Episode 121: David Kostman on the new Teads, and what’s next for the Open Web. Plus a Possible round-up and Apple’s big antitrust loss.

Summary

Marketecture Podcast: Episode 121 Summary

Release Date: May 2, 2025
Title: Episode 121: David Kostman on the new Teads, and what’s next for the Open Web. Plus a Possible round-up and Apple’s big antitrust loss.

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Introduction

In Episode 121 of the Marketecture Podcast, hosts Ari Paparo and Eric Franchi delve into significant developments within the advertising and marketing industries. The episode features an insightful interview with David Costman, the newly appointed CEO of Teads, followed by a comprehensive round-up of recent industry events, including the Possible conference and the landmark antitrust ruling against Apple.

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Interview with David Costman: The Future of Teads and the Open Web

[03:36] Welcome and Introduction
Ari introduces David Costman, formerly the CEO of Outbrain for over a decade, now at the helm of Teads following its merger with Outbrain. David expresses enthusiasm about combining both entities to create a leading platform on the open Internet.

[03:50] Differences in Leadership Roles
David highlights the fresh opportunities arising from the merger, emphasizing the integration of branding and performance on an omnichannel basis, including Connected TV (CTV) and open Internet platforms.

[05:04] Synergies Between Teads and Outbrain
David discusses the complementary nature of the two businesses:

• Advertiser Base: "All the advertisers are looking, even the most premium brand advertisers, they're looking at consideration and the end. They want to drive a conversion of one kind or another" ([05:15]).
• Publisher Relationships: Enhanced monetization through combined data signals and premium demand.
• Cost Savings and Upside Potential: The merger is projected to generate synergies worth $60-75 million ([06:51]).

[07:42] Evolving Publisher Dynamics
With the companies heading in different directions, David notes improved value propositions for publishers:

• Open Internet Focus: "Publishers... want to work with one partner that can service them on a bigger part of the page" ([07:42]).
• Enhanced Monetization: Increased data signals lead to better performance and higher revenue for publishers.

[09:32] Unified Metrics and Reporting
David explains the integration of performance and branding metrics:

• Short-term: Joint selling efforts with separate systems.
• Long-term: Unified reporting system integrating capabilities from both Outbrain and Teads, expected within 12-24 months ([12:30]).

[12:09] Brand Formats and Creative Integration
Introducing "brand formats," David envisions a seamless blend of branding and performance advertising. For example, placing a video in the middle of an article to measure user engagement and drive calls to action ([10:54]).

[15:12] The Future of the Open Web
David affirms the continued growth and monetization potential of the open Internet:

• AI Integration: "AI can be very important" for enhancing user engagement and advertiser performance ([15:12]).
• Content Evolution: Shift towards video content while maintaining original journalism.

[17:48] Financial Insights and Debt Strategy
David provides an overview of Teads’ financials and the strategic use of debt for the merger:

• Media Spend: Approximately $1.6 billion in total media spend ([17:55]).
• Debt Utilization: Conservative leverage ratios with less than three times EBITDA, financing a $900 million deal through high-yield bonds ([18:20]).

[20:08] Rebranding to Teads
David discusses the rationale behind renaming the merged entity to Teads:

• Emphasis on a premium, data-driven, and performance-oriented platform.
• "The logo has been redesigned, the whole messaging has been redesigned" to resonate with target segments ([20:08]).

[21:53] Conclusion of Interview
Ari and Eric wrap up the discussion with light-hearted anecdotes, highlighting the strategic and cultural alignment achieved through the merger.

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Refresh: Insights from the Possible Conference

[23:03] Post-Conference Reflections
Ari and Eric share their experiences attending the Possible conference, noting its size and the vibrant presence of brands and agencies:

• Attendance: "I heard 5,000 attendees" ([23:30]).
• Networking Challenges: Overcrowded spaces leading to logistical issues like finding food and managing conversations.

[24:53] Economic Sentiments
The hosts observe a generally positive outlook for the first half of the year, with concerns beginning to surface for the second half as economic impacts loom.

[25:16] Brand vs. AdTech Focus
Discussions highlight the coexistence of established brands and innovative startups within the adtech ecosystem:

• Established Brands: Focusing on incremental growth and integrating solutions around retail and CTV.
• Startups: Developing disruptive technologies with potential to change the landscape.

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News Round-Up

Antitrust Ruling Against Apple

[45:29] Epic’s Victory
Ari explains the recent antitrust decision favoring Epic against Apple:

• App Store Policies: Apple’s mandate requiring in-app purchases through its system, taking a 30% commission.
• Judicial Ruling: "Effective immediately, that all goes away. You could do purchases outside of the apps" ([47:21]).
• Implications: Enhanced flexibility for app developers and potential long-term benefits for user acquisition and innovation, though limited immediate impact on Apple’s revenue.

Microsoft’s Ad Revenue Surge

[32:35] Microsoft’s Earnings
Eric highlights Microsoft’s robust ad revenue, reaching $20 billion annually:

• Growth Drivers: Expanding Bing and LinkedIn functionalities.
• AI Integration: Strong execution with Copilot tools embedded in development platforms like GitHub ([33:14]).

Meta’s AI-Focused Growth

[33:14] Meta’s Performance
Meta reports strong earnings with an optimistic outlook for Q2 despite economic uncertainties:

• AI Emphasis: Mark Zuckerberg underscores AI’s role in making advertising a larger share of global GDP ([35:00]).
• Contrasting Snap: While Meta thrives, Snap issues an earnings warning, suggesting a divergent outlook within the industry.

Google’s Performance Max (PMax) Adjustments

[36:46] Increased Transparency
Google responds to advertiser demands by enhancing transparency in PMax:

• Feature Enhancements: More clarity on channels, search terms, and creative asset performance.
• Strategic Shifts: Aims to retain advertisers by transitioning from manual to automated optimization systems ([37:24]).

Trade Desk’s Take Rate Discussions and CTV Dynamics

[38:20] Take Rate Conversation
James Hercher’s analysis on Trade Desk’s take rate in CTV:

• Competitive Pressures: Other platforms like Comcast’s Universal Ads introduce zero buy-side fees, challenging existing models.
• Industry Reaction: Ongoing debates about platform fees and inventory control ([38:20]).

Speculation on Chrome’s Future

[40:07] Potential Spin-Out
Ari discusses rumors about Google potentially spinning out Chrome:

• Possible Buyers: Yahoo and OpenAI express interest.
• Implications: A significant shift in internet infrastructure control, with debates about who could sustainably manage Chrome’s advertising ecosystem ([40:59]).

Apple’s Antitrust Case Overview

[45:29] Epic vs. Apple Ruling
Ari provides a detailed account of the court’s decision against Apple:

• Policy Change: Immediate allowance for side purchases outside the App Store.
• Judicial Stance: Apple’s non-compliance leads to a direct referral of the CFO to the Justice Department for potential criminal charges ([47:21]).

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Community Highlights and Shout-Outs

• Startups and Rebrands: Acknowledgment of Springserve’s team launching Swivel, an AI-driven account management tool, and Freewheel’s rebranding from Beeswax DSP to Freebill DSP.
• Networking Anecdotes: Ari shares humorous moments from Possible, highlighting challenges in remembering names and interacting in large networking events.

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Conclusion

Episode 121 of the Marketecture Podcast offers a deep dive into the evolving landscape of adtech, spotlighting the strategic merger of Teads and Outbrain under David Costman’s leadership. The hosts also provide valuable insights from the Possible conference and discuss critical industry news, including significant antitrust rulings and major earnings reports. This episode serves as an essential listen for professionals aiming to stay informed about the dynamic changes shaping the advertising and marketing sectors.

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Notable Quotes:

• David Costman [05:15]: "All the advertisers are looking, even the most premium brand advertisers, they're looking at consideration and the end. They want to drive a conversion of one kind or another."
• David Costman [07:42]: "Publishers... want to work with one partner that can service them on a bigger part of the page."
• David Costman [10:54]: "Brand formats really reflect the potential of the combined company."
• Ari Paparo [47:21]: "The judge just destroyed them. This happened on Wednesday, I believe the judge came out with a ruling that said, effective immediately, that all goes away."

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Resources:

• Marketecture TV: www.marketecture.tv
• Slack Community: [e-mail]

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Stay tuned for next week's episode, where Ari and Eric continue to unpack the latest trends and developments in the advertising and marketing industries.

Transcript

[Ari Poparo]

This podcast is brought to you by Adelaide. Media verification and measurement are undergoing major disruption. Legacy players are pivoting to performance. Advertising AI is reshaping brand safety and attention is replacing viewability. Adelaide is leading the shift with au, a new way to assess media quality that scores placements based on their potential to drive attention and outcomes. Before your ads run, think of it like a credit score for media. Finally, a clear view of quality. Before you buy, take the guesswork out of your investment strategy and try Adelaide AU on your next campaign. Welcome to the Market Texture podcast. I'm Ari Poparo. I am joined by Eric Franchi. We're both freshly back from Miami. You adjusting to the real world again, Eric?

[Eric Franchi]

I am. It was a crazy and productive three days. We'll talk about it a little bit on the refresh and I'm hoping to catch up on sleep.

[Ari Poparo]

Yeah, yeah, I caught up on some sleep yesterday. So in Miami we recorded some amazing interviews in our AdTech Forum brand. Those are available at Marketecture TV, but also on LinkedIn and on YouTube. So we have interviews with companies like Zeta Global and many others. They're really fun and interesting. They're usually hosted by my co founder Jeremy Bloom and Nicole Pruis, who is an associate for us. So you should check those out if you follow any of the crew from Architecture, no doubt you're seeing them on your social network, so check them out. So this week we have David Costman who is the CEO of Teeds, formerly the CEO of Outbrain. David is going to tell us about the new Teeds because it's a new company from the merger of those two entities and how they sell to advertisers, how they sell to publishers. And then we're doing sort of a back to back thing because next Friday we have a conversation with Adam Sangola, who is the CEO of Taboola. And Taboola is also kind of a new company. They are moving to a performance orientation across media, much more so than what they're known for with the specific sort of bottom of the page stuff. So both these companies used to be head to head, identical. And they're both diverging. And I think it'll be really interesting to hear the contrast between those two interviews. Eric, what's your thinking on this whole sector?

[Eric Franchi]

It's great that you're doing it back to back because they were at one point, not too long ago, fiercely competitive those two companies were. If I, if I recall correctly, they almost merged at one point.

[Ari Poparo]

No, they didn't just almost merge. They, they went down the whole route of getting approvals and then they were kind of held up by European antitrust approvals because they felt like it'd be too much control over the publisher side.

[Eric Franchi]

Yeah, that's right. And then, you know, you fast forward it's only been a couple of years and these businesses are quite different and they've made like very significant strategic decisions. One is, you know, going after this idea of like connecting brand to performance and one is all in on performance. I think it's going to be really valuable for the listeners just to sit back and like observe how these companies are evolving in a time that they need to evolve.

[Ari Poparo]

I agree. I'm interested in hearing what they have to say. And then the news of the week, we have really interesting stuff from possible earnings, Google and Comcast making some changes and the new Apple epic ruling. So a lot of stuff to talk about. Let's dive right in with David Costman of teads. All right now welcome David Costman, the CEO of teads. David, thank you so much for joining us.

[David Costman]

Thanks for having me. Hey, Ari. Hey, Eric. Good to see you guys.

[Ari Poparo]

So this is a new job for you? Sort of. You've been doing it for 10 years, but it's a new job. You're the CEO of Teads, but you were the CEO of Outbrain for over 10 years. So how's it different?

[David Costman]

It is totally a new day. I mean, it's obviously a great opportunity for us to combine with TEEDS and create one of the largest platforms on the open Internet. It's a new journey where we building the new teed, which is combining branding performance on an omnichannel basis at a huge scale, both on CTV and open Internet. And I believe the opportunity is huge. I'm very excited. I feel refreshed and younger with this challenge and I think it's a great, great opportunity for the ecosystem to have a large scale player that, you know, we can reach 2 billion uniques. We work in 50 markets and the focus of the company is really to drive outcomes. We want to drive outcomes. Whether it's a branding campaign consideration or lower funnel. I mean the focus is on driving outcomes with sort of elevated creatives. I think creative is a critical path here too.

[Ari Poparo]

Right. So let's talk about the synergies a bit because the businesses previously I don't think had that much overlap. TEEDS and Outbrain, different formats, different parts of the page. So tell me, walk me through in detail where you think the real synergies are.

[David Costman]

So yeah, I mean, you're right. I mean it's a very complementary business. I mean our strategy at Legacy Outbreak and again we named the company Teeds.

[Ari Poparo]

It's a good name. We'll get to the name in a second.

[Eric Franchi]

Yeah, we'll get.

[David Costman]

So the strategy was for the last few years really to grow and sort of be a full funnel company and go into to branding. If you recall we launched product called Onyx a couple of years ago. So that was always our objective. So the, the synergy here is a. On the advertiser base I think all the advertisers are looking, even the sort of most premium brand advertisers, they're looking at consideration at the end. They want to drive a conversion of one kind or another and the opportunity sort of to leverage the amazing relationships that Legacy Teeth has built with the hold cos and with the most premium brands. We have more than 50 joint business partnerships with the most premium brands. I mean these companies have been spending mostly on branding but they also have huge performance budgets and I think that that's one of the biggest opportunities bringing video into sort of the sort of direct to consumer the direct response and some of our SME advertisers of Legacy Album is a huge opportunity I think particularly on CTV and. And the performance area. So companies are very complementary. The synergy in the go to market is. Is what I mentioned on the media owner side, publisher side. I think both of us serve many of the same publishers, lower end, sort of end of the article and mid article. So the combination of that is a synergy and, and this in. In these situations there's traditionally, I mean normally there is an overlap of offices and senior people and when we announced the deal talk to the market we're talking about synergies in dollar terms of around 60 to 75 million dollars.

[Ari Poparo]

When you say synergies in dollar terms are you talking about cost savings?

[David Costman]

Part of it is cost savings and part of it is the upside which is really the exciting part here. It's what we discussed about where we broadening the. The offering. So sometimes you have to go and find the sort of people that are in an agency responsible for performance in when we work directly with clients on performance. I mean there's other people potentially do branding but there's also a significant overlap of these teams and we see a merging of the digital and ctv. So it's a different sort of situation with every I think big company, big advertising agency.

[Ari Poparo]

And on the publisher side historically it was seen as sort of a head to head you and Your rival Taboola, you know, bidding to win publishers. How has that dynamic changed now that the two companies are kind of heading in slightly different directions?

[David Costman]

Yeah, I think the companies have been decoupling so we've been focused on the full funnel. I believe that sort of we've been focusing on the premium side of the market. I think with the combination with your offering that teeth brings, we can bring better monetization. A big significant increase in the data signals that we have on a combined basis that will improve the are improving already the performance of the company. So I believe we can deliver a much better value proposition. Also on the publisher side, I mean the open Internet is sort of critical piece here. I think publishers, the feedback has been phenomenal. They want to work with, you know, one partner that can service them sort of on a bigger part of the page. The more premium demand that we're bringing to the table now is also relevant and I think demonetization will improve significantly for publishers here.

[Ari Poparo]

Prior to the acquisition, I think it was generally, and tell me if I'm wrong, that most publishers were exclusive one way or another. It seems to me a big synergy here is that you can be a Taboola publisher with teeds on your page. So you've suddenly changed the competitive dynamic on the supply side.

[David Costman]

Yeah, I mean there are certain instances like this, but really we're focused on the combined offering to the publisher base.

[Ari Poparo]

Got it. On the buy side you said you focus on outcomes, but the kind of KPIs for the two businesses were a little bit different. Right. The legacy outbrain business was largely click based and the legacy teeds business was like video completes I'd imagine would probably be a key metric. So how do buyers reconcile those both? When you said you're going for outcomes, pitching hybrid outcomes or lower funnel outcomes that result from both media types.

[David Costman]

I think on both branding, I mean you mentioned one KPI, there's attention, brand recall, there's sort of many things that we measure and when we do post campaign reporting, we deliver to our advertisers. On the branding side, on the traffic safe consideration, there are many metrics that are acceptable and then yes, on the lower funnel, you want to drive a sale, you want to drive a lead, you want to drive a download. And I think all of those combined are sort of what we are aiming to deliver to advertisers depending on the objective of their campaigns. I think the future is also the ability to combine sort of and look at more holistically at the budgets of our advertisers combining branding and performance and optimizing for those two. I think that's the, call it the holy grail. But brand formants in a true way to do it in a way that I think we know that they are correlated. I mean you cannot stop totally branding investment. Just put everything on performance at the end it's not going to work long term, short term, you need to balance it. I think we are uniquely positioned to deliver on those best outcomes for advertisers. Combining these objectives, again very focused on data and outcomes irrespective of what your objective is.

[Eric Franchi]

I like that word brand formats, David, Is that trademarked by teams?

[David Costman]

Thank you, Eric. I mean I am having a lot of internal arguments about using that word. I love that word. I mean it's been used in the, it's been used in the past. I mean we didn't invent it but I think it's, I think it really reflects the potential of the combined company. I think our aim is we're going to be the best in performance and the best in branding separately. But then when you can combine the two and I'll just give you an example, I mean put a video in the middle of the article and you measure the engagement of a user with a video about a new car. Okay. We can take that signal and then when you scroll further down, deliver your call to action ad and that's very unique and it ties a little bit back how we, to the exclusivities we do have exclusive end of article. I mean it's, you can imagine how we can transform this to a super brand friendly environment. Once we have the depth of demand it can be, you know, full screen. We launched Moments, which is a vertical video product. So it's a great canvas for premium brands. If you change a little bit the sort of structure of that sort of feed and then connecting that to what you've seen on the top or what you, what you've done on ctv, connecting those two. And we are deep into this. I think it's a, it's a great potential.

[Eric Franchi]

Yeah, I can, I can see it as a, as a format enthusiast. How is this going to manifest itself in reporting? Will there be unified reporting? Because you have presumably like you know, multiple dashboards here from the two companies. Is there going to be unified reporting and where, where will that be? When, when can customers expect it?

[David Costman]

So let's separate short term and longer term. I think we are ready. We launched already cross selling efforts in five European markets in the US When I say that that Means that we have joint teams going to the advertisers and selling campaigns that would be performance and branding. Today these campaigns will get executed on the two separate system. TZ Ad Manager is the TEEDS platform where about more than 85% of the demand. I mean it's a programmatic platform where Teeth has been very successful getting big hold codes, big brands to launch campaigns and work on their platform. So that's sort of where the future for us lies. So longer term we're integrating many of the performance capabilities that we have in our, in the legacy Outbreak platform called Amplify. We're integrating those performance capabilities to be transparent. This takes 12 to 24 months. This is not something that happens in a day. I know people like to think it's all easy, but it's not. So that will take. But today we're already offering the two capabilities and we will provide reporting to the, to our clients in a unified way. But it's going to be done manually at this point. But those cross sales have already happened. I mean we have examples of few big brands that have already shifted budgets. It's very exciting. I think the interaction on the advertiser side has been phenomenal. I think the receptiveness for what we've been discussing is excellent. It's upon us to execute on it.

[Ari Poparo]

There's a bit of a minor product for you, but what's the current state of the dsp? What used to be called Zamanta.

[David Costman]

So the DSP is still a very, very significant platform for us for what we call the direct response business. I mean we, we kept a business called Outbrain Direct Response by Teeds which is focused on the more elastic buyers. And that's sort of where we've seen a significant increase in Shelf Wallet where these budgets are being spent obviously as a DSP across third party supply, not just ours. And it's been one of our significant growth drivers for the last few years and will continue to be. But we are looking at the already whole consolidation of platforms. At the end of the day. Part of the benefit here is that so I can already say, I mean PZ Manager will be our sort of platform for the future for enterprise brands and SMEs and that there we're incorporating a lot of the Outbrain legacy capability to that platform, bidding performance, et cetera. And on the direct response we're still sort of working out what's the best way to move forward.

[Ari Poparo]

So you mentioned earlier Open Internet, open web, whatever phrase you want to call it, you're kind of sort of the poster child for monetizing the open web. Is it dying?

[David Costman]

And let's all hope that not. And I, I don't think so. I think that the open aa obviously we need to define the open Internet. It includes our traditional publishers, ctv, retail media, podcasts and others, sort of everything that's not walled garden. So I think that's still a growing market. You've seen the data around sort of where people spend their time. I think it's more around the overall open Internet and I think the opportunities that we have on the open event are still significant. There's much more opportunity to monetize. I mean there is a question mark around page views and what will happen with AI and page views. So we're investing a lot in AI tools to improve performance, to improve workflows, improve creative processes. I do believe actually that even on the open Internet, I mean AI can be very important. I talk to, I can mention the name, Axel Springer, one of our partner publishers. I mean they have this sort of prompt which is called hi, hey. And it's increased usage significantly. So they're putting it on the articles. Then people start, you know, users start interacting with it on a chat basis. They get further, further down and sort of they see great metrics around increased engagement and usage. I think that's one of the ways that publishers can increase the engagement of the users. So I think that also keeping journalism, I think there's always going to be a role for original creative content journalism that's written, more of it is shifting to video. That's great. And I'm a believer that the open Internet has long, long ways to go.

[Ari Poparo]

I actually saw a couple of demos at possible. We'll talk about possible in the refresh section, but I saw a couple demos that were focused on using AI, not necessarily to create new articles for publishers, but to create new engaging pages of content that were related to articles so the user can click and click and click and spend more time on the web page. And that seemed really like an interesting use of the technology.

[David Costman]

It's good. I mean, I've seen the demo. I mean I worked with Jaxon Springer people and it's actually really interesting. I mean you, you get really relevant, you get deeper into something. They can leverage their existing content in this way, in a better way. So I think we're in early days of it, to be honest. I think. And we'll see a lot of advancements with people using it. Well, we're very closely tracking obviously what is going on and where we can play a better role leveraging AI to increase engagement and to improve performance for our advertisers.

[Ari Poparo]

Let's talk financials because you're a public company. So how much total media goes through operating. Is that a number you just.

[David Costman]

Yeah, it's about 1.6 billion.

[Ari Poparo]

And you made the decision as part of this acquisition to use debt. And I want to kind of get your perspective first if you could just give us the data like how much debt you have. And secondly, what was your perspective on the relative riskiness of taking on debt in an advertising business versus equity or some other way of financing.

[David Costman]

And so it's been an interesting transaction structure and overall. So the total value of the deal was around $900 million. The composition of the equity and that was also driven by the seller's desire. If you recall, Teeds was owned by Altice telecom conglomerate and part of the drive to sell it and put it up. I mean we tried to merge with Teed. I said it probably three times in the past. I was that close on doing actually area an equity all deal.

[Ari Poparo]

Right.

[David Costman]

But there were a lot of governance issues and other considerations that just sort of couldn't make it happen. And despite the management really wanting to combine and and deliver on this division we've been discussing for many years at this point Altice needed cash because they are deleveraging their overall parent company. So it was clear we needed to raise it. We spent a lot of time working with them. It's you know the ethic industry is not the most friendly to that. But I think the debt leverage we have is very conservative relative to the ebitda. It's less than three times and you know we feel very comfortable the so that we, we raised the high yield BOND that's yielding 10% when, when we raised it. And I think the completion of equity and debt was here was necessary to get this deal done. I think the, the leverage ratios are very, are very reasonable.

[Ari Poparo]

Yeah it's helpful when you're profitable. You don't really want to take on debt if you're. You're not generating cash flow. So last topic I wanted to cover is the bravery of renaming the company. So we're starting to see a lot of bravery. We saw Flash talking Innovid finally take the plunge and pick a name and you folks pick the name Teeds. So take me through the process. What was the back and forth on that?

[David Costman]

So I was seeing there were three alternatives. Keep the old, actually maybe four. Keep the old up by name. And we Acquired it. So use the new teens name, find a new name or a combination of the two names. A lot of people thinking about teens brains and other versions of that. At the end we decided, listen, the focus of the company is really on the sort of premium side of the market. The agencies, the big enterprise brands of the world. And that's where we're taking it. I think we looked at it as a. As a new teaser. I mean, it's much broader than what Teeds was in the perception of people. Much more data driven, performance driven, much broader platform ctp. So the logo has been redesigned, the whole messaging has been redesigned. But we like the name. We thought it's a name that resonates very well with sort of the segment that we're focusing on. And that was honestly, it wasn't that difficult. The decision. One of the critical factors in M and A and success is sort of can the teams work together and the cultural faith. And I mean, the dialogue with the. You can see it in the. In the outcome was very open. We made what we believe are the best decisions for the combined company for the next decade. Not very emotional and I think worked well in both the name and sort of launching the company with one combined org structure in day one and other things we've done that I think are critical to the success of a merger.

[Ari Poparo]

It was only a couple weeks ago, maybe a couple months ago, that Eric and I found out that the name Teeds is short for tech ads. Did you know that?

[David Costman]

Yeah, yeah, yeah.

[Ari Poparo]

All right. We were the only two.

[David Costman]

I mean, it's actually funny when Teeds is a merger with a company called E Buzzing, and E Buzzing bought Teeds, and they also use the name of the company they bought. So there's a continuation of that trend. So I guess probably it's pretty strong.

[Ari Poparo]

It's not a bad strategy.

[David Costman]

Yeah.

[Ari Poparo]

All right, well, let's call it on that. So, David Costman, the new CEO of Teeds, thank you so much for joining us.

[David Costman]

Thank you.

[Ari Poparo]

We'll be back in a moment with the refresh. This podcast is brought to you by audiohook, the leading independent audio dsp. Audio Hook has direct publisher integrations into all major podcast and streaming radio platforms, providing 40% more inventory than what could be accessed in omnichannel DSP. What's more, audiobook has full transcripts on more than 90% of all podcast inventory, enabling advanced contextual targeting and brand suitability. Audio Hook is so confident that in addition to CPM buys, they offer the industry's only pay for performance option where brands can scale audio and podcasting with peace of mind knowing they are only paying for outcomes. Visit audiohook.com to learn more. That's audiohook.com.

[Eric Franchi]

All right, we are back with the refresh. How you feeling, man? We're coming back from possible. Three hard days Possible.

[Ari Poparo]

It was tough, man. I came home yesterday afternoon and just fell asleep. My wife just walked in and, like, shook me and like, are you welcome back? And I was like, ah, where am I?

[Eric Franchi]

All right, let's talk about it. A lot of people were there.

[Ari Poparo]

It was great.

[Eric Franchi]

It was crazy. So I think a good percentage of the listener base was there. But for those who weren't there, give us the Vodcheck.

[Ari Poparo]

It was bigger than ever. I heard 5,000 attendees. Possible is generally like the can of the US is how it's sort of positioned. It was good and bad. It was good in that everyone was there, including many brands and agencies. It wasn't just the usual suspects of ad tech people talking to ad tech people. Good conversations, great weather. There was a little bit of a blowback on how crowded it was. It was so crowded that the lobby bar hurt your ears to talk to people. You know, we had many people coming to me being like, I'm starving. I can't find food. You know, that sounds silly, but it is an issue when you're just worn out from talking to people. But, you know, those are good problems to have, I guess, when you're in a networking environment.

[Eric Franchi]

Yeah, yeah, I think very good problems to have. And I think that they're planning, you know, some sort of expansion for next year as a result. But yeah, it was super crazy crowded. Everybody was there. It was a lot of challenges and benefits to being in a central location. In terms of the vibe check, it was very interesting because in the face of the past month, and it's only been a month with the ups and downs, with all of the tariff discussions, people were generally positive in terms of how they're feeling about the quarter, how they're feeling about the year. Did you get the same?

[Ari Poparo]

Yeah, I think so, to some extent. It was sort of like the first half is locked in, first half of the year is locked in. And so possible, especially the budgets were locked in months ago. Can, from what I hear, is going to be bigger and better than ever. But second half is starting to worry people a little bit, and the economy will have an effect on actual real business at some point.

[Eric Franchi]

Scenario planning continues to be a phrase that comes up a few kind of Things on my mind is, you're right, the brands were more noticeable than in previous years, which I think was a bit of a complaint. In previous years, there's a lot of ad tech, people talking to ad tech. We at Apperium, we co hosted this brand challenge. Did you attend that?

[Ari Poparo]

No, I didn't.

[Eric Franchi]

Okay. Yeah, it was super cool. We had a brand, so Acorns, the finance app, we worked with them and a partner, Growth by Science, who was our co sponsor on this, to put out a challenge for solutions to startups. And a bunch of submissions came in. The brand chose two finalists. The two finalists presented on stage. They were great solutions to like actual problems that the brand wanted to see address. They were very different. Like, one was around, like creative with dco. One was about performance tv. And then the brand, the promise was we're going to pick a winner. That winner will get the business and it will be presented next year as a case study at Possible. The brand chose both. So they both won the business. They're both going to do. It's. I don't know how we're going to like make this thing happen next year, but it was, it was just super cool that, you know, brands embracing innovation, brands being visible, that, that was really cool. And then, you know, in terms of conversations, you know, we'll talk about the antitrust stuff, which, you know, you're, you're, you're sort of the poster child for it. Everybody wants to talk about it. You know, I spent a bunch of time there with, you know, just like our corporate partners and friends, the bigger companies, and they're all thinking about how they're driving, you know, incremental growth, their next kind of new dollar, how they can kind of stitch solutions together around retail and ctv. And I juxtapose that with some of the startups that are just like building around these big companies with these agentic platforms and agentic experiences. It was almost like two parallel worlds. And it feels like the startups are going to sneak up with some very interesting, disruptive things before too long.

[Ari Poparo]

Yeah, I mean, I thought the number one problem for brands was that they didn't have a really great ad tech podcast listen to every week. So that's what I've been trying to aim for. So I think you're onto something. Your last comment about different worlds coexisting, because on the one hand, to the credit of this event, you had a who's who of folks investing in this world. You had every major retail media platform, X Wawa who was there in force. You know, Albertson had a full suite and Walmart and PayPal and like they were out there, which was great to see. You know, a lot of those folks don't put that sort of presence in other events. And then startups doing like things that felt totally different. Like a lot of AI dynamic, creative AI for planning. And it felt like those two things are on totally separate paths that may or may not intersect.

[Eric Franchi]

Oh, they're going to intersect.

[Ari Poparo]

They are. But how are they going to intersect? It feels like there's some big question marks in the middle of that intersection.

[David Costman]

Yeah, yeah.

[Eric Franchi]

It's a time of disruption. This is the time that personally, it feels good to be in the middle of.

[Ari Poparo]

Yeah, I'm sure it's good for your book. No doubt. On the antitrust stuff, we just bring it up. There was some news about antitrust this week and I bring it up because it's the only thing anyone wants to talk to me about. They're all like, oh, I love your newsletter. What do you think's gonna happen? What do you think's gonna happen? Just the update on the news this week is that the parties in the antitrust case, the ad tech antitrust case provided the judge with a schedule for the remedies that would go through the end of the year and today the day this podcast is coming out, Friday May 2nd, the judge is having hearing on seeing if she could do it faster. So Judge Bricma loves speed and she didn't wanna the end of the year. So the idea might be to have a final remedy ruling by the fall on the ad tech side. Meanwhile, Google posted a motion yesterday that was hysterical for its arrogance. It was a short motion. It basically said in order to speed things along, we should just tell you that a divestiture is impossible. So let's remove that from the remedies. That'll make things faster. Paraphrasing. It's hysterical. The company that could give you unlimited email storage and every other feature you've ever considered, it's totally impossible that they could spin out an ad server. It's just not. It's beyond the technical abilities. So that's fun. Anyway, so if. If you want to continue hearing my ad tech prognostications about antitrust, you know, keep tuning in.

[Eric Franchi]

Final thing on possible before we get into the refresh news architecture had a bunch going on. So there was the big Monday party. That was great. You were filming a lot of content. Take us through the highlights.

[Ari Poparo]

Yeah, sure. So marketecture was headquartered in the Soho grand which was next door. Not the Soho house. Sorry, the Soho House.

[Eric Franchi]

Okay.

[Ari Poparo]

Soho. Yeah, I got it confused. And it was really Anti God led. So Anti God had a party on Monday night. There were. There were dancers, there was neon. It was a hot party. It was great. I enjoyed myself. If I said hi to you and had no idea what your name was, good seeing you, whoever you are. And then we had. Here's a quick side note. Everyone who knows me knows how horrendous I am at remembering people's names. So for that one in a hundred persons who I actually know, like, if I saw Eric on the street, I know Eric's name. I know more friends. I would say, hey, Eric, what's going on? So the issue is that I often. Even for people I really know well, I often get their names wrong. And so I saw Mark Zagorski on Ed Possible and his podcast with us, like, I guess two weeks ago, or was it last week? I don't remember. Was really popular. Everyone loved it. So I said, mark, man, that podcast was so good. It's like. It's like popping. It's been one of our most best episodes ever. And he responded like, well, I wasn't on for, like, a year. And I was like, what? You were on last week? And he's like, I'm Scott Noel. And I was like, oh, God damn it. Those guys kind of look a little bit alike. And I know Scott Noel really well. Our kids went to school together. I mean, I know him really well, too. And that tells you how horrible it is to be me in a networking environment. It's just like the tenth level of hell for me. So, Mark, your podcast did great. Sorry I didn't see you at Possible. Scott, if you're listening, it was great seeing you.

[Eric Franchi]

You complimented the former CEO of IAS on his performance as the double narcotics.

[Ari Poparo]

I didn't even think of that. I didn't even think of that. That's even worse.

[Eric Franchi]

It couldn't be worse. It actually couldn't be worse. Maybe the only thing worse is if you said to Jonah Goodhart, hey, Mark, great job last week.

[Ari Poparo]

No, Jonah, I only called Noah. So that's my other thing. Even though Jonah and Noah, the brothers, look nothing like that. It's like you could barely tell they're related, but I still get them backwards.

[Eric Franchi]

Unbelievable. Okay, let's move on. So there was two pieces of news that dropped around earnings. So first, you actually flagged this one. So Microsoft had 20 billion in ad revenue last quarter.

[Ari Poparo]

No, I think that's an annual Basis.

[Eric Franchi]

Oh, I'm sorry, yeah. Annual. Still, 20 billion is a big number. 20 billion puts you probably top five. Yeah, yeah.

[Ari Poparo]

If it's digital only, I think it goes number four. I would say if you include everything, then probably Comcast and Apple and a bunch of other media companies are bigger, but digital only, I think It'd be number four.

[Eric Franchi]

Right. So Bing is growing. LinkedIn is on fire. And he mentioned in the tweet that you quote tweeted, which was just about Copilot. I never really looked at the Copilot Solutions page. They have like all sorts of interesting stuff. Have you checked it out?

[Ari Poparo]

I didn't look at the page, but I actually use Copilot for like, coding and stuff. And it's. The integration is very strong because so many people use Microsoft code for development or GitHub. So they have that big advantage of just being right where the action takes place. And I think the execution on Copilot, you have to contrast it with Google's Gemini, which still feels really disjointed from the products it's integrated with.

[Eric Franchi]

But it sounds like they're using Copilot in the same way that Meta and Google are using various, you know, AI to do everything from, like, creative to performance to recommendations. I think it's something to keep an eye on. If indeed Microsoft really wants to take advertising seriously, it's theirs to do stuff with.

[Ari Poparo]

Yeah. Although I would love to hear from someone on the buy side, maybe this would be a great topic for a future pod, which is that how integrated are these things? Like, are you buying Bing and LinkedIn on the same order? Feels like it's totally separate. And then obviously, Xander, whatever it's called now, Microsoft Advertising Solutions is sitting there running in the programmatic world, but feels also totally disjointed from these other things.

[Eric Franchi]

The other one was Meta. So Meta earnings came out last night. Strong earnings. The stock is up quite a bit. This morning I saw two things that were neat. So number one, they are forecasting a strong Q2 despite all of the tariff talk. And maybe this is. You're thinking that the tariffs and, you know, things kick in second half, but they were like, nope, Q2 is looking good and, you know, actually upgrading their forecast. And then Zuck is talking really, really big about AI to the extent that, like, I don't care about tariffs because AI is just like driving my business.

[Ari Poparo]

Yeah, good to be Zuck. I think the contrast with Snap's interesting because Snap issued an earnings warning in mid quarter. Usually they wait till their earnings report to screw up earnings. But they did it in advance, this time with a big reduction in the brand spend. And some people took that to mean a first domino to fall on economic issues. But if you contrast it with Meta, who doesn't seem to be the issues, maybe it's more like a flight to quality kind of issue.

[Eric Franchi]

It might be, it might be. Anthony Vargas from Ad Exchanger. He had some great quotes that he pulled from the earnings call. Zuck said this, which I read this and it sort of. I fell off my chair. Zuck said the increased productivity from AI will make advertising a meaningfully larger share of global GDP than it is today.

[Ari Poparo]

Nice.

[Eric Franchi]

Like that was the coldest statement about AI and advertising ever.

[Ari Poparo]

Oh, you know, you reverse the 50% of my advertising is wasted into double my ad spend. If I can figure out which half is wasted.

[Eric Franchi]

Yeah, no, that's. That's actually a really good way to look at it. Anyway, fascinating to watch Meta just amidst all this stuff, One other thing, not an earnings, but kind of a walled garden thing of interest. So people have been screaming for a year or2 Since PMAX by Google was launched for more transparency. It's like set it, forget it. Your ads could be running anywhere and everywhere. We don't know what search terms, we don't know what creative is working. And it sounds like they're going to give in a little bit and make basically those three things. What channels, what search terms, what creative assets are working more transparent to advertisers, which I think is good, but I don't know if it's going to increase adoption or spend.

[Ari Poparo]

Well, I think they're knocking down the objections to PMAX one at a time. If you recall, maybe a month ago, they had a pretty big change where they increased the ability to use negative keywords in pmax. So I think they're listening to customers. This is important enough to them that they will do what they have to to drive additional share gain versus the old way of doing things. They're probably not getting any new customers here. They're just switching customers from manual optimization to automatic, which has a huge benefit for them because it gives them more control over where the dollars flow, how the margins are calculated, et cetera. This is just very important to them, I think.

[Eric Franchi]

And it seems like pmax, because it's running on, I think it's just exclusively Google properties, including YouTube, includes ADX, it.

[Ari Poparo]

Includes third party websites.

[Eric Franchi]

What happens if there's, you know, the remedies are more of a breakup. Do you think PMAX suffers Greatly or this Google just has so much O and O that it doesn't matter.

[Ari Poparo]

Yeah, actually it gets better because the part of the problem that's been identified in the antitrust trial is that Google Ads, which PMAX is part of, is shackled to Adex and exclusively buy. Well, not exclusively, but largely only buys on Adex. If you allow PMX to buy anywhere, its margins will actually increase quite a bit.

[David Costman]

Oof.

[Eric Franchi]

Okay, so we'll see where it goes. Hey, let's move on to talk CTV for a second. Did you see James Hercher's piece on Monday? Just that whole Take rate conversation with ttd.

[Ari Poparo]

I think that's a big conversation because everyone's nipping at Trade desk's heels and Take rate is one of the complaints about the trade desk's position.

[Eric Franchi]

Yeah, yeah, it's a really well done piece, I'm sure. Link to it in the newsletter and it just talks about how particularly in CTV you can be more aggressive, particularly if you own inventory or with the technology costs you could be more aggressive on Take rate. And coincidentally Comcast Universal ads, they announced a day or two later more publishers are joining Universal ads. And you know, there's basically no buy side fees for customers using this. Now these are not agencies, these are not enterprise customers. This is a performance marketer and SMB focused offering. But I think it's pretty interesting and there's something happy happening here.

[Ari Poparo]

Yeah, definitely. I heard from insiders that Universal Ads is a real thing and it's got some momentum. I think previously when I talked about it I sort of indicated as a little vapor ish because they did, I think preannounced yet they did preannounce before it was really running but now it's running and it's growing very quickly. I've heard from sources who would know and also I would say this no buy side fee is sort of bogus because it's an ad network model. So who cares what the fee is? They're not like passing through the supply costs at zero markup. There's some margin here somewhere. So I'm not really sure what it means to have zero fee on external inventory.

[Eric Franchi]

Yeah, I think that's fair because there is the SSP fee and then there's obviously the, you know, they control the cost of the inventory. Right. So you can, you can mark up inventory inventory. But even from a positioning standpoint I can imagine a seller in market, if they're having a head to head conversation they can say hey, no buy side fee, right?

[Ari Poparo]

Yeah. And I think the competitive set is interesting because on the one hand you have buy side programs like Mountain Vibe and TV Scientific. Right. So that's a challenge because those companies also are trying to recruit the SMBs and the performance marketers. But you also have like Madhive, who is out there, who is more of an intermediary selling to cable companies and taking pretty big margins. So Madhive's core business is enabling cable companies to market to small businesses as sort of a middleware layer and they take pretty significant margins. And I think this is a sort of a bit of an attack on that margin.

[Eric Franchi]

It is for sure. Okay, we talked last week about the Chrome spin out speculation you put in the docket for this week. Is there more here that you wanted to touch on? Are there more rumors?

[Ari Poparo]

No, I think that this week we had Sundar on the, on the stand saying that it was impossible was another thing that was impossible, but also that it was effectively a gamble with the future of the Internet to start talking about Chrome being spun out. And then you have potential buyers. So you A couple pieces of news. So Yahoo said there might be a buyer. OpenAI said they might be a buyer.

[Eric Franchi]

And separately they said they would love to be a buyer.

[Ari Poparo]

They'd love to be a buyer. Yeah. And then covered in this week's Monopoly Report newsletter is the kerfuffle about Perplexity CEO being sort of quoted out of context saying that he would track everything that users do.

[Eric Franchi]

Yeah.

[Ari Poparo]

And it just gets you thinking. And it was another big topic of conversation impossible, which is what's the future of the browser? What's the future of Google's role there? So I don't think there's any new news, but it is a really important topic that people are circling around right now.

[Eric Franchi]

To me, it's basically the same statement that I made last week. As I think about this stuff, if you are Google, you need to keep this out of the hands of OpenAI. If OpenAI has Chrome, the Internet is changed forever. Yeah.

[Ari Poparo]

I think Google's worst nightmare, it's enough of a nightmare to get rid of Chrome. But their worst nightmare is that Chrome is owned by a different company that monetized through advertising. So if Google's fallback position is Chrome has to be spun out, but it can't be owned by somebody else that monetize it in that way, then you're talking about like a nonprofit or some other, you know, foundation that's going to run it. And that would probably be their, their backup solution. Although all of this is in the category of Google's worst nightmares.

[Eric Franchi]

Yeah, yeah, for sure. On this one. Last week, I think it was last week on the all in podcast, they were talking about this topic and Chamath Alihapitiya made an interesting point, which is Google is doing nothing to help themselves with driving, adoption, or awareness of their own AI tools, which are quite good to all of the people that use their services every single day. Right? So, like we're a Google workspace, shop at Apperium and there's a little diamond thingy that, you know, pops up everywhere. I don't know how to use it. I don't use it like they're not, you know, driving. Hey, you use these tools in your daily life. When you sign into Google One or YouTube or any Google property that there's like search, they're not driving you to adopt it in the same way you might if you thought ChatGPT was an existential threat. So call for some sort of innovation on Google. I thought it was a really good point.

[Ari Poparo]

I don't listen to the all in podcasts and my life's gotten better since I stopped. But I will say Google is horrendous at growth marketing. Growth marketing meaning doing things to get people to adopt your new products. Horrendous. Worst in history at that. And I totally agree with you. I'm both an administrator of Google because of my small company I run, but also as a user on multiple platforms. And they just pop up these random messages that don't appeal to you with confusing offers like try Gemini for free. And then you click through and you get to a very complicated billing page. It's really Hamfisted. And there's a history here. I mean, their biggest failure ever was Google, which was a failure, I think, because they couldn't explain why you should use it. They just. It was built in the ear and they will come kind of assumptions. And I don't think that's a fixable problem in that company.

[Eric Franchi]

And, you know, not an endorsement of the podcast that you don't want to listen to, but there was actually a really good conversation on this and it. It aligns with what you just said.

[Ari Poparo]

Was it about how Ukraine started the war? Because that's my favorite part. Was it about how vaccines cause autism? I like that too. Those are some of the best points they make on that show.

[Eric Franchi]

It was just about Google's lack of leadership, ownership at the senior levels to really drive some of these product decisions. And they're abdicated to, you know, like just randomness within the arc we started.

[Ari Poparo]

A new section of this podcast where we summarize last week's all in podcast so that people don't actually need to listen to was just one point, dude.

[Eric Franchi]

All right, let's move on. Talk about Apple. You're fired up about Apple and the decision that came down.

[Ari Poparo]

Biggest news in tech this week, by far, biggest news, which is that Epic really, really won its Epic antitrust case against Apple after many, many years. I don't have. I'm not going to be able to give a really detailed overview here, but I'll give the very simple one, which is Apple App Store has had this policy for many years that you can't circumvent the payment system. So if you pay in an App, Apple gets 30%. And Apple has a policy that says you're not allowed to pay outside the app or direct the user. So Netflix can't have a link that says, you know, go to our website to subscribe. It's absurd. It's obviously an abuse of power. So Epic won this case a couple years back that said that they were allowed to have sort of side purchases. This isn't side loading, this is side purchases. And then Apple did complied in a negligent manner. They complied by saying, okay, instead of 30%, you have to pay us 27% if you do any purchases outside the web App Store. And they made it really difficult. And they had a scary warning screen that says you're going to an external website to pay and stuff like that. And the judge just destroyed them. This happened on Wednesday, I believe the judge came out with a ruling that said, effective immediately, that all goes away. You could do purchases outside of the apps. And Apple was totally almost in contempt of his ruling. And he referred the Apple CFO to the Justice Department for criminal purposes because he felt like the CFO of Apple had specifically worked against the ruling, which he also indicated was not a suggestion. So this is a just slam dunk against Apple's policy in the App Store and a huge victory for Epic and for all app developers.

[Eric Franchi]

It really is. I mean, how much money are we talking here that, you know, is at stake?

[Ari Poparo]

Obviously app developers are going to love the continued use of kind of super easy payments in the App Store. Like there's a real benefit to that. Right. The problem has been the really big apps like the Spotify's and Netflixes of the world who can't possibly afford to pay 30% on all their purchases. Right, right. And they have been hobbled here on new user acquisition because they have to have this disjointed two step process to get people to pay. So yeah, I think they're going to enjoy that. I don't know that it'll have a meaningful effect on Apple's revenue but it might have a meaningful effect on those companies abilities to sign up new users or to innovate in their signup process or otherwise just do their business.

[Eric Franchi]

Wow. Makes sense. That's a big shift. Hey, quick shout out before we call it a day. Last week we talked about springserve and how it was arguably like one of the best ad tech acquisitions ever relative to the price. The team behind springserve launched a company called Pilot Desk last year and they just announced a series A and they changed their name to Swivel. It's a super cool business. Folks should take a look at it. It's one of those neat unsexy applications of AI like applying AI to account management and operations. But it's a great biz. We're backers and Joe Hirsch, who was one of perhaps the funniest interviews that.

[Ari Poparo]

You'Ve ever done so much. He's one of the funniest people in ad tech.

[Eric Franchi]

He truly is one of the funniest people in adtech. You should listen to that episode if you haven't. He posted on LinkedIn today that he need to do 59 pitches to get to the Series 8 close. So you know, just a reminder that, you know, it's hard out there for founders. Like this is, you know, an all in spend of time to, to get to get to a close.

[Ari Poparo]

So shout out to Joe and team, another great rebrand. New name of the company is Swivel and that's a really nice name. The old name was Pilot Desk which was a little, you know, kind of wonky.

[Eric Franchi]

Yeah, well, I know you love your name.

[Ari Poparo]

I love a good rename shout out to Freewheel for killing my baby. So Freewheel renamed the dsp. It's no longer Beeswax, that's now Freebill dsp. It was the time. I don't feel bad about it, but you know, Beeswax is an awfully good name.

[Eric Franchi]

Did you buy it back?

[Ari Poparo]

The name offers in. We'll see.

[Eric Franchi]

Amazing. All right, that's a good place to call it, right?

[Ari Poparo]

Yeah, absolutely. So Eric, thanks for taking us through that. That was great. David Costman was a great interview and thank you all for listening.

[Eric Franchi]

See you next week everybody. Thank you for subscribing to Market.

[Ari Poparo]

New interviews are added every week at marketecture tv. And your favorite Podcasting thank you for listening to the marketecture podcast. New episodes come out every Friday and an insightful vendor interview is published each Monday. You can subscribe to our library of hundreds of executive interviews at marketecture tv. You can also sign up for free for our weekly newsletter with my original strategic insights on the week's news at News Market tv. And if you're feeling social, we operate a vibrant Slack community that you can apply to join@adtech God.com.