally the default option for that. So I think for the trade desk when you listen to their leadership talk it's about scaling the business to become Google. They are right on the precipice of being DB360 and they're now at that level. So they likely are raising take rates amongst smaller customers because that's how big businesses grow. It's unfortunate for capitalism, you know from a capitalistic point of view that, that they do that. But in the same vein of capitalism vine is here we're the the next DSP that is independent buy side only only represents buyers. We have our own advantages we believe but there's new options available for customers as well. So to me the first question when I meet with customers is not take rate or fees. Of course they all want the lowest take rate and the lowest fees possible. But there are realities. Data costs money. A graph from Live Ramp will cost money or anyone else that they choose. So to me when you get in there it really is the costs are the costs. And then how do we use AI to automate more so we can get better productivity out of the budgets using AI rather than going after the take rate per se.
- [35:59]
Alison Schiff
And you mentioned just now Vayant is for buyers only, but SSPs are kind of becoming more like DSPS and vice versa. There's been a blurring of the lines and you have SSPs rolling out products that mimic, you know, the buy side and vice versa. Yeah. So would you guys ever launch a product like Open Path, which is the Trade Desk SPO solution, I'm assuming? Not based on what you were just saying, but maybe.
- [36:26]
Tim Vanderhoek
No, we. We actually did. We have a product called Direct Access, but where it's different.
- [36:31]
Alison Schiff
True, I should know that. Right?
- [36:33]
Tim Vanderhoek
Because I. Yeah, it's fine. Where it's different is Open Path is for display and online video publishers. Kind of traditional, programmatic, because the Trade Desk has a big business in display and online video. We did Direct Access just in CTV. It's the top 25 publishers of Connected Television. And really a lot of those big media companies want to do yield management on their own. And so they want us bidding in directly to whatever their own homegrown system or they'll rent it from someone else. Or some are using just straight up open source pre bid to execute their businesses that are out there. So they all have a little different strategy. But in TV there's not a long tail like mobile apps and websites. And so I think there's more of a. The Direct Access in CTV makes a lot of sense. We view the role of SSPs and online video and display, they play a good role there. Yes. The very head of the Internet, the top 20, most premium, very large organizations might want to do yield management on their own. But there's a huge Internet out there and that middle market, the torso of the Internet, needs SSPs to think on their behalf and try and drive yield up for them. And so there will always be an SSP that launches a buy side tool and some DSPs that cross over end to end. And you hear that from some public companies out there, we just don't believe in that. We believe there's a natural conflict of interest and you have to pick a side. If you, you either represent the buyer and your goal is to make the price as low as possible, or if you're on the flip side, you need to make the price as high as possible and drive yield for that publisher because that's why you're there. What ends up happening when you're in the middle. And I know this because we were once an ad network called Specific Media. When you control both Sides, the company you take care of is yourself and it creates a natural conflict of interest that is impossible to get rid of. And that's really why we switched from Ad Network. We acquired Adelphic, as you mentioned, and made it Omnichannel and now positioned as the dsp. We really do believe that there's very little competition in this realm of DSPs. Buy side only, no sell side activity. I don't own sites that I'm trying to sell you ads on. When you look at all of our competitors, they all have that ilk to them, but the trade desk. And that's why we like the rare, rarefied error of buy side independent only DSPs. And I would say other than bidding directly into the top 20 CTB companies because we were asked to, that's really what direct access is about. Yeah, I see a bright future for SSPs. The Internet is huge. The Internet keeps expanding. Most publishers don't even have extra money to hire a salesperson to go try and drum up ad sales. So it makes sense to aggregate together with an SSP and use an SSP salesforce and DSP integrations like us to drive demand for the open Internet. But at the same time, we need to clean up the open Internet too.
- [39:50]
Alison Schiff
Oh, definitely. And I will say I get, speaking of pitches, as I was before that land in my inbox, I think the CTV long tail is growing longer because I get pitches constantly about new fast channels, like really random ones. I'm like, well, there must be an audience for it. But there's a lot more out there than there was a couple of years ago.
- [40:12]
Tim Vanderhoek
Oh, CTV content is going to explode. And everything we're looking at till this day is pre AI. And ask yourself on your social feeds, how much AI content are you consuming via text or an image generated by AI in your social networks of choice? Today, probably a good percentage are now generated by AI. But in CTV that phenomena hasn't happened yet. And so you've got a huge content explosion coming in, Connected Television. And I do believe you're going to see more fragmentation. One thing that just got announced recently is the former CEO of Xumo is a guy named Colin Petrie Norris and he has a brand new startup that Vyant actually is the lead investor in with a couple other smaller investors. It's called Fairground TV and it's one of the most interesting companies. They use generative AI to create all the connected television content. So a remake of Dracula, Robin Hood, other content that's out there, that's old, that's in a library that could be more relevant for today's youth. And so I think what you're going to see is generative AI creating content for the big screen. And that's what's coming. That's why we were very excited to lead the investment in Fairground tv. It's not applicable to Vyant. What are we learning from that? We want to be able to make the ads in the same way that that content has. And like we talked about that creative being that next frontier. This is a great investment for us to watch one of the great operators that we've worked with and Colin really execute on the content side and hopefully we can learn some stuff.
- [41:58]
Alison Schiff
And maybe the answer to this next question is just as simple as AI. But what innovation do you think will define the next era of DSPs as the category gets smaller and smaller? I mean, if there's increased competition, there's been the shift toward cookie list despite the fact that third party cookies are staying in Chrome. There's pressure for more transparency and some pressure for lower fees. Although I know you say that that's not the number one question that you get. And of course the rise of CTV and more and more CTV content, as you were just referring to, and this blurring of the lines between DSPs and SSPs. There are so many things that people talk about, but some of it feels almost like a distraction at this point. And I want to look a little bit ahead to what like real innovation looks like for your category.
- [42:45]
Tim Vanderhoek
To me I would answer it not with the word AI, we'll use AI. But to me the future is autonomous. And I know, and I'm not just pumping by it, but it's actually making the computer. There are too many choices for humans to decide. If I'm a programmatic trader and I look at all the CTV apps you talked about the expansion of the fast channels that happen every week. More channels are popping up. How many data segments are proliferating? Audience segments for people to utilize from various RMNs are popping up daily of new data that people could use.
- [43:18]
Alison Schiff
Chuck E. Cheese has one.
- [43:20]
Tim Vanderhoek
Yeah, I mean everyone's going to have one. Why not? Why not? It's a high margin product, you sell it to people. So my cat Mermaid has one great first party data. So I just think to me, there are too many choices for humans to place the right ad in front of the right user at the right time that we all talk about, which is why autonomous functionality will be the big differentiator. It's the autonomy of not Just creating a campaign and setting it up, deciding what we're going to say to the consumer, deciding which consumer we're going to show this ad to and at what time of day and the price, et cetera, et cetera, and generate the ad. I mean it's all this hyper personalization. It is all going to be autonomous and it is going to power incredible productivity for these businesses. It's going to lower costs for customer acquisition. And I think what I focus on is how can we drive new customers for the advertisers that use our dsp, someone might be really good at retargeting but in the end the lifeblood of all businesses is new customer acquisition. And we focus on that mid market customer set. And so we're very focused on making advertising that actually works. Most of the players in the space take credit for something that was going to happen anyway. That is the current mantra of where all this innovation is. Who can show the last ad to the user and drop a cookie right before a sale was going to happen. That's the cookie dropping game we all know exists. It's a huge waste of money. We floated out of that 50,000 foot. And it's more first principles to the actual approach of innovation. Hyper personalization of the ad using AI. But in the end these are going to be autonomous ad platforms. I think Microsoft getting rid of Xander is a move in that direction. If you look at what they said, I don't believe it's going to be agentic the way they describe, but they're going down the right path, which is autonomous platforms are going to be much better in the future, not today, in the future than the human manual trading across millions of choices. When you combine them, the combination of audience segment plus publishers, it's tens of millions of choices, you can't keep up. So all the knobs and levers that were built are going to get replaced with a chat access that tells you what it's doing to catch you up to speed.
- [45:54]
Alison Schiff
So Xander, the imminent shutdown of the Xander dsp, which you just brought up, your bro, your literal bro, Chris, he posted a theory about the shutdown on X that I thought was pretty interesting. That it's not just about the product vision, but it's also about dodging DOJ scrutiny. And Xander is kind of a liability because it's not just drowning in tech debt. That's a quote from his tweet or his post or whatever they call it now. And it's that. But it's also because of today's antitrust climate and owning a DSP and also controlling a big O and O dataset and content assets, like that's a red flag. I mean, do you think it's about that also or it's really just about this agentic feature that they're shilling?
- [46:44]
Tim Vanderhoek
Yeah, no, they're part of the Mag 7 and I think the Mag 7 all need to be on notice for from the government. I mean, that's what you're seeing with Google is you had very bad behavior. They've now been found guilty of that bad behavior. And we've seen some looks at what the repercussions of that is going to be. And I think you're seeing the other parts of the Mag 7 look and take notice because let's make no qualms about it. All of them are monopolies in their own right. So that is the hardest part of they're good for America and they're bad for America. So what is the right rules and. And someone really smart needs to figure that out. But certainly was the Google DOJ antitrust issues weighing in on Microsoft leadership? Absolutely. As it should be. And we'll see where it weighs in. As applied to Amazon and as applied to Meta, I think Meta is probably in more trouble than some of the others. But Amazon's right there as well too. So I think you're going to see them. And certainly we've seen Google's behavior while they've gone through this process, pull back from the aggressiveness that they had 10 years ago. So we'll see how they all behave. But I think breaking them all up, putting right guardrails will be huge for innovation. It will drive way better outcomes. And I almost blame the open web experience, the consumer experience on the open Web. I think it's important that we recognize that it's terrible today and who is to blame for. When I go to my local news site, I have seven mini videos popping up nonstop, a banner sliding up on my phone, ads that take over the page. Why? Because they're drowning. They can't have enough revenue. And that is Google's fault. So I think it will improve the open web experience when more of the money flows to the publisher.
- [48:39]
Alison Schiff
There is desperation at the local publisher level for sure.
- [48:43]
Tim Vanderhoek
All publishers. All publishers. Even if you're a great content owner, you still deal with the realities of a monopoly, you know, And I wrote a post on LinkedIn. I'm the owner of MySpace, so I've seen all the internal data. I know exactly what caused the death of MySpace. Facebook had very little to do with it. Yes, it was another competing social network and yes, they did a great job at execution. But what drove all of MySpace's traffic were music artists, their music artist profile page, the fact that their music videos were on that page and it was a huge chunk of the traffic. And when Google bought YouTube, took us off of the search results and redirected it all to YouTube, that was the death of MySpace. That's what killed the traffic. The journalists just inferred, Facebook killed Google, but Google or Facebook killed MySpace because they were competitors. But if you understand the mechanics on the traffic wheel of the Internet like we do, deeply, it was all Google. And you know what's interesting about this, I said, you know, since they killed MySpace, was talking to council, I said, can we sue them for killing us? Because they did, Google search did turn out to be a monopoly. And so I'd like to sue them for all the money that we lost at MySpace. And they said, no, you would have had to sue them at the moment in time when it was happening. Now the time period has expired. I said, but they weren't a monopoly back then. They only just got found out they're a monopoly. So there is no repercussions against the businesses they killed along the way. That's why I think the government repercussions need to be severe enough so that Amazon and Microsoft and anyone else positioned to do it doesn't. Because if they can do it, they will. This is capitalism. They got to grow for their shareholders as well.
- [50:36]
Alison Schiff
I'm going to, for our audio listeners, make a sound because that's a mic drop. I mean, I actually just dropped a coaster, but I wanted to mark the end of your response. So one more question before I go into a little lightning round, if you don't mind.
- [50:52]
Tim Vanderhoek
Of course.
- [50:52]
Alison Schiff
I want to talk briefly about the upfronts, but because we just came off of the upfronts, TV broadcasters just very recently finished doing their whole razzle dazzle, dance and pitch for advertisers, trotting out their talent, pouring the drinks, all of that stuff, basically acting like it's 30 years ago. How do you think the upfronts should evolve in the streaming era? And I don't know, do we really need them anymore?
- [51:18]
Tim Vanderhoek
I think the upfronts are a good opportunity. What is it? It's basically it's a marketing event and you get to show off new capabilities, features, functionality, data, content, whatever you think is going to be appealing. So I think there's a role for it is the role going to be as big in the future as it was in the past, Very unlikely. That's there. But I do think the concept of upfront guaranteeing inventory on a content owner in aggregate what it does the upfront and then moves into the spot market, that is a very nice supply and demand concept or framework to think about for an industry to go against. So I, I do think there is some role. I don't know if all the commitments are 100% committed and not changeable like some of the past, but I do like this idea of post up front for a discounted cpm if you're a marketer, if you want to commit and you know you're going to do it or take your chances in bidding and pricing might be lower or it might be higher based on supply and demand. So I do think the construct of it for the media industry is a good construct for television in general, but I don't think it will be as rigid as it has been in the past. And I think the presentations will be less just about content and more about data technology, measurement capabilities, partnerships, things of that. So a little more platform pitch and a little less content pitch, but both are important.
- [52:52]
Alison Schiff
So more platform, less Jimmy Kimmel, I guess.
- [52:54]
Tim Vanderhoek
Yeah, likely. Likely.
- [52:58]
Alison Schiff
Okay, so I want to do a lightning round. Answers can only be 5 seconds or less and take me seriously because no one takes me seriously, no one listens to me. I say five seconds or less and I just get full on fulsome answers for every single question. I'm like, that is not a lightning round. Okay, I know you're optimistic about the guilty verdict in the Google AdTech antitrust trial, but will anything really actually change?
- [53:24]
Tim Vanderhoek
Yes, they'll be broken up entirely.
- [53:26]
Alison Schiff
Right. Okay. What's more important to measure, outcomes or quality?
- [53:33]
Tim Vanderhoek
Outcomes. Quality is a precursor to outcomes.
- [53:37]
Alison Schiff
Did the industry waste its time in the Chrome privacy sandbox?
- [53:41]
Tim Vanderhoek
Completely.
- [53:43]
Alison Schiff
Is the open Web dead?
- [53:47]
Tim Vanderhoek
There is a new open web. What's dead is traditional display is likely in secular decline and the areas of the open web that are exploding are connected, television, streaming, audio, digital out of home. So the open web continues to expand and I think there's a shift in prevalence from display into these newer exciting areas of the open web. And what you're seeing is legacy players stuck in the traditional programmatic channels are generally having business challenges.
- [54:18]
Alison Schiff
That was a longer answer, but I'll allow it. Because you can't ask the CEO of Vyant if the open web is dead in a expect a five second answer that wasn't actually fair. You're at an industry conference and you look down at the agenda and you see a session on X topic and it causes you to roll your eyes back into your head in frustration and boredom and annoyance. What is that topic for our listeners? Tim is thinking there are probably too many things.
- [54:55]
Tim Vanderhoek
Probably the word performance advertising, because it's all last touch attribution and it's all a lie. So to me, I write off when I hear people talk about performance. It's like, performance according to who? Google's report that we all read was rigged. So to me, I just the word anything performance, advertising. I'm just such a skeptic of it then.
- [55:18]
Alison Schiff
Last question of the shorter round. You've worked with your brothers very, very closely for decades. How do you get along so well and do you ever want to like, kill each other?
- [55:30]
Tim Vanderhoek
Yeah. No, it's the opposite. We're best friends. I mean we, we grew up sharing a room all the way until we went to college. So we're very used to sharing space and we're really good at negotiating with each other. So like, as you can imagine, the first 18 years of our life, the negotiation was who's going to turn off the light because it's bedtime. And we've come up with just a numerous ways to get past friction or if we disagree and we're just really, really good at it. And having someone that you work with, like your brother, where there's infinite trust, you're allowed to say anything to that person and you know it'll be fine. So we're able to hash things out really, really fast. I wouldn't trade it for anything else. It creates, it makes work so much more interesting when you're doing it with someone that's basically been your best friend your whole life. So yeah, I think, I think it's a huge advantage having a business partner with infinite trust.
- [56:27]
Alison Schiff
I am fascinated by this dynamic because I'm an only child.
- [56:31]
Tim Vanderhoek
But the last thing we should talk about is what's not important. I want to ask myself that own lightning round question. The answer is curation is not important because it's not new. And it's nothing different. It's. It's just an ad network from the sell side.
- [56:48]
Alison Schiff
And anyway, good stuff should be aggregated regardless, right? Isn't that just the job?
- [56:53]
Tim Vanderhoek
That's the job of programmatic. Yeah.
- [56:56]
Alison Schiff
All right, so to bring us home and you can answer full length. Last question. I've asked this of a lot of people on this podcast and I'd love Your answer. Because as previously established, you have ad tech bona fides. I mean, you've seen bona fides or bona fides. It's fun to feed, isn't it? I don't know. Listeners write in and tell me how to pronounce that. But you've seen a lot of things. And I want to ask you my favorite question, which is my time machine question. So putting aside the paradox of time travel, if you could travel to one specific point in history and make one strategic change that would alter the course of online advertising for the better, this industry for the better, when would you travel to and what thing would you change?
- [57:42]
Tim Vanderhoek
Hmm. I would. I mean, I feel bad saying this because I made a living off of it for so long, but the display ad turned out to be just not great. It has horrible engagement and it was. So if I could travel back in time, I would say it would be in the moment that the first Visa banner ad was running. I wish we had a better ad format and we didn't focus on print as or a print style format of a magazine to start. So yeah, I would probably go back in time and say, man, if we had worked out the ad format, our effectiveness today would be a lot better. And I think that's why CTV is so exciting.
- [58:31]
Alison Schiff
It's interesting to hear you say that as someone who was there building the pipes and now you're talking as you were during the first half, about how creative is very, very important to what you do. So yeah, all hell, by the way.
- [58:42]
Tim Vanderhoek
And if there's a close second, I would say retargeting. I mean how many people are over indexing their budget to retargeting with a banner ad yet, you know, are think they're killing it for their business. And I think Nike is a great example of what happens when you focus too much on cpa, all your budget tilts to search and retargeting and then you get no net new customers into your purchase funnel. So yeah, I think retargeting would be a close second back when we did that in 2004.
- [59:13]
Alison Schiff
I will say too, when anyone asks me what I do, one of my mom's friends for example, and I say, I'm a journalist first. People are like, ooh, wow, is it for the Times, Is it for the Journal? I'm like, no, it's a trade publication called Ad Exchanger that owns specific media. And they're like, oh, what's that? And I try to explain it and I see their eyes kind of glaze over. And then I always fall back on. Well, you know, the ads that follow you around the Internet? Well, I write about the companies that have done that, and then their eyes don't light up in excitement, but in recognition they go, oh, right, that.
- [59:50]
Tim Vanderhoek
Oh yeah. Well, I can't wait until after this gets published and all the LLMs come confirmed that Ad Exchanger owns specific media and it's going to be written in for the next decade. So thank you so much for having me on. I. I loved the discussion. It was great to chat.
- [60:07]
Alison Schiff
It was a pleasure. And we somehow astroturfed ourselves.
- [60:24]
Sarah Sluss
This episode was brought to you by Mutinex. Pioneers in AI powered market mix modeling get fast answers to hard questions with Mutinex. You can ask for a demo at Mutinex Co. That's M u T I N E X co.