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Marketecture: Get Smart. Fast.
From D2C to CTV: Nik Sharma and James Borow on Reinventing TV Advertising at Marketecture Live
00:20:11
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- [00:10]
A
Excited to be here with you guys. James and I were just talking. We come well, yeah, I guess both of us come a little bit from a different perspective. I'm mostly in the paid social world, consumer brands, e commerce, direct to consumer, but started my career in ad tech. And so I found it very easy actually going into direct to consumer after having a bunch of context on how ad tech works and operates. And James, you want to give a quick intro on your background?
- [00:35]
B
Yeah, I've always been on really kind of the walled garden, social network side of advertising. And so I think the guys from rperium are probably here, but talk to them about, oh, hey, there's really like, ad tech is really two distinct sort of sets of ad tech in some ways. There's like the open web, which I feel like has been really kind of east coast dominated, and then there's sort of the walled gardens on the west coast. And I feel like I'm based in LA and sort of kind of was raised in sort of that environment, but now at Comcast, building Universal ads, which is sort of an attempt to kind of combine the two. So that's kind of where I come from.
- [01:09]
A
Amazing. And James, can you. Because most of the room is ad tech here, can you tell us what we need to know about direct to consumer brands that are trying to get into this world of ad tech and now biting at the ankles?
- [01:20]
B
Yes, you're no better than me. I would say that, like, when I talk to these brands, the main thing is that they're just incredibly economically rational. So, like, they'll try anything as long as it works. They really don't, though, understand ad tech. They really don't. Many of them have never used a dsp. Many of them have never really paid for ad tech fees at all. Like, if you look at the supply chain and how much of it is monetized via the demand side, the social networks really kind of don't play at all in that game in terms of that fee structure. So when talking to those brands, I think the big kind of question for them is like, I just want to buy these ads. Like, how do I just, like, I know how to buy Facebook ads and I can get Facebook ads and if I want to pay some fee, I will. But, like, how do I do that in tv, that's been the big thing where we tried to help them understand that. Like now, hopefully with what we're building, there's a way to do that, but it's definitely a different approach than what they're used to.
- [02:12]
A
Yeah, the only thing I'd add is everybody's down to spend 10 grand and test something and try it. But they are, or I should say we are very much focused on like the performance KPIs. So you know, if, like, if you were to tell somebody who works at a consumer brand, a digitally native consumer brand, that real time equals one week, they would probably just walk out of the room. They want to know real time. You know, Black Friday. We have hourly check ins on ad spend and impressions and click through rates on ads. So everything kind of happens in actual real time there. But now going into kind of this world of ad tech and consumer brands, why is now the best time to rethink about tv?
- [02:55]
B
Yeah, I mean I think for TV again, this whole room probably knows, but there's a bunch of people working on making TV as accessible as an Instagram ad. We have our own flavor on it with what we're doing with universal ads. So I think that's probably reason one, it is now super accessible. You can use a credit card, you can start to test, you can get real time feedback basically at the speed of the equivalent of the Meta Ads API. So now we're finally kind of keeping the same score in some ways in terms of how it all works. And then I think the other reason now is because the creative barriers have come down so much. Right. Like as you know, the idea that Gen AI creative isn't like perfect yet, but it has totally changed the bar in terms of what you can do. And when I talk to brands, the big thing for them I tell them is like, just try to think about this as a horizontal 15 second or 30 second AD. It's just an Instagram ad that happens to be on the biggest screen in the room and it's not skippable and it's around all this great content. But this doesn't have to be this totally overwhelming thing.
- [03:53]
A
Yeah. Do you see? Well, we'll get to that in a second. But what are your thoughts around TV historically being more of a brand spend channel? And here's my I.O. and I want this many impressions on these channels and this will hopefully contribute to sales.
- [04:11]
B
Yeah, I mean it's kind of ludicrous, I think is like the honest answer. I think what's happening now, and ironically it's kind of the walled garden sort of shot themselves in the foot a little bit. But we're at this point now where I think most brands will use a third party for measurement, incrementality testing in particular. Incrementality measurement is sort of like the main currency when it comes to these DTC brands. And they've gotten to that point not really because they wanted to, but they started to add up all the conversions and all the ad managers and realized that it was basically showing five times as many sales as they actually had. And so the ball gardens kind of overplayed their hand. I was at Snap for a long time and we probably contributed to some extent to that. But I think because of that there's no trust in first party measurement anymore. And so when that moves into third party TV actually gets to shine. And now that sort of that I would say Train sort of left the station. I think TV gets to get the credit it's probably always deserved. Now it was way too expensive to buy and the barriers were too high because the creative format primarily. But I think if you look at it now, there's really no reason why it should be treated any differently than the social networks.
- [05:24]
A
Yeah, when I was at a beverage company called Hint Water and when I joined I took over E Commerce and we were spending probably $100,000 a month on Facebook, maybe 20 on Google and zero anywhere else. And by the time I left we were spending about $2 million a month and probably mid six figures on TV. But our barrier to get to TV was so high it was $100,000 commercial shoot and a $60,000 remnant TV buy with an agency that was basically placing the buys directly. And the barrier to entry was so low the only brands at that time that were on TV were insanely funded venture companies. But it was a huge hack because you could basically flood the market with awareness and then pick it up. Search how do you think brands should think about TV as a part of their media mix today?
- [06:17]
B
I think it's the same way but just way more integrated. So like what we say, and this is a little kind of blasphemous probably saying it from the Comcast perspective, but is like TV is the new second screen and that's totally fine. Right. Like from a human behavior standpoint people are buying things on their phones and none of the clickable TV stuff really works. And so it is about how do you use TV to drive impact on a phone and also make social media more effective from these brands perspectives because it's going to be 90% social budgets anyway. What's up man? So I think that's how they have to look at it. I think TV does a great job of finding incremental reach, driving incremental sales and it does make all Your media perform way better. We see that every day as a total fact. But you have to measure it holistically and then I think it has to be able to be transacted on the exact same way. So as you are context switching from building your TikTok campaign to your Instagram campaign, you really have to be able to go ahead and just take that learning and drive that into your TV campaign. And so, yeah, I think it's going to be a bigger percentage of the spend a brand's going to put towards tv. I think we're going to gain share, but I don't think it's a replacement for Social or anything like that.
- [07:31]
A
Yeah, I think if anything, TV is an amazing channel layered on. When social figures out what funnels work really well on the brand side. I'm curious, like from maybe a few years ago when you were building ad tech at Snap to now, what has changed that has allowed you to now build this type of platform for a channel like TV and plug into so many places of inventory?
- [07:55]
B
I think the thing that's changed is probably like, I think the walled garden's won. I think that Ari has the, we've had this on, I think podcast before, but there's a question of what's happening with the open web and, and wall gardens. And I think that's sort of been settled in terms of at least how consumer spend is actually going. And so as a result, you can go ahead and really kind of embrace this sort of ads API approach. And that has now made TV really accessible. Right. So like, I think that has been big. I think when we were doing Snap, it was like unclear what like the, you know, was it going to be like, could Snap stand on its own? And even though Snap sets issues, you know, those $5 billion a year of revenue as a walled garden. Right. So like things with scale can definitely generate demand. I think, you know, TV has now figured out it could embrace that. And when you start to embrace that, you start to then think about, okay, well like my job here is to actually derive value for the advertiser. So I think TVs had sort of. Because it's just been sort of separate a little bit like in the brand world. And with the Holdcos, there wasn't like a ton of empathy for the advertiser. They weren't necessarily like trying to make it where it was an always on channel. And so you had things where like, you know, broadcasters are like charging like for targeting. Right. First party targeting, they're like taxing you where like in our world, you would never tax someone for making the ad more relevant. It means it'd work better and they'd spend more. And so I think, like, that mind shift is sort of coming into play now.
- [09:19]
A
Yeah, it makes sense. I just lost my train of thought there, but is that good? Yeah, you stumped me there. Okay, well, I'm curious. Like, another thing is, oh, this is what it was. So TV as a medium hasn't necessarily changed that much. Like, it's still, you know, if you go to a Diageo or Bacardi and you tell them you want to run tv, their whole strategy is, okay, we're going to spend six months on the creative. Some kid in Brooklyn is going to finalize what he thinks is the best for the country. You're going to rip it out, put it on tv. It's going to run for six months, and then now we're going to analyze it for the next six months. By the time the next creative is already out in market. And with social, it's kind of the opposite. You can basically start with 100 pieces of creative and slowly refine your way down to one. What's changed that has now allowed you to build that way where you can start with volume and test your way into what is the actual creative that works versus before. You couldn't necessarily do that. Is it just the way in which you share reporting is different? Are there technological differences? Are there advantages you have?
- [10:24]
B
Yeah, I think. I think part of it is because we've adopted sort of the social networks, sort of API structure and sort of ad manager set, even to the point of, like, the campaigns, ad sets, ads, like, all of it is set up now the same way so you can start to think of it in the same way. And so, like, what we see right now is like, you know, like, we finally gotten brands to sort of stop being so precious about the commercials and let them fail. Like, start pumping out a bunch of different creatives and learn, like, that's how it works in social. And that is definitely like a mental sort of change for them. But if you talk to people at Meta, they would tell you creative is the new targeting. If Creative is the new targeting for Meta, it is definitely the new targeting for tv. The biggest advantage we have with TV is the creative. And so I think now you're starting to see, okay, let's pump out a bunch. In our case, universal ads is integrated with Bar Pipe, Dan's company. So you can do, like, dynamic product ads for tv. Like, you can start to do all the things you're used to on social, which has made social so sticky. And so I think that is, you know, it's sort of the, if you look at kind of the TV advertising industry at least, you know, for the year and a half that I've been into it, like there really are two distinct ones. There's like the traditional TV buyers at the hold cos that are using the DSPs and I think, you know, command 95% of the spend on TV or some massive amount. And then there's sort of this new cottage industry that like us and others are trying to create and they approach it fundamentally from the totally opposite perspective. Right. It's like it is just they couldn't look at it. It's results first. It's like unemotional in terms of like if the creative didn't work, screw it. Next. Right. Like they're, you know, targeting is, you know, it's all custom audience based. It's all the things that like that social can enable which is just different than how you would have looked at it probably traditionally in TV even three years ago.
- [12:19]
A
Yeah. I think that honestly one thing you said earlier was that TV is a second screen compared to social or whatever's on your phone. And I think that that mindset is what is probably the best mindset to go into TV buying with. Because again if, if you, if TV is your second screen but you're focusing everything to make it the, you know, one big campaign creative, it's just never going to work. Yeah.
- [12:42]
B
And it's, we have, there's a brand next week, that's when we start testing some stuff with influencer content for tied to TV. But like you know, if you, if you're running TikTok campaigns you have like local influencers that are going into like local Erwan and like stuff like that, they're going to start doing that for tv. Right. And you're like oh okay. Like why would we treat this any differently? Like and that will crush. Like I'm like very confident that's going to work well. But it is a total different mindset and it has to be, I think you're see the thing on TV and then you're going to see the next story on your phone and it has to be integrated and just because it's horizontal and longer doesn't mean it has to be different.
- [13:18]
A
Yeah. I think one thing too with connected tv, with streaming TV and also just ad platforms doing their thing is people are starting to see less of a difference between the creative they see on their TV screen, you know, when they're watching YouTube TV versus the creative, they see on their Snap ad or their TikTok ad or Instagram ad. Have you seen that also sort of dwindle down and that help the TV side in terms of creative. Like you can now basically put, you know, social level direct response, which is still storytelling first on tv. And it's not weird. It doesn't have to be this crazy, you know, Ashley home furniture style campaign.
- [14:02]
B
Yeah, it's make, it's making a huge difference. And I've seen we had, for Universal ads, we had an advertiser who was like purely testing kind of the narratives on TV and then was taking that to actually turn into the Instagram ads, which is kind of interesting because you would have thought you would have started with Instagram, but they're like, oh, this is sort of the top of the funnel. So why don't I have this be the first step in the storytelling? So like, I think I don't know if that's how I'll end up. I still think it probably will be social first and then extend it. Like, you'll launch, you'll build your business on social, you'll get scale, you'll go to TV to go ahead and get incremental scale and then you'll come back and retarget on social, I think will probably be the flow. But the fact that you can do those things now is the exciting part. Right. And it's just like TV does not have to be this like, it's like, we made it. TV almost made it like too special. And so like, as a result, if you look at like the TV industry versus social media, there's like 10 million Facebook advertisers, there are like 30,000 TV advertisers. And so part of that is access, part of that is the tools. But part of it is just a mindset where people have been told you can't do that. And I think that's changing.
- [15:08]
A
So CMOs for the longest time have been signing papers that say they're going to get delivered a number of impressions for a fixed cost and that checks their KPIs for their quarter. What do you think people have to unlearn in order to successfully navigate this kind of next generation of TV buying.
- [15:31]
B
Yeah, I mean, I think one is sort of like, forget about the pixel. The pixel should be used for targeting, not measurement. So I think once you sort of buy into that sort of mentality, then you're like, okay, well how am I going to keep score. And I think that's where you start to get to a lot of the incrementality partners. So I think it's probably leading there. A lot of marketers I've talked to recently were people who were like measurement PMs at social networks previously. So it's interesting. I feel like it's becoming so technical and sort of scientific that it's going to create now. I think they probably are losing some of the creativity in the process, but I think there's going to be this sort of the CMOs of this next generation are going to end up in reality being like measurement product managers.
- [16:15]
A
Right.
- [16:15]
B
For your business. And so I think like if you're.
- [16:18]
A
Not like budget allocators.
- [16:20]
B
Yeah, yeah. And if you're not like, I think if you don't have that skillset, I would learn it. And then I think probably once those people become too academic with it, they need to learn how to be creative, so it'll probably come back around. But I do think that is definitely a shift and how it's changing.
- [16:35]
A
Yeah, I think one thing, only thing I'd add there just because this happened to me in the world of paid social. When I was selling paid social, I spent probably three, four hours a day inside Facebook ads manager and learned that you could target people, dudes going to Vegas on a specific date and sell them tickets for something. And I would imagine CMOs of a lot of the brands who are signing with Universal probably don't even go into the platform themselves. Maybe they're buyers.
- [17:00]
B
You know, we're 100% self service, so it's like we like you couldn't pay us to pull lever for you, so that's good. So I think we're forcing them to do it right. And like, but I do think, you know, when we tell them, oh, you can like target based on viewership behavior, like what kind of things do people watch? Or like you can do custom audiences. Like, what do you mean? It's like there's no reason why this has to be so different. Like it's all, now that it's all connected to the Internet, this can be all the same. So I think, you know, if like the kind of irony is like when I'm talking to brands and you ask them to raise your hand, like, have you bought tv? Like very few hands raised. And then I feel like when I'm in ad tech rooms and I'm like, have you bought a Facebook ad? Very few hands raised. And so there's like some like convergence of the two that is happening now and I feel like the ones that kind of meet in the middle are going to end up doing the best.
- [17:49]
A
Yeah, totally agreed. Last couple of questions. I'm curious where, you think, you know, AI is already a part of your platform. I can throw in a Facebook video that's doing well and you guys will upscale it to tv. Generative AI comes out with a new model now every two to three weeks. Where do you think in six months to a year we're going to be with Generative AI and TV creators?
- [18:09]
B
I think it's going to be great, but I think it is definitely not ready for like full on black box, like sort of automation. I don't know if people saw like Meta this week, turned a true classic ad for a guy's jacket into a grandma wearing and it was like, I mean it was kind of clever because I guess it created a new audience for them, but it was also ridiculous. So I think there's a little bit of like pump the brakes to some extent and I think it's far enough along where it's gotten the barrier out for the brands. It's like now they can do it and you play around with Sora, like you can see how good it's going to get. But I think, you know, for now it's going to be just a lot of testing and iterating two years from now. I think it's going to be wild. Yeah.
- [18:52]
A
Like, and last question for, you know, let's say you're talking to somebody who's just got into the industry of ad tech. What kind of advice would you give them of what to focus on or what to study, what to learn for the next six months? Like where can they go and spend an hour a week and invest their time so that 12 months from now they're grateful they did.
- [19:13]
B
Selfishly, I would try to get a job at like Universal Ads, Spotify or Discord. I think like why Discord? That crew is incredibly talented and they have a really interesting ads business coming up. But I think people who have like kind of embraced sort of the walled garden, hedge garden playbook I think are really good places to go learn and that have really unique kind of creative formats. And like I think TV Spotify and Discord are good examples of that. I think that's an awesome place to learn. And then from there you can leave monetization if you want to. I'm going to be ad tech I guess forever at this point, but other people do leave it at some point.
- [19:48]
A
Amazing. I think for me, I would just say the generative AI tools and being able to build workflows with AI is probably where I'd focus. Guys, that's all the time we've got. Thank you so much.