Episode 97: Live from London with the IAB Tech Lab

Summary

Marketecture: Get Smart. Fast.
Episode 97: Live from London with the IAB Tech Lab
Release Date: November 8, 2024
Host: Ari Paparo
Guests: Shelley Singh, COO and EVP of Product, IAB Tech Lab
Produced by: Marketecture Media, Inc.

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Introduction

In this special episode of the Marketecture Podcast, host Ari Paparo records live from the IAB Tech Lab event in London. Joining him is Shelley Singh, the Chief Operating Officer and Executive Vice President of Product at the IAB Tech Lab. Together, they delve into the latest developments in advertising technology, with a particular focus on identity, privacy, and connected television.

Interview with Shelley Singh, COO and EVP of Product, IAB Tech Lab

Understanding IAB Tech Lab's Global Presence

Ari opens the conversation by inquiring about the international scope of the IAB Tech Lab. Shelley explains the organization's global charter, emphasizing its collaboration with 46 local IABs worldwide to address regional regulatory and technological standards.

Shelley Singh [03:07]: "There are about 46 IBs. They focus on the local, regional, regulatory and other aspects. So they're all based on the region. Tech Lab focuses on the technology standards. So we are a global organization. Our charter is global."

Regional Governance and Regulatory Differences

The discussion shifts to the nuanced differences in governance and regulation between regions, notably between Europe and the United States. Shelley highlights how regulations like GDPR, DSA, and E-Privacy in Europe contrast with the more fragmented state-level laws in the U.S.

Shelley Singh [04:37]: "If you look at the privacy regulations, like I said, you have GDPR, you have DSA, you have the E Privacy, like already three different regulations... In the US, we still don't have a federal law. But we have more independence and federal system for the states."

Recent Developments: Addressability, Privacy, and Connected TV

Shelley outlines the IAB Tech Lab's recent initiatives, including standards for data clean rooms, improvements in the OpenRTB supply chain, and advancements in connected television (CTV) advertising formats. She elaborates on the systematic approach to standardizing ad formats for CTV, ensuring end-to-end compatibility within the supply chain.

Shelley Singh [06:03]: "We are trying to make it more efficient to be able to advertise against different mediums and different channels and be able to reconcile all that data with that creative ID framework."

Ad Format Standardization for Connected TV

Ari probes deeper into the efforts to standardize television ad formats. Shelley explains the collaborative process involving submissions from various stakeholders, expert evaluations, and both qualitative and quantitative assessments to determine the most valuable formats for standardization.

Shelley Singh [07:43]: "We can't do this every week. So we said, why don't we have a program where we invite all at once, give them three months to submit everything and then we have a committee of experts..."

Future Projects: Privacy Labs

Looking ahead, Shelley introduces the concept of Privacy Labs, a new initiative aimed at educating the industry on privacy-enhancing technologies. This project will provide tools and platforms for companies to better understand and implement privacy measures such as differential privacy and k-anonymity.

Shelley Singh [08:37]: "We want to provide that platform where you can bring your data and you can understand what would K anonymity mean for your data set."

Challenges in Audio Advertising

The conversation touches on the challenges within the audio advertising space. Shelley mentions the existing focus on measurement and metrics, noting the high percentage of podcast listens through native apps, which complicates measurement and standardization efforts.

Shelley Singh [10:31]: "We have the podcast Measurement and Metrics working group, but it's mostly focused on metrics."

Shelley's Career Path and Role at IAB Tech Lab

Ari concludes the interview by exploring Shelley's professional journey. She shares her transition from enterprise supply chain management to the dynamic field of advertising technology, highlighting her contributions to transparency reporting and the evolution of standards at Yahoo and subsequently at the IAB Tech Lab.

Shelley Singh [12:00]: "I used to work in supply chain Management of the real world, the digital world of the actual stuff... Then I got into advertising at a company called Same Media."

News of the Week

Following the interview, co-hosts Eric Franchi and Joe Zappa present the "News of the Week," covering significant updates in the ad tech industry.

Applovin's Impressive Earnings and Market Cap Surge

Applovin reported a stellar 39% year-over-year increase in revenue for Q3, predominantly driven by advertising revenue, which now accounts for 66% of their total revenue. This performance has propelled Applovin to become the most valuable independent ad tech company with an $80 billion market cap.

Joe Zappa [15:35]: "Applovin is now the most valuable independent ad tech company at an $80 billion market cap."

DoubleVerify Uncovers Audio Ad Fraud Scheme

DoubleVerify identified a sophisticated ad fraud scheme targeting white noise apps, resulting in over a million dollars in monthly losses for advertisers. The fraudulent activities involve spoofed IPs and counterfeit servers generating fake impressions.

Joe Zappa [21:42]: "There's a collection of white noise apps... using spoofed IPs and counterfeit servers, resulting in over a million in monthly losses for advertisers."

Update on IAS and Potential Acquisition by KKR

IAS is reportedly in discussions with private equity firm KKR for a potential acquisition. This move could enable IAS to innovate and compete more effectively against larger players like DoubleVerify without the pressures of public market scrutiny.

Eric Franchi [26:24]: "IAS is indeed in discussions allegedly with KKR, the big PE firm. This makes sense for them to continue to innovate..."

United Airlines Launches Vertical Ad Network with Starlink Partnership

United Airlines introduced its vertical ad network, targeting passengers with personalized ads on seatback screens and through the United app. Partnering with Starlink, United plans to offer free Wi-Fi powered by Starlink, enhancing the captive audience for advertisers onboard flights.

Joe Zappa [30:05]: "This should also be an opportunity for United's advertisers to collect data on who's interacting but maybe not quite purchasing and then maybe even retarget them off site."

Google Enters the Curation Game

Google is making significant strides in the curation space, partnering with companies like LiveRamp and IAS to enhance its curation services. This development underscores the growing importance of quality inventory and audience data in driving effective advertising outcomes.

Joe Zappa [32:37]: "Google has obviously unparalleled data and a giant advertiser demand base. So, you know, that was part of what drove the whole antitrust trial over the past few months."

Conclusion and Event Announcement

Ari wraps up the episode by announcing the inaugural Marketecture Live, an all-day conference focused on identity in digital advertising. Scheduled for March 17th (St. Patrick's Day), the event promises expert speakers, fireside chats, and no panel sessions to ensure engaging and in-depth discussions.

Ari Paparo [02:57]: "We are announcing the first ever Marketecture Live. It's an all-day conference like no other... markitecturelive.com"

Listeners are encouraged to reserve their spots early, with significant discounts available for subscribers.

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Notable Quotes:

• Shelley Singh [04:37]: "If you look at the privacy regulations, like I said, you have GDPR, you have DSA, you have the E Privacy..."

• Joe Zappa [21:42]: "There's a collection of white noise apps... using spoofed IPs and counterfeit servers..."

• Eric Franchi [26:24]: "IAS is indeed in discussions allegedly with KKR, the big PE firm."

• Ari Paparo [02:57]: "We are announcing the first ever Marketecture Live. It's an all-day conference like no other..."

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This episode provides a comprehensive look into the evolving landscape of ad tech, highlighting the critical work of the IAB Tech Lab and offering insightful commentary on current industry trends and challenges. Whether you're a seasoned professional or new to the field, Episode 97 delivers valuable knowledge to keep you informed and ahead of the curve.

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Transcript

[Ari Paparo]

This podcast is brought to you by the Current. Ever wanted to sit down to a candid conversation with the marketing leaders of the world's biggest brands? The Current podcast is your chance. On the Current podcast you'll find exclusive interviews with the experts and trendsetters who are on the front lines of digital advertising and they always leave the ad tech jargon at the door. Subscribe to the [e-mail] or anywhere you get your podcast today. This podcast is brought to you by AdRoll. AdRoll is a name a lot of advertisers are probably familiar with. A leader in high performance Digital Advertising for 15 years, AdRoll is a brand you can trust to deliver strong ROI across display, native and paid social campaigns in one platform. Get in touch with an account expert or create a self service [e-mail] arri today. That's adroll.com Ari today welcome to the Marquettecture Podcast. I'm Ari Paparo. We have a special episode today. I'm recording live from the IAB Tech Lab event in London. So that's a treat to hear what's going on here on the other side of the pond. And then Joe and Eric will be doing News of the Week back in New York. I'll have to reach out with my hot takes next week. We have some exciting news. So last week I teased that we had an announcement. We are announcing the first ever marketecture Live. It's an all day conference like no other. We're applying the market ethos to this event with expert speakers of all kinds going deep on the most important topic of the day. Identity. So we're covering sandbox cookie alternatives, pets, everything else that a modern student of digital advertising needs to know. And best of all, we will have no panels. That's right, panels are your excuse to check your phone and play wordle. We're not doing that. No. Panels will have individual speakers and fireside chats only. All right, go to market live.com to reserve your spot. It is on March 17th. It's actually St. Patrick's Day, so we might have green beer at the cocktail hour. So markitecturelive.com early bird tickets are 20% off and if you're a paid Markitecture subscriber, it's 40% off. That's an unbelievable deal for subscribers. I'd actually recommend maybe just becoming a subscriber at Markitector TV to get the discount on the event. Then it's a twofer, so please check it out. And of course I'M open to feedback on speakers, on sponsors, on everything else. So you know how to reach me. So let's get into this week's podcast. I'm Ari Paparo. I'm here today in London at the IAB Tech Summit. International Tech Summit. I'm joined by Shelley Singh, who is the COO and EVP of Product for the IAB Tech Lab. Shelley, thanks for being here.

[Shelley Singh]

Thank you, Ari. Thanks for having me.

[Ari Paparo]

So what brings you to London?

[Shelley Singh]

It's our international summit. It's an annual thing that we do in the first or second week of November.

[Ari Paparo]

And the IAB Tech Lab is a global organization because the IB itself is per country. Is that right?

[Shelley Singh]

That's right. So There are about 46 IBs. They focus on the local, regional, regulatory and other aspects. So they're all based on the region. Tech Lab focuses on the technology standards. So we are a global organization. Our charter is global. We work with all of them.

[Ari Paparo]

Right? Yeah. I have to ask, what's the smallest IAB? There's 46. Is there like an IAB Vatican?

[Shelley Singh]

Isn't a Vatican one. But I guess there'll be some, probably some European countries.

[Ari Paparo]

Luxembourg has an ip.

[Shelley Singh]

Luxembourg, okay.

[Ari Paparo]

But tech matters the same around the world, I'd imagine.

[Shelley Singh]

Yeah, it's the same browser.

[Ari Paparo]

Same browsers, Right. So what. But what are the differences? Europe sees the world a little bit differently from the United States, from apac, et cetera.

[Shelley Singh]

I think culturally there are differences in how people do business and how they go about doing governance. I think that's the big difference. That's why. And you see that reflected in GDPR versus the ccpa.

[Ari Paparo]

Okay.

[Shelley Singh]

From a tech perspective, we do kind of account for those nuances. And now it's mainly coming through regulations. I mean, we're seeing that like there's more and more regulations in Europe. You had the gdpr, you have the dsa, you have the E privacy.

[Ari Paparo]

Do you have like a post it note with all these on your desk to all the acronyms?

[Shelley Singh]

Not anymore. I used to do that, but the old desk got covered.

[Ari Paparo]

So. Can you unpack what you said? You said there's differences in governance. What do you mean by that?

[Shelley Singh]

I think if you look at. Just look at the privacy regulations, like I said, you have gdpr, you have dsa, you have the E Privacy, like already three different regulations. And then now you have the AI regulation in Europe. Whereas you look at in us, we still don't have a federal law.

[Eric Frenchie]

Right.

[Shelley Singh]

But we have more independence and federal system for the states. And I have like 25 plus state laws. If you look at the CCPA, it's a simpler law compared to what you have in Europe. So that's why it's like the governance systems are different and that gets reflected in the way they do business. If I go to another example would be like when I talk to people in Europe about they want an ID for say creative ID in the supply chain, typically from Europe, you'll hear they want it structured like first four letters reflect this, next three letters reflect this. You go to us, you'll say like, oh, let me a random guid. Yeah, that's all I want.

[Ari Paparo]

That's true.

[Shelley Singh]

So there are those kind of subtle.

[Ari Paparo]

Differences very flow into the technology, very culturally different. Do you find that the standards that you produce have different importance in the different regions?

[Shelley Singh]

Not as much like we see the same importance because they're doing the same efficiency, they serve the same purpose. That doesn't matter. And that's one of the reasons that we are a global charter, that they don't matter.

[Ari Paparo]

So what are the most recent and important developments from the tech lab?

[Shelley Singh]

So the recent one is in the addressability and privacy. Some of the standards we've created for data clean rooms. The work that we are doing in the OpenRDB supply chain to incorporate some of the new developments and like ID solutions and different ID bridging. The third one that we're looking at is connected television. So we're trying to make it more efficient to be able to advertise against different mediums and different channels and be able to reconcile all that data with that creative ID framework. And then ad format idle that we just announced to standardize the ad formats for connected televisions. And there's a lot more coming in the connected television that's being worked on.

[Ari Paparo]

So what work went into the television formats?

[Shelley Singh]

So television formats is like we were getting requests like every week from somebody like I have this new format and can you standardize this? And some of them were really good, Some of them were, okay, fine, we can standardize that. That's too custom. But the idea was that we can't do this every week. So we said, why don't we have a program where we invite all at once, give them three months to submit everything and then we have a committee of experts that can look at them, qualify them, shortlist them, and then we do a qualitative and quantitative survey to figure out which are the ones that are most valuable for the business transactions point of view and then standardize them throughout the supply chain. So it's not just standardizing the format spec, but also how do you Signal it in OpenRTB, how do you deliver it through VAST or any other standard that needs a change. So we do all of them all at once. So then it's all ready from end to end.

[Ari Paparo]

So what came out of that? So that just launched for those of us just listening on the pod, what's the cool format that came out?

[Shelley Singh]

Not yet. So we're still. Oh, we just launched it like two weeks back. So I think we have as of last Friday we had eight submissions. I can tell you some of the formats like Pause ads was one submission. Pause ads and we're seeing different flavors of Pause ads being submitted. QR code is the other one. And there's some nuance in the QR code, like it's not just how you display it but also how you personalize the QR code there. I think there's a lot of work that goes into that. So those are the two interesting things I've heard so far from the submission and what's percolating.

[Ari Paparo]

What are people saying? Well, we need to work on this, but we're not working on it yet.

[Shelley Singh]

That's hard to say. Yeah, that's hard to recall. Like what people are delaying or defining or what's next.

[Ari Paparo]

What's next for the tech lab next.

[Shelley Singh]

Is we are looking at one is Privacy Labs is one of the projects I'm working on personally to set up a privacy Lab.

[Ari Paparo]

What's that?

[Shelley Singh]

So that's will be. We want to get the industry more educated and ready for some of the privacy enhancing technologies that we integrated. So we want to help them understand differential privacy much better. You want to understand like what is k anonymity? So a lot of the times we get asked questions like can you give us a standard like K anonymity is equal to 100 and anybody who knows a little bit of math knows that there is no answer to that. It depends on what kind of data. So we want to provide that platform where you can bring your data and you can understand what would KRN mean for your data set?

[Ari Paparo]

Okay.

[Shelley Singh]

What would differential privacy result in your data set? Yeah, so we'll have the software and we'll have the infrastructure. So you could take the software and install it yourself and do it in your walls or we would provide on our tools portal that you could come and upload some data and check it out for yourself. The other thing is I've had some initial discussions with some of the academicians at some of the prestigious marketing management institutes. So I'm trying to see if we can do something with them, some sort of research in this area and publish that.

[Ari Paparo]

That's interesting. So does the IAB Tech Lab have an educational purpose as well?

[Shelley Singh]

We don't have. There's no. Not that we don't have or we have to have, but typically ibs are the ones that are focused on education. We did do educational program in the last two years which was pretty popular, was on the helping policymakers understand ad tech complexity. So we used to always have full classes like we did. We ran it for two years. We're still deciding whether we'll continue running it or maybe it has a different flavor for next year.

[Joe Zappa]

Sure.

[Shelley Singh]

But so we've done that a little bit where necessary.

[Joe Zappa]

Right.

[Ari Paparo]

There's a podcast. So I have to ask about audio. Audio seems like a real backwater. Nothing really interoperates or works. Is there any plans or can you help in some way make audio advertising more efficient?

[Shelley Singh]

So we have the podcast Measurement and Metrics working group, but it's mostly focused on metrics. So I did ask this question, like 2017 and 18, like should we be doing something? People say it's like 700 million revenue.

[Eric Frenchie]

Well, that was 2 billion.

[Ari Paparo]

This is a billion.

[Shelley Singh]

At that time they said it's less than 1 billion. Don't have to do anything. But we did start the metrics thing and one of the reasons that the issues that is that I think I may be behind on my data, but when I did the Data earlier, about 50 to 65% of the podcasts will listen on the native apps like the Android and the Apple app and there's nothing you can do nothing to them. So that was one of the reasons that we haven't done anything but open. From your experience and others, if there's something to be done, happy to expand that group that works on it.

[Ari Paparo]

Yeah, we're smart enough here, marketexer to only sell our stuff on a sponsorship basis. No measurement at all. So I'm going to keep doing that. So I just wanted to finish off by asking you how do you get into this? How did your career land you at the IB Tech lab?

[Shelley Singh]

So I used to work in a different area until 2010.

[Ari Paparo]

In a different area mean not advertising, not advertising.

[Shelley Singh]

So I used to be working in the enterprise.

[Ari Paparo]

Sorry it worked out this way for you.

[Shelley Singh]

It's worked out, I think for the better. I was getting bored in that and that was the reason I wanted to switch. I used to work in supply chain Management of the real world, the digital world of the actual stuff. And then I was getting bored of like, these are pretty matured processes and all in that world. So there's not too much innovation happening. It was like the same thing. Maybe it's a better interface, a new reporting system. So then I got into like, I looked at the Internet and things were moving fast. And I got into advertising at a company called Same Media. Yeah. So that's where I started working in advertising. I joined them as a product manager, designing their trafficking system and creating like what was probably the first transparency report.

[Ari Paparo]

Okay.

[Shelley Singh]

Which went short to salespeople nobody wanted to take in.

[Ari Paparo]

Yeah. No one wants transparency.

[Shelley Singh]

No one wants.

[Ari Paparo]

No.

[Shelley Singh]

And then I joined Yahoo and that's where I got introduced to iab. Like I worked on the Emirates Standard.

[Eric Frenchie]

Right.

[Shelley Singh]

So that got me interested and then I was looking for a change after my Yahoo standard. And then TechLab was just started then. So I joined TechLab and then since being here, I joined with Scott Cunningham when he was the founding CEO and he said, yeah, it's a two, three.

[Ari Paparo]

Year gig and we just had the 10 year anniversary, right?

[Shelley Singh]

Yeah. So I've been here like almost 10 years.

[Ari Paparo]

Well, we really appreciate the relationship that the tech lab and market have been building and thank you so much for coming onto the podcast. This podcast is brought to you by sao, a leading CTV advertising platform. Purpose built to help brands effectively reach, engage and validate streaming audiences. For over a decade, SAO's platform has combined deep industry expertise with innovative technology to meet the needs of an evolving media landscape. Ready to unlock the power of CTV advertising? Learn more at SAO WS Podcast. That's SAO WS slash podcast.

[Eric Frenchie]

All right, we are back. You heard the first segment from my co host, Ari in the uk. By the way, I'm Eric Frenchie and I am here stateside with my man Joe Zappa, my co host at Open Market to talk about the news of the week. What's up, Joe?

[Joe Zappa]

Thank you for having me on, Eric. It's ad tax enfant terrible. I'm here to cause chaos. Daddy's gone. The leading luminary of ad tech is gone and they subbed me in.

[Eric Frenchie]

The inmates are running it. All right, cool. All right, so news of the week we have. There's nothing else going on in the world. So we have a bunch of ad tech news. We've got Applovin earnings, we've got DV finding an audio ad fraud scheme, update on IIS United, update on their vertical media network, and Google getting into the curation game. So lots of fun stuff to talk about. Let's get it going. So Applovin absolutely crushed earnings. They are up 39% year over year in revenue. Q3 and their software revenue, which is not actually software revenue, it's advertising revenue of 66%. So we're recording this on Thursday afternoon, November 7th. As of last night, November 6th, interestingly, AppLovin and TTD were roughly the same market cap. They're both publicly traded companies. They were Both in the 57 ish plus or minus billion dollar market cap range. As of today, applovin is up 43%. So applovin is now the most valuable independent ad tech company at an $80 billion market cap. What do you think of that, Joe?

[Joe Zappa]

Yeah, it's pretty fascinating. I was talking to Tim and Chris Vanderhoek from Viant earlier today about this and they had, they had some good points. What they were saying is that the market caps of Trade Desk and Applovin might be similar, but they're actually extremely different companies. And it's obviously not just that Applovin is a mobile company and the Trade Desk primarily isn't, it's that Applovin really coheres with the paradigm that Google and Meta have set around outcomes. Right. Like I wrote this newsletter this week about how we're essentially in the outcomes era that products like pmax and Advantage plus have built where tech companies just say to advertisers, tell us what outcomes you want and we'll deliver them. Right. And my understanding is that's the magic of Applovin is that it essentially does that, but specifically for a segment of advertisers, which is, you know, mobile publishers, games, direct response advertisers, E. Com companies who tend to be obsessed with performance. And so Applovin has seemed to have built a business that replicates a lot of the magic of the walled gardens through its own kind of semi walled garden which is like mobile, but also their own owned and operated mobile ecosystem.

[Eric Frenchie]

Yeah, yeah, well said. As I understand it, the focus to date has really been on the mobile app ecosystem and mobile apps which comprise most of the revenue. I think there's actually a lot more headroom, a lot more growth to come as they expand out to not just focus on like, you know, serving the mobile app ecosystem, but to your point, serving E comm brands, serving D2C and ultimately I think serving brands. So they've just been on an absolute tear. Two other things on this, number one, I am happy that they changed their labeling this is like the most minute thing. But as a person that invests in ad tech and tries to champion investing in ad tech, this is super important. So software revenue has never been software revenue. It has been largely advertising revenue. So they are putting a stake in the ground and basically said from here on out we are labeling this segment to be advertising revenue, which is great. And the market's rewarding them for having an advertising business. So I think that's like super important number one. And then number two, it's funny like, you know, Joe, you're on ad tech tw Twitter all day, I'm on ad tech Twitter when you drag me into it. But it's like everybody talks about the same handful of companies, right? Google, Meta, Amazon. It's amazing how now the most valuable company, publicly traded company at ad tech continues to be slept on. Nobody talks about them outside of Eric Sullen.

[Joe Zappa]

Yeah, it is interesting. I mean I think the trade desk looms so large because so many open market tech companies compete with them.

[Eric Frenchie]

Yeah, and trade desk obviously missed by me. Yeah, yeah, yeah.

[Joe Zappa]

But the trade desk is, you know, they do full funnel advertising. Whereas I think Applovin has again just built this giant business helping mobile app publishers drive installs. But then also to your point, cohering with this performance advertising paradigm that's dominated the industry and built the giant businesses that are Google and Meta and yeah, they probably do have a lot of room to grow. I also love that you're looking out for number one, you're like, most importantly, they're relabeling their revenue revenue advertising, which is bullish for me and the ad tech ecosystem. Apropos of which you mentioned Eric super, and he published something interesting about ad tech AI startups and how like the benefits of AI investment will mainly accrue to the big players who have like all the training data and the legions of engineers who are focused on AI. I was curious for your perspective on that in your sort of view of the ad tech AI opportunity, especially for startups that are not, you know, Google and Meta.

[Eric Frenchie]

I had a very dry response to your asks to join the fray, which was it was just factual, which is, and I'm paraphrasing myself and I don't like doing this, but effectively some of the most exciting companies and some of the highest growth companies as defined by year over year revenue increases in the apparent portfolio, which is adtech, are AI startups. The reason why I think, you know, people are properly focused on the value that accrues to the large platforms is, you know, Just, you know, AI for using, you know, algorithmic campaigns to drive outcomes. Right. So if you have the data, you have the AI and ML and you can start to feed it with like more and more advertisers, more and more ads, a large audience, you get it. I think the thing that some people don't keep in mind when thinking about AI is that AI is going to transform every part of our space. So we have companies that are focused on AI for workflow, like the most boring parts of the ecosystem, but the parts that can most benefit from AI workflow, ad operations, account management, like that's the stuff that, you know, like is just incredible. We have companies that are focused on like using AI for measurement. Right. So it's absolutely. The large platforms are going to be, you know, like the leaders in this stuff. But there's so much opportunity, there's so much headroom for independent startups to go after like every part of the, you know, equation and value chain using AI. So we continue to be super bullish on the category.

[Joe Zappa]

Yeah, that makes sense. It's a really big pie and there will be plenty of pie to eat for those who aren't just Google Meta. And also goes to another fact about the ecosystem which is as people will often say, and I've heard Ari say this, for example, and it's justify your existence segment, why wouldn't Google and Meta just kill you? And like the fact of the matter is, yeah, there are a lot of businesses Google and Meta could go into and kill off competitors, but they also just like they're not going to go after every single opportunity. So that, that alone also provides a lot of COVID for ad tech AI startups to claim their own territory.

[Eric Frenchie]

Totally well said. All right, let's keep it moving. So DV DoubleVerify finds an audio ad fraud scheme. This is so weird. So Double Verify found that white noise apps are. Do you use a white noise app?

[Joe Zappa]

I don't use a white noise app. I use white. I do use a white noise like a machine.

[Eric Frenchie]

Right.

[Joe Zappa]

Sort of thing on. No, I use a thing on Spotify. Like it's essentially. Yeah, yeah, it's not its own app, but it's just like an album or something.

[Eric Frenchie]

Yeah, so I have like a white noise machine, for want of a better term in my room. Like it's totally analog but when traveling white noise via Spotify has been my go to. But apparently there's this like collection of white noise apps for those that don't use Spotify and they are being used for ad fraud. So there are schemes that db found called beatsting and fm scam that are using spoofed IPs and counterfeit servers, resulting in, according to tv, over a million in monthly losses for advertisers. So basically people are sleeping. Sorry, people are sleeping. And like these like fraudsters are like running. I get display ads and just refreshing and billing and billing advertisers. So it's awful. Some of these apps that they found are called Deep Sleep and Deep Sleep Kids and they're basically just like generating fake impressions. So this is awful. And good on DV for finding this. Apparently this has been estimated losses of 225,000 per app. So it's good. Good. They stop this stuff out and it just, it amazes me that these things go on. I mean these things have been going on for as long as the industry has been around. I guess the, the whack a mole game of, of ad quality continues. What you got?

[Joe Zappa]

Yeah, fraud will never go away. I was saying earlier that we're in the outcomes era, but I think there's a countervailing force of anxiety in that era which is a preoccupation about quality. And I think that's what we've seen this year is especially with the rise and evolution of AI, advertisers know that increasingly they're being told by tech players like, just give us the budget and we'll figure it out. Don't worry about where the dollars are going. Well, that spurs a contrary anxiety, which is like some people are like, okay, yes, like we're glad that we're getting our outcomes overall, but there's also a lot of trash in this ecosystem right in the open web and the mobile app ecosystem. And so that's where I think that anxiety is like bubbling up into something salient where you have like the anti MFA craze, you have the curation phenomenon, you have the trade desks shifting from the open Internet to the premium Internet and launching things like SB 500 plus. I think that all of these anxieties about fraud are converging and they are driving interest in new products, new trends that are all about yes, we want outcomes, but we also want to make sure we're buying quality inventory and we're not wasting money in the pursuit of those outcomes.

[Eric Frenchie]

But it's just like if you see as an advertiser, I wish we had Jay Friedman on from Goodway Group on the POD here because he always likes to say like, good way. Clients are never in the middle of this stuff because they look at where the ads are delivered. And if you see a disproportionate amount of your budget going towards Deep Sleep kids or Deep Sleep and you're just like some B2B brand, like you should be looking at that stuff. And it's just amazing to me that people don't.

[Joe Zappa]

Look, you're just, you're just not thinking creatively about this. Like the kids are buying HubSpot in their sleep. Like HubSpot is seeding these kids to one day grow UP and be B2B SaaS drones who are living in their CRM. You know, that's the Galaxy version of this. That's not yet obvious, but people are going to see it in due time.

[Eric Frenchie]

Okay, all right, so it's the non obvious. Okay. Look at your post campaign reports. People related on. On dv. Chris Hare's name, right?

[Ari Paparo]

I think so.

[Eric Frenchie]

That's your buddy, right? Yeah, yeah, I think he's cool. He posted something, I think from the earnings of DB that they won 70% of the RFPs that they participated in for, for moat clients. So they, they did real well in the, in the fallout of, of Oracle going, going out of.

[Joe Zappa]

Yeah, I don't know if it would be too congratulatory to DV for our journals, but it could be interesting to know why, you know, they're winning 70%. Presumably IAS is winning the other 30%. I mean, there. It's often been remarked that DV and IAS are such similar companies and it's not immediately clear, I think, to people on the outside, like why DV has a significantly larger market cap and maybe, I don't know, there's something to that that's driving them getting 70% of those deals. Maybe it's random or maybe it is the fact that DV is already the market leader and is larger, that is, you know, accruing more spoils to their side.

[Eric Frenchie]

Yeah, no, it's a, it's a really good question. Hey, speaking of ias, just one quick follow up from last week. We talked about how IAS was getting some inbound interest from potential acquirers. So there was an update. I think Business Insider had the scoop here that apparently IAS is indeed in discussions allegedly with kkr, the big PE firm. So this makes sense. You know, a take private allows them to theoretically kind of do some work, continues to innovate, continue to kind of figure out how they compete against such a competitor like DV without the scrutiny of public markets. Having seen this before, I can imagine a couple of scenarios if indeed this happens and it might not happen at all. It's number one. You know, typically it's not just one pe, like, you know, it could be some syndicate of a couple of partners that get together to do this. So be interesting to see if it happens, who the sort of bedfellows are. And then number two, oftentimes this is not the deal, but it's like the first deal. So there could be, you know, other roll ups in play for other verification companies, measurement companies. So worth keeping an eye on.

[Joe Zappa]

Yeah, I mean I is an interesting company, right. Because again they seem so similar to DV from the outside. Everyone always talks about them together. You know, they're talking about DV and I'm talking about the ad verification market. Therefore it's natural to wonder, you know, why? I mean overall they perform decently but it's like why, why is DV significantly larger if from the outside they don't seem to have superior technology? Which, you know, I've talked to people in the market about that and I don't think it's clear that DV is just like the superior option on product alone. I think I also like they have the publica acquisition they made, right? They, they have a contextual targeting product. They were involved in this Google curation announcement that we're going to talk about with Google launch and curation services in gam. So there's a lot of different stuff they're doing and I'm sure they're investigating trajectories that will allow them to maximize the value of that and maybe level the playing field.

[Eric Frenchie]

Makes a ton of sense. And with new entrants coming in, I think it's needed. All right, let's keep it moving. So United, United launched their vertical adnet at Cannes. It's a few months later and they just had another announcement. This is kind of cool. So their network targets passengers with presumably personalized ads on screens, on the seatbacks in the app and on the site because you always need to go to the app or the site to activate WiFi and pay for it. They are partnering with Starlink, an Elon musk company, to offer free Starlink powered wifi starting next year. So this is pretty cool. So you've got no reason for someone not to open the app, open the website, start to interact on the web during the flight and the seat back. So you've got what will hopefully be a growing audience and then obviously they've got their mileage plus members so they've got the data for that. They can start to do Some cool targeted in flight captive audience advertising. So I think this thing is still pretty nascent. My sense from the, the news was that, you know, there's a handful of early brands and they're, they're, you know, obviously looking to scale us next year. So this is, this is kind of cool, I think a cool partnership, cool way to drive like more usage because I think, you know, being in the air, you know, you really have a, you know, a couple hours or longer to capture unit attention and serve ads. And it's a neat way to, you know, I think maximize the opportunity. What you think, Jeff?

[Joe Zappa]

Yeah, contextual advertising opportunity. You know, we're constantly talking about privacy changes and how to leverage first part of data and then also contextual signals to drive advertising outcomes. I mean this is a pretty good way, right? You know who they are because you have United's first party data and they can leverage that to help advertisers. But also, you know, you're reaching an audience that probably has a disproportionate amount of disposable income because they're traveling in the first place. Business class travelers in particular might be valuable, you know, you know, who's a first class traveler so you can like target them with luxury products. And then I don't know if there's like a sort of off site commerce media element to this, but I feel like that this should also be an opportunity for United's advertisers to collect data on like who's sort of interacting but maybe not quite purchasing and then maybe even retarget them off site. So it speaks to the opportunity that has led Commerce Media to be one of the two fastest growing channels in advertising along with ctv as far as I know.

[Eric Frenchie]

I do wonder what the opportunity is from, you know, just like a contextual and a creative perspective to, you know, capture the attention of a person like on a flight. Right. You know, and kind of brand and with United say hey, we know that this person is on a flight in their chair. Like maybe they're bored enough to purchase something, maybe not. But can they do something to recognize the context of the situation and do some fun stuff? I hope that's interesting case.

[Joe Zappa]

Yeah, there could be signals about or patterns regarding mindset. Like, you know, are people actually more likely to buy something when they're traveling? Are they less likely? What sorts of things do they buy? Like there's so much rich signal you would get from that kind of situation and I'm sure, you know, they'll, they'll be able to Leverage it. And I mean Uber, you know, speaking of other commerce media businesses, like Uber has built a giant ads business.

[Eric Frenchie]

Billion dollars.

[Joe Zappa]

So it's not so surprising to see another transportation company targeting this opportunity.

[Eric Frenchie]

Are there airlines doing this? Like, are there other airline ad nets that you know of?

[Joe Zappa]

I think there are, but I don't, I couldn't name one for sure off the top of my head.

[Eric Frenchie]

Yeah, I mean it's a no brainer. They should all do this.

[Joe Zappa]

Yeah, I think it's, I think it's happening. It's well underway.

[Eric Frenchie]

Cool.

[Shelley Singh]

Okay.

[Eric Frenchie]

All right, let's talk curation. You're all over this whole curation thing, Joe, Why are you so obsessed with curation?

[Joe Zappa]

I have a client that is very big on curation, Azerian. So they're part of what keeps me clued in on it. But also a lot of my clients had an interest in it and wanted to weigh in on it once the topic was bubbling up. I mean, to me again, it is about this counter movement where it's like the dominant paradigm is outcomes. Just give me outcomes. I don't care how you do it. But the anti MFA buzz that accumulated earlier in the year has just been the tip of the spear in driving this industry focus on quality. Not, I think, as something that's going to overtake the emphasis on outcomes. Because ultimately marketers want to tell their boss that they're hitting KPIs and they're driving growth and that won't change. But in AI, I think will only exacerbate that. There is also again, this desire to make sure that while we're getting these outcomes, we're like, we're buying quality inventory and we're finding our audiences efficiently, et cetera. And to me, that's what curation is all about, is just applying audience data to inventories to find audiences as efficiently as possible. And so it's interesting in that context that you see the creator of pmax the ultimate will just deliver the outcomes company also saying, we'll offer curation. So I think you see Google sort of saying like, hey, we're going to drive the outcomes. But also if you're concerned about how we're doing it and you want to make sure you're getting high quality inventory, we will also be on top of that.

[Eric Frenchie]

Yeah, this is, I think like real validation of this whole curation thing. The fact that Google is now getting into the game because they see this as a market trend. I think this is like real validation. So it's pretty awesome. And they're Partnering with, with great companies. So a couple of companies in our portfolio, Origin, Scope, 3, they're partnering with Live Ramp, they're partnering with IAS to bring this to market. So. So I think that, you know, you teed this up in the notes here, right? Like, you know, Google's got a lot of advantages. Google got advantages because it's the ad server. Every publisher use it, they've got the data, you know, they've got obviously the integrations with all these, all these companies, I think they could, you know, take a lead in curation. You know, pretty, pretty handily.

[Joe Zappa]

Scott Meltzer has this framework where he says the curation phenomenon split into two categories of companies. There are curation houses, which would be like Autogen, Azerian, Lotume, Multi Local, like these dmp next gen DMP type companies. And then there are curation platforms which are the SSPs who are, you know, taking those curated audiences and activating them for advertisers. You know, Index Exchange, I think has been big on this. Xander has a curation product. So Google obviously also, as the owner of an ssp, is now essentially competing with them to offer, to offer and activate curated audiences. And yeah, Google has obviously unparalleled data and a giant advertiser demand base. So, you know, that was part of what drove the whole antitrust trial over the past few months. And Google will have a major advantage in terms of leveraging the this.

[Eric Frenchie]

Yeah, it makes a. Makes a ton of sense. All right, cool. That's the news of the week, folks. Joe Zappa, thanks as always for coming in and doing the job. You did great.

[Joe Zappa]

Thank you, Eric. Appreciate it.

[Eric Frenchie]

All right, with that, Ari, hope you get home safe and we'll see everybody next week. Thanks, everybody. Bye bye. Thank you for subscribing to Markitecture. New interviews are added every week at Markitecture TV and your favorite podcast app.

[Ari Paparo]

Thank you for listening to the Markitecture 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 Markitecture 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 at AdTechGod combination.