← Marketecture: Get Smart. Fast.
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- [00:01]
Ari Paparo
This podcast is brought to you by Bert Intelligence. Take back your Mondays with Bert Intelligence, the publisher BI platform that turns chaos into clarity. And now with their new product, Bert leads publisher. Sales teams can uncover hidden gems, recapture lost opportunities and upsell deals with Intelligence. Stop guessing and start closing. Sign up during May for an extended trial at Bert AI AdTechGod. That's B U R T AI AddTech. God. 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 podcast. I'm Ari Paparo. I am joined by Eric Franchi. Eric, how you doing? You recovered from possible?
- [01:26]
Eric Franchi
I'm doing great and yes, I am recovered from possible. Took a week. I had a crazy flight back. I got home at 2:15. Oh my God, the morning of the 3rd of Thursday. Yeah. So our pod, I never mentioned it.
- [01:38]
Ari Paparo
Yeah, a lot of people had a hard time getting back from Florida. Was it bad weather or was it the Newark thing or what?
- [01:43]
Eric Franchi
It was the Newark thing. Yeah. Down a Runway, down. Air traffic control signal just down. Bad as a kid say.
- [01:52]
Ari Paparo
Yeah. I mean for all the people listening to this who are in ad ops, it's like you're the air traffic controllers of the ads. So you gotta come to work, man. You can't just take days off and hope the planes land. So hopefully that's inspiring for you. How important? So we have an interesting show today. So last week we had David Costman who is the new CEO of Teads, longtime CEO of Outbrain. And sort of coincidentally, we didn't really plan this. We had interviewed Adam Singolda who is the CEO of Taboola, their arch rival.
- [02:21]
Adam Singolda
And.
- [02:22]
Ari Paparo
And we decided to sort of repurpose that interview and put it as our guest for this week's podcast and hear from him because he has a very different story. So David is talking about multi formats video and banner ads and other things all on the same page. And Adam is a little more inventory agnostic and he's talking about performance, performance no matter where. And these companies who used to be sort of mirror images of each other are really taking different paths Eric, do you think that makes sense for Taboola to be thinking about performance and outcomes?
- [02:53]
Eric Franchi
Yeah, I mean, of course the largest wall of gardens are built on driving outcomes. And I think it's very reasonable to think there should be a open web equivalent or an open web competitor to it. So I think it's super cool that Tuple is going after that. And then also fascinating as kind of a longtime observer of these two companies, who were a long time quite competitive, super competitive, almost merged to take two such divergent strategies in 2025. And we said this last week, I think just the story has yet to be finalized on outbrain nautieves vs taboola. But it's neat to see the moves that are being made.
- [03:35]
Ari Paparo
Yeah, absolutely. And later on in the news section, we'll talk about Applovin's monster earnings. And I don't think Adam said this, but I think the goal in some sense is to become the Applovin of the open. We, or at least someone should have that goal to be able to deliver performance at scale across platforms. So I think that's kind of what he's shooting for in Housekeeping. So Markitecture will be at Cannes. Big surprise. We're still working out the details, but we'll definitely be having a party. You'll probably see me with a hat walking around, maybe with camera crew, interviewing some people. If you want to be involved, reach out to me or to Jeremy or ATG or whomever. We're all very easy to reach. And tell us what your can plans are and how you think architecture could help you. All right, so with that, let us jump right into the interview with Adam. Welcome to marketecture, where you can get smart fast with in depth interviews of technology executives. I'm joined today by Adam Cingola, who is the CEO and founder of Taboola. Adam, thanks for being here.
- [04:37]
Adam Singolda
Thanks for having me.
- [04:38]
Ari Paparo
So you've been on the show before, probably one of our earliest guests, but we want to find out what's new because you've been making a lot of waves with new product announcements, new pronouncements about the company, its direction. There's a product called Realize I want to learn a little bit about. So what's the latest with Taboola?
- [04:55]
Adam Singolda
First of all, the latest with the industry and kind of like the world we're in. And the macro is that there's a big shift towards performance, advertising and outcomes and measurement and attribution and any permutation of the same decision, which is we need to know what's going on with our money. And we need to drive sales and growth to the business because for the last four years the world has been fairly complicated, right? You know, from the pandemic to recessions to you know, wars and a lot of different things. And I'm not sure there's ever a comeback. Maybe, maybe the world is just complicated. And if that's the case, businesses big and small, when they look for growth of their business and hiring employees and all those things, performance advertising is an even more important and strategic kind of part of what they want to do. And especially when you have kind of new entrants, you have Uber generated more than a billion dollars last year from advertising. And so now you have this whole new kind of generation of companies that when you and I got into this industry it was not the case. And all of those folks want a strong foundation of performance advertising revenue. So that is kind of like, I think it's a macro change. And in that vein with realizing what we realized, no pun intended, is that we, you know, we did a good job for advertisers and publishers around native advertising. For those who may not know, Native is primarily those bottom of article ads that look like, you know, they, they mimic kind of organic recommendations so they're in their in stream like an Instagram feed of sorts. And what happened is that a lot of our advertisers and a lot of advertisers who just did not work with us thought that was, they wanted more. They felt like search was kept out to some degree. Especially with the inflation of Gen AI, you know, the less search results you can present because you have Gen AI, there's an inflation in price and surge in price and less value and social, they start seeing diminishing returns. So there's a need in the industry for who else can drive performance. So we saw that and then publishers, you know, Native is a great business. No doubt it's about 20% of publishers revenue. But that too was not enough.
- [07:14]
Ari Paparo
Right.
- [07:15]
Adam Singolda
And for those two reasons we, you know, we felt like advertisers want more from us, publishers wanted more from us. And to be honest, we wanted more for us too. We wanted to go after the entire, we estimate it's like $55 billion of performance advertising market. So for those reasons we launched Realize, right?
- [07:33]
Ari Paparo
So yeah, the outcomes era is what people are calling it. And I think that the content recommendation business was always very much about outcomes, right? It was about cpc, CPA or roas. So how is. So let's talk about realize. What is realize and how Is it different from the core. The original business? I don't want to call it the core business. The original business, yeah.
- [07:55]
Adam Singolda
So look, look. It's an adjacency to what we've always done. We're known. Taboola is known for performance advertising partner. We generated last year almost $1.8 billion of performance advertising budgets. No one has more conversions than we do outside of the big platforms. So we're known for that. And what realize now does. The net new kind of realize is one you have a whole new kind of demand. So you can upload display formats, you can upload social formats. Basically you don't have to anymore be specialized with us. You can just tell us, here's what I already got. I already work with social media. I already have a display partnership with someone. Just take what I got. One, two, run my stuff anywhere. I get performance. And by the way, maybe I don't want part of a vertical. Maybe I'm a big enterprise brand and I want to be on my own. I don't want to be next to anyone else. So I want to get net new supply. So realize now is connected to all supply that we have on our publisher sites as well as some of our bigger partners like Microsoft and Yahoo and Apple News and Apple stocks. So now we have net new demand display and social. We have net new supply which is more than just part of a vertical and we offer performance pricing.
- [09:18]
Ari Paparo
What does that mean?
- [09:19]
Adam Singolda
Yeah, so that's really cool. Let's say Today you're buying $100 million of display and you pay a CPM of sorts and you want to get performance with realize you actually can pay on a CPC basis. So you can do. We're bringing the performance culture to a traditional industry of edtech and we're saying you can just pay us when someone clicked on it. That's how good we are and that's how good you should expect us to be. So we're now saying you can pay us like you pay search, like you pay native. And now how are you going to pay in this $55 billion market? So we're bringing that to with realize. That's new to my knowledge. I don't think other folks are doing that.
- [10:01]
Ari Paparo
So it's CPC though, not CPA or CPL or.
- [10:05]
Adam Singolda
Yeah, it's CPC right now.
- [10:06]
Ari Paparo
Yeah.
- [10:07]
Adam Singolda
And over time we may introduce other kind of like performance metrics. But this is really cool. You can upload your display campaigns or social campaigns.
- [10:13]
Ari Paparo
Yeah.
- [10:14]
Adam Singolda
Literally click a button and it's there in realize choose the price if you want to, you can also let us choose the CPC for you. But you still only pay based on CPC and we have a lot of audience opportunities. We can get into that as well. And essentially it's beautiful too. It's a gorgeous new, beautiful platform.
- [10:31]
Ari Paparo
Gorgeous platform. You heard it here first.
- [10:35]
Adam Singolda
That is easy to use. So all of those things.
- [10:37]
Ari Paparo
So would it be fair to call this an ad network or it'd be fair to call this performance DSP or something in between?
- [10:44]
Adam Singolda
I think it's not. I think it's more of a wall garden, but open because we have our own supply. We have our own supply, we have our own demand. Taboola is not. All of this is kind of like. It's kind of a full stack system. Right, right. Ad networks tend to not have demand, DSPs tend to not have supply. We have both.
- [11:02]
Ari Paparo
Right.
- [11:03]
Adam Singolda
So. So with this we only bid on our own publishers.
- [11:06]
Ari Paparo
Okay. That's important information. Yeah. So it's like a hedged garden. It's your supply that you have relationships with. Right. And some of that is proprietary like Yahoo News.
- [11:17]
Adam Singolda
Yeah. In fact, we only bid where we have basically unfair advantage.
- [11:23]
Ari Paparo
Right.
- [11:24]
Adam Singolda
So think of it as we have unique first party data. We have something that if you bid from the outside on our publisher, it's not fair to you. It's great for the advertiser because we know that Adam was here yesterday. You read about a Lego article or you read about the example I gave yesterday at the Nasdaq at our investor day. Is that when I moved to New Jersey from New York. And that was a great decision, obviously.
- [11:51]
Ari Paparo
Sorry about that.
- [11:53]
Adam Singolda
That was a fantastic decision. My wife may think like you, but. But now she's convinced it's been three years. So when we moved to New Jersey, one of the most, you know, important decision was, you know, how can the kids enjoy, you know, being in the, in this beautiful New Jersey place? And we wanted to buy trampoline. So I was reading about trampolines, the most expensive one, the most affordable ones, up and coming ones. And so obviously I was in market to buy a trampoline. And in many ways the analogy I'm giving here is that disintent on our publisher means a lot to advertisers, maybe more than my profile on Instagram. So we're only bidding where we have first party data, where we have conversion data, where we have some sort of an advantage to the advertiser, which we hope bring prices up and pay publishers a lot more money.
- [12:40]
Ari Paparo
Right, that makes sense. Okay, So I have a Couple of like follow up questions. First is so this, this system is not bidding through RTB into any other exchanges.
- [12:50]
Adam Singolda
No, zero. And then we don't have advantage, we don't need more supply.
- [12:55]
Ari Paparo
Like you don't need more supply.
- [12:56]
Adam Singolda
There's no lack of supply. Yeah, we'll take it. But I mean I'm not against more, I'm just saying. And by the way, when we do want more supply, we really want it to be great for advertisers so we want ones that can perform.
- [13:06]
Ari Paparo
And then second related question is on the other side, you know Taboola has been a seller on RTB to DSPs for many years, right. One of the largest sellers. So is that still available or is there some inventory that's not available through that?
- [13:21]
Adam Singolda
No, no, no. You're always, I mean if you have, you know, if you want to buy through a DSP, that's completely fine. It tends to be about 10% of our overall revenue.
- [13:29]
Ari Paparo
Right.
- [13:30]
Adam Singolda
And that is because you just don't have access to our first party data and our conversion data we, we generated last year north of 500 million conversions Performance people are buying stuff. So you don't have access to that. But it doesn't mean you, if you want to do it, that's fine.
- [13:45]
Ari Paparo
Right, got it. So what types of advertisers are find this appealing? I think that you know the content recommendation business often got, you know, a lot of lead gen kind of advertisers and folks who wanted a click and a quick like one page conversion. Tell me if you disagree with that characterization. But who's looking for this kind of click based conversion?
- [14:07]
Adam Singolda
I mean again I think anyone. So every and any advertiser who spends now in ethic at large, SSPs, DSPs, affiliates and is trying to get an outcome should consider Taboola. Anyone. Any dollar that goes anywhere in the open web, through any channel, any pipe and is. And their goal, that marketer says my goal is an outcome. I'm trying to get, I have an acquisition cost in mind.
- [14:36]
Ari Paparo
Right.
- [14:37]
Adam Singolda
They should try to realize and see if they can get a better price per acquisition. Which means. So that's one and two. We think that. And that means again direct to consumer automobile financial services. You know, we're seeing great results across the board and we also estimate there's about $30 billion of social dollars that are seeing diminishing returns essentially out of the entire social market. The way usually what advertisers tell us is at the very beginning it performs really well and it's actually below the Requisition goal and then it gets a bit more expensive. A bit more expensive. It gets more expensive than their goal. The average is still okay, but there's a portion of that spend that is above the goal. It's more expensive. And that money in aggregate is about $30 billion, which we think we can provide better value to the advertiser and which is really nice. Pay publishers.
- [15:31]
Ari Paparo
Right.
- [15:31]
Adam Singolda
So, you know, if we do a good job, we can bring up to $30 billion back to publishers.
- [15:35]
Ari Paparo
And let's talk about publishers for a bit. So you made a huge splash. I guess it's been over a year ago when you made a deep deal with Yahoo. I want to hear what sort of inventory you get from them as part of the deal. And then there was a second splash with Apple News where you became, you know, participate in their ad ecosystem. You can give me more characterization. Some people totally freaked out about that thinking like there was something nefarious about it. I'd love to hear the current state of those two sources of inventory, how they help your customers and what the relationships are like.
- [16:07]
Adam Singolda
Yeah, I mean, I can tell you we're very honored to work with many great companies around the world. And definitely the partnership with Yahoo and working with Apollo and Dreamland Zone and Matt Sanchez and Rob Rilk and Monica. I mean, these are startup people that are looking to do big things and that's fun for all of us because I think yao independently, they have a lot they can do on their own because there's so much growth there. And then together, I feel like we can, as partners can do a lot more. And we have 30 years to go at it. So we're definitely going to end that deal.
- [16:41]
Ari Paparo
To your children.
- [16:43]
Adam Singolda
Yeah, so I'll be here. But what's happening is that you have a bunch of people that want to do a lot of and are in it to do it. It's very fun and exciting for all of us to kind of think big and break things and go and try to create a lot of success. And look, advertisers love Yahoo. It's an incredible source of supply. Again, if performance is important to you and you want objectives that you can measure, then this is an unbelievable amount of loyal audiences that go again and again and again. And for us, that's incredible because again, as we're trying to become the performance advertising kind of alternative to search and social or beyond search and social. That is awesome to have access to that for the next 30 years. So we were on the homepage, we're on Mail. We're on a bunch of different places that advertisers really like. Yahoo partnership also came with great advertisers.
- [17:33]
Ari Paparo
Right.
- [17:34]
Adam Singolda
So Yahoo is a great advertising business, and those advertisers now can buy Yahoo through the Taboola technology and get a lot of success. And moving forward, there's an opportunity to get those Yahoo advertisers to kind of also enjoy the rest of the Taboola network. So, again, we're still. Even though we're already a year and a half or two into it, there's a lot to do, and we dream big year, so that's that. And of course, we're very honored to work with Apple, which is really amazing, too, for me, as in, you know, to open my iPhone and see Taboola on my iPhone. You know, we can't speak too much about the partnership here, but I can just tell you to. To be in this industry and to partner with company of that nature is just. You have to pinch yourself sometimes to remind yourself that it's real. And I think. And I think there's a lot more in the future.
- [18:23]
Ari Paparo
Right.
- [18:23]
Adam Singolda
For. For us. Because, you see, here's the thing. Many, many companies, Fortune 1000 companies, CEOs, and board meetings are having an advertising meeting. Like, they have to answer to the question, what is your advertising strategy? All of them. There's no world in which the first round of EBITDA for Amazon is ads. Netflix shows ads to 70 million people. Uber makes more than a billion dollars in ads. Spotify is a big. And you're just sitting there letting it pass by. So you're all having an advertising meeting. Advertising is the new pink. And I think in that world, do you want to invite someone you might be afraid of, or do you want to invite Jabula, who's a very good friend? So we're being invited to those because we're never going to compete with them.
- [19:06]
Ari Paparo
Yeah, yeah. I mean, it's great positioning. Were you surprised when the Apple news was announced? There was some negative sentiment around the Internet, around it, probably mostly from people who had no idea who you were or what your company was. Did any of that reach you? Do you have any feelings about that?
- [19:25]
Adam Singolda
I heard mostly good things myself. And I always assumed that when you're doing great things, you always. If you're doing something that matters, you always get people that also have other opinions, and that's fine. Our culture was always around. We'll never bash anyone. We'll just want to create value for clients. To me, it's part of building something big.
- [19:46]
Ari Paparo
Speaking of bashing, before we started recording, we mentioned company that used to be, I guess your rival Outbrain. And I only bring them up because you said something interesting about diverging strategies. So without saying anything negative, obviously about Outbrain, they're a great company. I have friends there. Can you just maybe explain your point of view about how your two companies have diverged in strategy with them acquiring Teeds and you going into the performance side of things?
- [20:16]
Adam Singolda
Yeah, but they're my friends too, and I would never say, I never did say anything better about anyone. I don't think that's a good culture in any case, so. And I think this industry needs as many good companies as we can to drive value outside of the platforms. So we should all be saluting any advertising company that's trying to do something good outside of the platform.
- [20:33]
Ari Paparo
Absolutely.
- [20:34]
Adam Singolda
So as a, as a reminder that while we all compete, we want a very, very successful part, you know, ecosystem that, that's growing outside of search, social and some other platforms. So in any case, that's, that's a reminder. But, but I think, you know, what happened is that Taboola, in a war, we're just laser, laser focus on being the best in the world in one thing, which is performance advertising. I also think that's when the, where the world is going. I suspect in 5 to 10 years. Branding is always an important piece of the funnel because it's when you warm up curiosity and people consideration things. But I think there's going to be a lot more emphasis on attribution and measurement and things of that nature, which probably means a lot of new startups in the space that will help justify that money is being well spent. So for us and personally, and I can tell you also as a founder, I think it's really hard to do two things really, really well. It's actually really hard to do one thing well. And so for me to imagine that we can be the best in the world of performance and at the same time the best in the world in branding is not something I think we can be. In fact, I think Google had to buy YouTube to have a video TV CTV business and beforehand they were only performance and outside of YouTube they're probably still only performance. So I think it's just really, really hard. And so one, I think it's just a very different state of mind and opinions. I think Albrand took the point of being a full funnel and we took the strategy of being performance. So that's why in many ways, now that we're so focused I guess both companies on demand, they sell to people that want to probably optimize for viewership and viewability and high top of the funnel metrics. And I want to make sure you compare me to meta and search. So we have different KPIs and different metrics for success and that's fine.
- [22:24]
Ari Paparo
It's really interesting that as of a couple of years ago you were almost carbon copies of each other competing on every single deal and now you've diverged so much. So it'd be an interesting case study. We'll check in a couple of years where everybody at. I guess I have to ask an obligatory question. AI. How does AI fit in?
- [22:45]
Adam Singolda
Of course, otherwise that would be a weird podcast.
- [22:47]
Ari Paparo
It'd be a weird podcast for me to talk about it.
- [22:49]
Adam Singolda
Yes, I think AI touches many different things for our business, realizes AI through and through. I mean from the generation of creatives to the most difficult part, which is matchmaking between consumers and specific offerings. That takes a lot of data and a lot of matchmaking, I can tell you. And I said it also yesterday, at the end of the day, there's a part of AI, you know, the LLM portion of it, which is kind of commodity. I can, you know, we've seen it for deep seq, I can download an open source LLM, compile it, buy an Nvidia chip and I'm in the market.
- [23:24]
Ari Paparo
Right.
- [23:25]
Adam Singolda
So what set what sets winners from losers, what makes me a winner and you a loser or vice versa. And I think where it's going, a lot of it is going to be who has unique data that is unique to them and who has distribution so they can create ecosystem and value that is hard to compete with. And we have both. We have so much first party data which we train, we use AI that again is in many ways many people can get access to the model, but we train it against thousands of advertisers generating conversions. So the next time an advertiser come, we say, by the way, we've seen people that want to buy pizza oven, we know how they behave. So that to me is. It's all AI for us. We have 400 engineers and most of them work on that. But then on the publisher side, I'm very optimistic, actually. I think most publishers have yet to truly adopt AI in any significant way. Most of our publishers, there's so much opportunity for us to gather, to personalize homepages, personalize article pages, increase pages per session from 1 and a half to 2 and 2 and a half and three to change design based on preferences to create new formats. There's a lot to do.
- [24:37]
Ari Paparo
Right.
- [24:37]
Adam Singolda
And that is, to me, just a lot of opportunities. So the way I think about my role in this ecosystem is not just to create revenue for the open web, but it's also to drive audience growth to it.
- [24:50]
Ari Paparo
Yeah.
- [24:51]
Adam Singolda
So we're spending a lot of effort. You know, you and I talked before this podcast started about Taboola News. Taboola News, for those who may not know it, is where you buy an Android device and we are your news aggregation service offering your news from publishers. Or you may have Line if you live in Asia Pacific. Line is the WhatsApp of Asia Pacific. So if you, if you use Line, we may show you a news recommendation. So we have so much great content that is something people like that now we can use that in a way that's relevant for you to drive traffic back to publishers. So we see ourselves as a company that needs to not only drive revenue with realize, but also drive audience and engagement growth to our partners.
- [25:36]
Ari Paparo
It's pretty funny that you're making a business out of news. And Google just recently put out a study saying that they make zero money on news, but they're not monetizing these.
- [25:48]
Adam Singolda
Yeah, I'm guessing a lot of the revenue of search. First of all, most of the revenue is search, and I don't know enough about, you know, speak about Google, but I'm guessing a lot of the revenue comes from high intent search queries.
- [26:00]
Ari Paparo
Yeah, of course.
- [26:01]
Adam Singolda
And that pays dollars versus less. So that's probably true. I'm sure it's still a big business for them, the news part, but in.
- [26:08]
Ari Paparo
Comparison, it's really not. That's the thing. They don't make much money at all on news. All right, well, I usually do a lightning round. I'm not going to do that. I'll just ask you the one question, which is your new product, Realize. If Realize was a animal, what animal would it be?
- [26:24]
Adam Singolda
An animal? Well, I can tell you maybe it would be a Marvel character, a daredevil. It would be someone that is a new character that has many, many senses, everything. It gets a lot of different signals and is able to beat the bad guys and create a lot of value. So I like that shot.
- [26:47]
Ari Paparo
I'll take it. All right, Adam, thank you so much for being here.
- [26:50]
Adam Singolda
Thanks for having me.
- [26:54]
Ari Paparo
This podcast is brought to you by audiohook, the leading independent audio dsp. Audiohook has direct publisher integrations into all major podcast and streaming radio platforms, providing 40% more inventory than what could be accessed in omnichannel DSPs. 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.
- [27:35]
Eric Franchi
Hey everybody. And we are back with the Refresh the news of the week. So on the docket for this week we got a bunch of things to talk about as it relates to Google. So proposed remedies from both the DOJ and Google, a little bit more Google news around competition and search with Apple earnings, a new entrant in the Lumascape, and a little bit more if we have time. So all right, let's go from the top. There are proposed remedies, there's a three step remedy from the DOJ and then also three steps proposed by Google. How about I'll roll through them and then get your reaction.
- [28:09]
Ari Paparo
Sounds good.
- [28:09]
Adam Singolda
Cool.
- [28:10]
Eric Franchi
So three step remedy from the doj. So number one, force Google to give competing ad exchanges and servers real time access to adex bidding data through pre bid number one, Number two, share the logic, the code behind dsp. And then number three, potentially fully divest ADEX and dfp. But if one and two cause the market to, you know, kind of like reach equilibrium in terms of increased competition, they may not roll that one back. So reaction to this from the doj?
- [28:41]
Ari Paparo
Yeah, I think this is pretty straight up the middle. A little surprises here. So I think it's really a forced end process even though they call it three because the first step is spin out adx, they want to spin out ADX right away. So step one is allow Google Ads to bid into other exchanges. But if ADX is spun out, then that sort of happens anyway. So that first step gets a little confusing. And what this means, and this was a big point in the trial, is that when ADAX bids on non DFP ad servers, it has this tag based solution that effectively works like the old fashioned waterfall because it does not give a price, it only gives a yes, no, I want the bid or I don't at a given floor price. And as a result that's a critical flaw which doesn't allow other publisher ad servers to optimize. You can't say, well ad X is $2.10 but Magna is $2.09 or 2011, you can't do that because Adex refuses to give the price. So effectively, by giving the price, which should be trivially easy, even though Google says it's impossible, you should be able to just take that tag, put in your header bidding and make the ad server back into what it used to be, which is sort of a dumb vessel for picking the highest price. So that's the biggest deal in the proposal. The second step, this open source thing, I wrote about it in my newsletter this past week and I've written on Twitter, it strikes me as a bit off in the testimony from competitors like Kevl and like Equitiv and AppNexus. No one said in the testimony, well, the real problem is we can't reproduce the algorithm in dfp. No one said that. There was a lot of worry about the algorithm being biased or wrong or giving last look, et cetera, but no one said it was the actual intelligence that was a problem for competition. So I just kind of am holding judgment on that as to why it's in there. And then the third part, this like eventual multi year spin out of DFP itself, I think that's really problematic because effectively DFP after your move, the advantages of adx and after you effectively prohibit DFP from doing anything transaction oriented, it's not worth anything. It's a near monopoly software product with low margins and no growth. I think that is a problematic part of this plan. Realistically that you have Google, who is effectively running this thing like the ugly stepsister it doesn't care about because it has no strategic value and it has to be spun out so it's not going to get a lot of, you know, innovation or the best product managers and then they have to limp out into a spin out a couple years out for a product that I think the demand would be minuscule for. So I'm not, I'm not saying this is a bad plan. I just think there are some rough bits that need to be worked out.
- [31:28]
Eric Franchi
Go back to the number two, the sharing the code behind dfp. If it's not going to lead to increased competition and a more level playing field. What's the reason why they're pushing for this?
- [31:41]
Ari Paparo
Well, I don't know. I don't know if there is evidence, I haven't seen that. Folks have said it would be a lot easier to transition customers to a competitive ad server if they had this logic. That's possible, but it wasn't in court. And the second possibility is that it's just kind of a assumption of certain people in the tech industry that you have to do that in order to move people over. But I don't think it's the case. When you talk to publishers, especially the ones who testified in court like News Corp and Daily Mail about transitioning the ad server, the one and only thing they said was they needed the demand from Google Ads to come in with a price and then everything was on the table. Then they could look at features and migration plans and forecasting and all the other things you need to do to switch ad servers. No one in testimony said, oh, and the real problem is that we won't deliver our ads on time the way DFP does, which is what the algorithm does. So I think it's a little bit, I think it's just, you know, weird.
- [32:41]
Eric Franchi
Got it. Okay, so Google propose remedies for themselves. Let's go do that one. So number one, Google will share real time bid rates for adx display ads with all publisher ad servers. Number two, publishers can set their own price floors instead of using Google's pricing rules. And then number three, Google bans first look and last look advantages for display ads, which apparently were already removed in Ads Manager. How impactful would this stuff be?
- [33:11]
Ari Paparo
Well, the first one, the sharing of real time bids, is similar to the DOJ's proposed remedy. So that matters. I think that the removal of the price floors just goes back to before they enforce the price floors, which was one of the big complaints in the antitrust. So it goes back to where it was five, six years ago. And then the issue here is trust. Basically Google is saying all that bad stuff we did in the past, we're not going to do it again. They're supposedly not doing it now. And you have to trust us. And we'll put ourselves in handcuffs for. I think the proposal was three years. So it's kind of a joke. Honestly, this Google proposal, compared to the seriousness of what they have been not just accused of, but found guilty of as running an illegal abusive monopoly. So for them to give these really milquetoast kind of remedies and say trust us court, it just doesn't hold a lot of water, in my opinion.
- [34:09]
Eric Franchi
Seems like the opening of a negotiation. Right? The DOJ starts here, Google starts here, and then we see where everything ends up. Right?
- [34:19]
Ari Paparo
Yeah. Google's approach to all of these cases is just total slash and burn, like absolutely. If you take anything against us, you're damaging national security, you're going to kill publishers. We're the only ones who could possibly operate this technology and it goes for Chrome and dfp. And I think, I don't know if it's a strategy or if it's a cultural issue of arrogance. It's somewhere in between it seems. I don't think that their approach gives them a lot of credibility with the court. I think the court kind of sees through this bluster and to some extent discounts some of the arguments because they're pretty absurd.
- [34:56]
Eric Franchi
Yeah, I agree. Okay, well we're going to keep talking about this stuff until it gets gets finalized. Two other things on the Google front in case you were thirsty for more. So first is they laid off 10% of the 250 person strong sandbox team. A surprise to no one, maybe outside of the fact that it's 250 people. Given the news about non deprecation of.
- [35:21]
Ari Paparo
Cookies in Chrome, 250 people is a lot of people. And they only laid off 10% of them. Even though the main reason for the group to exist is seemingly passed.
- [35:31]
Eric Franchi
What do you think happens to the other 225?
- [35:35]
Ari Paparo
Well, they're going to keep working on what they're working on.
- [35:40]
Eric Franchi
I'm kidding. We shall see. Okay, this one may be a little bit juicier. So there is some news reported this week in Bloomberg that Apple is exploring alternatives to Google in search. So as we know, Google pays Apple $20 billion a year for the right to be the default search engine for Safari on mobile. Apple is reportedly seeing searches on Safari fall because users are increasingly turning to AI. So as a result, they are exploring new partnerships with companies like OpenAI and Perplexity. Google closed 7% down on this news. When Google closes down 7%, that is equivalent to $150 billion in market value. That's a lot of the market value. Yeah. This is a big one. What do you think?
- [36:38]
Ari Paparo
You know, you and I have been talking about this for probably a year, which is, you know, about a year ago we started saying, well, it's obvious that Google search is going to decline. It's just a matter of when it does and what will be the first sign. And then this fall we started saying things like, oh wait, look at this, Google search share fell below 90% for the first time. That was a data point. Maybe it was more like December or January that that data point came out. And anecdotally, probably everyone who's listening to this podcast has had conversations with their friends like, oh, I'm not using Google search anymore, I'm switching to blah. We had Taz from Perplexity at our conference talking about how they're building an ad business on their searches. So where's the surprise?
- [37:19]
Adam Singolda
And.
- [37:19]
Ari Paparo
And then Eddie Q goes on stand in the Chrome trial and just absolutely takes a knife and shoves it into the ribs of Google. Really saying that publicly. Oh, we're seeing searches decline and we're looking into for other options. It took that to wake the markets up to what's really happening.
- [37:41]
Eric Franchi
Yeah, this is going to be another big one to watch. Hey, after our conversation last week, did you try any of the, like, new embedded Gemini tools across, like, Google Workspace or some of the other Google properties?
- [37:54]
Ari Paparo
I've posted this on Twitter because it was kind of funny. I was working on a document in Google Docs. I'm a big Google fan. Just for those of people who think I'm some sort of Google hater. I love Google Drive, I love the Docs. Anyway, so I was working on something and I typed out, is Google evil? That's what I wrote.
- [38:09]
Eric Franchi
I saw that. That's right.
- [38:11]
Ari Paparo
And Gemini pops up as it does, it says, do you help writing? And I was like, this is fun. Yeah, sure. So I pressed the button and it gave me like five paragraphs of pretty balanced analysis of Google's abuses versus the other side of the coin across data and privacy and antitrust. And it really did quite a nice job writing a full essay for me about whether Google is evil or not. And I was. I was kind of impressed with the pros and the thought process.
- [38:40]
Eric Franchi
I didn't do that. I did something different. I hit the button on like an email string and it summarized the conversation and proposed next steps quite well. And that's interesting, right? Because Google is all. In our emails, they have all of the data, you know, all the conversations there. So I see the enterprise potential. But gosh, there's like, so much on the other side of this with respect to search and all these other properties. It's. It's wild.
- [39:08]
Ari Paparo
Yeah, I think Google has a real problem with the execution on some of this stuff. It's not the model. The model is good. It's the way the user interfaces with it. It's like what companies like Meta have gotten so good at is what they call, you know, growth marketing, which is how do you put an offer in front of a consumer that gets them to try something that gets new products adopted, gets more money out of their wallet? And Google's so bad at that. Like, just outrageously bad at convincing consumers to try something new or change their behavior? And if you're in the Google products, they're just showing these sort of contextless pop ups that have bad offers that sometimes click through to complicated administrative screens. And it's a real shame that they have such a, such a problem with this because it's really hurting their adoption of new products.
- [39:56]
Eric Franchi
I mean we talked about this quite a bit last week, so I didn't to beat it to death. But Google, if you're listening, we got ideas.
- [40:02]
Ari Paparo
We love beating things to death. That's pretty much the theme of this podcast, actually.
- [40:06]
Eric Franchi
It is. Okay, let's move on to some other stuff. All right, earnings, a couple things to talk about with earnings this week. Criteo reported revenue was up a bit, but the stock got hammered over a customer change. So their largest client switched to self serve from managed. Managed service is 20% of their business. So I don't know if this is a canary in a coal mine or just one thing, but it was quite significant. Stock went down on the news and they also did address the Uber Eats loss to Instacart over the course of the, of the call as well. So I guess, you know, acknowledging that, you know, it's a, it's a meaningful thing. But they seem to say, hey, you know, seem to be a better fit for the customer. Any thoughts on radio?
- [40:50]
Ari Paparo
Well, they've, you know, they have the, they have the buoying of the stock from the cookies. Stay.
- [40:56]
Eric Franchi
Exactly.
- [40:56]
Ari Paparo
Cookies are a big part of it. They're in sort of a game of thrones, you know, they're in between the giant retailers who all see advertising as core part of their business. And so offering what they do, managed services or platform services is a dangerous position because the customers are often thinking about how to replace them.
- [41:14]
Eric Franchi
Yeah, but they have self service tools. Right. So you know, like largely focusing on that I think is a, is a good move. Viant had good earnings. Viant beats revenue up 30% year over year. CTV now 45% of total revenue. So good stuff out of Viant. And then Applovin is back again. So, I mean, God. Applovin beats revenue up. Ad revenue to be clear, up 71% year over year. They're selling another of their mobile gaming properties to double down on advertising and they are. Adam is quite serious about buying TikTok. Did you see this post from Adam?
- [41:59]
Ari Paparo
Yeah, I saw it.
- [42:00]
Eric Franchi
I mean he is talking. They're the biggest independent company in ad tech. They're an extremely important company. They need to do big boy things in order to, you know, move this stock. And I guess buying TikTok is a big boy move. So basically his thesis, and you should read this, we'll put a link in the newsletter, is that all of the data and security concerns hampers TikTok's ability to like really monetize and really hyper target. So he thinks that, you know, applovin acquires it, you know, does the right thing with respect to data and security and lets Axon AI, their AI product run wild. And he thinks he can take TikTok from a 20 billion business to an $80 billion business in two years.
- [42:41]
Ari Paparo
He's got a point in that if TikTok were to aggressively look at, let's say, an audience network where they convinced independent apps to put in their SDK, everyone would sound the alarms as like the Chinese taking over every app on the app store and collecting data and fingerprinting, blah, blah, blah. Also, TikTok has, you know, this enormous progress in getting advertisers to build vertical video and to do shopping on their site. Those sort of formats and commerce activities could be leveraged pretty heavily outside of the walls of TikTok. And you can see it as a new ad format and expanding AppLovin's place in commerce. I think it makes a lot of sense, this combination, but obviously the TikTok situation is very unpredictable and political and it's unclear if rationality will win or if it's more about closed room deals.
- [43:31]
Eric Franchi
There is undoubtedly people at Applovin that are close to Adam that listen to this pod. This is an open call to get Adam on this pod, people.
- [43:41]
Ari Paparo
Absolutely.
- [43:42]
Eric Franchi
Adam on the pod. We will open the floor. Could be the longest pod. Like just, just come on.
- [43:48]
Ari Paparo
You don't even have to talk about work, you know, tell us about your hobbies and your family. People just want to hear from you. Adam.
- [43:54]
Eric Franchi
Yes. Starting with these two people. Okay, this is a fun one. Liveramp Ventures. So for those who don't know, Liveramp has a corporate venture arm called Liveramp Ventures. It's under Dave Eisenberg, friend of the pod, and Jimmy Ren, who I've gotten to know, published a new market map. So a guess, I guess a post Luma Lumascape where it's interesting, it's really two things. So number one, it puts forward this idea of how to organize this whole, you know, emerging AI landscape for digital advertising. And then number two, and this is the interesting stuff for us, all of the new companies that are AI native, that you know, are very young, you can organize them in a bunch of boxes. So they did a great job with this People have started to run wild with it. So Joe Hirsch, we talked about last week from Swivel. He created an encyclopedia out of it using an LLM. Bach took it a step further because Bach thinks that there needs to be just an agentic marketplace map. So he used Claude to create one. This feels like a really good moment for adtech, right? Like an entirely new landscape, entirely new logos, entirely new companies. I was excited to see this thing.
- [45:11]
Ari Paparo
What about you? I'm a little hesitant to put people in boxes, considering that the boxes themselves are questionable and people are going to break out of their boxes. But it's great to see so many logos and so much innovation around advertising and AI, and I think it's going to keep going and those boxes are largely going to collide with each other. So I'm not going to invest my personal time in trying to make sense of it. I'm just going to go with the flow.
- [45:36]
Eric Franchi
It's a good point. No matter what, when you do something like this, there's a lot of people that are going to be mad and a lot of people that disagree. And I feel very sorry for Jimmy's inbox because they're companies that are just like, why are we not in this thing? But somebody needed to kind of take the first step, so I give that kind of credit.
- [45:52]
Ari Paparo
Terry needs a new slide. Does he have an AI slide? Maybe he does. Terry Kawaja's big event is next Tuesday. Maybe you'll see a new slide from him.
- [46:00]
Eric Franchi
Somebody said this created a lot of conversation, like, why isn't there a Luma slide for this? And we should hear from Terry directly. But somebody said because there is no origination of, like, a media standpoint, that's the reason why. And I'm butchering the explanation.
- [46:16]
Ari Paparo
Yeah. I think it's just that Terry hasn't gotten around to it. It's a busy guy.
- [46:20]
Eric Franchi
Or that. Anyway. All right, so we'll see you next week. Hey, couple quick hits before we. Before we call it a day. Liftoff. So it is a mobile app and monetization company. It was the combination of Liftoff and Vungle took a PE investment valued at $4.3 billion.
- [46:38]
Ari Paparo
That's a lot. That's a lot of liftoff. Yeah, yeah.
- [46:41]
Eric Franchi
It's mobile app space. Right. There's still apparently a lot of. A lot of room.
- [46:45]
Ari Paparo
Okay. I have two hypotheses for why this happened, and I'm open to hearing about it. Number one is yours, which is mobile app as a space is interesting because it has a Feedback loop and it's all performance and people are willing to spend as much as they can as long as it works. And that's why Apple often is worth so much. That's option one. Option two is that the closed loop companies that do both buy and sell are much more valuable than just buy or just sell. And you know, this comes sort of a little bit against my career where I built Beeswax as a buy only platform. But it feels as though being a platform on one side or the other limits your ultimate tam. And it's companies that do both that make the most money and lift off. Plus you just said Vongel. Yeah. Is under kkr, I think brought the lease up.
- [47:37]
Eric Franchi
Yeah, yeah.
- [47:38]
Ari Paparo
Sort of was able to corner some margin, maybe not corner the market, but corner some margin between buy and sell side and make the valuation go pop.
- [47:47]
Eric Franchi
Yeah, that's a big number. You track this one. IIS is now rating podcasts for Spotify. What you got?
- [47:53]
Ari Paparo
Yeah. So following on a bunch of product news from Spotify, trying to make their platform more appealing to advertisers, they announced IAS brand suitability in podcasts. It's similar to what IIS has been doing in other social areas where they look at the content immediately preceding or postseeding the ad and evaluate it. So I just thought it was kind of interesting that you can do that now. Gosh.
- [48:17]
Eric Franchi
Podcasts have their own issues as it relates to brand suitability because there's just so many of them. It's a wild west. So it's a, it's timely for this type of product. One other thing and we'll end it with a shout out. So, friend of the pod, one of our best early ones, Jay Friedman, he is handing over the reins at Goodway Group. Jay has been the CEO of Goodway for some time. He's been there for 20 years. It is a 70 plus year old, 80 plus year old business that got its start in direct marketing and he's built it into one of the largest and best independent agencies. So big shout out to Jay Friedman and congrats and look forward to what you do next.
- [48:55]
Ari Paparo
Yeah. So Jay was a witness at the Google trial. This has nothing to do with Google, but I'll just quote him. So the Google attorneys were grilling him and saying, what's the difference between a square ad on a website and a square ad on Facebook? Because Google was trying to make the case that it's all the same thing. And he said, well, what's the difference between a square parcel that has a Hilton on it and a square parcel that has Four Seasons on it. And I thought that was a pretty sharp little answer from Jay.
- [49:23]
Eric Franchi
So yeah, all right, let's leave it there. Thank you, Ari. It's been a good week and we will see some of you next week at lumadms and we'll see all of you on next week's pod.
- [49:35]
Ari Paparo
Thanks everybody.
- [49:36]
Eric Franchi
Thank you for subscribing to marketecture.
- [49:39]
Ari Paparo
New interviews are added every week at marketecture TV in your favorite podcasting app. 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 opt a vibrant Slack community that you can apply to join@adtechgod.com.