← Marketecture: Get Smart. Fast.
Marketecture: Get Smart. Fast.
Episode 110: Adalytics finds CSAM and ends up in the crosshairs
00:53:56
Loading summary
Transcript140 lines
- [00:01]
Ari Papara
Imagine managing your digital ad campaigns without juggling five separate platforms. With ribeye, planning, buying, reporting, measuring and optimizing all come together in one seamless solution. Whether you're tapping into the open Internet or navigating the walled gardens, ribeye delivers full transparency into your supply, pricing and performance. No more wasted ad spend, no more fragmented data, just faster decisions and better results. Elevate your ad game and carve out your prime cut of success today with Ribeye. What do planking, Gangnam Style hashtags and viewability have in common? They were all popular in 2012, but while the first three fizzled out, viewability has lingered. Adelaide thinks it's time to retire that relic. That's why they created a ultimate a modern metric you can use to plan, buy, optimize, and even trade media. EdWeek calls AU the attention economy's most widely recognized metric, and it swept the measurement category at last year's Ads Exchanger Awards. Don't get stuck with a fanny pack of metrics. Ask your agency about switching to AU. You can also visit adelaidemetrics.com that's adelaidemetrics.com welcome to Marketecture. This is Ari Papara. I'm here with Eric Franchi and we have an exciting show today because we have Christoph from Analytics who has been in the news. He has started a congressional investigation of various bad ads and he's causing all kinds of trouble. So we want to ask him why he's doing that, how he's doing it, and what's the latest? What do you want to ask Christoph, Eric?
- [01:53]
Eric Franchi
God, that guy is in the news a lot. And you know, there's a lot of conversation over the course of the past week or so since his latest report about analytics itself, about Kristoff. Like what are they up to? Who are their customers? Do they actually have customers? Like you have a list of questions that people have been throwing out that I know you're prepared to ask him. To me, that's the thing that I think is most interesting. I mean, his reports are, you know, they're long, they're dense, they do amazing work. But the real, you know, kind of how and why behind analytics is going to be interesting because I don't think anybody's had that conversation.
- [02:23]
Ari Papara
Yeah, I'm excited about that. He seems like such a nice guy, but you don't want to get on his bad side. So we are have been talking a lot about our upcoming event Market Live, where Eric and I will be recording a live version of this podcast with a special guest yet to be named who we're very excited about. I also want to highlight one of my favorite little breakouts that we have, a breakout called Sandbox Palooza. And it brings together a bunch of people who have done research on the privacy sandbox and they're going to rapid fire tell you what they learned, what they didn't learn, what they want to know. And is being moderated by Alex Cohn from Google. We have someone from Bizwitch, someone from Raptive, someone from Index Exchange. We're going to get it all done, all that content in just 20 minutes. And that's just one breakout out of, I think, nine that we have. So this is going to be the most content intense conference you've ever been to. Please register. Do it before running out of tickets. Marketlive.com and of course, if you DM me and ask for free tickets, I'm going to publicly state that you are too cheap to take your clients out to spend any money. You don't have an expense account. Everything you say publicly is just a sham because you don't have the budget. But I may still give you a free ticket after I abuse you in that way. But please DM me asking for the free tickets. See what happens. Eric, how many people have asked you for free tickets? A lot.
- [03:45]
Eric Franchi
And I don't make threats like that. But I also am not ashamed to say buy a ticket support market. It's not even that expensive. You're going to expense it. Yeah, come on, people.
- [03:59]
Ari Papara
What I was contemplating doing was I was like, I was going to give a free ticket to anyone who would post on LinkedIn. I am too cheap to buy a ticket to market live. I would like a free ticket and that would be the entry point. But you have to do it.
- [04:13]
Eric Franchi
Exactly those words. I have some names for you of people that are apparently a little too cheap for it.
- [04:20]
Ari Papara
All right, all right. Well, we hope to see you there. Let's jump into it with Kristoff. All right, Kristoff, thank you so much for being here. You're a very busy guy.
- [04:31]
Christoph
Thanks, Ari. And great to be here.
- [04:33]
Ari Papara
So you've been in the news a lot. I mean, that seems to be your milieu, but last couple of weeks. So you put out a report or analytics, your company put out a report about finding essentially child porn, csam, as it's called and finding it in the log files of various advertising companies. Why don't you just tell us the story about what you found and how you found it?
- [04:56]
Christoph
Yeah, absolutely, Arim. So in January, I was working on some unrelated research. And as part of that research, I was using a service called URL scan. URLscan is similar to Internet Archive or the Wayback Machine. It's a bot that visits various websites or links, and it archives those links. And it archives both the source code of the website itself. So you can look really nitty gritty, but it also takes a screenshot of the page. And when it does this, it saves that archive for years. So you can go back up to 2017 and see what a specific website looked like. What's interesting is they do a lot of crawling, like 2 million plus URLs per day. So there's a huge archive built up in that data set. Correct. So you can see, for example, you know, what your website looked like a month ago or two months ago. You can see what the New York Times looked like seven years ago. And they also do this from multiple countries, not just from the US they do it in Asia, Australia, Europe, et cetera. And so when I was doing this research in January, I incidentally and accidentally came across an instance where I found a US government ad being served on a specific URL in URL scan in 2023, where when I looked at the screenshot, that government ad was appearing next to some very explicit content. And I was thinking to myself, the government probably doesn't want to be advertising next to this kind of content or adjacency. And I looked at the specific URL and the specific domain where the ad was served, and it was one I had never heard of in my life. And I suspect you guys also had never heard of this specific domain beforehand. It was imgbb.com or IB co. And what was interesting to me is I went to a bunch of like audience traffic sources, like I think it was Semrush. And according to Semrush, this domain was getting 41 million page view visits per month. So that's more than Los Angeles Times, like Politico or some other really well known newspapers or websites. Correct. So this is not like a fringe website. Even though I had never heard of it, clearly there are people use it. What was also interesting is I realized this specific domain has been blocked by Reddit. Like you can't hyperlink or post to it. Apparently Reddit has a policy blocking this. This kind of got me intrigued. I see a government ad next to explicit content, a domain that gets a lot of traffic and something that's like basically deemed to be too unsafe or whatever to be blocked by Reddit. And I was Going through these archives because there were many instances where this bot had archived this specific page over the last few years. And it was like the fourth or fifth link that I checked that was going through link one, link two, link three, link four. And then I found what unfortunately was an ad from a major brand, a major advertiser, directly adjacent to an explicit image where the image was very clearly someone who was very, very young. Right?
- [07:31]
Ari Papara
Oh, wow.
- [07:32]
Christoph
And as soon as I saw that, like my eyes just went wide for like two seconds and I just knocked out of there. I just closed that link immediately, like clear my in history, everything. But what I realized. I processed it for like a few seconds. I realized what I saw was obviously like a human rights abuse, it was a crime. And so as soon as I saw that, I started like basically reporting this to the FBI, Department of Homeland Security, HSI special agents, the national center for Missing and Exploited Children, they have a tip line. And the Canadian center for Child Protection or C3P, they also have a tip line where you can report this. And all of those four groups have legal authorization. They have specific individuals and specific facilities that are illegally authorized to view this content. Because otherwise, even for a normal police officer, it's illegal to view this content.
- [08:15]
Ari Papara
And isn't. Maybe I'm a little bit misremembering, but isn't there like this database of known child pornography that is all hashed so you could do like database checks without looking at the content?
- [08:27]
Christoph
That's correct. So for example, NCMEC, I think C3P, they actually have a database, as does the Bureau, I believe, basically images that have been reviewed and confirmed to meet the legal definition of csam. And then what they do is obviously they can't distribute those images, but what they do is they create a cryptographic hash. You can hash an image and then if someone else gets an image, they can do a hash collision and check is this the same image without actually looking at the image. So Facebook, for example, they actually, I believe, use this exact technology to scan through millions of images on Instagram every single year. And when they find collisions, they just auto delete the image. Like if you were to go and you know, God forbid, upload an actual CSAM image to Instagram, and it was in that database, Instagram would just auto delete it. It wouldn't even take like a second. Right.
- [09:10]
Ari Papara
One of the, one of the things about CSAM that I've read is that a lot of it is the exact same cache of images that have been going around for years and so they get caught by this system without any human beings involved. Did you happen to check if the images that you came across were in the database or did someone check that?
- [09:27]
Christoph
I myself did not. But my understanding is that some of the folks at C3P that they did check that and some of the images were not exact copies, they were altered copies of those, which actually. Exactly. And that actually raises an interesting point is that from what I understood, because again I'm not an expert in this issue, but from what I've learned From speaking to C3 and other these sources, you know, through this project, was that there's unfortunately a rise in people like editing photos or using AI to alter photos. For example, these so called deepfakes where you take an image of someone like a child and you put it on the body of someone else. It's still non consensual explicit content but it's being done in a way that would defeat the cryptographic hash matching. And so unfortunately one of the images that we identified was exactly that the C3B guy said it was an AI like basically face swap, you know, where they took the image of an actual confirmed human trafficking victim and they put it on someone else's nude body.
- [10:20]
Ari Papara
So there's a lot of follow up questions. Let's start with the sites. So do you know who runs or owns these sites?
- [10:26]
Christoph
That's a fantastic question. And we did dedicate some amount of time trying to investigate that question and the answer is no, we don't know. So we looked at like the terms of service, the about us page, the privacy policy page on this, on this website. None of them indicate who runs this website or even what country they're based in. We also did a whois lookup which is we basically look at the domain registrar and you see, you know, what was the domain register to redacted. And so we looked at sellers, JSON, adsdxt, it wasn't clear from that either. So basically to the best of my knowledge we could not figure out who is running or owning this website. Neither could some of the media buyers that we work with. Right? So there's this kind of weird issue that brands were spending ad dollars with an entity which obviously the fact that they have CSAM is terrible, but, but it's also just like an anonymous entity. They have no idea if this entity is based in North Korea, Iran, you know, us, wherever.
- [11:14]
Ari Papara
But the selling agencies have to know, right? The exchanges, the people who are in the ads text have to know because they sign contracts, right?
- [11:22]
Christoph
I want to clarify not one specific point, not necessarily. Because you know there's these so called exclusive sales houses like companies that work with like a network of 9,000 small blogs, for example. So in sometimes the cases that the DSP or sorry the SSP is paying those exclusive sales houses and only the sales house actually knows who is behind the veneer of running that specific blog. So it does happen in some cases. And what's interesting is in those cases, sometimes those sales houses, obviously there's some very well known ones like I think Mediavine and Raptive or Cathedia are two prime examples. But there's also cases of smaller ones which are based in like foreign countries like Singapore or China. And it's not clear what level of due diligence they are doing on the publishers that they put in their examples. House networks.
- [12:02]
Eric Franchi
Do you know who the sales house is on these sites?
- [12:05]
Christoph
The from what I this is like with a huge disclaimer asterisk. This might not be correct. So if I say this, don't quote me, but from what I've seen and what I've heard from other experts who've reviewed their ATL JSON, some of them mentioned a domain, a seller called PubPower IO Pub Power. But again, huge disclaimer. I'm not, I haven't confirmed that. I'm not sure for sure. They might be completely unrelated to this. So that's what I've heard from multiple like experts in advertising technology. They said it was PubPower IO was like the kind of monetization unit, but again that might be completely off base. So please put that with a huge asterisk while we're recording.
- [12:38]
Ari Papara
I just typed in imgbb.com ads TXT and nothing comes up.
- [12:43]
Christoph
That's correct. We've seen the same thing happening over the last few days.
- [12:45]
Ari Papara
Right. So who, who was monetizing these?
- [12:49]
Christoph
So what we saw at least in the source code because the ads TDSD file, we did get a copy of it actually before it got nuked, but we actually saw it. But of course, ad txt a lot of the seller paths are not active. Like you can put anything you want in the ads. Txt file. I could say that I work with Google and Amazon analytics that I which is not true. But in terms of this, what we do is we capture the source code of the ads, you know, through URL scan or through crawlers and we inspect the source code to see like what is the actual like vendor transacting. Correct. And so we could see Amazon Publisher Services or aps, we could see in some cases, I think Pubmatic, we could see DSPs. I think we saw Amazon DSP. Historically we saw DV360, but not after July 2024. We saw Amazon, of course, you know, AdSense or ADX transacting at gaming before July 2024. And I think there were some other SSPs and DSPs that we also saw in there. There was a bunch basically. But what was interesting was there were some SSPS and some DSPs that both before in our data, we didn't see them at all. And they've since publicly confirmed that they didn't serve any ads there. So for example, Cargo and OpenX in the last 48 hours have issued public releases confirming that they didn't serve any impressions on these websites. And that's consistent of the data that we had available. So clearly There were some SSPs who did not monetize these pages.
- [13:59]
Ari Papara
And these sites ostensibly are just these open image sharing sites. You could create a free account, upload an image and send links to your friends. That's basically what they claim to do, right?
- [14:11]
Christoph
That's exactly right. And the problem is there's actually some initiative I should clarify on that specific front. You can upload images there without registering. So unlike Snapchat or Instagram, you don't have to register with an email or a phone number.
- [14:22]
Ari Papara
Right.
- [14:22]
Christoph
And secondarily you can set those images to auto delete, you know, within 24 hours. We actually had through URL scan plus another data source, we did actually get an analysis of several tens of thousands of links. Would you gentlemen like to guess? These are all links where ads are served. To be clear, how many of those links had been auto expired? Like what percentage?
- [14:42]
Ari Papara
All of them. Like 98%.
- [14:44]
Christoph
No, not that bad, but yeah, it was over 60%. Over 60% of the images that were uploaded were configured to have auto expired by the time I rechecked them.
- [14:51]
Ari Papara
Yeah, I mean the, the purpose of this site is nefarious. It's not that this was a good site that had some bad actors. Like, you don't build a site like this unless you want to. Unless you want to distribute bad things.
- [15:03]
Eric Franchi
And then cover your tracks.
- [15:04]
Ari Papara
And then cover your tracks. Okay, tell me about how the senators got involved. So Senators Marsha Blackburn and Richard Blumenthal issued a statement saying that serious concerns, advertising verification and brand safety products led advertisers to inadvertently fund websites that are known to host child sexual abuse material. So I have two questions. One is tell us how they got involved and two is why are they so focused on verification and not, you know, supply chain.
- [15:30]
Christoph
That's a great question. So number one is, you know, I'm like the IT nerd. I did the research, wrote out the report, etc. And because of the involvement obviously of children that we discovered, I reached out to someone that I know at an organization called Fairplay. Fairplay is like a human rights kind of children protection advocacy organization. They were. We worked with them previously when we published research that you covered in 2023. About it was the New York Times about ads being served on kids channels, on YouTube. And so I asked, you know, you know, Josh and from Fairplay, and we basically said that you would recommend discussing or briefing at least some members of Congress on this research and they would decide, you know, what to do about that. And so there was also a second component to it is because we found in our research, I mentioned the first example of an ad that I found on this website through URL scan was a US Government ad that was funded by the taxpayer. Right. So we thought there was two angles. One is, of course, you know, children being abused, but. But also the US Government itself, in its capacity as an advertiser, was directly funding this. So those were the two reasons. And so we got on a call, we basically shared the research. The call was actually very quick. We briefed them basically on what we found, and then they basically had some kind of deliberations about how to proceed, you know, afterwards. So that was kind of like, you know, the advocacy stuff is kind of not my space. I'm just more of an IT nerd. But basically my understanding was that they, you know, saw kind of systemic issues and they had systemic questions like, how is the taxpayer funding a CSAM website? How is that even a thing? How is that even possible?
- [16:50]
Ari Papara
Right. We're going to have Doge come down off of DoubleVerify. We're going to hear the tweets from Elon any minute now. I'm kidding, but not really. But no, I guess my question is like, my first reaction is that the criticism should, number one go to whomever auctioned off and sold this inventory. That should be number one. And then a distant number two should be the verification companies, because even in the best case scenario, they're not perfect. They still have culpability, but that's at least my perspective. So why aren't the exchanges and selling agents coming under more heat here?
- [17:27]
Christoph
I don't know. I'm not a congressman. I'm not a sign, any rate. So I don't.
- [17:32]
Eric Franchi
Eric, what do you think I would imagine that the senators and congressmen don't have an exhaustive knowledge of how the ad tech space works and they see the existence of these companies that, at least on the surface are purported to solve this, and they're pointing towards them.
- [17:51]
Ari Papara
Well, I think I want to make a little editorial comment. This is just my opinion, which is in today's politics, finding an issue like this can be very dangerous because people are willing to go to the mat on anything. And so either side could take a piece of evidence that's bad, this is as bad as it gets and just absolutely persecute people. So I'm a little worried about this whole environment, but that's just my opinion. I'm going to go back to interviewing now. So I don't have this in the notes. The details aren't top of mind. But about three weeks ago, DoubleVerify put out a preemptive statement aimed at you. We basically said you're a bad person and you don't communicate your findings and their findings are flawed and you know, nothing's wrong, more or less. So what's your reaction? How did it make you feel to see that document? And secondly, what was your reaction?
- [18:45]
Christoph
Yeah, obviously we always encourage public discourse and public dialogue. So I'm always grateful for when people and vendors take interest in our research. But that being said, from my understanding of that document, there were some things that were in that document that were not consistent with any research we had ever undertaken or written. So I'm a little confused by some of the things that were put in that document. That being said, as a general point, you asked me about, you know, sharing reports ahead of time, let's say with, with vendors, for example, we do share reports ahead of time with law enforcement, with regulators. We also share with third party independent experts, with peer reviewer reports. Our most recent reports, We've had three. Each of them were reviewed by over 30 different experts. People work that, you know, vendors, people work the publishers, people work the agencies at brands. So we go to pretty extreme lengths to do what we call, you know, academic peer review on each of our report drafts before they're disseminated to journalists. But one of the primary reasons we can't, we literally can't share our reports ahead of time with specific vendors is because at this point we have over 12 confirmed examples where specific things that were identified in our previous or current research reports, when a vendor finds out about it, they go to links to basically what we call destroy evidence. And as an example of that, in our most recent Report, the CSAM report, there were specific links to URL scans cited in our report. Those links included references not to csam, but just to explicit material, you know, adult performers or adult entertainment actors with very large brand ads appearing directly adjacent to it. We've since learned in the last 24 and 48 hours that someone apparently went to URL scan and got URL scan to delete those archived links so they are no longer accessible to people for independent reproducibility. And as an academic, or formerly as an academic, I'm a big proponent of reproducible research. Right. So when I tell a journalist, you know, here's the research, what we have, I tell them, don't trust me, don't believe anything I say. 100% validated with your own eyes. Go to these websites, you know, go to, do this thing, click here, do that, whatever, but make sure you yourself has seen it. So it's not just based on my assertion, my reporting. Make sure that you yourself can confidently say to your editor, to the public at large that you yourself have validated this. Right. And so if we were to, for example, say certain things, you know, like a vendor serving ads on this website or you know, a vendor has this specific practice, if we told the vendor ahead of time, in many cases, not all, but in many cases they would take action and they have taken action, as we've seen, to basically disrupt that.
- [21:07]
Ari Papara
Yeah. So how to double verify? Get wind of this three weeks ago.
- [21:10]
Christoph
I'm not fully read it on the details, but my understanding is that the Wall Street Journal may have reached out to some vendors for comment about a specific report unrelated to the CSAM report.
- [21:21]
Ari Papara
Okay, so you explain why you don't give notice to the people implicated. Why are you so aggressive at getting coverage in the press?
- [21:29]
Christoph
Well, for an issue like child abuse. Right. I want to get as much publicity as possible because I want it to stop as quickly as possible and clearly. And we've seen in the last week Microsoft, Amazon and a bunch of other vendors have public confirmed that they have stopped serving ads and funding a specific child abuse hosting website. So in terms of having effect on target, which was the goal here, that you know, the optimization is how do we get this funding to cease as quickly as possible. I think it was pretty effective in that endeavor.
- [21:56]
Ari Papara
I get that. So before the interview you and I talked that I wanted to bring up kind of the criticisms of Atelix and you, and here are your point of view, and that's one of them, is that you don't give people Enough time. Notice in advance. There's just this general question, and I'm like, Mr. Backchannel, everyone. DMs me. I'm like the confessional in ad tech. And people are like, hey, what's up with this Kristoff guy? He's up to something. Why? Why is he doing all this? Like, is analytics a real company? Does he actually have customers? So, please, do you really have customers? And they pay you? And there's a multipart question. Do you have customers? Do they pay you? Is that your primary business, servicing customers? And how do they feel about your. Your public Persona?
- [22:43]
Christoph
Yeah, absolutely. That's a great question. We're pretty transparent about this. It's literally on the US page of our website, if anyone cares to bother it. We exclusively work with buyers. We work with only media buyers. We don't work with publishers. We don't work with ad tech vendors, et cetera, intermediaries. We only work with buyers. Correct. And we do that for a number of reasons. We don't want our wires to get crossed. But it's also so that when, if and when we identify a specific issue, we're unencumbered in our ability to transparently inform those buyers of those specific issues. In the past, as I'm sure you guys are both aware, there have been instances where various vendors have identified issues in the industry, but that information was not disseminated widely with buyers. For example, In April of 2024, we found that a premium financial services news website had a hidden MFA subdomain.
- [23:32]
Eric Franchi
Right.
- [23:33]
Christoph
That domain subdomain was serving ads for many brands and many vendors.
- [23:36]
Ari Papara
This is www.3.forbes.com.
- [23:39]
Christoph
I found tweets, people on Twitter. Ad tech experts and veterans from many ad tech companies were specifically posting about this issue on Twitter from 2019 to 2024. So that information was out there. People knew about this. The only people who didn't know about it were apparently the brands whose ads were running there. I want to answer your core question, though. So our funding sources. It's just buyers. We work with brands and agencies. As you. I'm sure you're aware from your time that. Beeswax, you're not always at liberty to disclose the identity of those buyers. Sure. But if you go on LinkedIn, I'm sure you can find, because there have been several of the buyers that we work with, we've publicly acknowledged that they work with us. So you can go and check who those buyers are.
- [24:14]
Ari Papara
And are they happy about your public work? Do they call you up as a, hey, good One getting that financial site down.
- [24:21]
Christoph
I mean in the last two weeks, yeah, we've gotten a lot of calls, including on the weekends where brands were like, thank you for stopping child abuse. You know, so it's pretty unilateral. But I will say that there's, there's a, there's a variety, there's a spectrum. Generally speaking, we, all of our reports are things that are basically informed by our work with brands. What I mean by that is that we find that there are systematic issues. For example, a brand doesn't have visibility into their delivery. They don't have the ability to control a specific feature. They're not able to know if frequency capping is being enabled correctly or not on specific campaign. And so when we have these issues and brands are unable to get satisfactory resolution through the normal channels with their vendors, their account managers, etc. They sometimes specifically request that we pursue research reports and publicly disseminate them with the press on behalf of those. And one thing I'll point out is we've actually had numerous instances, including in the last two months, where brands have specifically asked me to include their brand in one of our reports. They say like, please make sure that our brand, our screenshots, whatever are featured in our report because it helps them facilitate discussions with their media supply chain.
- [25:23]
Ari Papara
Right. There's like a law and order shoot off. It's like in the advertising ecosystem those heinous crimes are handled by a special unit.
- [25:31]
Christoph
I will say that I know this is a joke, but we actually had several brands, they call us the Ad tech Special Operations Forces or sof.
- [25:39]
Ari Papara
Okay, that is a great tee up for the next sort of rumor back channel thing which is are you actually funded by the Mossad?
- [25:48]
Christoph
All right, we talked about this. It's not the Mossad, it's unit 8200. And as you're aware, everyone who is part of that unit has to sign a lifetime non disclosure agreement. So even though we were, I couldn't say anything about it.
- [25:58]
Ari Papara
Yeah, I feel like hiring you might not be their top priority. What about the U.S. mossad, otherwise known as like Oracle or Microsoft.
- [26:05]
Christoph
I mean those guys are featured in some of our reports. So draw your own conclusion.
- [26:09]
Ari Papara
There's like this general feeling like your report, who loses the most from your work? And the answer is open Internet giants like Google. They're the ones who suffer the most from your report, whether you mean to or not. And then the next logical question is who has a history of funding people who hurt Google? And it's obviously Microsoft and Oracle, maybe a little bit of Apple. So that's kind of how the dots connect.
- [26:36]
Christoph
No, that's a fair question. But like, let me go back, there was an ad set kind of pow hour meeting that happened a while ago. I think Dave Morgan was the one hosting it and Terry Kawagio was there and I got this kind of question, similar question to this one. And basically my answer was we believe in growing the GDP of the Internet. What do we mean by that? Is in for Internet advertising and the Internet to perform, to function, there has to be a functional marketplace. And for a functional marketplace to exist, there has to be clear price signaling based on quality, right? Like when you buy a Ferrari or you buy a Honda, you should know exactly what you're paying 300k versus 30k for, right? But the problem is that we've seen multiple times and we've been told by media buyers in some cases they struggle mightily to differentiate high quality inventory from low quality or MFA or otherwise. Right? And so our thesis is that if we can create a marketplace so there's less information asymmetry where buyers and sellers can connect and basically compete on quality with different levels of pricing that will actually benefit all parties involved. It will grow the entire size of the pie rather than making people fight for different parts of that pie.
- [27:44]
Eric Franchi
Totally agree. All right, I think you your questions, you ran through them. So maybe we can end this on a little bit of a constructive note. And this is a question for you, Ari.
- [27:54]
Christoph
How do we fix this?
- [27:55]
Eric Franchi
How does the programmatic supply chain fix this? So Kristoff, I'm sure there's like no shortage of things that can be done, but stuff like this, which nobody wants.
- [28:07]
Ari Papara
Well, I think we have to go beyond the conventional wisdom of include lists. Include lists should be the primary way that all Advertisers work with DSPs. And I think we also have to have like a system wide exclude list. Like there are certain categories that just should not be monetized by anyone. And sure, if you're a offshore North Korean ssp, I don't know if those exist, you're going to still do it. But most DSPs have the ability to have a system wide blacklist and that should just be a more aggressive thing. And I think it's TAG and other groups have that sort of recommendation. I just don't understand why a site like this would even get through.
- [28:48]
Christoph
I don't even claim to have the full answer, but I can think of three things that would at least incrementally push the needle in the Right direction. Number one, this is something we've heard from multiple advertisers the last few months. Some ad tech vendors, not as a matter of technical limitation, but as a matter of pure policy, choose not to give buyers full URL transparency, meaning they can't see where the exact ad serves right, which is actually a critical detail in this most recent research report. So there are vendors who do give that UL transparency beeswax, of course, being one of them. There are brands we use Beeswax, they have a full URL where the ad is served. So the question is, why can't some of those other existing vendors basically get off to industry best practice and start giving brands and buyers full visibility, full transparency, and the full URL where the ads are being served? That's number one. Number two, we've spoken with a bunch of brands and buyers who use various tech vendors to understand where their ads are being served. What they've since discovered the last few weeks is that in some cases, even though the vendors are monitoring or measuring and invoicing the brands on a CPM basis, it turns out that they're not actually checking or not at least fully checking all of the places where the ads are being served. Right? So there's a bit of a sampling kind of happening. And so the question of course becomes how much sampling, right? Is it 1%, 10%? Is it only pages that have over a thousand impressions? Pages that have over 10,000 impressions? The buyers literally can't get an answer to that specific question. They don't know what the sampling threshold or logic is. But if they did know, that would be a critical component to basically being able to handle risk, be able to adjudicate relative risk. So having that visibility to how much sampling specific vendors are doing when they're doing various measurement processes could move the needle a lot. And the third one is this will refer to as basic, like what I call kyc, although that's not exactly the right term, is not just knowing which website or app or CTV channel your ads are running on, it's knowing who owns that, who financially benefits from that. Right? Because in this specific case, if buyers, for example, had the ability to exclude anonymous publishers, anonymous media entities, or foreign, you know, let's say foreign owned media entities for whatever reason that could have addressed at least or mitigated part of this issue. I actually had a conversation this last week with the VP of media at a large Fortune 500 financial services brand, and I asked them a simple question like, you know, they're a regulated entity, you know, They've got all sorts of laws from the US treasury asked them, do you know how many foreign media entities you funded in the last week? Is it 1000? Is it 100? Is it 10,000? This is inclusive of programmatic, but it's Also inclusive of YouTube, many YouTube channel creators, et cetera. And he had no idea.
- [31:23]
Ari Papara
Right. That's a really interesting point. I was joking about North Korea, but it's actually possible, maybe not North Korea, but certainly some secondary countries you might not want to do business with. Although someone's getting mad at me for calling them secondary countries. Let me ask you one final question just to end this. Are you enjoying yourself? Do you like doing this on a day to day basis?
- [31:44]
Christoph
Honestly, like, I reported over 700 child abuse images to the authorities in the last, like month or so. And it was just tough, let's just put it that way. But like, you know, I'm just happy that a lot of those images are being removed and I'm happy that, you know, the authorities are currently searching for one of the missing children and hope they find them soon. And so I guess, yeah, just being able to help clean up the Internet a little bit and doing our small part, I think that, I guess I do enjoy that. I know sometimes it's a little difficult.
- [32:13]
Ari Papara
Yeah. All right, well, thank you for doing what you did. Listeners of this pod are going to be divided between people who love you and hate you. And that means you're doing good work. So we will call it there and we'll be back with the news of the week. This podcast is brought to you by Sojourn. Thinking about how to get more out of your travel marketing. Sojourn's travel audiences tap into real time data from top hotels, airlines and more so you can reach the right travelers at the right time. Whether you're running programmatic or social ads, Sojourn's AI powered audiences plug right into your DSP for better performance. Test Sojourn's travel data to take your campaigns further. Learn more@sojourn.com architecture. That's s o j e r n.com architecture.
- [32:59]
Eric Franchi
All right, we're back with the news of the week and a bunch of stuff to tick through. So first and foremost, we'll have a little bit of the rumor mill that's been in Ari's dm' Then we'll move on to super bowl, recap some big earnings and CTV stuff. So you said in the previous segment that you're like the confessional of ad tech. Dms. I have such A visual. I want to like open up like a AI generator and actually create that. But what's going on? Who's. Who's hitting you up with what?
- [33:26]
Ari Papara
Yeah, we need some like theme music for my DM ARES DM mailbox. All right, so hot rumor coming in anonymously that the trade desk is building an ad server, perhaps in reaction to MediaOcean buying Innovid, which hasn't closed yet. The buy side ad server business is pretty consolidated. There's really only three players. There's Flash talking and Innovid, who are now merging and Google. There are some others like Clinch, but the trade desk already does the buying, does the reporting. The only thing they don't do is send out tags and work with publishers on compatibility. Makes sense as a defensive move, maybe a revenue move. So that's one rumor. Totally unsubstantiated, only from a single source.
- [34:14]
Eric Franchi
But it's interesting, Innovid closed this morning.
- [34:17]
Ari Papara
What? Really? Oh, that's exciting. Yeah, I don't know.
- [34:20]
Eric Franchi
Bill and Ramsey were posting about it this morning. So now MediaOcean officially has two of the three largest buy side at Surface.
- [34:27]
Ari Papara
So it makes it interesting as a plug here. Bill Wise will be on stage with me at marketecture Live. So we will ask him about that. The second one is like more like I'd say it's me starting this rumor more than rumors starting me, which I'm just noticing a lot of data points around this. My favorite subject, the Google antitrust problems. Data point number one. The ruling from the Virginia court is six weeks late. The judge specifically said she wanted to do it by the end of the year and we're in mid February and there hasn't been a peep. And lawyers have told me there's no way they're negotiating. I don't believe them. They're negotiating. The reason is, I believe no evidence that it's delayed because behind the scenes Google is working on a plan to exit the network business. The second rumor, someone who would know told me that Google is talking to bankers about spinning out the network business. The third is Data Point in my little constellation is you may have noticed over the past week, and we'll talk about this on news of the week, that YouTube is just front of the news. They're pushing out all this news about how great YouTube is, how wonderful it is. Neil Mohan laid out the strategy for YouTube. Why are they doing that right now? Because they want to make it clear to Wall street that YouTube's the future so that when they announce the network Spin out. No one cares. And then the final data point obviously is Steve Yap leaving. He was a leader in the network business with a cushy job that paid him a lot. Why did he leave? Why'd he leave? I would say he didn't get the CEO job. I know Steve Yap is a listener of this pod, so I'm just kind of giving him a hard time. It's probably not. Has nothing to do with it. So anyway, so that's my constellation of facts. I think Google spin out being announced sooner rather than later, maybe in the next month. And then, final thing, this isn't a rumor, but I really want to bring it up because we found out this on Twitter. What does the name Teeds mean? Last week we found out that Outbrain was renaming itself Teeds. And we all were like, teeds. That's probably French for banner ad or French for play button. I don't know what it is. And then we were helpfully told that Teeds is a combination of the word technology and ads. And that just, like, blew my mind.
- [36:38]
Eric Franchi
And blew everybody's mind, like, so it was so shout out. James O'Connor was the one that chimed in with the, with the, with the reply guy. And he did it. It was like, I think he did it at night. And then both of us woke up really, in the. Really early in the morning and. And saw the reply and we both had the same reaction. We didn't even talk about this, but I was like, shook.
- [37:02]
Ari Papara
I was shook. I thought it was the worst. One of the worst, most uninspired names in ad tech. It turns out to be the most brilliant name in ad tech. And, you know, I'm a big connoisseur of naming, and I'm just. I'm shook. There's no other word for it.
- [37:16]
Eric Franchi
This is some really nerdy stuff, but there's a whole thread. People can see this stuff publicly. Scott Messer. Scott Messer has been in my DMs, giving me little bits of clarification for, like, ad tech trivia over the course of the past week. So we have our listeners just, like, solve problems. It's awesome. Exactly. That's some good dot connecting on the Google front. I think you're onto something there.
- [37:42]
Ari Papara
Yeah, I think I am.
- [37:43]
Eric Franchi
Yeah. For sure. Okay. All right, before we get into the earnings stuff, because a lot to talk about with earnings, let's talk Super Bowl. So, guys, what did you think of the Super Bowl? Did you watch it?
- [37:52]
Christoph
I did. On Tubi.
- [37:56]
Ari Papara
Tubing is the real winner of the Super Bowl.
- [37:58]
Christoph
Yeah.
- [37:59]
Eric Franchi
Yeah. So two data points. Number one, it is the most watched Super bowl in history. 127.7 million people watched it. And then over 10% of that 13.6 million. I think the term is like average minute users watching it on Tubi for free in 4K. And I did as well. And it was awesome. I mean, but for like one or two little hiccups that, you know, lasted about five seconds, but felt that felt like they lasted a minute or so, it was great. They had like a pre show that was like a red carpet. It was really, really good. So I agree. Tubi was the.
- [38:34]
Christoph
Was the winner here.
- [38:35]
Ari Papara
One little nuance on the measurement. I forgot where I heard this, but this is only the second year ever that Nielsen has measured out of home viewing, meaning bars and restaurants. Historically, that was a big gap in measurement. So the fact that they're adding probably tens of millions of viewers that they hadn't measured previously is also boosting the measurement, the number. When we say it's the most watched super bowl ever, it's because the first 49 Super Bowls, they didn't measure anyone in bars.
- [39:02]
Eric Franchi
That makes sense.
- [39:03]
Ari Papara
Favorite ad, T Mobile and starlink, because I'm a meat and potatoes guy. And they said, here's the product, here's how you get it, here's why it's important, and here's what it costs. Love that. I bet they actually got some signups from that without any celebrities or any other nonsense.
- [39:20]
Eric Franchi
Edo the measurement company put out a list. We'll actually link it in the newsletter. I put it in the docket here. They said that was the number one ad in terms of engagement.
- [39:30]
Ari Papara
Oh, really? That's interesting.
- [39:31]
Eric Franchi
Yeah, yeah, yeah. What about you, Kristoff? What was your favorite?
- [39:34]
Christoph
This is going to sound really stupid, but as I was watching it, I was trying to actually like capture and record the ads, including the source code of the ads. Because I was streaming it and it didn't actually work out very well. So I didn't actually get all the ads. I didn't see.
- [39:46]
Ari Papara
Next year, super bowl parties at Kristoff's house.
- [39:49]
Christoph
I know, it's like, it's like computer it nerd, super bowl party. You know what?
- [39:55]
Ari Papara
Did you find anything interesting in the code?
- [39:57]
Christoph
No, that's what I'm saying. The capture didn't work out. I kind of screwed it up.
- [40:02]
Eric Franchi
Yeah, I thought the rocket mortgage. Rocket Internet.
- [40:06]
Ari Papara
Yeah, the song.
- [40:08]
Eric Franchi
Yeah, that was really good. Then they transitioned it to the stadium. Singing along right after the spot. I thought that Was cool.
- [40:14]
Christoph
It was good.
- [40:15]
Eric Franchi
It was memorable.
- [40:16]
Ari Papara
Yeah. I have an issue with the reveal of the brand only in the last frame of the ad. I think it's just not as effective. I bet most people know that song, the West Virginia song, but how many of them associate it with Rocket? And you also have to know what Rocket is. It's a mortgage app. Not everyone knows that either. So I do wonder about the ROI and something like that.
- [40:38]
Eric Franchi
Yeah, yeah, no, that's a good point. They should hire you as their creative director. This is not a video podcast. But Ari happens to be wearing a black T shirt, so he's got the uniform.
- [40:50]
Ari Papara
Yeah, exactly. I would last in that job for about 10 minutes.
- [40:53]
Eric Franchi
That would be. I would love to cover that as a, as a segment anyway. All right, moving on, earnings. So last night was a big night. We had two of the largest independent ad tech companies report and we saw very two different results. So first, AppLovin up 30% overnight in terms of the stock. I didn't check it at the open, but at the overnight it implied a $175 billion market cap. So by far the largest independent ad tech company. Couple of interesting things I picked up from the coverage. So number one, divesting the app business to become a pure advertising platform. Number two, $4.7 billion in revenue in 2024 and also building some self serve ad capabilities because right now a lot of what they do is managed service. And then I thought this thing was interesting. Adam, as part of probably being in founder mode, took over HR last year. So that guy is moving into E commerce. He is pivoting the business to become a pure play, divesting the app business. And he's running hr Founder mode.
- [42:02]
Ari Papara
Yeah. I mean, I'm sure you could email Adam and ask him why your 4 okay deduction was slightly lower this week. I'm sure he'll respond right away.
- [42:10]
Eric Franchi
All right, what's the take on Applovin Two takes?
- [42:13]
Ari Papara
The first take is, I think it's really interesting they're selling their gaming business because the thesis on Applovin just a year or two ago was that the reason they were being successful is because they had O and O and therefore they were able to sort of arbitrage attention between the things they knew as first party and the third party. Either that wasn't true back then or they've developed their AI in targeting so much that it's no longer required. Either way, it's an interesting story. I would love to hear more about that because there is sort of an air of mystery as to why Applovin is so successful.
- [42:48]
Eric Franchi
That makes a ton of sense. We should have Adam on first off.
- [42:51]
Ari Papara
I've asked Adam, but Adam for listening or anyone's listening at Applovin. Come on.
- [42:56]
Eric Franchi
I don't think I've ever seen Applovin in. I could be completely wrong. This is recency bias in one of your reports.
- [43:02]
Christoph
Yeah, not to my knowledge. Not that I can think of. I mean, I know obviously come across them many times because they're integrated a lot of mobile apps, you know, they have both. They're the mediating later on a lot of mobile apps. But they also, I believe, acquired in like 2020 or 2021. A attribution vendor, I think it was adjust. Don't quote me on that. But they basically have their software code embedded in a lot of iOS apps and a lot of Android apps. So that earlier point that you and Ari raised, like, they're definitely like really well connected across the mobile app ecosystem. So it makes sense that they would have access to a lot of inventory.
- [43:33]
Ari Papara
Yeah. And there are definitely Applovin haters out there. There are independent short sellers who've published articles about Applovin. You can find them on your own. We won't link to them, but there are folks who effectively are saying that there is a lot of very low quality inventory and ads in that ecosystem, which, you know, it's mobile app installs. Yes, that's absolutely true. How bad is it? And whether that affects the financials is unclear. But the mobile app ecosystem is pretty dirty business.
- [44:02]
Eric Franchi
Yeah, yeah, for sure. But you know, has different challenges than, you know, the subject matter of the, you know, first part of the product in terms of quality and brand safety.
- [44:10]
Ari Papara
So here I have a question about Applovin. So Applovin feels a little bit like Trade Desk did five years ago. What I mean by that is like a lot of Trade Desk's growth was sopping up market share from independents who weren't as strong. I think a lot of Trade Desk growth in those years was media math and turn and Rocket Fuel and all the folks who were pretenders to the throne but couldn't get there. And where's Applovin's market share coming from? I think it's coming from Unity, Ironsource and those folks, not necessarily from Google and Facebook. But I don't know that I would love to hear it because the mobile in app install business isn't growing overall. Right. It's like kind of mature. So where's the growth coming from?
- [44:58]
Eric Franchi
They have not broken out the growth of E Comm yet, to my knowledge, with the latest earnings. But there was a moment in Q4 where a lot of some people actually thought this was like a paid influencer marketing strategy where a lot of like the D2C, Twitter and the measurement and attribution folks were talking about how they were seeing, you know, spend shift from meta to Applovin spend shift in a way that was more profitable. So if you believe that E Comm and commerce is starting to be a growth driver for Applovin and you would believe what some of those individuals were saying, which is, you know, there was a share shift happening beginning in Q4 because it was just more cost effective. I think there's a line of reasoning that the growth comes from walled gardens, number one.
- [45:45]
Ari Papara
Right.
- [45:46]
Eric Franchi
Because that's the playground of D2C and E comm. And then number two, don't forget they have world. So I think there's, you know, a parallel path here that we're not paying attention to, which is performance tv, which they're not talking about. So I'm assuming it's still kind of in a development mode. But that's the bull case on Applovin. They've sopped up all of the mobile growth and now they're going to move into D2C and Ecom.
- [46:10]
Ari Papara
Yeah. So the bear case is that they've been running rampant against weak independent competitors and they're about to hit the wall of meta and not be able to take share from them. And that was largely the bear case against Trade Desk back in those days, which was, sure, it's easy to beat turn because they're a shadow of what they used to be. But at some point you're hitting DP360, you're not gonna be able to take share. That was the case. Which tees up your next subject, I.
- [46:36]
Eric Franchi
Think it is speaking of ttd. So TTD missed estimates for the first time ever. It had happened at some point. But just ironically, that happened the same day that Applovin released an amazing earnings report. And the stock was down. Stock was down 27%. There was a bunch here that we don't have the time to unpack, but they blamed unnamed kind of people, mistakes that they pointed to just a lot of operational stuff. A sales reorg that had an impact on client coverage, a slow rollout of COCAI and a bunch of other things. This was the first time they ever had an earnings report like this. This is the first time they had a, you know, provide reasonings for why. So, you know, I think it cut them a little bit of slack from an IR perspective. They mentioned having a 15 point plan on how they're going to address this. They mentioned that they're increasing their direct to brand focus because customers who have a JBP, a joint business plan involving TTD agency and brand, apparently they see 50% higher spend and results. So there's a lot here, but it's the first time for ttd.
- [47:50]
Ari Papara
Yeah, I don't have any comment on ttd, but I do have a comment on the natural inclination to contrast Applovin and ttd which is open versus closed. One interpretation which I'm sure will be going around is that TTD plays mostly in open and that is not growing anymore and they're going to hit a wall. Whereas the closed applovin is reproducing the walled garden sort of in an ad hoc way and is in a better space. I'm not advocating that point of view, I'm just pointing it out. And I put in the notes that Brian Weiser in his newsletter today, he estimates that open Internet is only growing about 5% year over year, whereas Trade Desk grew I guess 12% year over year. So they're taking share, but there's a limit to how much growth there is.
- [48:36]
Eric Franchi
And that open representation isn't really open when it's like the premium Internet, 500 sites, it's CTV, it's audio. So it's an interesting comparison. The other comparison is so there's this whole thing out there of folks debating is this the year of outcomes, is this the year of quality? That's another interesting juxtaposition where Applovin is certainly an outcomes oriented company. It's all about performance, install, so on and so forth. And TTD is the champion of quality.
- [49:07]
Christoph
Right.
- [49:08]
Eric Franchi
And again, we can't use this as an indictment that this is, you know, the year of outcomes, the year of outcomes won. But you know, comparisons will be made, that's for certain. All right, let's keep it moving. We'll talk about some CTV stuff. So two interesting things today, YouTube, YouTube, to your point earlier, Ari has had a bunch of real proactive rolling thunder of momentum. So there were two data points here. So number one, apparently Americans now watch more YouTube on TV than any other device, which is like kind of wild if you think about it started as a mobile app or desktop, started as desktop, moved on to mobile. You know, from a personal consumption perspective. Like I'm still, you know, kind of doing this stuff on, on my own Mobile. But at the same time if you ever flip on YouTube on your CTV like it's a good experience. So is that a head scratcher or a shock to either of you guys?
- [50:04]
Ari Papara
I think generationally I'm 54, I don't even know how to get YouTube on my TV.
- [50:08]
Christoph
Of course you do.
- [50:09]
Ari Papara
I know how to get YouTube TV on my TV and I watch that right now the app is right there.
- [50:13]
Eric Franchi
It looks like the one on your phone.
- [50:15]
Ari Papara
I don't have it on my Samsung. Maybe I'll fiddle around, see if I could get it. But then how would I log in? I don't even know how it'd be.
- [50:21]
Eric Franchi
You don't have to, you don't have to log in. We're going to do a session later on. I'll show you how to do it. Kristof, you watch YouTube on TV?
- [50:29]
Christoph
I mean I don't personally subscribe to YouTube TV but I definitely have a lot of friends who have gigantic TVs in their apartments and made up watch, you know, subscribe to YouTube TV. So I definitely see there being adopts and.
- [50:39]
Ari Papara
Yeah, yeah well this number does not include YouTube TV.
- [50:42]
Eric Franchi
Correct. This is watching the YouTube app on your CTV and you guys should do it. It's really good depending on the type of content that you watch obviously. But that's the dominant form of watching YouTube so it's no longer the app. So that was interesting thing number one and then number two, Neil Mohan to Ari's point, you know, had a whole bunch of things in terms of their announcement for the year. They have the largest share of CTV So they have 11% of market share in terms of watch time versus the next largest competitor which is Netflix at 8%. So maybe it's a generational thing but YouTube is winning CTV.
- [51:19]
Ari Papara
Yeah. I've also wondered back to YouTube TV. You know the, they're the sponsor of the super bowl pregame show. They, they spend a ton of money on traditional TV getting people to install and I just wonder if they're. If that's in the best interest of the broadcasters in the long term.
- [51:35]
Eric Franchi
Yeah, it's a good question. It's a really good question. I don't know. One other thing that made the rounds this week that I thought was interesting is Disney plus so ad week we'll put a link shout out to Trishla. Found this update in the terms of service. So Disney has a change in the terms of service allowing them to show ads even on paid ad free tiers. But that was kind of interesting. So there's either some programming or some ad formats that are coming down the pipe that you're going to see ads for, even if you're paying for the most expensive version of Disney.
- [52:11]
Ari Papara
Yeah, I don't know much about this particular, but Disney is interesting because they came out of the streaming gates so strong, hit all kinds of records on new signups, looked like a real viable competitor to Netflix, and just in the latest earnings report noted that their price increase had a real negative effect on Churn. And it feels like they don't have the mojo with consumers on the streaming that they thought they did. So maybe there's some strategic conversations going on about how to fix their Right, their ship.
- [52:46]
Eric Franchi
Yeah, no, that makes a lot of sense. I mean, Amazon proved that you can have a wholesale increase in ads across, you know, everything and you probably don't. They spoke to very little Churn, so that might be coming for Disney plus because Amazon is training people to just watch a handful of ads prior to a movie. All right, this was super long and amazing. Call it here.
- [53:11]
Ari Papara
Yeah, let's. Let's call it. So this was super interesting. Kristoff, thank you so much for being here.
- [53:16]
Christoph
Thanks for having me, guys. Thank you for subscribing to marketecture. New interviews are added every week at marketecture TV and your favorite podcasting app.
- [53:34]
Ari Papara
Thank you for listening to the Market 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 Market tv. And if you're feeling social, we operate a vibrant Slack community that you can apply to join@adtechgod.com.