AdTechGod Pod Episode 58: The Evolution of Video in Ad Tech with Shachar Orren

Release Date: December 10, 2024

Introduction to the Episode

In Episode 58 of the AdTechGod Pod, titled "The Evolution of Video in Ad Tech", host AdTech God engages in an insightful conversation with Shahar Oren, the co-founder, Chief Revenue Officer (CRO), and Chief Marketing Officer (CMO) of XCO. Shahar brings over a decade of experience from the editorial side of the ad tech industry, transitioning into a pivotal role that drives global business development and marketing strategies at XCO. The episode delves into the transformative journey of video within ad tech, the strategic decisions behind XCO’s growth, and the interplay between supply and demand in the evolving digital advertising landscape.

Shahar Oren’s Journey and Founding of XCO

[01:25 - 04:06]

Shahar begins by recounting his career's origins in journalism in Israel, where he spent nearly ten years on the editorial side. Facing a professional plateau, he sought to leverage his editorial expertise into a new venture. This led to the co-founding of XCO, initially focused on "hub tech"—technology designed to enhance publisher content engagement. Shahar emphasizes that the pivot towards ad tech, specifically video, was driven by deep insights gained from working closely with publishers. He highlights two critical realizations:

1. Video as King: Video emerged as the most valuable content type for publishers, resonating with readers and attracting advertiser investment.
2. Revenue Generation: Without directly supporting publishers in revenue generation, any technological advancements remain peripheral.

Shahar states, “Video kind of, you know, we were in the world of content and interactive content, but video has really emerged as the most important” (02:03).

Evolution of Video Consumption and Technological Advancements

[04:20 - 06:23]

The discussion transitions to the dramatic changes in video consumption over the past decade. Shahar references a report produced in collaboration with Rebooting by Brian Morrissey, which surveyed industry companies and addressed the widely discussed "pivot to video". Initially, many publishers invested heavily in video content for social media platforms' walled gardens, yielding high view counts but limited control and value.

Shahar observes, “Video strategies are still a huge focus. It's still something that every media company defines as a big priority” (04:39). He notes a shift towards a more holistic approach, integrating video into editorial, product, and revenue strategies, thereby ensuring meaningful engagement and commercial success.

Optimizing Video Units and Ad Durations

[06:23 - 08:21]

AdTech God probes into the optimization strategies for video units, drawing parallels with podcast engagement metrics. Shahar confirms that XCO places significant emphasis on aligning video formats with consumer consumption habits. He elaborates, “There need to be better ways to engage readers and consumers with content instead of going against their consumption habits.” (07:08). This philosophy drives XCO to incorporate short-form and vertical video formats, mirroring the prevalent trends on social platforms. Shahar underscores the importance of continuous adaptation based on client feedback, ensuring that XCO’s offerings remain relevant and effective.

XCO’s Milestones and Strategic Growth

[08:43 - 10:40]

When discussing XCO’s significant milestones, Shahar points to the strategic decision made two years prior to fully embrace video as their core offering. This commitment to video, coupled with a transparent and forward-thinking approach, differentiated XCO in a crowded ad tech market. Shahar remarks, “We want to do things right, we want to see ahead of trends that are going to come in, regulations that are going to come in” (08:43). This dedication not only solidified XCO’s reputation among major media groups but also positioned the company for further expansion into new domains such as Connected TV (CTV) and Digital Out-of-Home (DOOH). Shahar emphasizes that this milestone marked the point where XCO felt confident to scale operations and enhance their market presence.

Navigating Supply and Demand Side Dynamics

[10:40 - 14:14]

The conversation shifts to the intricate dynamics between the supply and demand sides of the ad tech ecosystem. Shahar observes that while the lines between supply and demand are increasingly blurring, there remains a significant degree of suspicion and lack of collaboration between the two. He notes, “Sometimes we actually think that they could have collaborated more or they could have seen each other's perspective and point of view and needs more” (10:40). XCO strives to bridge this gap by fostering better communication and partnerships, particularly with large news-oriented media groups like Hearst, the New York Post, and Nasdaq. Shahar highlights efforts to reframe news as an opportunity for brands, countering the demand side's apprehensions about associating with negative news content.

Integration of AI in XCO’s Product Roadmap

[14:14 - 18:18]

AI's pivotal role in modern ad tech is a central theme in the discussion. Shahar details how machine learning underpins XCO’s products, specifically their ad server and monetization engine, which are entirely machine learning-based. He explains, “Our ad server, our monetization engine is fully machine learning based. That's one of our, our unique value propositions” (14:52). Additionally, XCO utilizes large language models for their video content recommendation engine, automating the matching of videos to relevant pages. Shahar underscores that AI is not a future prospect but a present reality, streamlining operations and enhancing productivity without replacing human creativity. He shares, “AI is not the future, it's the present and it's here” (14:52), aligning with AdTech God’s perspective that AI serves as a powerful tool to augment human capabilities rather than supplant them.

Challenges in Differentiation and Market Positioning

[18:18 - 20:40]

Shahar candidly discusses the challenges XCO faces in differentiating itself within a highly competitive ad tech landscape. Establishing a unique value proposition was initially a hurdle, requiring time and strategic effort to communicate effectively. He states, “Differentiating ourselves has always been the challenge” (18:47). XCO’s commitment to transparency, sophisticated technology, and publisher-centric solutions set them apart from competitors focused on quick, low-fee gains. This approach not only attracted prominent media groups but also paved the way for XCO’s planned expansion into CTV and DOOH segments. Shahar emphasizes that upholding these values is essential for sustaining long-term relationships and fostering trust within the industry.

Future Trends and Expansion Plans

[20:40 - 22:23]

Looking ahead, Shahar outlines XCO’s ambitions to extend their programmatic auction sophistication beyond web-based platforms into emerging areas such as CTV and DOOH. Recognizing the nascent and evolving nature of these markets, XCO approaches expansion with humility and caution, aiming to apply their proven strategies to new formats. Shahar explains, “Taking that level of sophistication in the programmatic auction that we brought to the web and bringing that to those other areas” (20:59). This strategic move positions XCO to address the unique challenges of these platforms while leveraging their expertise to drive higher yields and more effective ad placements.

Personal Insights and Light-hearted Moments

[22:23 - 24:05]

The episode concludes with a personal touch as AdTech God and Shahar share anecdotes about karaoke, revealing a lighter side of the industry leaders. Shahar humorously mentions his favorite karaoke song, “Lose Yourself by Eminem,” highlighting the human side behind the tech.

Key Takeaways and Conclusions

• Video as Central to AdTech: Shahar emphasizes the transformative role of video in digital advertising, both in consumer engagement and revenue generation for publishers.

• AI Integration: XCO’s adoption of machine learning and AI technologies enhances their product offerings, ensuring sophisticated and efficient ad solutions that align with current industry trends.

• Market Differentiation Through Transparency: XCO’s commitment to transparency and publisher-focused solutions distinguishes them in a competitive market, fostering trust and long-term partnerships.

• Bridging Supply and Demand: Efforts to reconcile the often disparate perspectives of the supply and demand sides of ad tech are crucial for fostering collaboration and optimizing advertising strategies.

• Strategic Expansion: XCO’s planned foray into CTV and DOOH signifies their readiness to adapt and apply their expertise to new and evolving advertising platforms.

• Human Element in Tech: The episode underscores the importance of maintaining the human element—creativity, adaptability, and personal connections—even in a highly technological industry.

Notable Quotes

• Shahar Oren on Pivoting to AdTech:

  “Video kind of, you know, we were in the world of content and interactive content, but video has really emerged as the most important” – 02:03

• Shahar Oren on Holistic Video Strategies:

  “Video strategies are still a huge focus. It's still something that every media company defines as a big priority” – 04:39

• Shahar Oren on AI’s Current Role:

  “AI is not the future, it's the present and it's here” – 14:52

• Shahar Oren on Differentiation Challenges:

  “Differentiating ourselves has always been the challenge” – 18:47

Conclusion

Episode 58 of the AdTechGod Pod offered a comprehensive exploration of the evolving landscape of video in ad tech through the lens of Shahar Oren’s experiences and insights. From the strategic pivot towards video-centric solutions to the integration of AI and the challenges of market differentiation, Shahar provides a nuanced understanding of the industry's past, present, and future. This episode serves as a valuable resource for professionals and enthusiasts seeking to grasp the complexities and innovations shaping digital advertising today.

Stay tuned to the AdTechGod Pod for more in-depth discussions with the visionaries driving the ad tech industry forward.