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- [00:00]
Ari Pipero
This podcast is brought to you by the Current. Ever wanted to sit down to a candid conversation with the marketing leaders of the world's biggest brands? The Current podcast is your chance. On the Current podcast you'll find exclusive interviews with the experts and trendsetters who are on the front lines of digital advertising. And they always leave the ad tech jargon at the door. Subscribe to the current@www.thecurrent.com or anywhere you get your podcast today. Welcome to the Markitecture Podcast. I'm Ari Pipero. We have an exciting show this week. We have Andy Goldberg, who's the president and CEO of Publishers Clearinghouse which has been around forever. He's actually been there for 41 years. It's amazing. We have a really interesting conversation about data, direct response, how it's all evolved. I mean Eric, are you a Publisher Clearinghouse family? Do you play the games and upload and subscribe to the magazines?
- [01:07]
Eric
No. So in preparation for this, I was poking around on their on their site and doing a little bit of reading. It's a fascinating business. Number one, it's a 70 year old business. Number two, to your point, he's worked there for 40 years, so he has seen everything and how this thing has evolved over time. So PCH has I think really interesting offerings and opportunities in a bunch of stuff. So not just like selling media, but like data and identity because you know, people sign up for this with their real names, with their real addresses to win prizes. So he's got probably unique perspectives, not just from 40 years at the place, but also in a modern era where increasingly it seems like this stuff is moving in the direction of a company like this. So I'm looking forward to it.
- [01:49]
Ari Pipero
Yeah, exactly. A lot of interesting insights about first party data. We also have exciting news of the week, including the Experian Autogen acquisition, a new another acquisition from interpublic group and OpenAI considering ads. Also some gossip from London. That should be fun. So let's do some quick housekeeping. If you're not aware, market is on TikTok. We're also on reels and on shorts. It's not me, it's not some fat old guy dancing. That is not what you'll see if you go to that channel.
- [02:17]
Eric
We would love to see that. What are you talking about?
- [02:19]
Ari Pipero
I'm sure you would, but you will have to wait. Come at 2 in the morning at Cannes, you'll see that. But you're not going to see that on TikTok. What you will see is our newest correspondent, Caitlin O'Brien, who does a weekly refresh series on these channels. It's great. It's really kind of fun and interesting. She's really insightful, and she talks about the news of the week just like we do here, but it's a little more interesting. So definitely. Check us out. TikTok reels, YouTube shorts. It's the same content on all three. All right, let's go for it. Let's talk with Andy Goldberg from Publishers Clearinghouse.
- [02:51]
Eric
Let's go.
- [02:54]
Ari Pipero
Andy Goldberg, thank you for joining Marquitecture.
- [02:57]
Andy Goldberg
Thanks, guys. Really appreciate the opportunity to be here.
- [02:59]
Ari Pipero
So Publishers Clearinghouse, PCH, you've been there 41 years.
- [03:05]
Andy Goldberg
Yes, it's actually true. But, you know, the business has changed so much over the years that it kind of felt like I got a number of new jobs along the way. But, yeah, it's been quite a run.
- [03:14]
Ari Pipero
So what is PCH now? I mean, I probably. Everyone's heard of it. Everyone's probably. No, it's not Ed McMahon, is it? It's the other.
- [03:22]
Andy Goldberg
No, actually, it's funny. You know, my granddaughter told me a few years ago about a thing called the Mandela effect.
- [03:28]
Ari Pipero
Yes.
- [03:28]
Andy Goldberg
And so if the Mandela effect suggests that everybody's sure something happened when it really never did. So everybody in America is sure that Ed McMahon worked for publishers Clearinghouse, but in fact, there were two companies. There was us, and there was American Family Publishers, which was owned by Time, Inc. And some other publishers along the way, and he worked for them. But we used to advertise on TV at the very same time. And so kind of like everybody got confused, and it lifted all the boats. It was actually not a bad thing.
- [03:57]
Ari Pipero
Yeah, I've looked this up before. Eric, you look like you're shocked. Like you're just.
- [04:00]
Eric
My mind is blown. It's too early for this.
- [04:05]
Ari Pipero
Yeah, but did you have Giant checks?
- [04:08]
Andy Goldberg
We are the guys with the giant checks and the Prize Patrol, which we created ourselves. And then along the way, we did use a bunch of different celebrities, you know, in our advertising. So.
- [04:18]
Ari Pipero
Yeah, so what? So what is pch?
- [04:21]
Andy Goldberg
Okay, so let me tell you a little bit. Can I tell you, like, for a second about how the business got to where it is today? Because I think it's important to kind of understand how we got to where we are.
- [04:29]
Ari Pipero
Look, if people are listening to this podcast, they're pretty bored already. So give us a story. Let's hear it.
- [04:33]
Andy Goldberg
Okay, hopefully I won't bore you. The business has been around a long time. You said I've been here 41 years. The business is about 71 years old. It was started back in the 50s by a guy who came out of magazine circulation, and he created this novel idea of putting all the magazine offers into one direct mail piece and taking on the marketing and the credit risk. It was pretty much successful right out of the box and became the biggest source of new subscriptions for the publishing industry. The sweepstakes came along about 14 years later in the 60s. It wasn't really an original idea. We kind of took it from Reader's Digest, but that lifted the business to a whole new level because the response that everything got with the sweepstakes was much bigger. We then got into merchandise in the 80s, and so the business was diversified. And then we were able to offer a lot more things to people. But what's interesting there is from the pretty earliest times of offering merchandise, we were starting to look at all the purchase data that we had. So this is now back in the early 90s, and create essentially a recommendation engine based on what people had bought. So we started putting people into affinity tracks and saying, okay, we see that you have an interest, for example, in music, or maybe even specifically country music versus jazz. And so we were able to start to curate selections based on what the data was telling us somebody wanted. So I kind of feel like we were pretty early on in that. And data's always kind of been central to the business along with the promotion. We took the brand online around 2000, started out and built a large opt in email database. Did a lot of work with DoubleClick. I know you have that in your back.
- [06:13]
Ari Pipero
First generation DoubleClick.
- [06:15]
Andy Goldberg
First generation DoubleClick. Yeah, it's a very large email opt in file which we were monetizing with traffic that we were exiting out to performance offers. And then we started offering our own merchandise and magazines. The next big aha was like, I don't know, X number of years later. I was at one of. I used to run the merchandise business at the time. And the coolest of all the trade shows was the music industry. It was unlike anybody else's. It was only a handful of customers back then. And so instead of having a big, you know, conference center, it would take place in a hotel, and the meetings would gravitate from, like, suites to the bar. And then in the evening, all the big artists would put on shows for a handful of the retailers one night, because we sold a lot of country music, they introduced me to Tricia Yearwood, who was a pretty big star in her own right. Before she married Garth. And she said, oh, say no more. I know all about PCH because in my house there's one night between Christmas and New Year's where we spread out the mailing piece and we decide what color Jaguar we might want to win and that sort of thing. And so what it said to me was we're really more than just a one dimensional direct marketer. We're really offering a unique form of free to play entertainment for a big chunk of America. So we sort of went from just this one dimensional PCH.com registration page to developing a network of properties and that got us into display and video advertising. We always knew that we had some kind of tremendous competitive advantage with the fact that our audience is 100% identified and that we're able to get them to tell us a lot about themselves. But it wasn't really until the last couple of years when all of a sudden all the talk about cookie deprecation where we said, you know, I think we've got like actually a really interesting opportunity because we have, I think the three ingredients that are going to be critical here. We've got a large 100% identified audience and nobody lies with a full postal registration to go along with email, which is very unusual. And nobody's going to lie about their address because they want to make sure the price patrol shows up at their house, not at their neighbor's. Right. And a lot of permission data that we're able to capture people and this amazing engagement that we have. So we said we really have an opportunity here, I think to play a role as first party data becomes more critical in a cookie less environment. And so to make a long story short, we have pivoted now to a focus on data led advertising and consumer insight solutions using this consumer platform that we have as a way to gather tremendous amount of permission data that we can then leverage in different ways.
- [08:56]
Ari Pipero
So what are these sites that people are registering for?
- [09:00]
Andy Goldberg
You know, a new user will find us through paid or organic social media, but paid media is more than just social and they'll come in. We have PCH.com, which is sort of like the flagship site. It's got lots of chances to free, chances to win, but it's also got a game section, it's got a quiz section, so on we have a free to play lotto site, we have a, we have two search properties, so it's a variety of ways and then we have apps. So it's a variety of ways to engage with us.
- [09:31]
Ari Pipero
So let's step back from PCH and talk about the general data marketplace that we're in right now. What are the trends that you see in the data world with the loss of identity and the kind of downgrading of third party data in many cases. I'd love to hear just kind of what the way the wind's blowing.
- [09:50]
Andy Goldberg
I think that there's a. We're getting, you know, we find a tremendous amount of reception to once we are able to tell people the story about the quality of the data that we have, where it comes, everybody wants to know where it comes from and so we take the time to explain to them like where our data comes from. The fact that we've got, you know, hundreds of thousands of people who are answering millions of questions. We've got a redemption center that we have a token reward economy and that creates gets about 300,000 redemptions a day in the reward center and that's really meaningful data because for example, if you go in and you pick a cabela's, you want to win a cabela's gift card that says a lot about who you are and so on. And we also got like 700,000 search queries a day. So the point is, what I think we're finding to answer your question is that there are some places in the market today where there is an understanding and a need for high quality first party data. And then there are other places where I think people are satisfied with. They know they need data but they're satisfied with the third party solutions.
- [10:53]
Ari Pipero
Yeah, exactly. That's the distinction I was trying to tease out. So in the old world third party cookie world with data brokers and integrations into DSPs, the quality was totally unknown. So when you're talking about a high quality first party list of some kind, are agencies coming to you directly or is there still brokers involved or they, or do they have to buy your media to get.
- [11:16]
Andy Goldberg
So our audience is Data Solution for example, which has got like 3,000 different segments. It's mostly made up of our own zero and first party data. We're actively, it's available on Liveramp and so you can find us organically through all the major DSPs and PubMatic for example. But we're going out and we're having the meetings with the brands and the agencies to make them aware of the fact that the data's out there and explain to them why it's better. So I wish they were all coming to us but you know, we're going to them. And then the other thing that's really interesting is, and what we're trying to do is we're trying to find the places where there's a real need and appreciation for high quality data. Like where they. If you're in a regulated industry and you can't screw around with, you know, age or geography, whether it's, you know, alcoholic beverages or gambling, let's say, then there's an immediate appreciation. Oh, this is really good. You know, yours isn't model data, it's actual data. So we're looking for the places where it makes sense. And the other thing that we're finding is like, because we've always had a traditional performance business, you know, and on the performance type advertisers, like for example, in our case social casinos, big category, these are sophisticated marketers. And what we're doing right now there is creating seed segments based on questions that our audience are answering that are specific to the needs of that market and creating a seed segment based on all this shared answers to questions and building profiles of high quality users based on original seeds as opposed to like a probabilistic model that somebody else would have.
- [13:03]
Ari Pipero
And so I hate to ask, what's a social casino?
- [13:07]
Andy Goldberg
Oh, so social casinos are stuff like double down Playtic is a big player. It's like a huge. And then there's.
- [13:16]
Ari Pipero
They're playing slots and poker for fun.
- [13:18]
Andy Goldberg
Yeah. So people playing it for fun. The revenue is coming from in app purchasing of currency, but the currency is just to level up and get in front of the next guy on the leaderboard.
- [13:28]
Ari Pipero
So it's not gambling.
- [13:29]
Andy Goldberg
No, but it's interesting. There is a new genre that's really interesting. That's, that's called online sweepstakes casino. And there are a few players who have emerged big and there it's a combination of social casino play gambling because you can actually win a real prize. And sweepstakes is the mechanism to be able to make it all work. So there's a lot of action in this space. It's a big space with players who are spending a tremendous amount of money on user acquisition, but they need, you know, they're always looking for new solutions. And also the, the maid deprecation issue was a big problem for a lot of app developers.
- [14:10]
Ari Pipero
So you ask a question like, hey, do you like playing craps with your friends or something?
- [14:15]
Andy Goldberg
Yeah, exactly. So we're asking. So we asked like, we went out and we got like in two weeks we got like I think 48,000 people who answered very specific questions about things like, you know, have you been to a land based casino? Do you play social casinos? Or have you ever purchased currency in the social casino and stuff? And then you put that together and you create a seed and you go like this is going to blow away every other source of data overlay that you have to inform all of your ad spend. So I'm hoping we could do more of that kind of thing.
- [14:46]
Ari Pipero
And when you say a seed, it's a pretty small amount of actual users, but then they use it to look alike or otherwise. Yes, manipulate.
- [14:52]
Andy Goldberg
Yes, exactly, exactly. So it's like let's say somewhere between 2 and 5,000 people who are qualifying for the high value seed. And then you take it and you can do a lookalike model against that and then blow it out to a much larger volume. But it's based on that original pure seed as opposed to just probabilistic modeling.
- [15:11]
Ari Pipero
Yeah. What's your take on the current state of deterministic IDs? There's a lot of mystery about how UID 2 or the RAMP ID are actually going to be ready for the cookie apocalypse or not. I would assume that you're licensing some of your data in that. So what's your take on the current state?
- [15:29]
Andy Goldberg
We do a fair amount of work with the trade desk via UID2 and also with Amazon. I would say those are the two leading sources of, with his actual attraction. I would like to see more scale than we've seen. I mean we've seen good growth from the trade desk but I don't think anybody has established themselves as a definitive answer the winner. And then there's also cleanroom matching which you know, we're starting to see more action right now. We're seeing the action mostly from Amazon. They have a, they have a AWS clean room solution that's similar to Google has a product out there called Pear.
- [16:07]
Ari Pipero
Right, Pear.
- [16:07]
Andy Goldberg
And we did a tremendous amount of testing with them over the past year with Pear. But for whatever reason I haven't seen that thing scaling as well as I'd like. So I don't think there's a clear winner yet. I think the Google shift in direction in terms of how they get to ultimately eliminating cookies has slowed things down a bit, taking a little bit of the urgency out. But I don't think it's going to change the ultimate reality.
- [16:32]
Ari Pipero
So when you say pair, that's about allowing advertisers to use your IDs on your website. Yeah, yeah.
- [16:38]
Andy Goldberg
In those cases they're both matching from their database to ours via the Clean room.
- [16:42]
Eric
Yeah.
- [16:43]
Ari Pipero
And Amazon is the same use case. We're talking about advertisers. Right. Okay, that makes sense.
- [16:47]
Eric
Yeah. Yeah.
- [16:47]
Andy Goldberg
By the way, we're doing some other cool thing with the seed segment with Amazon. So, for example, for Halloween, we asked our users two questions that Amazon wanted to know that they thought would define a high value Halloween buyer. And the two questions we asked were, do you dress up for Halloween? And are you planning to buy chocolate for Halloween? Because they said that that defines. It's kind of like Halloween is the kind of thing where you go up and down a street in the suburbs and one house is totally decked out and the other one has nothing. So there's clearly a differentiation of people who spend and don't spend anyway. So we built a segment for that and we're going to do that. A variety of tentpole events throughout the year, which could be leveraged on by Amazon by other people. So kind of cool.
- [17:34]
Ari Pipero
It is cool. So just stepping back, direct response and some of these things like Free lottos, et cetera, has often a bad reputation. I remember during the dot com boom, there literally was a company called Free Lotto, which was not the best.
- [17:48]
Andy Goldberg
Oh, I knew them. I know them. Yeah, there's a guy named Kevin something or other. Yeah.
- [17:52]
Ari Pipero
My friend Ben Saitz who's worked there. So call out to Ben Saitz, who I think listens to this podcast.
- [17:56]
Andy Goldberg
Actually a funny story about Free Lotto.
- [17:58]
Ari Pipero
Yeah, it makes.
- [17:59]
Andy Goldberg
I love to work there. So I went one time, I forgot Kevin's last name, the guy who owned Free Lotto. So somebody said, you gotta go talk to him. So I went to his office somewhere in midtown and I had never seen this before. So they were all like chain smokers.
- [18:12]
Ari Pipero
Yeah, I remember this. They had a. They had a giant. I don't know how he got anybody to work.
- [18:16]
Andy Goldberg
Yes. And he had like all these like air filter removers, but like giant commercial sized removers. And I walked into it, I'm looking like, how do any of you people work here? This is like crazy. I never saw.
- [18:28]
Ari Pipero
Anyway, that's my one memory of Free Lotto when I went to their office and they were all smoking. So.
- [18:34]
Andy Goldberg
Yeah, sorry, I digressed a bit there. I'm sorry.
- [18:37]
Ari Pipero
I guess what separates good from bad in this direct response world, because it's very easy to trick somebody into getting their personal information. And that's not the best.
- [18:46]
Andy Goldberg
No, that's definitely not the best. So you got it. You got. If you're not clear and transparent about what you're doing, you're ultimately going to get tripped up and it's not going to be sustainable. But I think it all comes down at the end of the day is like, is it wanted or is it unwanted? And then what's the core quality of the, of the response or the engagement that you're getting?
- [19:05]
Eric
Yeah, it's interesting. You talk about the, you know, the dot com stuff and the, and the free lotto. If I think back, a lot of the media buying practices back then that were employed were to, you know, kind of almost avoid things that we're talking about today. Right. So I remember distinctly, like, you know, in insertion orders, having no incentivized traffic. No, like sweepstakes. Right. Because, you know, brands were trying to, again, this was back in the days where it was all. Dr. Where brands were trying to guard against, you know, just traffic that wasn't necessarily what they wanted or people just clicking on ads because they got something free. You know, funny enough, maybe this was well timed with the, with the pod intentionally. Yesterday, Roy Franco, your cpo, actually a good friend of mine, wrote an interesting article about the value of incentivized traffic. So, like, do you today, in sales situations, when your sellers are out there in the, in the market, do you get pushback with just the nature of the traffic, the nature of the experience, or has everything, you know, kind of evolved to the extent that, you know, people just accept that this is, you know, the business model and there's positives to it.
- [20:20]
Andy Goldberg
So it is an issue, it is a source of frustration. It's interesting because when you talk to somebody about obtaining first party data, they kind of intuitively understand that you have to offer some value in exchange for somebody giving you an email, a postal address or telling.
- [20:38]
Eric
Access an article, right?
- [20:40]
Andy Goldberg
Access an article for free. You get 15% off your first order if you give me your email address. Free stuff or will give you a chance to win. And there's a tremendous number of sweepstakes that brands run as part of an effort, let's say, to build their first party database. Where we encounter the challenge is, let's say on the platform where we're selling, you know, display and video. And honestly, I would say, to be very honest with you, it's not so much the brand or the agency, it's double verify. So we have an issue with double verify. You know, where they have classified us as incentivize. IAS has no problem with us. You know, they recognize that we are providing entertainment. But in that case, it requires the brand to then have to go in and do a workaround and white label us. I would say yeah, it's a source of frustration. But again, when it comes to building data, everybody intuitively understands you gotta give them something in return or they're not gonna do it.
- [21:41]
Eric
Yeah, that makes sense.
- [21:43]
Andy Goldberg
And just by the way, we're even talking to publishers because publishers have this issue of like most publishers have most of their audiences. Unidentified and so a lot of there is an effort on the part of a lot of them to try and identify their audience. And they recognize that running a sweepstakes on their platform is probably the most effective way to get people to identify themselves.
- [22:05]
Ari Pipero
Right. There's a big difference between giving something away for identity versus paying people to visit a website, which was some of the worst abuses during the.com era.
- [22:14]
Andy Goldberg
Yes.
- [22:15]
Ari Pipero
And that's why whenever some bonehead comes up with the idea of paying people for their data or paying people for their traffic, it's like, no, it's not going to work. No one wants that. Right. That's my mantra.
- [22:26]
Andy Goldberg
Yeah.
- [22:27]
Eric
And for the record, just prior to this, I did a search. The IBTs and Cs do not prohibit incentivized traffic. It's a buyer decision or I guess a provider decision.
- [22:38]
Andy Goldberg
I mean, we never viewed ourselves as incentivized traffic. We always felt like people coming to us. Yeah, they're initially coming to us for that chance to win. But it's a source of entertainment. I remember once years ago, we were in a focus group and this is a guy, very young looking guy, plays golf every day. But he said I just cut back the number of hours I'm working and I've got to figure out what to do with my time. I now have four hours a day free. And I'm happy to say that PCH represents an hour of my. I filled an hour of my dance car with PCH because I love you guys. It's a fun form of entertainment.
- [23:11]
Ari Pipero
That is very cool. All right, let's call it there. I'm looking forward to seeing Andy and friends at my doorstep with a giant check, but not Mr. McMahon who passed away. Anyway, let's take a break. We'll come back with the news of the week.
- [23:27]
Eric
All right, and we're back. So we've got a bunch of things on the docket. More adtech M&A, some rumors about open AI. Will they or won't they enter into the advertising game? More Rolling Thunder from Media Ocean and a couple of rumors. So I'm going to give the floor to you, Ari because you've got some sort of breaking news rumor or something out of the UK that you have to share.
- [23:54]
Ari Pipero
I'll do my Perez Hilton impersonation. There's gossip coming from London. Now, this is pretty minor stuff, but I've been pinged by, like, seven people about it this morning. So there's a very popular WhatsApp group in adtech, but specifically, it's mostly London and it's very gossipy, and everyone just chats and talks about their brekkies and stuff like that. The stuff that the London ad tech crew likes to about. And they had a Christmas party because that's another thing that people in London love to do. And the entertainment at this Christmas party were scantily clad female acrobats doing acrobatics in a way that was just not seen as appropriate by the female guests at this event. And they complained and they left. And then the WhatsApp group went on fire with people getting very upset. And the excuses that were made were considered somewhat offensive as well, that these were just athletes showing off their capabilities and things like that. And now there's a mass exodus from the WhatsApp group. So this is not important or relevant to anybody, but it's a fun little piece of gossip, and I thought that the people in the US who listen to this podcast would want to know about the drama from their brethren, our special friends across the pond.
- [25:05]
Eric
I've heard about this WhatsApp group a few times, and I've to this day, never been invited. And I might even be blacklisted.
- [25:13]
Andy Goldberg
I don't know.
- [25:14]
Ari Pipero
I joined and I just couldn't take it. It was too active with stuff that was totally irrelevant to me. It's really chatty, and it's really very London. Like, oh, who's going to the pub? Who sees the IO from this company? That sort of thing.
- [25:27]
Eric
Got it. Okay. Well, it's 2024, folks. I think you should be thoughtful about what you do at your holiday parties.
- [25:34]
Ari Pipero
Mail acrobats only.
- [25:36]
Andy Goldberg
Yeah, yeah.
- [25:37]
Eric
Or 5050. Come on, people. All right, let's get into the real stuff. So we've got two deals to talk about. First is Experian yesterday announced the acquisition of Autogent, which is a company that my fund invested in. And we should talk about it. Autogen has been on a tear. Autogen, I think, arguably, like, established the curation category. This is the first sizable transaction in that category.
- [26:08]
Ari Pipero
Yeah, I think they proved it worked. Right. Because it was a pivot. Right. That was not their original business was It.
- [26:15]
Eric
No, no, no, no. This was them basically taking the DMP business, which was their original business, and building out the activation layer, which became like the business.
- [26:26]
Ari Pipero
Yeah, exactly. So their original business was collecting and organizing publisher data to allow publishers to do PMPs that were smarter, et cetera. Sort of a little bit like what Permative does or ARC Span that I'm an advisor to. And they realized they could just make a ton more money by activating that data themselves instead of just handing it back to publishers and letting them do that. I interviewed Drew on architecture and we made that interview free yesterday. It's a funny interview because the first 10 minutes I have no idea what the company does. I keep thinking it's a SaaS business and he keeps telling me it's not and I'm just not getting it. And then finally I'm like, oh, you're curating. Okay, now I get it. And that was my big eye opening moment.
- [27:09]
Eric
When was that interview? That was like. It was early in architecture, right?
- [27:12]
Ari Pipero
Yeah, no, it wasn't early in architecture. It was right when I started writing the newsletter. So it was this early spring, like might have been March of last year. Because I think the first issue ever of our newsletter was about curation and it was tied to that.
- [27:26]
Andy Goldberg
Yeah, yeah, absolutely.
- [27:27]
Eric
And I think this probably puts to rest all the debate about curation and, you know, it's, it's value because this is, you know, they didn't provide details, but this was, this was a great deal.
- [27:39]
Ari Pipero
So I'm hearing, I'm hearing like 300 million, but you probably know, so you can't say.
- [27:43]
Eric
Yeah, I can't, I can't comment, unfortunately. But super happy for the team, super happy for Drew and Greg Williams, who is an Unsung Hero of AdTech and is the president of. So shout out to Greg.
- [27:56]
Ari Pipero
Andy, are you, are you thinking about curation as another way to monetize your data? You know, integrating the seller side?
- [28:04]
Andy Goldberg
What do you mean exactly?
- [28:06]
Ari Pipero
You know, like basically the SSPs nowadays let data owners basically create your own deal IDs and monetize that way instead of selling data directly or selling media directly.
- [28:18]
Andy Goldberg
Okay.
- [28:19]
Ari Pipero
You should check it out. You can make a lot of money.
- [28:20]
Andy Goldberg
Definitely. Yeah, that sounds, yeah, that sounds very promising actually. I like that idea. Yeah. Now I'm going to go in the other room and go, hey, guys, why aren't we doing this?
- [28:28]
Ari Pipero
Yeah, you're yelling. Just curation. I want curation tomorrow.
- [28:31]
Andy Goldberg
All right. Okay, call Autogen.
- [28:34]
Eric
And then right before. So second transaction, right before this POD dropped ipg, announced that they were buying a retail analytics company called Intelligence Node in a deal valued at nearly 100 million. So another nine figure deal. Had either of you heard of Intelligence.
- [28:51]
Andy Goldberg
Node prior to this?
- [28:52]
Ari Pipero
Never heard of it, I haven't, no. And they're based in Mumbai or something?
- [28:56]
Eric
Yeah, yeah, it's a 10 year old company, more than 100 people and basically it's like Shopper Insights. It helps companies understand shopper trends and gives them the data to inform their own decisions around product development, marketing, sales. Seems to be all things retail and commerce intelligence. So on the surface a good fit for an agency.
- [29:19]
Ari Pipero
Yeah, I mean since retail media is so important that just having a team that really gets it like the Flywheel acquisition, hard thing to cross train in if you're not from that world. So it's worth a lot, I think to these agencies.
- [29:33]
Andy Goldberg
Yeah, it's interesting because we have a consumer insight business we started a couple of years ago and we're really bullish on it because we've got the unique. The survey research experience for the user is really bad. Typically, you know, they don't know who the user is so they ask these mind numbing list of questions every time you ask a survey to try and qualify you. And after you go through all that like 90% of the time you get disqualified because you don't meet the characteristics of what they're looking for. So in our case we've got because the user identified, we can pre qualify who should see a particular survey and then we can provide like underlying insights around people who said yes or no instead of just 40% said yes and the X percent said that. So we're doing some really cool stuff there. Like you know, for example, we had done a thing last year when the whole Bud Light issue came up.
- [30:27]
Ari Pipero
Right, right. The trans. Trans activist. Yeah.
- [30:30]
Andy Goldberg
So we did, we surveyed our audience to understand how they felt about it, whether it was going to impact. Because they're heavily beer drinkers and your.
- [30:38]
Ari Pipero
Audience is heavily beer drinkers.
- [30:39]
Andy Goldberg
Yeah, they are. They were indexing beer. And so we, not only did we find out like you know, what percent were concerned or not concerned, but we were able to determine, for example that women were more likely to be forgiving of the brand than men. And so what it said to me was, well, you know, if I was inbev, I would have, instead of investing, let's say in ufc, I might have invested more in like country music, you know, and try and get the audience back faster that way. So, so it's, it's interesting. I'm. I'm. I'm really fascinated by that.
- [31:13]
Eric
That whole.
- [31:13]
Andy Goldberg
It's a huge industry. You know, the whole research industry is huge. It's like 60 billion a year or something in the US and it's predicated on a really bad user experience that also has about a 30% fraud rate, typically because it's dependent on cash rewards and stuff, and ours is not. So I find any movement in that space really interesting.
- [31:33]
Ari Pipero
There's a little bit of a side note, but in my brief time at Nielsen, there was a product that Nielsen offered that they didn't brand Nielsen. It was called tvrewards.com? it was a website. I do.
- [31:46]
Andy Goldberg
I do remember it.
- [31:47]
Ari Pipero
And people didn't realize that Nielsen owned it. They bought it for, like, a large amount of money. Because what the questions were. They would ask you questions, like normal questions, like, what did you watch on TV last night? And then they would ask you something about the plot of the show. And the plot question would be, whatever happened in the show right before the commercial break. So that they could say to Gillette, like, you know, 80% of the people who watched Magnum PI last night were paying attention at the time, your commercial rank. But they never said it was Nielsen. They never said why they were doing it. It was like, win prizes if you paid attention.
- [32:20]
Andy Goldberg
No, I primed them last night. It's interesting now there's a whole new world of media attribution, and we're sort of heavily involved in that because that requires you to have an identified audience enable to match against, let's say, an impression that the trade desks serve. So if. So if you're Ford, you're looking for someone who saw the impression and they have to match it. So I think that's really interesting also to see how that whole space is evolving.
- [32:49]
Eric
Yeah, absolutely. All right, this is good stuff. So OpenAI, will they or won't they? Let me set the stitch. So Financial Times earlier this week came out with an article that said OpenAI is exploring advertising as it steps up revenue drive. So the journalist basically pieced together some things to put forth this narrative that OpenAI is exploring advertising. This came from an interview with their cfo, said that they're open to it. It came from recent hires. So Kevin Weil, who was former head of product for both X and Instagram, strong ad product leader, he's now head of product there. There's a person that was VP of search ads at Google who is now there. So, you know, they're. They're making moves and then just if you take a step back on the business, you know, it's a business that's valued at $150 billion and it makes about 4 billion on licensing and subscriptions and it loses about or burns about 5 billion a year. Right. So it's a business that you know, needs probably a new revenue model and what better revenue model than advertising? So everybody got super fired up. Ads are coming to OpenAI. It's just a matter of like what they look like, when and how big is this sucker going to be?
- [34:05]
Ari Pipero
Right?
- [34:05]
Eric
Because it's going to be probably a billion user company before too long. But no, then the next day or even later on that day, Search Engine Land smacks this thing down and says OpenAI has no immediate plans for ChatGPT advertising. And again similar with FT, they have no idea. They're pointing to a bunch of comments that are quite humorous and we should put the link in the newsletter Ari about ads that Sam Altman has said and they're actually quite humorous. Sam, he has a way with words sometimes. If you saw the videos from the deal book interview with him talking about musk and everything like that. He's just kind of a funny guy. So I'll poll two. Number one, I kind of hate ads just as an aesthetic choice, end quote quote. I'm not saying OpenAI would never consider ads, but I don't like them in general. And I think that ads +AI is sort of uniquely unsettling to me, end quote. So this has been quite humorous to watch and see people get whipsawed. But I guess from your guys perspective, I don't want to lead the witness, but is there any chance that OpenAI does not roll out an ad business over the course of the next 12, 18 months?
- [35:15]
Ari Pipero
Well, I'm not going to answer that question. I'll just say what I'm observing is that OpenAI is product development process seems pretty chaotic. In the very short time they've been a commercial entity they've kind of launched products and pulled them back. They've switched around things. I think that they're making a lot of money on licenses but the free alternatives are just as good. So I think they may have some concerns about their business model. So I would say it's a pretty chaotic situation and I wouldn't deign to predict what's going to happen.
- [35:48]
Andy Goldberg
It sounds pretty analogous though, doesn't it? To like other places where the founder initially said no way we're going to bring in advertising and then they ultimately realize that the market is so much bigger if you provide an AI supported option versus a subscription option. It just, it seems fairly inevitable to me too.
- [36:08]
Eric
You mean literally every company existed? Right? Exactly.
- [36:13]
Andy Goldberg
Yeah.
- [36:14]
Ari Pipero
I mean, the only positive thing I've ever heard any of the big tech people say about advertising is like, I guess like Sergey Brin once said, advertising is a form of information that was as close as anyone's ever come to like. That's pretty good.
- [36:27]
Andy Goldberg
Yeah, yeah, right.
- [36:29]
Ari Pipero
But you know, there's more than enough evidence that Zuck and the Larian, Sergei and all these people really didn't care for advertising very much.
- [36:37]
Eric
Right.
- [36:38]
Andy Goldberg
But then look what happened.
- [36:40]
Ari Pipero
Yeah. Right now they're in Maui on their estate going like, you know, maybe it's not so bad. Yeah, right, exactly.
- [36:49]
Eric
I've said this before, unless you are Saudi Aramco, you do not become a trillion dollar business today without some sort of connection to advertising. They all have that in common. So I think it's just a matter of when and not if. But that's my perspective.
- [37:04]
Ari Pipero
Yeah. I mean, I think the quote from the CEO of Microsoft in his congressional hearing was that it turns out advertising is the biggest software business. And for Microsoft, which is, you might think of it as the largest software business in the world, to admit that is quite saying something.
- [37:21]
Eric
Yep, gotta love it. All right, cool. Let's move on. Second week in a row we're gonna talk about MediaOcean. So MediaOcean launched a certified service partner program with some agencies, specifically ipg, Omnicom and wpp. Why is this interesting? It's interesting from maybe three perspectives. Number one, Rolling Thunder, they acquired Innovid. This is another big announcement, so love that. Shout out to Aaron. Number two, along with this program, all three agencies invested in the business. So I've heard you say before, not a bad thing for your customers to be investors in the business, but it's not just one, it's three. Hopefully to avoid some of that, you know, kind of, kind of risk that comes with, you know, going all in on. On one. And I thought that was interesting in the announcement that they specifically called out verification, ad quality, ad fraud. So it seems like this is something that they're leaned into with the category of just verification and fraud in general being somewhat on the back foot in terms of innovation and solutions.
- [38:28]
Ari Pipero
Well, on the last point, first, which is that Flash talking has its own verification fraud solution that they sell as part of their ad server. So I think they're trying to make hay out of that, which is smart. I mean, putting it as part of the ad server makes sense. It doesn't necessarily have any conflicts of interest. I'm not sure about the certification part, but the investment part I think is a message here. I don't know any details, but I think it's a way to make these three holding companies, three of the six, really tied into MediaOcean. They're already tied in very significantly, but even more so, the main competitor, Hudson MX, went under, doesn't exist anymore. So MediaOcean is on its victory lap, I think a little bit.
- [39:11]
Andy Goldberg
It makes sense to me too. I mean, I know it's. It's always an ongoing challenge, right? It's a. It's a issue that's always out there in the background, I feel like. So.
- [39:19]
Eric
Yeah, yeah, totally. Hey, let's talk one more kind of juicy one before we end it today. So there was this article that popped up, I want to say maybe AGM tweeted it from Semaphore. If you guys saw this. Employee lawsuit accuses Apple of spying on its workers. So this is adtech adjacent ad tech relevant for two little, little things. So number one, the employee, like the plaintiff in the lawsuit is somebody that works in Apple's ad tech division. Did you know that Apple has an ad tech division?
- [39:55]
Ari Pipero
I kind of did a little bit, yeah.
- [39:56]
Eric
So that's number one. The accusation is. We'll get it to the reason I asked that question a second. The accusation is basically like Apple is looking at not just work devices, but home devices that, you know, your icloud is connected to, which is pretty wild. But the other thing that the plaintiff said was he was prevented from talking about the fact that he worked at Apple ad tech or just Apple generally on his LinkedIn or what he was doing there. He was prevented from career opportunities such as all allegedly. Such as, you know, speaking on stage at conferences and everything like that. So there's this like mystique around Apple and like what they're trying to do, what they're planning in ad tech. It always has been. This is a little bit of validation of that coming from a lawsuit about spying.
- [40:46]
Ari Pipero
I'm going to take the under on this one, which is, have you ever tried to have two different iCloud passwords or accounts on the same device? It just doesn't work. Apple is incapable of managing user identity in any way. Like they've taken privacy so far that you can't possibly log into anything. I know someone who recently switched from Apple to Android and getting his phone number deactivated in icloud. Was virtually impossible. They just can't do it. So the idea that this employee is complaining that he had to use his personal icloud is probably the only feasible way to work with Apple devices. And I'm going to go on Apple side on this one.
- [41:25]
Eric
Worth reading the article. It's fun, kind of interesting.
- [41:28]
Ari Pipero
Although I'd love to know. The other thing is we heard about this don't update your LinkedIn thing recently as well, because the trade Desk's operating system, Ventura, allegedly had been worked on by many engineers at Silicon Valley who didn't update their LinkedIn to say they worked at the trade desk. So this is becoming a trend where people have stale LinkedIns because they're on secret projects.
- [41:52]
Eric
Yes, that's maybe the juiciest part of this whole thing. Anyway, let's call it a day.
- [41:57]
Ari Pipero
One thing that was on the note, just want to call it out for everyone's awareness that Walmart Vizio closed.
- [42:03]
Eric
Oh, that's right.
- [42:04]
Andy Goldberg
Yeah, that's right.
- [42:04]
Eric
Congrats to them. Let's see where this thing goes.
- [42:07]
Ari Pipero
Get ready to shop on your TVs, people. Yeah, it's happening.
- [42:09]
Eric
Yeah.
- [42:11]
Ari Pipero
All right. This was awesome, Andy. Thank you so much for being here.
- [42:15]
Andy Goldberg
You're welcome. Thanks again. I really appreciate it.
- [42:18]
Ari Pipero
Eric, thanks as always.
- [42:19]
Eric
Yeah, this was a lot of fun. Thanks, Ari. Thanks, Andy. And we will see you next week, folks.
- [42:23]
Ari Pipero
Bye Bye bye.
- [42:25]
Andy Goldberg
Thank you for subscribing to Markitecture. New interviews are added every week at Markitecture TV in your favorite podcasting app.
- [42:41]
Ari Pipero
Thank you for listening to the Markitecture podcast. New episodes come out every Friday and an insightful vendor interview is published each Monday. You can subscribe to our library of hundreds of executive interviews at Markitecture tv. You can also sign up for free for our weekly newsletter with my original strategic insights on the week's news@news marketv. And if you're feeling social, we operate a vibrant Slack community that you can apply to join at AdTechGod Combat.