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Episode 106: Dissecting the Vistar-TMobile and Sincera-TTD deals
00:48:37
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- [00:00]
Ari
This episode of Marketecture is brought to you by Start IO, an industry leading mobile SSP. If you build ad campaigns, Start IO is offering marketer listeners curated evergreen deals with no audience fees. Visit www.start.ionofees to activate today. That's www.start.ionofEES.
- [00:25]
Eric
This episode is brought to you by Amazon. Sometimes the most painful part of getting sick is the getting better part. Waiting for an appointment, sitting in crowded waiting rooms, standing in line at the pharmacy, that's painful. Amazon One Medical and Amazon Pharmacy remove those painful parts of getting better with things like 24. 7 virtual visits and prescriptions delivered to your door thanks to Amazon Pharmacy and Amazon One Medical Healthcare just got less painful.
- [01:02]
Ari
All right, welcome to the marketecture podcast. We have a special episode today. Because of the Vistar T Mobile deal, we're not calling it an emergency pod, but it's a topical pod. So, Eric, we're joined today by Tim Rowe from Out of Home Insider. Ooh, Insider. You should get this newsletter podcast. He's been a previous guest friend of the pod expert on out of Home. So we're going to kind of go through this deal and see what we think the pros, cons, rationale, pricing is. Eric, is there anything particular you want to hear about?
- [01:34]
Tim
Yeah, I'm excited to dive in. I mean, you know, as I've learned in life, it's helpful to have a guy, right? I got a guy to fix my.
- [01:42]
Ari
Car.
- [01:44]
Tim
I got a guy to take care of the H Vac. We have a guy, his name is Tim. He's an out of home expert. So getting his analysis, like I think he understands Vistar quite well. He has a view into what can be in terms of like what could T Mobile do with this asset is going to be a fun conversation. And he's just great. Like he's, he's just one of the best conversationalists. So I'm looking forward to it.
- [02:06]
Ari
Yeah, me too. So this week, big news. We announced the agenda and speakers from Architecture Live. That is our event that's taking place in New York on March 17. It is going to be fun. So the theme of the event, we originally were focused on identity. Then we realized there were bigger problems out there in the world. The entire media landscape is in chaos right now. Between changes in consumer behavior, AI, AI identity, et cetera. So we actually changed the theme of the event to chaos. And maybe that isn't a typical theme, but we like it. So this event has amazing speakers talking about AI identity. We have perplexity on stage talking about their advertising program. We have folks from Progressive Insurance, from Hershey's talking about how brands are handling some of these issues. And we have an AI startup showcase where we're going to do very brief, like two or three minute pitches from companies you may have never heard of, but are innovative and are on Eric's radar. And Brett Wilson, the former founder of Tubemogul who's now a venture capitalist, he also is curating a bunch of startups. So it should be super interesting. Call to action. You should go to marketlive.com and register. This podcast comes out on Fridays. The deadline is Friday, so you need to do it right now. You need to actually like pause the podcast, go to marketlive.com, register and you'll get your discount, early bird discount. Otherwise you pay more starting tomorrow. The second call to action. If you are a really innovative early stage, especially AI startup, and you're interested in being part of the startup showcase, you can email me at InfoArchitecture TV and I will forward it to the appropriate parties. And there's no cost to that. That's just something we, we want to do. Are you excited about market?
- [03:46]
Tim
Of course I'm excited about market. I can't wait to hear from Taz at Perplexity. I've known Taz for a long time. What a job. Yeah, that's going to be neat. Having brands on stage is always insightful. Startup showcase. Spending some time with Brett is going to be great. And we're going to do a live pod at the end, right?
- [04:02]
Ari
We are doing a live pod, so that should be exciting. And we probably have some more guests that we'll be announcing over the next coming weeks. So check out the agenda. There's a lot of really good stuff there. And of course, if you're interested in sponsoring also, feel free to reach out. We're happy to hear from it. We have some great sponsors lined up, but there's still availability. So with that very long plug, let's go for it. Let's have Tim on here to talk about vstar T Mobile. All right, let's talk Vistr T Mobile. Tim, thanks for being here.
- [04:31]
Brett Wilson
Thanks so much for having me back, gentlemen. It's good to be here and exciting to talk about digital out of home news.
- [04:37]
Tim
Yeah. I mean, who was excited about digital out of home before Monday?
- [04:41]
Ari
You.
- [04:41]
Tim
That's right.
- [04:44]
Ari
Yeah. Like people really liked the last time you were on the show. I don't know, it was a couple months ago, but that was probably the Last time anyone thought about digital out of home until this week.
- [04:54]
Brett Wilson
Well, you know, that's good.
- [04:55]
Tim
And now everybody's an expert. Everybody's an expert and my man Tim is the expert.
- [05:00]
Ari
We got him. We got Tim. Tell us what, what does it mean? Matt Flo's living under a rock. T Mobile acquired Vistar, which is probably the most well known ad tech company in the digital out of home space was $600 million reported price. And what does it mean, Tim? Give us, give us your hot take. Just, let's start it there.
- [05:20]
Brett Wilson
So what does it mean? I thought a lot about this in preparing for today's conversation. Initially I thought this is T Mobile's way of creating defensible moat around some of the investments that they already have going on. Obviously Eric, the, the acquisition of Octopus was two years ago almost now at this point. Yeah, they started in the fall of 2023 to make a serious investment and play into retail media. I know that they were having large conversations about the hardware associated with that and actually got to spend some time with the T Mobile ad sales team last February at their sales kickoff. And we talked about things like first party data and connectivity. And what was interesting was when we talked about first party data, there was obviously the privacy limitation between sharing the actual T Mobile user data with an ad application. But one of the exciting things that the team shared then was how they were starting to pilot the T Mobile. And this was one of the notes here I see in prepping, they started to pilot T Mobile connectivity to power the digital signage infrastructure and that stood out as interesting. And I think that that's one of the interesting details on this deal is Vistar, because none of this existed. Vistar created an ssp, a DSP and the hardware themselves. So I think that T Mobile might be looking at it from a few different angles. Obviously the plugin to the install base of advertiser of Vistar, but then also there's a huge ecosystem of hardware that needs connectivity to RADs.
- [06:51]
Ari
Yeah, I think unit economics are a big part of this. But before we dive into that, let's do some refreshers for those of us, for the listeners who aren't experts at the time, 99% of the listeners. What was Octopus? What is Octopus?
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Brett Wilson
I would actually love to defer the question to Eric.
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Ari
Oh Eric, you're an investor in Octopus, right?
- [07:08]
Tim
Invested, yeah, yeah, we were an early investor in Octopus. So if you have ever been in a Uber or Lyft in a major city and there was a tablet behind the headrest of the passenger seat. That's Octopus. They basically pioneered this idea of like back of the car, video gaming, content, advertising and T Mobile acquired them, to Tim's point, a couple of years ago because they have a strategy. You know, I don't even know what you would call it, you know, sort of around digital out of home, but you know, kind of like unique places, unique screens, unique formats. And they've done a great job with it by the way. It is growing a top.
- [07:48]
Ari
That's great. They don't do top of cab though. That's a different sort of thing.
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Tim
No, nobody looks at that stuff. You're inside your captive.
- [07:55]
Ari
I like the top of cab business, but let's, let's move on from that. So Tim, what does Vistar do?
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Brett Wilson
So Vistar is a dedicated digital out of home DSP and they've done a great job of building really the requisite sales motion to advocate for digital out of home the networks that are on the platform. And that's fundamentally what they are, a DSP but also functioning as an ssp having to build that connective tissue in the hardware associated.
- [08:22]
Ari
You said just a moment ago they had screens too. They physically own screens or rent screens.
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Brett Wilson
They don't own any screens. It's rather the networks the publishers plugging into to create the supply available on the platform.
- [08:36]
Ari
Right. So you have a retail location, they have a screen that's provided by another party and that also is monetized by another party. It's an ad network, for lack of a better word. And then Vistar's buying into that. Now does Vistar also have an SSP or is it only like an SSP to the extent their DSP can bid?
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Brett Wilson
That's a good question. I believe it's to the extent that their DSP can bid, but I would let the audience correct me if that's incorrect.
- [09:02]
Ari
Yeah, I kind of think that a dsp, like a trade desk or media math type DSP can buy from Vistar, but probably, you know, this has always been a very small amount of volume.
- [09:12]
Tim
Yeah, yeah. I mean all of the DSPUs at this point have like the omnichannel capabilities. And then to your point, I think it's a very de minimis part of this.
- [09:21]
Ari
Okay, cool. I'm really interested in the unit economics. I mentioned this earlier because if you think about an individual screen, we're not talking about Times Square here, we're talking about a Wawa that has an individual screen above the cash register. Right. The return on investment of that screen is largely A function of the cost of the screen, physical cost, how much does it cost to buy the screen, the installation cost because someone has to go in there, turn it on, screw it in, the bandwidth to receive the content and the ads. Mixture of fixed and variable costs, right? And maintenance. It breaks, it goes down, someone has to come out and check it out. And all of those things, although they're kind of boring, they're outside of like us fancy, programmatic, speed of light people, right? Those are things that a telecom can do. They have people in vans who go to places, right? They go and buy, you know, acres of digital screens, not a couple screens. So how much do we think that was a big factor here?
- [10:23]
Brett Wilson
It seems like, I don't know necessarily on the hardware side, but I think that, I think that that's maybe what's most interesting about the deal is from my perspective is how can T Mobile unlock synergies between the things that they were already doing and what Vistar does, right? They were going out, having to source their own hardware, build an ad sales team, build this technology. Well, now they own it and it's the biggest piece of the pie. So I think that it, it creates that moat for them. But then also obviously they can unlock the, the unit economics that you just described.
- [10:55]
Ari
They also have team 5000 or so t Mobile stores. They could promote their products. They're one of the largest advertisers in.
- [11:02]
Tim
The US north of a billion in ad spend. They own T Mobile arena. So there's a lot of interesting assets here. Just to come back around to this unit economics thing, that was part of the thesis behind acquiring Octopus, which is, you know, Octopus had to buy these screens though. When we were contemplating the, the investment at Aperium, it was the first time for us like looking at something where we had to like actually factor in hardware costs, shipping, all that stuff. And that was a, that was a gating factor for, for them growing T Mobile to your point, like oodles of screens. So I don't have no idea about this particular transaction with Vistar, but it makes a lot of sense because if they've got the unit economics down on the screens and all of a sudden they've got most of the market demand for ads. You got yourself a nice biz in a box right there.
- [11:50]
Ari
Eric, can you give us any color on this? I don't want to give away any confidential information, but size of a breadbox. How much does it cost to get a screen in an Uber or to get a screen in a store or maybe Tim you have the numbers here, like what's the hardware cost? Is it 100 bucks or 250 bucks or how fast would that pay back?
- [12:09]
Tim
No, the screens. Let me go first on the back of the Ubers because I don't have less knowledge on the in store stuff. At least you know, previously and likely, you know, to date. These are very cheap tablets, right? So they're not buying like Androids, you know, generic Androids. Exactly, exactly. So I would say it's certainly double digits in terms of the cost and then there's no installation cost. You basically send it to the driver who's a 1099. You say, hey, strap this to the back of the headrests and you'll start making money.
- [12:42]
Ari
So let's say including, including shipping, you know, call it 75 bucks to enable an Uber.
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Tim
Even that feels high. Yeah.
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Ari
Really? Okay.
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Tim
Yeah, I just think these are, these are very low cost devices. Tim is an expert.
- [12:53]
Ari
And then you've got, you have to pay for bandwidth, right? So per, it's not a lot and it's only data and you do a bulk deal, but still it's gotta be like 10, $20 a month or something like that. So you need to generate enough revenue to after the revenue split make money on that whole thing. So that's a, that's a decent burden in terms of payback. Tim, those numbers sound right to you or how does it differ in like a checkout aisle?
- [13:17]
Brett Wilson
Yeah, I think that that sounds in line for, for a tablet in the back of a ride share. And then when you think about a screen, right, maybe close to or in a bar or restaurant, something like that, it's going to be closer to that thousand dollar range. Really depends on the operator. Say 5 to $700 to get a screen hung with hardware online, plugged in, ready to, ready to receive advertising and then it's based on a rev share with whoever's property it's on. And that payback period can be a lot longer, especially if the publisher doesn't have a sales strategy to support it. So I think there's a lot of inventory out there that's not getting filled. So it could be interesting to see how maybe we, we purge some of that out.
- [13:58]
Ari
So we've talked a lot about the unit economics. Let's talk about the upside. How can T mobile make this business bigger and better using their ad sales and their data? And this is where everyone on Twitter seems to have an opinion. Anyone want to want to tackle it?
- [14:14]
Brett Wilson
It looks like they're going to Lean in on the ability to measure app engagement. That's where it looks like it could be really interesting from a bot funnel outcome standpoint is app engagement. Mobile delivery could be interesting. I think where I think T Mobile wins the most is by really putting their name on digital out of home. It was some of the feedback that we talked about in that session last year, which was I don't want to speak for T Mobile here, but do we want to disassociate from digital out of home as a category? How do we create ownership of this idea? T Mobile is so much bigger than whatever digital out of home might mean. So I think that this play kind of solidifies what is digital out of home? I don't know, but called T Mobile.
- [14:56]
Ari
So I'm sorry, but what do you mean by app engagement?
- [14:58]
Brett Wilson
So it. And I'm sorry here, I didn't do enough prep on this. You want to cut me out on it? You could totally cut me out.
- [15:04]
Ari
No, we're leaving it.
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Brett Wilson
Oh, we're leaving it. So I was looking at the T Mobile website earlier in leading up to this and that seems to be on the ad sales page. I could pull it up, but the.
- [15:14]
Ari
So are they measurement that they're going to get people to pull up the T Mobile app because they see a billboard that says hey, it's T Mobile Tuesdays, get a deal, that sort of thing.
- [15:23]
Brett Wilson
You know what? I think I fumbled this so well that we'll get lots of good answers.
- [15:27]
Ari
Okay. With someone. Reader, reader, respond. Let us know what we mean.
- [15:31]
Tim
Let me take a step.
- [15:32]
Brett Wilson
Eric will save me.
- [15:33]
Tim
Let's give Tim a moment. Let's give Tim a moment. Let me take a stab at this.
- [15:37]
Ari
Go ahead.
- [15:38]
Tim
Before I do. When the deal was announced and by the way, Imperium is not an investor in Vistar, unfortunately, so can't do the usual joke. Dad.
- [15:48]
Ari
I'm not either, which is remarkable.
- [15:51]
Tim
I gave some thoughts on this and one of which was around this idea of using T Mobile data to help infuse out of home in an interesting way. I got some pushback from folks on X about this. Basically saying that was a big thesis behind some of the Verizon acquisitions, some of the AOL acquisitions. And they were like if you start getting into the nitty gritty of pii, this stuff is a little bit less easy to do in theory on the app install and app engagement piece. T Mobile is not just a device seller, they're a carrier. So I think based on the fact that they're a carrier and again Maybe Tim could check me on this. They then have unique insight into what is happening from a device engagement perspective. So perhaps somebody sees an ad on a screen somewhere out there in the wild. Digital out of home at its finest. They take some kind of engagement that results in an app engagement on their phone. You then have an interesting measurement story. Am I wildly off?
- [16:54]
Brett Wilson
No, it seems to be that is the case. App lifecycle marketing, the messaging on the website is becoming part of the journey. Re engage app owners discover new possibilities. So it does seem to be just.
- [17:05]
Ari
That on Android devices the vendor Digital Turbine, which is a public company, has the ability to do one click installs when they work with carriers. So I assume T Mobile is part of that network, which means if you were on an Android you could hit a QR code and get an app automatically without going through the app store. So that might be part of this. I'm just speculating. I want to talk about data though. So if we go back in time to the early days of the iPhone and Android devices, there was a pretty big security loophole where you could sniff out people's IP address and Mac address and things like that and use it for telemetry and analytics. And there were a bunch of startups that did this. They'd say like we could track exactly how many people saw your billboard because we basically we passively look at their wi fi signals and are able to tell. And that loophole was closed pretty tightly by Android and Apple. So as a result if T Mobile wanted to do something where they recorded users behavior versus the billboards, it would certainly have to be opt in in some way. Certainly on an Apple device it would have to be. So I would love more feedback on that. If it's possible on Android for a carrier to just track the user individually versus their location without explicit cons, maybe it is possible for the carrier they can triangulate by the cell towers, but that's maybe not precise enough for billboard attribution. One thing I do think they can do is non individualized traffic patterns like how many gross T Mobile visitors were in the store. I think that's very possible to do without any privacy issues and with quite a bit of data. Tim, did what I just say make sense or am I off on some of that?
- [18:53]
Brett Wilson
It does and I think that that would be an exciting future state. Some of really what exists today is a little bit more rudimentary than that. So getting to a place where we're incorporating some of the live data and maybe it's synthesized audiences and Maybe we're looking at it scaled out, but I do think that that could be an interesting future state. It's not really how the industry operates today, more on historical data, traffic patterns, things like that. But that would be exciting.
- [19:22]
Ari
Yeah. I mean certainly it's a better approach than an independent out of home company renting this data from data brokers.
- [19:28]
Tim
Yes.
- [19:28]
Ari
You know, even if T Mobile only has a small amount of market share in the overall telecom market, having a pure signal on that percentage of users and then extrapolating is a much better approach than what's currently out there.
- [19:39]
Brett Wilson
Absolutely. And again from the source of truth of T Mobile, the digital out of home dsp, I think that that's such a big piece of the story is just the, an absence of trust because of the fragmentation. So it's multivariate. What is digital out of home? You've got publicly traded publishers who we know love and trust and that's lumped into the same, you know, inventory pool as maybe an independent operator who's got a hundred screens in a, in a region that isn't really relevant. So I think normalizing, standardizing, that's going to be a big piece of this.
- [20:11]
Ari
Yeah. And I think you're begging the next question, which is the history of telecoms and ad tech isn't good. You know, the haters came out immediately being like, oh yeah, you know, the summary of what they said. So I think the question is, is T Mobile in this to win this or is this another sort of dilettante approach to ad tech?
- [20:34]
Brett Wilson
I think that they're in it to win it. I think that they see a lot of ways to make money out of the deal. Maybe this is the hot take. I think that the digital out of home advertising piece may be the least interesting piece of this for T Mobile, but maybe, maybe too soon to say that. So I think the T Mobile wins. Thinking about other telco in ad tech, AT&T and DirecTV. DirecTV just announced DirecTV remote which someone's gotta think about the SEO that's their new digital out of home platform. But if you search directv Remote obviously what are the social. So no one thought through that, at least I don't think so.
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Ari
Wait, what is DirecTV remote?
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Brett Wilson
So it's their digital out of home network. It's mainly, mainly venue entertainment based. They just announced this a couple of days ago. DirecTV announcing remote footprint in hotels, planes and small businesses. So you know, DirecTV obviously was pretty tied in with AT&T for, for the last decade. AT&T got out of that business and Simultaneous to that, DirecTV leans all the way in on digital out of home. So I think that's interesting. The Verizon and Catalina have had a long standing partnership. Could that mean something in the in store retail media space? Maybe, but I don't think we've seen anything yet from anyone in a meaningful way.
- [21:54]
Ari
I mean, it makes sense as the same sort of synergy. Go ahead, Eric.
- [21:57]
Tim
You don't spend $600 million if you're not taking this seriously. Index to the market. 600 million is on the high end of ad tech acquisitions. Historically the sort of range is 150 to 500. Right. So your index to the high end. And then, I mean T Mobile is a massive company. Right. You know, it's, it's a little bit of kind of couch change for them. But still on an absolute basis, this is a lot of money. And I think that there's a real opportunity in this concept of just redefining out of home, perhaps. And you know, it's about screens, right? It's the screen in your, in your pocket, it's the screen outdoors, it's the screen in the, in, in the back of the car. And that's I think ownable for T Mobile. So I'm excited about this. I'm really excited.
- [22:45]
Ari
What about the multiple? We don't know what Vstar's revenue is, but 600 seems like a pretty big number. I don't know, is this a rich valuation? I mean, there's been so little digital out of home acquisitions, it's kind of hard to say. Tim, any thoughts on that?
- [22:58]
Brett Wilson
I've heard unofficially off the record, that the money that flowed through the platform last year was in the neighborhood. 350 million.
- [23:06]
Ari
So gross might be a good question.
- [23:08]
Brett Wilson
For you, Ari, because I know you've got great thoughts on how DSPs make money. What do you think of that?
- [23:12]
Ari
I think that ad networks have been selling for 1 to 2 of gross. So it's a pretty low multiple on gross, but that's what it is. That would be in this category. They're not an ad network, but it's a comparable. If it's 350 and they keep 20%, that would make them a 70 net business. Probably a little profitable at that level. 600 seems a little rich. Not terribly. Eric, what do you think? You're the professional.
- [23:37]
Tim
Yeah, no, I'm aligned. If it's so the question is how much are they growing? Right. So if you know, they have been on a good trajectory from a Growth standpoint. And again, I don't have any knowledge. We're not an investor. It's been some time since I've talked to Michael. Shout out to him. Awesome job. If they're growing, you assign a premium to that. If there was a lot of interest in the company, you can assign a premium to that as a buyer. Again, don't know. So I think you can rationalize this as, you know, high end of a adnet multiple, high end of a DSP multiple. Assuming there's profitability and growth.
- [24:13]
Ari
Yeah. The one thing I will say is they were been looking for an exit for a long time. I've heard rumors for years about like them getting to the church and then not getting married a couple of times. But I don't know any of the details. I just have heard that. Well, congratulations to Michael and the whole team. This is a great deal. M and A is back baby. And I think we're going to talk about that. So we're going to come back with the news of the week. We have more M and A with Trade Desk and mparticle and others, a lot of retail media and some other good stuff. Google may be starting to show some cracks, so we'll be back. All right, this episode of Architecture is brought to you by Start IO, an industry leading mobile SSP. If you build ad campaigns, Start IO is offering architecture listeners curated evergreen deals with no audience fees. Visit www.start.IO no fees to activate today. That's www.start IO nofees.
- [25:16]
Tim
And we're back. As Ari said, it's a big week for M and A. You may not like it, but this is what peak performance looks like, ladies and gentlemen. Huge M and A week. So we had Vistar Media on Monday. On Wednesday the Trade Desk announced the acquisition of the metadata startup Sincera. Sincera was a investment of ours at the fund Sincera, I believe. Ari.
- [25:42]
Ari
I'm an independent investor too as well as an advisor and I help them with their marketing. I'm like really into this company.
- [25:48]
Tim
They were the 2023 market share startup of the year. We know how to pick them.
- [25:54]
Ari
Absolutely.
- [25:56]
Tim
And what an awesome deal. Okay, a couple things to talk about this. So for those who don't know Sincera, Sincera is a metadata startup. They have all sorts of interesting data that they observe which is then utilized by ad tech companies to either inform their data or build products. Sincera's data was used by TTD last year in a lot of different ways, but I think most notably to build the SP 500 plus they had a deal with IAS and they were the data behind their MFA product, their quality attention product. Like it's an awesome company and I think it was a very strategic acquisition for TTD just given where they're going from a quality perspective. And man could not be a better team to pick up for ttd. This is only the second acquisition TTD has ever done. There was a third rumor acquisition that was at Acquihire that apparently is buried so far that we'll never see see it. So TT has not been very acquisitive. So it would be interesting to talk about like does this signal a change for TTD or is this just like so squarely like we have to own this thing that you know, be business as usual?
- [27:06]
Ari
Yeah, this is my. I have a lot of hot takes here. So you know, you know the famously Amazon says, you know, your margin is our opportunity and the trade desk is your ad tech tax is our opportunity. So in the past 18 months they have been attacking the SSPs with OpenPath and slowly taking that margin for themselves. You know, reducing the total take rate while increasing their volume. This move is a absolute death blow to IIS and DoubleVerify. IIS and DoubleVerify have very crude ways of measuring the web. The idea of brand safety based on keywords, the idea of mfa, the ways they do these things are just not very intelligent. And not only are they not intelligent, but they're hard bundled. So the customer just gets a true false signal or maybe a percentage signal. They don't have any control. The trade desk is buying the only, the world's best and only map of the Internet, the open Internet. They have every single detail about how the ad stack works and they can make that into products that do mfa, brand safety, viewability, everything else just vastly better than the existing incumbents who have multiple billions of dollars of market cap. And they're going to do that. It's going to be better and cheaper and integrated and you know, watch out.
- [28:25]
Brett Wilson
Mic drop. Tim, I've got nothing.
- [28:32]
Tim
Tom, please Tim, take the microphone.
- [28:35]
Brett Wilson
I don't know there is anything I can add other than Ari has spoken.
- [28:40]
Ari
I'll put it in my newsletter on Monday.
- [28:42]
Tim
Good. You should. You know it's funny, when I, when I first saw their demo, this is in 2022, I said something to the effect of hey, this dislike. This reminds me of Moat. This feels like early days of Moat when Moat just had unique data like across the whole web as it related to viewability and Mike and Ian didn't like that they were like, we're not moat 2.0. We're building something different. But at the end of the day, I think TTD picked up perhaps the next moat.
- [29:13]
Ari
Yeah, I think there's definitely an analogy there. The taboo has always been you can't measure what you also transact. Right. So you need independent measurement. I think that taboo has some validity, especially when it's a currency, like the Nielsen measurement. But a lot of what the verification folks do is not currency. I mean, the closest they come to currency is viewability measurement, which maybe continues to be independent. So a good example, and Michael talks about this, is like the question of what is an MFA site? So an MFA site, some people will say, everything's mfa, because as advertised. Sure, okay, great. But there are certain factors that you can measure to make it a judgment about mfa. The number of ads on the page, the ratio of ads to content, how often the ads refresh. There's like five or six or maybe 10 variables that go into a determination of MFA. So let's just put it two ways. On the one hand, you could pay an outside vendor to take all those signals and just tell you, yes, no mfa, not mfa, and then blacklist the mfa. On the other hand, you could give each agency the opportunity to take those signals and build their own model to say what they think MFA is, or maybe to have a sliding scale of how much they're willing to bid based on some of those variables. It seems like that second approach is the better approach and kind of the way a lot of things in advertising have been headed. So I'm really excited about this acquisition. I still don't know what the price is, though. You don't know what the price is, do you, Eric?
- [30:41]
Tim
Nope. No comment. Final word on this, because I think you bring up really good points around TCD having DV and IAS in their sites. Ryan Barwick from Morning Brew, who is awesome. Shout out to Ryan. He asks ttd, like, what does this mean from other companies using Sincera data? And what the answer was. Hi, Ryan. We won't stop working with ad tech companies. We will evolve the way we work with them. I think that's interesting because the other question is, you know, with Sincera, do you continue to work with DV and iis? And obviously it's a customer decision, so the customers will kind of always weigh out there. But that's the real question here. And I think all this is going to be to. To be determined.
- [31:28]
Ari
I'm going to say one other thing, which is someone pinged me, like, you know, if since they are shutting down its data feeds to these other companies, which we don't know if they are or not, wouldn't it be a great time to start a new Sincera? And my answer to that is literally no one on earth besides Michael and Ian could have created this company. Like I couldn't. Like, there's just no way these guys understand this topic better than anyone. You know, maybe a handful of people on the earth could create Sincera's data set. So if you're one of those people, ask Eric for a funding round because it'd be a great business. But it's like impossible if you're out there.
- [32:05]
Tim
My DMs are open and we got a spot for you on the stage in March. If you're using AI. We'll talk about that later.
- [32:11]
Ari
Yeah.
- [32:11]
Tim
Anyway, let's go on. Second big deal of the week. Mparticle is I guess acquired by rokt. So rokt, if you're not familiar with it, very cool company. They have basically built a retail media network, retail media business, monetizing the post transaction. So if you've ever bought something on a DTC brand or basically anywhere and you start getting, you know, very relevant offers based on what you just bought. ROKT is the company behind that. It's strangely sort of positioned by ROKT as a merger by mk. Shout out to MK Michael Katz as an acquisition. Ari, sounds like you might have a little bit of insight on this.
- [32:51]
Ari
I was just dming with Michael. It was announced as a $300 investment and merger and he said it was just confusing language. It's a $250 million acquisition with another 50 in investment in the Mparko products. So they're going to operate the two as sort of separate companies within Rokt. But it is an acquisition. And shout out to NAS for his great investment. So one of the angel investors in mparticle. Oh, nos, sorry. So give him that.
- [33:22]
Tim
Some other guy was an angel investor in nparticle too.
- [33:24]
Ari
Oh, were you? Look at you.
- [33:27]
Brett Wilson
You don't say.
- [33:27]
Tim
Yeah, so ROKT is a cool company. So a they're kind of monetizing something interesting, you know, that I think is not being done by some of the bigger guys. The other thing is it's a big biz. This morning, in addition to the mparticle announcement, they announced secondary transactions that valued a business at $3.5 billion. This is like big biz.
- [33:48]
Ari
I had never heard of this company. I went to their website and checked it out. Yeah, I'm not as plugged in as you are. And you know, their website doesn't make any sense. It's all about e commerce transactions. But then they give actual examples and it makes sense. Which is like you take an Uber and then it recommends a restaurant kind of thing. Uber's probably not a client of theirs, but that's the basic idea. Or you know, financing of offers. They offer you a credit card after you buy a travel ticket, that sort of thing. So it makes a ton of sense.
- [34:16]
Brett Wilson
I'm curious Eric, your thoughts on with all the M and A happening and consolidation at large, the companies that are interesting to you, what problems are they solving? Like where startups standing out?
- [34:30]
Tim
That's a great question. I think there's, you know, there's still a ton to be done in the markets that we know are great markets right now. So commerce media, ctv targeting in an agency of an age of privacy. Right. These are very obvious. But I also think these are markets that are continuing to be very interesting where I want to see startups building. And again we're dedicating stage time to this at the market is just shaking every part of this thing up with AI. There's still so much to be done because as we know through our own personal habits, we're interacting with LLMs in new and unique ways. And the advertising opportunity is still yet ahead. And if you look at a new form of consumer interaction, something that is probably bigger than the Internet in terms of how it's going to shape things like that is just, you know, immense and huge and we're excited about that. So that's where I'd love to see like more, more startups dive in, it.
- [35:31]
Brett Wilson
Makes sense to give a thought on the rock deal. I think that as out of home as digital out of home matures, certainly having the same sort of messaging, the connected experience of online and offline, seeing the brands that maybe you are seeing after purchase on a digital out of home screen makes a lot of sense. I think that efficiency overall is the long term play.
- [35:52]
Tim
Yeah, totally. Okay.
- [35:54]
Ari
All right.
- [35:54]
Tim
That was a lot on M and A, folks. Maybe give us a break next week. This was pretty intense. There's a lot to do. Let's just chill, you know, come back later in the month. All right, let's talk about retail media. Speaking of, so last week while we were at ces, Amazon dropped kind of a bomb with this new product announcement. So basically letting other retailers use its advertising tools to run sponsored ads across their sites, kind of a critio in.
- [36:24]
Ari
A box yeah, it seems that way. It's a little confusing because it seems like you have to use Amazon for fulfillment for this to work like the ads. I was pretty confused about the announcement as to whether it's pure tech and you can do your own ads and your own fulfillment and your own everything, or whether there was some tie to the Amazon existing retail media network. Maybe I just didn't read it clearly enough. There's a lot of speculation online about this that like big guys are never going to use this. It's all for the small merchants. Maybe it's just a play for Amazon Marketplace merchants to have their own websites and have the same ads on those sites. That would make a lot of sense. Sort of a syndication play. I remain a little confused about the details.
- [37:08]
Tim
If I understand it on its surface, it sounds like it's a great option for SMB or mid market retailers to build an advertising business like right away. Not have to build a salesforce, not have to worry about the tech, all of that stuff. I would imagine that this becomes a alternative to Critio and citrus ad and some of those I think full solution monetization for the upper end. But I think it makes perfect sense if you are a large retailer or a large kind of commerce media entrant generally like handing over the keys to Amazon fully. I don't think you're going to do that. But then again, we've been saying there needs to be some sort of aggregation play for the Wawas of the world. Shout out to Wawa. And this could be the way you get that from a buyer perspective. Either that or we don't understand it.
- [38:03]
Ari
I'll just stick with that or understand it.
- [38:05]
Tim
Okay. All right, cool. What else do we have? We have maybe the first new vertical adnet, first new RMN of the year launching. Mohegan sun launched their ad network and it's being built on Liveramp. So if you're looking to reach gamblers, we got a place for you.
- [38:25]
Ari
All right, so what does Liveramp have to do with this? It's just Liveramp is the data exchange so you can reach these users elsewhere. Yeah, right.
- [38:34]
Tim
Yeah. All right, audience extension play. So reach them on the Mohegan sun properties, but then also reach them across the border web. Makes sense.
- [38:42]
Ari
Sure.
- [38:43]
Tim
DoorDash and TTD are partnering similarly on audience extension. Talk about that one. Ark.
- [38:49]
Ari
Yeah. So I think this is a pretty big announcement for the partnership. Once again, press release was really confusing. But what it seems to be is similar to the Walmart TTD deal where you can use DoorDash's data in TTD to reach the same customers off DoorDash. And then you can also use it for attribution, which is probably a big deal for QSR. So like DoorDash is very much like a lot of long tail folks, advertisers that use it, a lot of little one off restaurants, they're not going to care about this. But if you're a QSR company with hundreds or thousands of locations, the ability to use DoorDash's ad platform, but then also empower your agency with the mid funnel, upper funnel data to be able to reach those customers, that seems like it's a really nice, powerful move. I like to say that Trade Desk is trying to build a walled garden like brick by brick. Whereas someone who has owned and operated properties has a giant data set they can control. Tradesk doesn't. So they're kind of creating this coalition. They get a Walmart data, little DoorDash data, a little Samba TV data, a little, you know, a little bit of this and that. And the more exclusive data plays they have, the more they become like the must buy.
- [40:09]
Tim
Yeah, that makes sense, right? You combine the premium web SP 500+ combined with, you know, some of this, like really, really interesting data, you got your world guard, you got your third world guard or fourth. Yeah. And then finally we have an answer to who the next CEO of Criteo is going. The CEO of Criteo, incoming CEO is Michael Kolmas Inski, who I believe was previously a Dentsu executive. Right.
- [40:40]
Ari
Agency guy. Dentsu.
- [40:42]
Tim
Yeah, yeah, agency guy. Any thoughts on that?
- [40:45]
Ari
It's a tough job, man. Very, very political.
- [40:49]
Tim
If you have slugged it out in the agency world, you probably have the skin, the thick skin for a tough job. So shout out to Michael, we'll be looking for.
- [40:58]
Ari
I mean, the company's doing well, stock's doing well.
- [41:00]
Tim
Yeah.
- [41:00]
Ari
But still a tough job anyway.
- [41:02]
Tim
All right, let's get to this Google story that you want to spend some time talking about.
- [41:07]
Ari
Yeah, so we don't talk about search that much on this show, but I think this is worth it. So the search engine land reported that Google's market share went down a tiny bit. It's below 90% for the last three quarters of 2024. And you may be saying, oh, poor Google, 90%, that's just such a tough position to have them in. But I think this is, this is interesting because for the past like, I don't know, year, 18 months, we've all been saying the same thing. Which is AI is a massive threat to Google's core search business because first of all changes consumers behavior, second of all changes the results that they give answers instead of links and that doesn't match with their ad revenue. And then thirdly, you may just have less clicks. The actual ads may be worth less. So there's a triple threat here. And Google is working their ass off with Gemini, et cetera. But we've had like anecdotally, you know, people in this sort of tech forward group, probably many of the listeners of this podcast are using AI to replace search results. And we've all been kind of waiting to see if it was real or not or if it was just like the behavior of a tiny, tiny, meaningless elite. And so the results, they did not say where the search results were going. It actually went to the other category, which is kind of indicative that it might be AI. But every percentage of share that Google loses is like, I don't know, a billion dollars in revenue or something like that. Just round numbers. Google makes like 300 billion off search a year, I think. So 1% would be $3 billion less in ad revenue depending on the mix of which types of queries are being replaced. This is definitely a watch this space kind of news item.
- [42:52]
Tim
This is a very big deal. For every search that Google loses, they're losing the click, they're losing the data, they're losing the customer habit and then they're losing the monetization opportunity. This is not like a triple like kind of loss. This is, I mean, I don't know what the, what the term for this is, but this is, this is big. This is why like, you know, before Tim you asked me like, you know, where we like see more innovation. I mean, gosh, think about, think about this one as an opportunity. Anecdotally, you know, I tweeted about this to X, about this to you, Ari. You know, I fashioned myself as like trying to be better at diy and I used to just go to Google, do a search, end up on YouTube, have to sift through like, you know, YouTube videos to just find how to, how to fix a little thing. Now chatgpt, I just asked the question, it tells me what to do. You know, I maybe lose the, you know, kind of janky video of the person, you know, holding their phone while they're or trying to get something done. But it has been a habit change and I don't no longer go to Google for this stuff. And I'm just like one meaningless elite amongst, I think a growing Subset.
- [44:00]
Ari
I think that we've replaced search results with answers. And that change is not going back. There is no going back to search results for many, many queries. Obviously navigation queries. You still want kind of a URL. And Google can become the answer engine. They're trying to. But first of all, there's a lot of risk to that. It's really hard to move to this new world. And secondly, the monetization is very unknown. So you're taking the most profitable business maybe in the history of humanity and it's being attacked on two dimensions simultaneously and very quickly. And that's a real challenge for the team there.
- [44:44]
Tim
That said, a smart guy I know once said, never bet against Google, never.
- [44:50]
Ari
Bet against Google's stock price. You can bet against Google's individual performance, but the stock price just goes up no matter what.
- [44:56]
Tim
Yeah. Before we wrap, Tim, what does this mean for digital at a home?
- [45:00]
Brett Wilson
That's. That was a great question. Buy more. Buy more billboard. You know what, here's what it means. That billboard on the side of the road that you pass every day going to and from work, nothing's changed about it. Buy more billboards.
- [45:15]
Ari
Is there an AI angle to digital header phone?
- [45:17]
Brett Wilson
I would love to tell you. Yes, I think that there is probably from a planning and creative standpoint and there's, there's companies that are leaning in and solving for that. The tech for the industry writ large is just not there. We just don't have the infrastructure to do all of the fun, exciting things I think that our imaginations can come up with with.
- [45:37]
Tim
No, but you raise a good point, Tim. If you think back to the Viant AI demo, you know what they're doing is building media plans and optimizing media plans. And if digital out of home, if out of home is shown as a higher performing segment, as we intuitively think it might be for lots of brands out of home benefits from the AI wave. So don't count it out.
- [46:00]
Ari
Someone should create Muzak using AI. You know, Muzak has to pay pretty hefty licensing fees and the world, like the Spotify's of the world, are not willing to have AI based music for. For a lot of reasons. But Muzak is a perfect use case for AI. No one cares if they understand the songs. They just want to like, be pleasantly soothed by the dulcet tones in the Wawa. So anyone wants to do it?
- [46:23]
Brett Wilson
I'm making my own music. Yeah, I've been doing that. I've been making AI music for myself.
- [46:28]
Ari
Speakers of your local Wawa, and then you make money.
- [46:30]
Brett Wilson
I'm just gonna stand outside with a boombox.
- [46:33]
Ari
Do you know how much money? Okay, I think. I think we've beaten up three Wawa.
- [46:44]
Brett Wilson
Plugs in one episode. This episode brought to you by Wawa.
- [46:47]
Ari
I have the wrapper from ces, you know, which is very helpful if I need a sandwich wrapped in my house, I got the Wawa so I can cosplay as a Wawa customer here. Those of you who are not watching.
- [47:01]
Brett Wilson
I was holding tuna sandwiches to school in Wawa wrappers.
- [47:04]
Tim
All right, Tim, this is awesome. Thank you, man. Anytime there's out of home to talk about, you're our guy. Ari, always a pleasure. Thanks for putting up with all the bad jokes today.
- [47:16]
Ari
This is awesome. Tim, thanks again for me as well.
- [47:19]
Brett Wilson
Absolutely. Thank you both.
- [47:21]
Tim
We'll see you again next week, everybody. Thank you for subscribing to Market. New interviews are added every week at marketecture TV and your favorite podcasting app, Foreign.
- [47:39]
Ari
Thank you for listening to the marketecture 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 marketecture tv. You can also sign up for free for our weekly newsletter with my original strategic insights on the week's news at News Marketing. And if you're feeling social, we operate a vibrant Slack community that you can apply to join@adtechgod.com.