← Marketecture: Get Smart. Fast.
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- [00:01]
Paige Billings
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- [00:30]
Eric Fronte
Don't you love it when things are.
- [00:32]
Ari Piparo
Both easier and more affordable?
- [00:34]
Eric Fronte
Like when the rain washes your car for you? Or like when you save up to 10% by bundling your renters and auto insurance with USAA. Bundle with USAA and start saving. Get a quote today.
- [00:55]
Ari Piparo
Hi, welcome to the Market podcast. This is Ari Piparo. This week we have an interview with Paige Billins, who is the SVP of Product Management for Magnite. So Paige and I caught up in Vegas at ces. We're on a panel together at the Magnite Space at the Barbershop in the Cosmo. And it was great. And we asked the AV guy, hey, is it going to be a problem for you to send us the files so we could put them on the podcast? And the AV guy said, hey, no problem. And dear reader, it turned out there was a problem. So I re interviewed Paige today and we got her on the interview. I thought it was really interesting what she had to say. Magnet's kind of at the center of a lot of CTV action. We talked about live streaming, about pause ads, a bunch of other interesting topics. So you'll get that in a moment and then Eric Fronte will join me for the news of the week. This week's vendor interview is with VidMob. VidMob is a very interesting company that does creative analysis. They tell you what is working and not working in your creative. So that's on the podcast until, I guess, Monday. And a reminder, if you haven't already, to sign up for our upcoming Architecture Live event in March. That event is covering AI identity and a bunch of other issues. Unfortunately, you missed the early bird. Early bird's over, but you could afford it. So buy a ticket, be part of the party. There's going to be a lot of fun. We're going to have a after party hosted by AdTech. God, it's going to be a lot of fun. All right, well, with that, let's get into it and hear from Paige Billings of Magnite. All right, Paige, thanks for being here. We're really excited to talk to you.
- [02:28]
Paige Billings
Thanks for having me.
- [02:30]
Ari Piparo
It's been so long since we spoke, what, two weeks since we were on stage in Vegas?
- [02:34]
Paige Billings
Barely two weeks. Maybe not even.
- [02:39]
Ari Piparo
Yeah. So unfortunately, the recording of our little session at the barbershop at Magnite's Barbershop did not go so well. So we're reunited to produce some of this content. All of our listeners are desperate to hear and to hear about the future, present future of ctv. So I'm glad you could make it.
- [02:58]
Paige Billings
Absolutely. Take two.
- [03:00]
Ari Piparo
Yeah, take two. So, you know, Connected TV is all anyone was talking about at ces. Seems to on kind of an unstoppable run. What. What do you think's different in 2025?
- [03:11]
Paige Billings
Well, I think, you know, we've been on this upward trajectory of CTV for a while in terms of it being the, you know, the, the hot topic. I think this year we're really starting to mature our offerings in CTV and kind of get past some of the original just make it work problems and get into the. Some of the more advanced, harder things to solve, like Live or what we're going to do with unique ad experiences. And kind of watching that maturation curve, we're kind of climbing up that maturation curve a little farther.
- [03:43]
Ari Piparo
Yeah, Live was a big subject that everyone wanted to talk about. Is that really driven by sports and the sports rights starting to get to streaming?
- [03:52]
Paige Billings
Yes, I think so. I mean, sports is obviously the crown jewels for a lot of these publishers. It's very expensive to get sports rights. There's more people vying for those sports rights now. And it also is what really brings a lot of subscribers to all the different offerings. But it's also really hard to execute in the DAI even environment, much less in a programmatic environment. A lot of the technology is built for VOD and Live is just very different. It's a lot of users watching at the exact same time. You don't have room for error in terms of going back and troubleshooting. It's all happening very fast and it's really high premium. You want a really great experience. So it's just a very hard technical challenge as well.
- [04:35]
Ari Piparo
Is there a difference in the business model for Live vs VOD?
- [04:41]
Paige Billings
To some extent. And I think that will be interesting to see how it evolves this year. You know, today a lot of Live is. Is sold as part of the linear package, either via linear pass through or it's, you know, iOS at very premium CPMs. It'll be interesting as we kind of move it to more automation and more programmatic how that evolves because we definitely don't want to lose that value and just have it get lost in the sea of open auction bid requests. So I think there could be some interesting, almost kind of more guarded biddable conversations start to happen this year around how we want to execute live with all the great things that programmatic brings to the table.
- [05:21]
Ari Piparo
Yeah, I mean, if you watch, let's say the NFL playoffs right now, even if it's on AVOD or a virtual MVPD like YouTube TV, you see state Farm in almost every block because they, they have a very big relationship. It's not bidding. You know, it's a big annual relationship with broadcast network and the NFL, et cetera. And a lot of that's going to continue, I would think, whether you're streaming it or watching it in linear or whatever.
- [05:46]
Paige Billings
Absolutely. Those big sponsorships. And you think about, you know, some of the insurance companies especially that also do the in stadium advertising. That's a really nice experience to have all that together for the advertiser. And I don't think anybody wants that to go away, but I think there will be opportunity for new entrants, you know, people that can't put up those big dollars in the upfront to be able to participate in life, whether that's, you know, through smaller buys and enabling some of this automation and, and more biddable environments or potentially through new formats. Slate is annoying.
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Ari Piparo
And you see the same ad I've seen Patrick Mahomes a couple too many times with State Farm.
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Paige Billings
Right.
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Ari Piparo
So let's talk formats. So what, what's Magnite been doing to spice up the creative side?
- [06:31]
Paige Billings
So we have, you know, obviously formats is something that our OEMs specifically are really leaning into, which is great. We do support tiles and pause ads and making sure that we can help monetize those different types of formats better. When I say tiles, I'm only talking about the static image on the home screen. So, you know, in, in a very basic technical sense, it's a display ad, but it's obviously a highly engaged ad. So it comes at a much more premium cpm. But we're also looking at other ways, you know, what other formats are out there, what other engagement models do our publishers want to experiment with and how can we bring new advertisers into that? Whether it's typically like performance advertising, is this a way to get them into the CTV space in something that they can understand and something that they can actually produce creative for?
- [07:22]
Ari Piparo
Right, right. Pause ads seem to be very popular. So for those of you who don't know, because I was new to it. Like, if you're watching certain AVOD systems, I think Hulu has them very prominently, and you pause the content, you see a different ad like order Domino's Pizza while you're pausing. How much excitement is there around that format?
- [07:41]
Paige Billings
There's a lot of chatter about it. And actually it was a big topic of conversation even last year at CES as well, because of the fact that it does, you know, it is a new opportunity in ctv. It is a pause. So it's not like somebody's going to watch a 15 second ad, they're pausing the screen to go do something else. But a display ad really works well because you come back to it and you get very quickly see that entire ad and you can do things like order the wings at the.
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Ari Piparo
Yeah, order the wings. You have your full television screen, you know, in the living room for imagery. The QR code could actually work because it's paused. There's no rush to open the phone. But you don't get the audio because that would be super annoying if when you paused your content, the audio kept playing.
- [08:26]
Paige Billings
Yeah, I think that would defeat the purpose.
- [08:31]
Ari Piparo
Just to follow up on that, like, from a technical perspective, when a OEM wants to sort of implement a new ad format, is it a big lift for them and how does a vendor like Magnite help them or is there. Because there aren't really standards for this stuff yet.
- [08:46]
Paige Billings
Right. It can be. And especially, you know, when, if you're a distributor, every app might have different capabilities. So you have to be careful where you place them. Obviously the stitcher has to understand what to do with it. So there are some technologies, you know, to think about how you kind of shoehorn some of these ads into something standard that the stitcher can understand. But really what we're trying to do is start with a basic implementation, things that are more widely understood as formats are coming to be more popular. But then also think about how we can enable more of an ecosystem for our publishers to more easily take advantage of all these different technologies out there to actually be able to experiment with some of this stuff. Because it really is kind of unproven at this point outside of tiles and pause ads. So kind of what's next and what are the new formats going to be is still anybody's guess.
- [09:41]
Ari Piparo
Yeah, there's a lot. Seems to be a lot of heat around using AI to create ads and things like that for. Because many advertisers don't have appropriate television commercials. When you're talking about long tail advertisers I don't think anyone's really cracked it. Like, you know, we're still, we're still putting QR codes in ads that people have zero chance of being able to scan in time and stuff like that.
- [10:02]
Paige Billings
It does make creating ads cheap and easy. I think on the flip side of that, you have to be really careful about making sure that there's still TV quality and they're giving the brand image you want and then they, you know, a lot of our publishers have pretty strict quality and creative review standards and it all has to go through that too. They can't possibly look at thousands and thousands of AI creatives. So there's going to have to be a balance.
- [10:29]
Ari Piparo
Got it. So what's the general vibe around OEMs right now? What's going on? You know, you obviously have the Walmart Vizio deal, but like what's going on in the heads of the OEMs? Can you give us some perspective?
- [10:44]
Paige Billings
Absolutely. They're our fastest growing customer segment and we are lucky enough to work with all of the big ones, which is great. And then the Walmart and Visio partnership is going to be very interesting to watch. Yeah, I think they're really doubling down on their data, which will be really interesting to watch. They have really unique first party data sets because not only do they have that first party relationship, but they have it across everything that the user sees. So whether they're in one app or the other, the OEMs understand what those users have seen through their ACR data, which I think can bring some really interesting data and audiences to market and they're doubling down on that. They've spent a lot of money getting those customers protecting their data and making sure that those relationships are secure. So I think you'll see a lot of that data activation continue and the OEMs will continue to push for that to be activation that's on the sell side and really trying to push that data out into market as so really kind of make sure that Manu stays in CTV and doesn't just all leak out to the walled gardens.
- [11:53]
Ari Piparo
Right, right. So yeah, the OEMs control the glass. We talked about that previously and as a result they have a big data advantages over the buy side. And I think we've talked previously on this pod about how there's sort of a shortage of CTV data on the buy side because in many cases the folks who own the data have exclusive relationships. Like Vizio before the Walmart deal had an exclusive with the Yahoo dsp. That's called the AOL dsp. That's a whole Yahoo dsp. So do you see more power accruing to the sell side because of that dynamic?
- [12:32]
Paige Billings
I do. I think, for one, like I said, the customer acquisition on the sell side is expensive. And so they're definitely not going to just let that leak out and be used. However, and that value be extracted from that, that's not coming back to them because they're not going to be able to continue to invest in those customer acquisitions. But I think the other part of it is also privacy and regulation. Just making sure that things aren't just going out, you know, being able to control all of that data and making sure things aren't just leaking out to the ecosystem. I think it's going to be really interesting to see what happens to IP address, which is kind of a key identifier in the CTV space, because we don't have device IDs per se like the desktop and mobile environments do. But I think that IP address will continue to crack down, which means a lot of that will have to stay on the sell side because they'll have to keep it inside their walls.
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Ari Piparo
Yeah, yeah. If you think about it from the OEM perspective, they have a physical device in your living room. Let's say they're able to use ACR to see what you're watching. They have the IP address. Assuming the DSPs don't. And when I say DSPs, we're talking about big companies like Comcast don't change their policies. Right. That's all in place. But then the question is how much of that do they then send to. Through to the buy side? Because it's a big difference between your TV knowing what you're watching and a buy side company you've never heard of knowing what you're watching.
- [13:57]
Paige Billings
Exactly. It's actually taken longer than I expected to for consumers to start paying attention to that a little bit more. But I think that these companies that do have these relationships and nobody wants to be on Twitter or X, sorry, with oh my gosh, the super creepy ad experience on my tv, they must be giving my data away to everyone. So they're going to have to obfuscate that, but still be able to give the buy side the audiences they want and the performance they want and actually continue to improve that performance. So the buy side doesn't necessarily need to know who is at the other side from just passing that data along, but they need to be able to reach that person somehow. And so I think the OEMs will make sure that they have all the capabilities to do that safely.
- [14:42]
Ari Piparo
It was a little bit off topic or sort of a side topic, but there's been an increasing number of lawsuits about the vpaa, which is the law that prevents disclosure of what video rentals you do is sometimes called the Clarence Thomas law, because Clarence Thomas during his. During his confirmation hearings got exposed as renting certain videotapes. And some courts have now applied that to digital so that you could actually be sued if you let people. If you distribute information about what videos people watch.
- [15:14]
Paige Billings
Yep. And our publishers obviously take that very seriously. The people that have more of a linear background, this is old news to them. They kind of never even thought about allowing the combination of a video with any kind of PII information out of their own walls. But I think that's. That's transitioning to the whole ecosystem now. The reality is I'm not sure like that is even at scale, and I'm not sure the technology on the buy side can actually go through and kind of suss through all of that. It's very granular. We don't have really good ways of kind of standardizing videos across publishers, et cetera. But that's all going to be. If that is being passed still anywhere, it won't be for very much longer.
- [16:00]
Ari Piparo
Yeah, I got it. So it's talking about kind of the industry and cleanup. We had Lara Honig from MIQ on the show a couple months back. It was a very popular episode where she claimed a single video ad at 118 different paths to be bought by a DSP. What's Magnite think about that? About this SPO or the proliferation of bid requests around CTV.
- [16:28]
Paige Billings
I think it's ugly. And of course, there are cases that might be 118, and there are cases that are much cleaner. But I think kind of on that same theme of maturation that we started with, this is an evolution of where we are as an industry. And now that we've kind of gotten over the hump of, hey, things work now, now we need to clean it up and make it more efficient and inexpensive for us as magnite to have 100 paths to a video. I hope it's not that bad under an 18. I've definitely seen numbers that aren't quite that drastic. I mean, we're working on it all the time, too. How can we just filter that stuff out, throw it away? Because it's just expensive for us to process and it's not good for the overall ecosystem.
- [17:17]
Ari Piparo
Yeah. We also reported on this A little bit of a kerfuffle with your competitor Freewheel, where I used to work, where there was an accusation they were doing multiple bid requests for every single impression. And it turns out what they were actually doing was trying to accommodate for combinations of durations. So instead of one bid request for 60 seconds, they were doing two for 30 seconds and then a different bid request for 60. So that's a problem that is solved by technology but hasn't really been adopted. The latest OpenRTB, et cetera. Have you come across this problem?
- [17:52]
Paige Billings
Yes, in different forms. There's the duration problem and there's also just making sure that you get enough bids back to fill the pod, which makes it different from a display or kind of one to one situation. I think there are technology like OpenRTV 2.6 that can help solve that. It doesn't go away. There are legitimate reasons to get a single ad request in and need to make multiple bid requests, but there's also a lot of cases that it's not and we need to make sure we're getting rid of all of those.
- [18:27]
Ari Piparo
Right? Yeah. And this is exacerbated by live streaming. When you have to fill the pod, you can't just come back to an empty screen.
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Paige Billings
Exactly. Nobody wants to see that.
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Ari Piparo
We talked about Walmart Vizio in terms of data, but what do you see in commerce? Do you see commerce media coming to TV and how do you see that playing out?
- [18:44]
Paige Billings
Yeah, it's definitely here. Walmart, I think, is going to be a very successful example of it. I think a lot of companies are trying to figure out how to leverage their retail data to bring different experiences to TV or just boost sales and performance. But I think Walmart can really, the Walmart Vizio Partnership acquisition can really accelerate that. Now Walmart has this very rich set of data and now they have the asset to get different experiences, more relevant. Ads, for one. You can just start there, but then also shoppable. I mean, if they know that you're a loyal Walmart customer and you haven't bought paper towels in two months, you know, they could probably show you an ad and you could just click and have it hooked up to your Walmart.com account and two hours later it arrives at your front door.
- [19:38]
Ari Piparo
Yeah, I mean, they control the remote too. I mean, there are lots of ways you could use. Innovit has products that will let you have interactivity across devices as just one example. But owning the remote as your own property is a different level. I mean, you could have a remote that Literally has a Walmart button on it and lets you buy stuff.
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Paige Billings
Absolutely. Easily navigates your most recent purchases. Like, it could be a whole different experience.
- [20:01]
Ari Piparo
Yeah, I've made the point before that Amazon has Whole Foods, but Whole Foods is not an ideal partner because Whole Foods has very esoteric skus that you can't buy Pringles at Whole Foods, you can't buy Coke at Whole Foods. I mean, that's just the reality. Like, if you might some sort of like handmade soap on your front on your ctv, fine. But like, you know, I, I don't think it was a bad acquisition, but the comparison between Walmart Vizio versus Fire tv, Whole Foods is certainly in the favor of Walmart.
- [20:34]
Paige Billings
Yeah, I think it's. It's probably pretty different to buy a comforter or paper towels versus trying to shop for broccoli.
- [20:41]
Ari Piparo
Yeah. So just a final word. Is there anything in particular you're looking forward to this year in the industry?
- [20:48]
Paige Billings
You know, bringing up Amazon, I think that's going to be interesting to see. You know, they're definitely a powerhouse and I was expecting really big things from them in 2024, and I think they're getting there. So I think 25 will be a big year for them. But ultimately, I'm hoping that 2025 is really a year that we start to see the hearts and minds change of. This doesn't have to be just the linear ad experience repeated in app and streaming form. Let's do something different and something better. And I think there's a lot of room for improvement in making sure that there are much more interesting and relevant ad experiences as opposed to just watching two and a half minutes of 15 and 30 second videos.
- [21:31]
Ari Piparo
All right, that's great. Well, Paige Billings, the SVP of Product Forum, Magnite, thank you so much for being here.
- [21:37]
Paige Billings
Thank you for having me.
- [21:38]
Ari Piparo
All right, we'll be back in a moment with the news of the week with me and Eric.
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Eric Fronte
All right, and we're back. So big news week. Big things going on in the world. Thankfully, we got a break from ad tech. M and A. Which? Man, that wore me out last week. That was a bit.
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Ari Piparo
That was. There's a lot to talk about last week. This week, I'm just huddled in the cold, just trying to survive, hoping my family gets through the winter like a bunch of bears.
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Eric Fronte
I think you're going to be fine. All right, so let's start with, I guess, this past weekend. This past weekend, TikTok went down. I have some teenage kids, so I was getting the play by play on everything. And then it was brought back like a day later or hours later.
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Ari Piparo
Yep.
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Eric Fronte
So for the listeners, we have show notes and a docket and, you know, once in a while, Ari has a zinger, and once in a while I'll actually pull it out. So the. Let's just call it out. TikTok, you don't stop.
- [22:37]
Ari Piparo
You know, I didn't think it was that worthy of a zinger, but, you know, you're writing up the notes, trying to keep it a little bit exciting.
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Eric Fronte
That was the line from Color Me Bad, right from back in the 80s.
- [22:48]
Ari Piparo
You gotta give Kesha a shout out as well for her song TikTok. I think this has been covered a lot elsewhere, which is, you know, the TikTok's act behavior doesn't comport with what the law actually says. They did not actually have to shut it down. They could have kept it going. It's just that they couldn't be supported by the app stores after the deadline. But they took it down and then put it back up as widely interpreted as a goodwill gesture to the new president. And then Trump signed an executive order that I think most observers think has no legal authority, where he basically gave the company 75 more days to operate and has told the service providers, meaning people like Oracle and Akamai that support the app that they're not going to be prosecuted under the law. But he has really no right to do that. So some people who understand the laws better than I do have pretty strong concern that companies that are supporting TikTok have quite a bit of liability right now because the law, as passed by both branches of Congress and the president at the time, Biden, says that they are not allowed to be supporting TikTok at this date and that there are some pretty almost ruinous fines that could come their way based on doing that. Does law matter anymore? I don't know. Alan Chappelle in the Monopoly report this week asked that exact question, like, are we post law? And now it's just sort of vibes. Vibes determine what to do. But anyway, you could log into TikTok right now and see some fun content.
- [24:22]
Eric Fronte
Unless you were one of those people that were so alarmed by this whole thing and oh my God, is this actually just a surveillance tool by the CCP that you deleted the app? If you deleted the app. Apparently Apple and Google are taking this seriously and they are not making it available in the App Store. So if you deleted the app, you are sol.
- [24:43]
Ari Piparo
That makes sense because they don't believe that they would get the free hall pass from Trump the way maybe Oracle does.
- [24:50]
Eric Fronte
That said, and we'll get into our next item here. Maybe they would just. Given the fact that Big Tech was all over the place at the inauguration.
- [25:00]
Ari Piparo
Yeah. It wasn't just Sundar, the CEO of Google who was there, but also Tim Cook and also Sergey Brin showed up with his beard. It seems like everyone's in on the party, you know, supporting or at least showing their face at the new administration's inauguration. Trying to curry favors or just avoid prosecution.
- [25:22]
Eric Fronte
Yeah, Bezos was there. Zuck was there. Like, you know, seemed like it's a who's who of Big Tech that was like, literally, like, in the camera the whole time. It was pretty wild. Sick.
- [25:32]
Ari Piparo
Yeah. Speaking of Big Tech, you saw Bezos fiance, right?
- [25:36]
Eric Fronte
I'm sorry, I don't know what you're referring to. This is a family show.
- [25:41]
Ari Piparo
I know. I just had to. This is a family show. But the joke was right there.
- [25:47]
Eric Fronte
Anyway, moving on. So what does this mean? You found something interesting? I'd actually do a little bit more digging. I saw some things to validate it. The Pelosi tracker lit up, and Nancy Pelosi bought $500,000 in Google calls, and she bought some Amazon and Nvidia. Does this signal that, you know, the future for Big Tech is going to be good and I guess, you know, more interesting and relevant to this audience? Does this mean anything for antitrust and regulation or anti.
- [26:21]
Ari Piparo
Regulation? It's like, such a coincidence that one of the most powerful women in the world is also the world's best stock picker. I mean, what are the odds of. The Google calls just caught my eye because someone on Twitter, I forget who, pointed them out and said, so that's good news. Google's not going to get broken up. She's making sure that the Google situation is handled. I don't know if that's true or not, but we're three to four weeks after everyone expected the judge's verdict in the Virginia trial, and no word. And people are starting to, like, come out of the woodwork with all kinds of conspiracy theories as to what's going on. It's interesting. Me included. So it is interesting. Everything's directional. We're like in the. In the Soviet era where there was just no information being provided to the citizens. So they all had to, like, guess and. And triangulate to figure out what was going on.
- [27:17]
Eric Fronte
Well, let's talk about. So there's antitrust, there is regulation, and then there's Just the capital markets. And one of the things that, you know, we've had a dearth of over the course of the past four years has been IPOs. The IPO window has been effectively shut and, you know, scaled M and A. So, you know, in my conversations with, with VCs, interestingly, for a lot of VCs who haven't had exits over the course of the past three or four years, it's been difficult for them to have conversations about their new funds because it's just like, you know, show me the money, right? Show me what you've returned to your LP is. And there's nothing. So, you know, one would imagine that, you know, in a more business friendly administration, we see the IPO window open up, we see the M and A markets continue to unfreeze, I think for, you know, the larger transactions. And I think that could be, you know, ultimately an interesting environment and, you know, likely has, you know, some cascading effects to ADF because there's some big companies out there.
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Ari Piparo
Yeah, absolutely. I think the, there are different causes. The IPO market closing has causes that are around regulation and the index funds taking over. Whereas the MA market was very clearly policy and the Biden administration's hostility to big tech M and A cut off one of the main ways in which venture capital could become liquid. And I think there's no reason to believe that the Trump administration will be nearly as tough as Lina Khan was.
- [28:49]
Eric Fronte
Yeah, yeah. So we'll see. Could end up being the year that everybody's predicting it's going to be, which is the year of M and A.
- [28:54]
Ari Piparo
Okay. Well, we didn't do any predictions or we did very few predictions at our prediction show. But I would like to ask, like, what's a big M and A that you could see happening? Or a target, maybe not the buyer, but what's a target that you think could be in play? I have one.
- [29:10]
Eric Fronte
Well, the one that everybody talks about is Roku.
- [29:13]
Ari Piparo
That was mine too.
- [29:14]
Eric Fronte
Yeah.
- [29:14]
Ari Piparo
Okay. That was mine too.
- [29:15]
Eric Fronte
Yeah. And it's large enough that it would, especially if it was acquired by a tech buyer, like a tech platform, which would be, I think, the logical buyer for that. You know, it's one that would certainly have some scrutiny. So that's the one, I think to keep an eye on. But also I'm rooting for Roku to stay an independent company because I think it's such an exciting business.
- [29:36]
Ari Piparo
It is. But I think that there's no doubt that like Facebook, Roku would make a ton of sense. You know, Facebook effectively doesn't have a living room strategy at all.
- [29:46]
Eric Fronte
Correct.
- [29:47]
Ari Piparo
But you can think of other possibilities. All right, sorry to disrupt us, but. No, no problem came to mind.
- [29:53]
Eric Fronte
All right, well, you love a good Nielsen MRC certification story. Tell me what's going on in the world of measurement.
- [30:01]
Ari Piparo
I love these stories, but they're important. I wish I didn't love these stories.
- [30:05]
Eric Fronte
Tim Rowe is my Idaho guy. When it comes to measurement and metrics, you're kind of the guy.
- [30:12]
Ari Piparo
No, I'm not. It's. Josh Chasen is really the guy. He's my guy.
- [30:15]
Eric Fronte
That's true.
- [30:15]
Ari Piparo
I don't. I have. Despite the fact that I worked at Nielsen, I don't understand the stuff at all. But anyway, so a couple hours ago, we're recording. On Wednesday, Nielsen got MRC certification for its hybrid ratings for tv. And this is a big deal because it uses the panel, the 60, 70,000 households that have the Nielsen metering devices, and combines it with what they call big data, which is a little bit outdated term, but effectively it's set top box or screen data from 85 million homes. And they've created a methodology that adjusts for the errors, adjusts for the sampling bias, et cetera. And this is a really big deal for Nielsen because historically it's been the panel versus big data, where folks like videoamp and the other competitors had, were renting or licensing giant data sets from Comcast and other people like that to create ratings. And there are problems with that. There are biases and other things. Whereas the panel was very accurate, but only for programs that had sort of a minimal amount of viewership. If you have like one show long tail on Netflix, the panel will never have statistical significance. Right. So the hybrid, I think everyone thinks the hybrid is the way to go long term to get really good, accurate data. And so this is sort of Nielsen Strikes Back, and the Ad Exchanger covered it very well and had a nice overview of the competitive situation. And Nielsen has said they're going to use this measurement technique starting in the new season. So I guess in the fall or this upfront would be.
- [31:49]
Eric Fronte
I'll buy it. That's exciting.
- [31:50]
Ari Piparo
Yeah, it is. It's important. Whether it's exciting or not, it's important.
- [31:53]
Eric Fronte
Yeah, Yeah, I agree. Speaking of adexchanger, good piece that caught both of our eyes on Netflix. So Netflix seems to have a lot of momentum in the. In the ad biz, which is. Which is great to see. So some of the stats that we pulled out of the article and we'll Put it in the newsletter. Everybody should check it out. Well, number one, they're raising their prices, including on the ad tier. So that'll be interesting in and of itself. So they doubled their ad revenue last year. And from a small base.
- [32:24]
Ari Piparo
You have to.
- [32:25]
Eric Fronte
From a small base, that's. Everybody says you have to say it. At some point. Doubling every year becomes a meaningful number.
- [32:31]
Ari Piparo
We should have T shirts made, as I say, from a small taste.
- [32:36]
Eric Fronte
So ad review doubled last year. They're going to double it again this year. According to them, 55% of new subscribers are on the ad tier, which I think is pretty impressive.
- [32:47]
Ari Piparo
That's impressive.
- [32:48]
Eric Fronte
Yeah, yeah. So you're just, you know, your, your business is going to, I think, have some significant tailwinds there. And then that in house ad server that they talked about building, it's actually live in Canada and it's coming over the course of the next couple months in the US So seems to be a momentum story about Netflix ads.
- [33:05]
Ari Piparo
This reminds me of high school when my girlfriend was in Canada that no one ever met. It was very similar. Netflix is like, hey, Freeville. Hey, Google. You know, I have an ad server. She's in Canada. She's doing great. One day you'll meet her if you come up to Ontario, but she's very busy.
- [33:21]
Eric Fronte
Did we see a story, was it a media post last week you pointed to. We didn't cover it. That Netflix had like top five ad revenue.
- [33:32]
Ari Piparo
Yeah, yeah. There was a report that Netflix ad revenue was somewhere in the three to $4 billion range. And they were.
- [33:38]
Eric Fronte
Which makes them top five, which would.
- [33:39]
Ari Piparo
Make them top five. And I think we didn't cover it because it didn't seem very well sourced and we were just sort of skeptical about it. I'd be surprised if that was the real number.
- [33:48]
Eric Fronte
Yeah, yeah. We got to keep an eye on Netflix, though. This is momentum. Yeah, Eyes are keeping. Okay. WPP employ are mad. They're angry. They're not mad. They're angry. They. So apparently CEO Mark Reed fired off a note, I think it was fired off a note at CES that it's RTO four days a week across the entire agency network and the Times of London, again, we'll put it in the newsletter. Had a deep article about all things WPP and how this is just one symptom of larger issues. Let's start with rto. What's your view on return to Office RTO for wpp?
- [34:34]
Ari Piparo
I would say that it is a creative and dynamic business running an agency, and it's all People. And I think that's the kind of business that needs a good amount of eye contact that you can't get over. Zoom. And I will take the other side of my argument, which is I've talked to people who work at companies that have aggressive RTO and they feel totally demoralized by the nanny state. I spoke to one person. I want to say what company that gets an automated email from HR if they don't badge it enough that says, you're on warning, this could affect your career, et cetera, et cetera. And that's just kind of awful. So there's gotta be some middle ground here where you treat people like adults but also ask for a certain amount of time in person.
- [35:25]
Eric Fronte
Yeah, yeah. So it sounds like employees are up in arms. This story points to. There was a, you know, apparently, like, an internal message from somebody in the UK blaming the US for this whole thing, because apparently, like, Mark walked into the offices right down here at Free World Trade on a Monday, and like, nobody was there. And apparently it's folks in the UK or wherever. Wherever this. This rumored message came from, like, you know, saying, oh, Americans, you blew it for everybod. That's just. Yeah.
- [35:56]
Ari Piparo
Europeans accusing the Americans of not working too hard. This is new.
- [36:00]
Eric Fronte
Yeah, yeah, yeah, for sure. And, you know, again, the story has a bunch of, like, interesting roads it goes down. So apparently, like, the. The AKQA leadership has largely left unhappy. They wanted to actually buy it back from wpp. And, you know, that. That conversation didn't go anywhere. The stock price is down under Reid's tenure. Competitors are merging, competitors are growing, I. E. Publicist. So there's a lot of pressure on the. On the business. So, you know, to add a little bit of context or maybe opinion on what you said, look like if you have a business with a lot of challenges and you're trying to drive change, you're trying to drive culture, it's pretty hard to do when people aren't around. Right.
- [36:46]
Ari Piparo
Yeah. The idea, I think, just really matters in some contexts. Of course. You can be productive at home. I work from home. That said, there's nothing like being in person some amount of time. You have to do it in a human way. You have to do it to improve productivity, not just to punish people. I do wonder. This story reminds me a little bit of a story we also didn't cover, that all the creative Leo Burnett agencies were being combined into. Into a new thing called Leo. How much of this is stealth cost cutting, is headcount reduction by other means? I feel as though the other shoe dropping on the AI revolution is going to be that the big agencies are going to get smaller and they don't want to get smaller in a public way. They want to shift and move people around and get attrition going and then keep the people they keep.
- [37:39]
Eric Fronte
Yeah, that's an unfortunately very logical line of thinking, Zuck.
- [37:44]
Ari Piparo
Today, Zuckerberg's having quite a week. In addition to his political activities, he's told his staff that this is going to be a really tough year and that low performers can be let go, effectively giving kind of a headcount reduction by proxy of performance.
- [38:02]
Eric Fronte
He said 5%, right?
- [38:03]
Ari Piparo
Is that a number? I don't recall.
- [38:05]
Eric Fronte
Yeah, yeah, I believe it was 5%. I could be wrong on this. Yeah, this is going to be, I think, a big year for that stuff, unfortunately.
- [38:13]
Ari Piparo
So people getting cut, but capital's not. I mean today, this morning, Stargate was announced. Or was that yesterday? It's all blurring today.
- [38:21]
Eric Fronte
It was yesterday. Yeah.
- [38:21]
Ari Piparo
It's not in our nose, but 500 billion with a B in data centers. It seems like a large number.
- [38:28]
Eric Fronte
500 billion in data centers. Supposedly 100,000 bus jobs created. Some big name investors behind it, Softbank, you know, committing, you know, lots of money. Microsoft committing lots of money. So, you know, irrespective of how you might view the current administration, if that's a real thing, that's great. That's great for AI innovation in America.
- [38:55]
Ari Piparo
Yeah, the administration did a little bit of a victory lap, but it wasn't clear they had very much to do with it. It's a private investment. The government's not doing very much here.
- [39:05]
Eric Fronte
Right, right. But you know, it sort of kind of happened during the, all the announcements that the administration was making.
- [39:12]
Ari Piparo
Yeah, and kudos to the political instincts there. I mean, I think, you know, I certainly in my career have taken credit for other things that have happened that have nothing to do with me. That's the way to go, Matt. Something good happens. Cheer it on. Go for it.
- [39:25]
Eric Fronte
Amazing. All right, there's one more thing that we found here that's interesting and shout out to Brian Weiser who brought it to our attention. So there was some reporting around Pepsi. So the FTC is charging Pepsi with violating the Robinson Patent act, which is effectively giving unfair pricing and promotional allowances to like basically what one retailer in the doc, which we'll put in the, in the newsletter, they named an unnamed big box retailer several times. You know, presumably it's Walmart or one of the other ones. And basically they Were saying like, you know, Pepsi through a special relationship which is presumably like their largest customer, they were giving them pricing, promotions, allowances, all the stuff that one might expect, but it's actually illegal. Like you need to give access to all that stuff to small retailers, small businesses, according to the Robinson Patman act. Now how does this intersect with retail media?
- [40:27]
Ari Piparo
Yeah, probably we should have an expert on this subject, talk about it at some point because you are allowed to give volume discounts. Obviously if someone buys more stuff from you, you could give them a lower price.
- [40:37]
Eric Fronte
Right. This is around like special promotions that only they can have.
- [40:42]
Ari Piparo
So you have to make, you have to make these things available to all your retailers. The intent of this act, I don't know if it's a great Depression, I think it's great Depression era, is to prevent big retailers from taking all the money from the brands and thereby creating monopolies. So in the context of retail media, it seems as though brands have some obligation to participate in retail media programs across their portfolio of distributors, distribution. They can't just say, oh, we're just going to use Walmart and spend all our money on Walmart and Amazon. But Wawa doesn't get any of it. Pepsi's got to log into the Wawa portal, buy some ads. I don't know how they judge the budgets and the roas and whether they have to make documented intelligent decisions about that, maybe that's sufficient. Or if they have to have strict proportionality. Really interesting subject. If anyone could suggest an expert on this subject, I'd love to hear from them. I don't even know who I would call to find out more about this. Maybe Mr. Chappelle on Monopoly reports got some insight because he is a lawyer. I could ask him.
- [41:49]
Eric Fronte
Yeah, or Lipsman who we had on at the end of the year. But there seems to be some sort of line here that connects the two. So it's worth looking into and following. God. Bunch of stuff going on this week.
- [42:02]
Ari Piparo
You know, there's no rest for the weary. It's January. We got things to do, right?
- [42:07]
Eric Fronte
We got things to do. All right. Let's call it there, Ari. We got things to do.
- [42:11]
Ari Piparo
All right. Thanks everyone for listening. We'll be back next week with another exciting episode.
- [42:15]
Eric Fronte
See you next week. Bye bye. Thank you for subscribing to marketecture. New interviews are added every week at marketecture TV and your favorite podcasting app, Foreign.
- [42:33]
Ari Piparo
Thank you for listening to the marketexture 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 marketectures tv. You can also sign up for free for our weekly newsletter with my original strategic insights on the week's news@news.market. and if you're feeling social, we operate a vibrant Slack community that you can apply to join@adtechgod.com.