← Marketecture: Get Smart. Fast.
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- [00:01]
Ari Paparo
Marketector live is back and better than ever. Our first show was a sold out hit with 450 attendees and an action packed agenda. We even got an NNPS score of 40 which means people would actively recommend.
- [00:11]
Eric Sueford
It to their friends.
- [00:12]
Ari Paparo
We're back on October 27th in New York City and the theme is the Age of Outcomes. We're deep diving on everything that makes great advertising accountable and measurable with speakers like Eric Sueford, Dr. Mark Grether from PayPal, and Jenny Wall from Videoamp. Plus our popular AI Startup Showcase and a live recording of Markitecture Live. All that and no panels. Go to marketlive.com to register now. Early bird pricing ends September 2nd. That's marketlive all1word.com this podcast is brought.
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Eric Sueford
To you by Audiohook, the leading independent audio DSP. Audio hook has direct publisher integrations into all major podcast and streaming radio platforms, providing 40% more inventory than what could be accessed in omnichannel 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.
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Ari Paparo
Addition to CPM buys, they offer the.
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Eric Sueford
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 welcome to Marketecture where you can get smart fast with in depth interviews of leading technology executives. I'm Ari Paparo and I'm joined today by Stephen Upstone, who is the CEO and founder of LoopMe. Stephen, thanks for coming.
- [01:51]
Stephen Upstone
Hey Eric, great to see you. Yeah.
- [01:53]
Eric Sueford
So Loubme is an interesting company because it's pretty big and a lot of people probably haven't heard of it or aren't as familiar with it. So why don't you start out with just like tell us about Loomy. How long has it been around? How big is it? What do you guys do?
- [02:06]
Stephen Upstone
Yeah, sure, I founded the business 13 years ago with my co founder Marco and we work in the area of brand performance advertising or as what Michael Kasson likes to call brandformance. And that is taking a kind of disciplined AI integrated real time measurement approach to brand advertising. Things that would typically have been on linear television in the past and treating that with a performance mindset. So you know, optimizing well beyond just reach frequency and using standard segments to produce much better results for customers and I guess a couple of other things that kind of are defining about LoopMe is the full end to end platform. So we're not just playing on the DSP side. We have the kind of buying platform, the measurement platform that's all entirely owned and built by LootMe. We have audiences and then a marketplace and most of where we drive our value is within mobile apps. So now it was 80% revenue was mobile apps and we actually acquired Chartboost from Zynga last year and actually boosted that up to 90% revenue. So that's around 400 million of revenue media spend will see through the platform this year. And we're about 400 loopers around the world as well. So we built to a decent scale and I think have pretty good kind of ownership position around this kind of space of bringing brands into apps and driving greater performance through AI to brand advertising.
- [03:38]
Ari Paparo
So loopers, not loopies.
- [03:39]
Eric Sueford
I guess that's better.
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Stephen Upstone
They are loopers and we have boosters from chartboost as well who have happily joined the gang as well. So not loop easier.
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Eric Sueford
I didn't realize how much you were in app. That's really interesting because that's a space where there's a lot of hesitation for brands to play, right?
- [03:58]
Stephen Upstone
Yeah, I think there's a huge opportunity I guess a little bit about my history. I was super early fortunate to be very very early in AI. So first started working in with AI and real time learning technologies 22 years ago a business called Touch Clarity. We were collaborating there with a lot of the guys who went on to found DeepMind and their kind of professors and Dav Silver out of Google's DeepMind and bought some of that team, bought my old boss to help found the business and always was fascinated. Why is AI not applied to more of advertising? At the time it was still incredibly segment driven because that's how marketers thought. And then I was pretty early also in mobile and mobile video stitching together the first video podcast ads on pre iPhone Apple devices and then also stitching together streaming TV stations with Vodafone first they were doing globally as well and just saw that mobile brand advertising would, would be the future of brand advertising and and I think as you put it there is still hesitation from advertisers and that really excites me because there's just crazy opportunity there. It's very like YouTube in the early days of YouTube everyone's like hey that's cat videos. No one's going to ever build brands. It's, it's, it's the biggest television, the biggest video station in the world. And it was just the same with mobile. Mark Zuckerberg's, you know, mobile social and saying, oh, that's all blogging. Why am I going to want to advertise there? And now, of course they're the biggest, the biggest place to advertise. And I think that mobile app, which has a lot of gaming, it has also a lot of other great apps as well, is still massively undervalued by brands. CMOs might have dinner with Meta three times a year and do they know if they're in mobile gaming or do they know what it is or why it's important? It's two thirds the size of social media and has a fraction of the brand spend. It has a lot of endemic gaming spend and we just see that as massive opportunity because of the quality of experience you have kind of 15 seconds sound on to build that emotional connection. And if you think about, I don't know, your family situation, I've got three kids who are now kind of adults. We often all sit and watch television together. It's not usually, usually just one of us has their mobile device out. Usually all four or five of us have mobile devices out. Mostly that's where people who are in their 20s start and finish all of their video viewing. It's the future of all advertising, but particularly brand advertising. That's a really exciting opportunity.
- [06:30]
Eric Sueford
It's really ironic because you go into, let's say in London, the tube or us, New York, Subway, everyone's playing games and they're in your demographics. There are young people with disposable income and yet it's looked down upon by certain people in the advertising world as just a bunch of games.
- [06:48]
Stephen Upstone
Even older guys like me. I play Words with Friends quite a bit with Zynga. Amazing studio. I think I remember seeing the press release when Nielsen had just sold for. I can't remember what it was, 16 billion or something. And I think that night before that day I'd been finishing a game of Words with Friends with David Kenny, who's the CEO of that. It's not just young Gen Zs like my kids in these games, it's all sorts of folks spending time there.
- [07:16]
Eric Sueford
So we'll get to AI in a minute. But I think one of the interesting things you said when you were introducing the company was about the measurement that you built your own measurement because I think measurement is definitely an area where, especially for brands, where in app is problematic because you can get MMPs with installs and stuff like that. But that's not what Brands are looking for. So walk me through what brands are looking for and also how your measurement suite enables that.
- [07:46]
Stephen Upstone
Yeah, so everything we're doing is in mid funnel and what we're trying to do is drag brand advertising from the upper funnel where it's kind of reach frequency, brand safety, viewability, quality measures, and bring it into the mid funnel. And in the US that's probably $120 billion market opportunity in the US alone. And by making it work harder by bringing it into that mid funnel, you can then optimize in flight as well. So the measurement that we built is a brand lift measurement. So we didn't want to reinvent the wheel. People like Cantar, Mill Brown have been doing brandly for years. Brands can rely on it. Nielsen shows that if you increase brand awareness by 1%, you'll usually get sales by 1%. Everyone's very focused on lower funnel, but often there's only 5% of customers are in market at any time. Brand advertising is bringing in the next 5%. So we run surveys, we run about 300 million consumer surveys a year. And rather than relying on a panel of maybe 10,000 people or something like that, we actually run that in ad space and then it ties back into our DMP. So in the US there's 90 million households we can run a survey in. We survey on the mobile device, but we tie it back to the household, which means we can do control exposed and everything's concurrent. And so the hard thing you need to do with that is make sure that you maintain no bias in any of the control groups. And so that was fundamentally kind of how we built the AI in the first place. Because AI is always trying to ask, how can I do better, how can I build incrementalities? You have to have a really clear idea of where you are, what is standard, if you like, what's the standard position. So we run those surveys against concurrent control groups. And there are two different outcomes we get from that. We can either build an audience. So it could be, do you intend to try this new flavor of Ben and Jerry's? Do you intend to buy a new high end IKEA car? And then there's a bunch of other questions afterwards that qualify them a little bit further, learn about their demographics, et cetera. And you can then run that as a control exposed to see, did I incrementally increase that likelihood of buying Ben and Jerry's? Or and you can also run it as an audience, who are Ben and Jerry's ice cream intenders? If you like, And That's a big part of our kind of our data, first party data.
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Eric Sueford
That's fascinating. And is it a built in thing where you just get it automatically when you run a campaign or do you have to opt into it separately or pay for it separately?
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Stephen Upstone
You don't pay for it separately. So let's say an average campaign, you might run 20 million ads to people. We might run 100,000 surveys. They're not incentivized, you can skip away from them. So let's say for now 100,000 servers, I get 3,000 surveys completed. If I compare that to the kind of Kantars or those guys, they might have normally completed 100, 125 surveys. And they do that over a six week period. And then suddenly after the campaign's finished, you get that data. Because we've got those 3,000, we can start to have real time reports, we can do optim. We get much more fidelity at data. And so we're collecting data at a tenth of the price of traditional panels, sometimes better. And that means you can get to really interesting audiences like small business owners or niche groups. And it's a really powerful way to measure mid funnel FX and then kind of optimize those.
- [11:02]
Eric Sueford
And maybe this is an easy question for you, but what do the surveys show? Do the ads work?
- [11:09]
Stephen Upstone
They work phenomenally well. We don't just run them on our own surveys. One of the greatest things is actually we have tons of other big publishers and brands and agencies who actually create, take the survey technology just standalone and they use that to then prove that their ads are doing great. So people like HBO Warner for example, it's part of their upfront that they talk about every year. And because you get more data, we can do some really cool things. So we can do local advertising for people like Cox reps, we can do Warner Discovery, hbo, smaller channel, really high quality audiences. We can find the results from that. Businesses like Vevo, because you're tying it back to the mobile device, you can also do that against out of home placements and you can look at campaigns that contain a number of those pieces. So we have other big customers who would have out of home at mobile and CTV and they can see the results across those. So the results do work. But there's always room for optimization and learning. And I think that's one of the really important things about having real time data. So some of our customers who just take measurement might optimize in flight or take away some of the things that aren't working and improve results and if they're taking our platform, which they can take from us either managed programmatic delivering into the trade desk or DB360 or they can take it self serve. We have about 100 self serve customers using the platform for either curation or dsp. Then they can actually optimize in flight and drive better results. And fairly consistently you can drive those results up from two to five times. And that would depend on, I think of it as how hard is the audience to locate. If it's like trying to build brand awareness on a Coca Cola product, then there's less headroom to go. If it's about finding a niche product that someone might be in market to buy, then maybe I can get 10x uplift compared to not running targeted ads. And I think that's the real transformation for brand advertising. Because linear television works so well, people kind of got lazy and they would just have great products, not easy to do. They would run campaigns on reach and frequency and it would all just work really well. And now that you move into digital, you have really powerful formats, but you have the opportunity, really the obligation to actually find which audiences are influenceable. Who's in that movable middle. How can you kind of do mid funnel actions that really work? And that's been a lot of our growth story.
- [13:27]
Eric Sueford
Right, and you mentioned you have a marketplace. What kind of marketplace?
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Stephen Upstone
Yeah, we have a marketplace that is an inventory marketplace and we're integrated to 30,000 mobile SDKs and that allows direct inventory to be bought. But we're also integrated into CTV and web placements as well. And we wanted to do something unique with AI when we built the marketplace as well. So it's kind of what I think of as mass personalization. So we get about 300 billion ad requests that we could send every day. And we tend to send only 2% down to an individual customer. And every five minutes the AI is learning what are they actually buying, what price points, really important, what placements, but also what profiles, what individual people and what signals are they looking for. And by having that kind of real time personalization, it just works really well. In the same way that probably you and your partner might have very different things you'd like to see on Netflix. And it helps both of you steer itself to that. The AI helps people. So let's say Kellogg suddenly starts buying looking for a certain audience. If you're doing that in App as well, those main shoppers in app might be very different for what app Loving or some of the other guys are willing to pay very high prices for. So that kind of mass personalization is, is a real competitive advantage and really helps buyers to buy really premium inventory. And now we're extending that into connected television and web and more broadly. And we're also laying our data on it as well. We're building deal libraries as well. So it's kind of if you think of purchase Loop as almost like a super kind of tailored product which is almost like you know, couture or tailored suit you have then wholesale which is running through the open marketplace. And now we've built all these deal libraries that are kind of almost like off the shelf if you like that allow people to buy at scale and discover a self serve in any platform. And that's. We love partnerships and, and just growing through partner channels.
- [15:23]
Eric Sueford
Right. So trying to understand loopme as a company you have a sort of a dsp, an ad network and an ssp. If I had to put you in buckets here.
- [15:35]
Stephen Upstone
Yes. The way I think about it, more in customer buckets if you like, is about half of our business comes from our direct sales team and that would be broken up in whole cos mid market agencies of which there are thousands in the US and then some brands direct, we generally work through agencies. If they have an agency agency, that's our point of call. Some brands are going in house. And so our team of over 100 sellers globally, mostly in the U.S. i think we have 16 U.S. offices now are calling on those clients and doing very tailored solutions mostly for them. And then half of our revenue is running all of that app inventory which is really hard to get. There are probably only 10 SDK companies in the world and the kind of top five are controlling most of the revenue in that space and opportunity. We can sell that through SSP channels and through DSP channels, adding our AI, adding our data as well. So the business is I guess it's an end to end platform which is very similar to Google. Of course you'll know very well from there. But it's also similar to App Loving and I suppose you have other partners like Magnite and Trip TTD who are also taking that same kind of end to end approach with their technology stack.
- [16:46]
Eric Sueford
Yeah, okay, got it. That's a really good description. So I know you've been pretty anxious to talk about AI. So we'll finally talk about AI. So probably you've been talking about AI more than for longer than most ad tech people. So tell us how AI in the last year or two has changed your business versus kind of the old way of doing things with just machine learning and general optimization and where you think it's going.
- [17:11]
Stephen Upstone
Yeah, so we grew up through 20 odd years of AI and time optimization. I think of it as computational AI or real time predictive analytics. I still think there's a lot of a long way to go in that market. I think some people just casually say, oh, everyone's got that. Actually, oftentimes very big companies even just have a single algorithm. And we would have 2,400 algorithms that all compete against each other on every single campaign. So they all read the same data and every five minutes they swap out the best performer of that. So that's all computational, that's patented. There's a bunch of other patents we have around. I think we have for granted 9 pending as well. So there's a lot of kind of computational AI advantage from different companies. And also the way you structure your data gives a lot of advantage. And the guys who are winning today, if you think about the map of people, whether or not you're in web, whether or not you're in app or ctv, the guys who are winning and creating these multi billion dollar businesses are usually having AI data and greater performance. You know, whether or not that's a Zeta, a liftoff, an app loving or a loopme. And the guys who are maybe suffering are more just plain format businesses. They do great creative or they had one slot in the format, but they don't really produce results. So that's kind of the story somewhat of the last five years, especially of the last, to some extent of the last 20 years. And there's still a lot of room for better computational AI, better data stacks. You know, look at what Zeta is doing with its first party data is, you know, phenomenal business. What look at what publicists are doing there as well. What is now changing the industry is generative AI.
- [18:49]
Eric Sueford
Sure.
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Stephen Upstone
If you think about it, I was a math graduate originally, my wife was an English graduate. And what computational AI has gave you kind of like a million PhDs who could all spend a week on something. And by the way, you can return that result in 5 milliseconds. Now with the generative AI, it's like you have a million kind of business or English language students who read every single thing that was ever written and they return the result of all their considered thoughts within seconds. And so that's going to transform the industry in a couple of different ways. And I think the broader industry web has got a lot of problems actually. If you look now at reference books, reference reading, on web for example, it's down 15% first six months of yesterday this year and it's down 30% on health for example. We've all found it probably doing ourselves. Why would I go to Google to ask them about a health problem to then click on a site and then scroll down. It's just there in the prompt. And I think now you have 7 out of 10 people aren't clicking on Google links. So actually performance advertising is going away there. So I think that's going to fundamentally challenge web and web focused businesses over the next five years. And if you think from an investment point of view, you're always investing on a five year old the forward horizon. So sure that will challenge, that will create a lot of consolidation and a lot of pain in the, in the industry that is great for apps actually because you can't recreate, you can't say to chat GPT, I want to play my best game of, of a game and then suddenly just, you know, so mobile apps, mobile gaming is, is going to be a massive winner in that, in that area, in that new era of our AI. We're in the right side of history in that area. And I think it's also going to be a big challenge for some agency models as well. And if you look if, if a lot of the big agencies are 97% time and materials based and suddenly you've got that army of a million PhDs who can go and return a request within a second, that's going to be very, very, it's going to change a lot of the business models there. So people like Publicis are doing a great job on this now and they need to move from just time and materials to actually driving platform revenues, driving outcomes. Listen to someone like Dave Penske. He's doing phenomenal stuff. He's not just focused on media delivery. He' happy to make a client money if he's building CRM influencer marketing, helping them on sales promotion. So he's thinking more broadly about their business. And they're also building AI to deliver better outcomes. They used to have 200 people operating their Epson DSP and now it's a team of eight and a lot of it's just automated. So those big shifts are going to be really interesting in the market and at the same time as challenging a lot of the kind of status quo or current businesses. It will create huge opportunity for a whole bunch of new startups who will be able to instantly create a platform. They won't have data, customers, brands, you know, connections A lot of those other things that, that people like LoopMe have built, but it's going to be really interesting to see. And I think the other thing, you know, how's LoopMe using generative AI? We've been using kind of Copilot and writing a lot of our code in AI now for some other tools for a couple of years at least now. So I think we've got got fantastic history of launching new products. We love innovation and so for us to increase our rate of production of code, you know, to double that over the coming years without growing our team is just going to be really transformative for us. We do have self serve customers which I think self serve interfaces will be a big part of the improvements and we do do some creative. They're not massively core to the business, but maybe there would be more in the coming years. So I think creative is going to be hugely disruptive and the ability of our AI to measure and optimize the results that I think is going to be really interesting. And I think that at the top end great creative is still amazing, great editorials are still amazing. But it's like anything, probably 80% of it is pretty predictive and actually could have easily been done better, faster, cheaper by AI technology. So I think there's going to be a lot of transformation around creative web agencies that would be make it a really exciting industry. Any disruption brings loads of opportunity. Really exciting industry for companies leaning into AI and the generative AI opportunity and really exciting opportunity whether or not you're a brand new startup or a bigger company that's good with these new technologies. I think it's going to be a really interesting future and in the end that makes advertising work better. And the two key constituents for advertising are the advertisers and the consumers and they will both be massive winners in this. Whilst not all the publishers now tech players will be the opportunities for advertisers that would be huge winning opportunity and better consumer experiences. Massive winning opportunity for consumers as well. So I think they are the core constituents of advertising and AI is going to make advertising a lot, lot better.
- [23:51]
Eric Sueford
All right, consumers and advertisers. I was hoping to hear publishers in that three way conversation but publishers can.
- [23:57]
Stephen Upstone
Win, but not all publishers will win. I think there will be disruption there, but there will be some new publishers who, who don't even exist yet, who are dreaming about things they want to do and there will be a lot of disruption consolidation in that market. Of course publishers are an essential ingredient within the market but some of them will face more challenges if they're coming from the website, for example.
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Eric Sueford
Right. Okay, let's do a quick lightning round. I'll ask you a couple of quick questions, we get some quick answers. What is your number one business challenge?
- [24:27]
Stephen Upstone
I think the most important thing that I think about is team. You know, so we've acquired businesses and we've built out this scale team of 400 that moving from kind of 50 to 400 is a big, big challenge. So I, what we're trying to do is create an amazing culture and make sure that every constituent is, is heard. You know, we've just acquired Chartboost. Fantastic team. We don't want them to maintain their existing code. We've got a bunch of great developers now in, in San Francisco. We want them to build amazing new things and to, and build into the vision. So I think we've done a full integration there is working phenomenally well at the moment. But that will continue to be one of the biggest, most important things in my mind. How do we create an incredible global culture and keep everyone make sure that everybody is heard in that business and able to contribute to it?
- [25:15]
Eric Sueford
All right, why won't the big guys like Google, Facebook, Amazon ultimately win in this market?
- [25:22]
Stephen Upstone
Well, I think a lot of them will win this market but actually they look pretty challenged, don't they? I mean take Google, your, your old shop, they've got some great AI technology but they've got the regulator breathing down their neck. Google Search is also getting kind of kind of hammered with you know, research saying 7 out of 10 people aren't clicking on links anymore. Their fundamental business model was to, to make everything come through them. Everyone. Everything started with search and now that the search model is going to be broken. So I think there'll be disruption in the big guys, but there will still be very big guys. I remember Mike Kelly was a very early guy in the industry around the whole AOL merger and he remembers a day and he was saying to me, do you remember everyone used to say oh MSN and Yahoo, no one's ever going to beat their dominance and look at where they kind of ended up. So I think that of the big guys there'll be disruption there. Amazon's doing phenomenally well. A lot of the app focused assets and meta actually might be more enduring than some of Google's assets as well. But I think there'll be incredible opportunities for businesses like LoopMe and the Little startups. You know, I started in the first in 94 and that was the first year that the first AD banner was served on Wired. And those next 30 years have transformed everything. My son is just starting in his first job now, you know, kind of 25. And if you think, think how fast the next 30 years is going to go. You know, AI is going to transform so much faster than what the Internet did. It's really exciting for startups. So I'd love to see what are these 20 somethings going to do with this amazing technology, completely new structures of how to build businesses, you know, with, with, with their working arrangements, with the way in which values produce. So I'm, I'm really fascinated to see that as well as a, as a keen enthusiast of new technology and innovation.
- [27:11]
Eric Sueford
Question. That's great. So last question. If loop me was an animal, what animal would it be?
- [27:16]
Stephen Upstone
Oh, wow. I suppose innovation is at our heart and a good amount of ethics as well. So I don't think I'd pick some sort of apex predator. Maybe it would be a kind of chimpanzee or monkey of some type. So very kind of social, very thoughtful and hopefully quite sort of of giving and with a good strong sense of ethics and self.
- [27:45]
Eric Sueford
All right, you heard it here. Some kind of monkey. All right, Stephen Upstone, thank you so much for joining us.
- [28:04]
Ari Paparo
Thank you for listening to the marketecture podcast. New episodes come out every Friday and.
- [28:08]
Eric Sueford
An insightful vendor interview is published each Monday.
- [28:11]
Ari Paparo
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- [28:16]
Eric Sueford
You can also sign up for free for our weekly newsletter with my original.
- [28:20]
Ari Paparo
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