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"I think it will be blunt and arbitrary" - Goodway Group CEO Jay Friedman on what happens if marketers have to slash budget during Tariffmageodon
00:26:35
"I think it will be blunt and arbitrary" - Goodway Group CEO Jay Friedman on what happens if marketers have to slash budget during Tariffmageodon Next in Media talked to Goodway Group CEO Jay Friedman about the state of brands' decision making amidst an uncertain economy and a rise in AI automation. And of course, we talked about cookies and the various court decisions facing Google.
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- [00:01]
Mike Shields
Collaboration is a new competition. The One Audience alliance by Elemental TV unites premium publishers to tackle CTV's biggest challenge, fragmentation. By collaborating over AI powered audience insights and inventory, we're creating an ecosystem where advertisers win, publishers thrive and audiences stay engaged. Join the movement redefining ctv@elementaltv.com 1audiencealliance that's E L E M E N T a l t v.com Oneaud I e n C E A A L L I A N C E this week on NEXT in Media, I spoke with a very outspoken Goodway Group CEO Jay Friedman. Jay and I talked about how he's ended up talking to the US Department of Justice and why his name keeps ending up in all these analytics stories. J and I also broke down the fallout from a potential Google breakup and whether brands will be restrained this time around and making cuts as tariffs potentially wreak havoc on the economy. Let's get started. Foreign welcome to NEXT to Media. I'm Mike Shields. My guest this week is Jay Friedman. He's the CEO of Goodway Group. AJ thanks for being here.
- [01:13]
Jay Friedman
Thank you, Mike. Great to be here.
- [01:14]
Mike Shields
Excited to talk to you because there is a lot going on in our world. I have some specifics that I wanted to get into with you. Your name comes up a lot in all these interesting reports that have been kind of shaken up the industry. Where do we start? I'm thinking it is hard to avoid the Google elephant in the room for a number of reasons. So we can jump in there. What's your take on the antitrust verdict and whether that is going to mean anything right away? Knowing that there is a still a process to come here, I would, I.
- [01:43]
Jay Friedman
Would break the, the Google situation down into a couple pieces. I think. First we have to remember a lot of the industry centers around the very ad techie specific parts of it. But Google is a much bigger, bigger ecosystem.
- [01:59]
Mike Shields
Yes. I tried to make this point that that is you. It's hard if you're looking at it through just the lens of, you know, those three pieces of ad tech, it's one thing. But yeah, there's a much bigger, there's a much bigger thing going on here.
- [02:09]
Jay Friedman
There's a much. You're right. And, and so, you know, in Goodway Group having everything from a consultancy down to a performance marketing group, like we have to look at this at very, very different levels. And so, so I think one is certainly the ad techie essentially like where will Gamma end up and how will that change the publisher's model? But the reality Is is Google has a number of different ecosystems. We have to remember a couple of things. Number one, Google didn't really build much. Google acquired Overture to invite. Yeah, invite, double click.
- [02:44]
Mike Shields
It's true.
- [02:45]
Jay Friedman
Right.
- [02:46]
Mike Shields
YouTube, I mean, yeah, you go on and on.
- [02:48]
Jay Friedman
Pretty much. Android, literally almost everything was acquired. And so now it was acquired in probably the most strategic, brilliant way that any American business has ever been built. But we are where we are because of acquisitions. And those acquisitions, it is the back channeling of data. It's the undersea data cables that Google has between Android and maps and YouTube and search and display and Gamble and everything else that makes it so unstoppable. And so I don't believe, and I'm not a legal expert, clearly, but I don't believe that all of that is up for discussion. Right. With either of the judges.
- [03:32]
Mike Shields
Meaning that they're not going to rock the entire company and all their pieces in one shot. Even. Even with these two big trials that we're getting at.
- [03:41]
Jay Friedman
Yeah, I think the search trial is going to go where the, you know, really the crux of it, unfortunately is, is like this Apple payment or whatever.
- [03:51]
Mike Shields
Paying to be the default search engine, which at this point is the, the, the market share is what it is. Right. Like, it's, it's pretty hard to put that back in the bottle.
- [04:00]
Jay Friedman
Yeah. It just makes Google 18 or $20 billion richer, you know, and is unlikely to change much. So I think there's one thing there. Even if they do force a Chrome spinoff or a Chrome and a Chromebook or even an Android or something like that, you still have so much with YouTube and, and search and YouTube TV now. Right. Like, which I think they did create. So kudos there.
- [04:24]
Mike Shields
I mean, there, there was sort of a model for that. It's called cable, but yes, well done.
- [04:29]
Jay Friedman
Yeah. So, and they did buy Motorola, which I think had some cable elements to it. So the challenge there is like, judge, I think his name's Meta, is dealing with that. And then Brickman is dealing with just essentially the GAM DV360ADX component. And really YouTube's not a part of this, which is like, is a sacred cow within Google. And so the reality of, of dealing with all of the aspects, I think there's two components. One, there's, you know, prior to 2020, they still had an amazing stack and breadth of things that were all tied together, but now that's all been used to train Gemini and Gemini is kicking ass.
- [05:10]
Mike Shields
It's already trained. Like, yeah, it's. You can't untrain it.
- [05:13]
Jay Friedman
Right. And so absent breaking apart multiple parts Google and absent breaking out any AI Gemini and what's been trained. I feel like they have four trains running down the track and even if two of them get taken out, they've still got two with a whole lot of diamonds.
- [05:29]
Mike Shields
Right. I, I, I tried to wrap my head around this. There's the, there's the like what changes in, in the programmatic ecosystem tomorrow if they just spin those things off. And it's probably good news for other DSPs and SSPs and other exchanges, I guess, but I don't know that it hurts Google all that much. And I don't know how it, how do regulators remedy the challenges of today when they're working on cases that were unfolded over 15 years. That's to me is the problem.
- [05:53]
Jay Friedman
And I've seen a lot of LinkedIn comments about like, you know, if there was regulation. And I think if you look at like the SEC and the EPA and other regulatory components of the government, I think they have a really good win percentage when they go after something. But the amount they don't go after is tremendous. And so I don't.
- [06:13]
Mike Shields
Because they only go after you if they've got the goods, it seems like, you know, if they've got the emails and the statements and those kind of things.
- [06:18]
Jay Friedman
Right. And so I think Google or Meta or anybody could have a hundred wrongdoings in the future even if regulated, and three of those might get pursued. So I think to your point about the ad tech ecosystem itself, I think publishers probably get hurt short term. Right? Because Google is driving enough demand to, you know, supply enough oxygen so that nobody dies and gets strangled on the publisher side. And if that becomes disintermediated, Google is certainly likely to overcut and over bias things elsewhere. Pmax will get a boost inside Google. Right. I think a lot of people are, are holding up the flag for, for, for the open Internet of publishers, Web publishers.
- [07:07]
Mike Shields
Yeah, it's like a populist cause right now we have and those guys are much more concerned about search traffic and AI than who's, who owns Gamma or edX. I think yes.
- [07:20]
Jay Friedman
And I think let's say there are a million and forty thousand websites, that means there are probably a million more websites than we really need. And so as one of the smarter guys I've never met in the industry said to me, if you're looking for a chicken parm recipe, it's really hard to create a site that has an advantage. And so most publishers out there don't serve a niche.
- [07:41]
Mike Shields
They don't need. I hate to say they don't need to exist. No, they don't say that, but yeah, right.
- [07:46]
Jay Friedman
And the business model of today is not to go build a website first and then build your media empire today. It is be a creator first and either be on substack and build from there or be on YouTube and TikTok and build from there.
- [08:02]
Mike Shields
It's not text based recipes. Unfortunately it's not. And so as a, as a text person, that hurts me, but yes, well, I understand.
- [08:09]
Jay Friedman
Well, that's why we're speaking. But I hope this goes on. But I think you look at one of the most successful publisher brands recently is Mr. Beast, and he's not a publisher at all. I mean he is, but he's, you know, he's not.
- [08:26]
Mike Shields
Not in a traditional sense. No.
- [08:28]
Jay Friedman
And so I think this whole save the publisher, I think we do need to save, save the free Internet and everything around that. But I do think we also need to recognize that you can build a brand across whatever platform exists to communicate socially and that's very valuable.
- [08:45]
Mike Shields
And are your clients, you know, sure, every brand is purpose driven and pro journalism, but are they sitting around like, I gotta save the Internet. I'm so worried about these small creators. Or they gotta, or they gotta deal with their business.
- [08:55]
Jay Friedman
They gotta deal with their business.
- [08:57]
Mike Shields
Yeah. Amidst all this, then Google finally says, you know what? We're never gonna get rid. We're keeping the cookie forever. All that stuff we'd be talking about for like five years. There's a million angles there. But is there. Is your reaction like, who the hell cares? We've been moving on anyway. Is it, you know, probably really not good news if you've been building an ideal alternative or something else. But what is your initial thought there?
- [09:21]
Jay Friedman
I don't know that it matters tremendously to the alternative ID people. I think, I think it's probably a little bit bad for retail media because retail media became immensely valuable. It is not a coincidence that because they had id.
- [09:37]
Mike Shields
Not, not, not, not just because it's good. Because they were great timing.
- [09:41]
Jay Friedman
Yeah. So retail media is great, no question. And ITP hit in 2017 or whatever it was, and then ATT hit and there's no coincidence that retail media swooped in right around that time.
- [09:54]
Mike Shields
Right, right, right.
- [09:55]
Jay Friedman
And I think a lot of like retailer boards don't understand that that was a replacement for a lot of Apple signals.
- [10:01]
Mike Shields
Like they were lucky and good.
- [10:03]
Jay Friedman
Yeah, correct. And instead think my site is the most valuable thing on the planet. Why aren't people paying $400 thousand to advertise? So I think it's not like maybe modulating or whatever, if that's the right word for retail media for a very short amount of time.
- [10:20]
Mike Shields
Interesting.
- [10:21]
Jay Friedman
So that's one thing I think then I think it just continues to support what's existing. I think it's more or less false attribution that people will continue to rely on. But the most important thing is Google doesn't do anything without thinking five steps ahead, maybe 12. And my guess is that this is primarily to hold as a, as a negotiating chip, you know, in one of these trials.
- [10:45]
Mike Shields
Oh, so they, that's it. I hadn't thought about that. I, I, you know, that I thought maybe this was more about throwing their hands up. This is never going to make the regulators happy, but they can actually hold on to it and say fine, this is the time, we'll do it. We're ready. So the sandbox might not be dead, right?
- [10:59]
Jay Friedman
It, it gets hibernation or whatever it may be, but I think as part of this, you know, the Brinkmann trial, the ad techie trial, I think this just becomes a negotiating chip. Well, you know, like, well listen, you know what we can do is we can deprecate cookies once and for all. We said we weren't going to. This would really disappoint the industry. But we do have the power to give consumers there we got something to give you.
- [11:22]
Mike Shields
Meta or whatever. Yeah, it's very confusing that one of the judges is named Meta by the way. Shifting gears a little bit, there's been a string of stories. Let's just go back to more negativity about the open web. I love it about analytics finding all sorts of horrible things, whether it's ads next to child unsafe stuff, you know, the verification companies not doing what they're supposed to be doing, YouTube stuff that was on undisclosed or non transparent, your name comes up. You are in these stories sometimes. Tell us how you, this seems like maybe something you care about. Why are you involved here? Give us how do you get involved and what, what is your feeling on where this is going?
- [12:05]
Jay Friedman
You know, I'd say there's two parts about this that I don't love, that it has to happen. Right. Number one, it only happens because there are people who I believe are intentionally being ignorant or intentionally looking away and letting bad stuff happen. I am not a crusader. In fact, you know, my attorney, when I was, you know, prior to testifying in the Google trial.
- [12:29]
Mike Shields
Well, give people some Background. You were, you were part of that. I wish we should have led with that one, but. No, tell us how that came about.
- [12:35]
Jay Friedman
Yeah, yeah, DOJ reached out to me and just said, you know, hey, we've seen a lot of your opinions out there and we want to, Was it on signal? No, no, it was through, through my attorney. I don't, I don't remember. It was a long time ago. As you said, these things are 15 years old. But, you know, my, my attorney made it very clear to me. He said, you don't have a dog in this hunt, and your job is not to build the DOJ's case for them, nor Google's case for them. Your job is to just give the facts that you know and leave. And I, I said, you know what? You're dead right? Because I don't, I don't love one or the other.
- [13:09]
Mike Shields
I, I, which is a weird, you know, for, for, in the ad industry, you're supposed to be selling something or promoting something. That's kind of a weird neutrality world to play.
- [13:16]
Jay Friedman
Well, you know, it's funny because agent is the root of the word agency. And so, like, you're supposed to be neutral. You're supposed to provide neutrality to your clients as a component of the value. And so that gets us right back to these analytics reports, which is neutrality is a component of our value. We're not like, you know, I sat across the table from a vendor who said, you know, how much do you need to do more business with us? I literally didn't understand the question. So I know there are a ton of agencies out there that take payment, kickbacks, whatever it may be. We just don't do that. And so I think because of that, that enables me to comment on some of these stories without fear of retribution.
- [13:54]
Mike Shields
Your hands are clean. You don't have a, you don't have anything to get you on.
- [13:57]
Jay Friedman
Well, nor do I risk losing money. Right? Like, it's not like my rebate will go away next month because I didn't have one to begin with. So I think there's that component. I do think people are willfully and intentionally looking the other way and, and really mischarging people and misrepresenting their products, which, again, I don't know. I, I don't walk down the boardwalk at the Jersey Shore and tell the, the guy doing three Card Monty that, like, I don't think he's being fair. Like, I don't have a, a crusade, you know, to pick here, but it does cost advertisers Millions of dollars and they are led to believe things that aren't true.
- [14:34]
Mike Shields
Who, who is misrepresented? Are you talking about the verification companies? Are you. Some of the exchanges who have all these protections. Lots of different players. Who's. Who is like, misrepresenting what they can do.
- [14:43]
Jay Friedman
Let me say this. I don't think analytics is 100 right about everything they publish, but there's something there. It's. It is not just smoke and they.
- [14:54]
Mike Shields
Don'T have an ax to grind. They, they're, they don't have a. They are, they are on the side of the advertiser and the buyer.
- [14:59]
Jay Friedman
Right.
- [15:00]
Mike Shields
But they're not out to get specific parties in your mind?
- [15:04]
Jay Friedman
I. Yeah, I don't think so. And as it relates to that. Yeah. All of the targets of those analytics reports, I think have probably misrepresented or willfully hidden some information. Somehow or another. I don't think that's good. I think that rather than cleaning up their act, they, they shot back. And I don't think that's all that. But there are a few crusaders out there that, you know, they're bad, they're good. I don't care who's bad and good. I just want my clients to have the truth and to be able to make informed decisions. And it's challenging when you have companies who are worth billions or trillions that are willfully out there and obfuscating information that would help them make a good decision.
- [15:45]
Mike Shields
So do you think it's hard because part of me said, like, you read these reports, oh, my God, this is crazy. But then it's. It feels like it's been 10 years of shocking fraud reports of different variations that don't feel as shocking over time. Will this have an impact? Like, I wonder if brands are going to finally say, you know, I'm not even going to touch some of this open exchange stuff ever again. Or is it just another thing that gets shoved aside and the market goes on it?
- [16:10]
Jay Friedman
You know, I read the story of the London air raid sirens in World War II, where the first siren went off, everybody scurried into the. By the tenth siren, they were like, I'm busy shopping, you know.
- [16:20]
Mike Shields
Right. And it's just part of life. Yeah.
- [16:23]
Jay Friedman
And so my advice on, on the analytics or other, you know, anyone who's trying to go down that route is just focus on signing up clients who will listen to you and clean up their stuff. Because I think continuing to publish these reports while juicy and while true in many cases, I just don't know that they are. I guess it depends. If 10 brands are calling analytics after every report and signing up, then I guess it's going well. I don't know if that's happening.
- [16:54]
Mike Shields
Yeah. And it's, it's happening in the shadows. You only know what's going on. Yeah, that could, that could be a game changer if it's just not public. We don't know.
- [17:01]
Jay Friedman
Right.
- [17:01]
Mike Shields
Getting. All right, let's get out of the nitty gritty programmatic scandal world. So let's talk big picture. This is, it's a huge issue where, you know, we're talking in late April. The economy has been uncertain for several weeks with the position of these tariffs. I don't know if the full like pricing impact is hitting shoppers yet, but people are nervous. You see the consumer confidence, things like that. What's going on with you, with the market, with your clients? Are you scenario playing, cutting, trying to wait, what's, what's the temperature like?
- [17:34]
Jay Friedman
Yeah, so there's not cutting yet. There's definitely scenario planning. And I, I think the challenge is, and this, if, if we do talk about AI at all, I think one of the biggest benefits of AI will be debiasing decision making. So I think right now, so if you look at like one of our clients, super smart, my eye doctor. So they have like 800 and some, you know, eye doctor locations around the country. And I think if we think about it from their marketing partner, their agency lens, and we think, okay, well but if your eyes are bad, you're going to have to go to the doctor. Right. But you may think that, but at the same time, if you look at, in Covid how many elective surgeries were delayed, postponed, an elective might have meant you can't move your shoulder.
- [18:25]
Mike Shields
Right, Right. It wasn't like getting work done in your nose necessarily.
- [18:29]
Jay Friedman
Correct. And so the amount of things across the board that are elective are choice based and can be traded down out of. Right. And so I think Walmart often thinks, you know, that they are, you know, we're great partners of Walmart but they think like we're the low cost leader. I understand that, but there's buying less and.
- [18:53]
Mike Shields
Right. It's not just the, the guys who have good prices win when people, people just pull back in general.
- [18:58]
Jay Friedman
And there are parts of the, you know, so we also work with Dollar General. There's parts of the countries where you're a mile and a half from a Dollar General and 25 miles from a Walmart. Right. And so the gas alone For a small trip doesn't make sense. Right. And so there are just, there's a lot of factors, so I think a lot of that. But will be okay or but we're in really big trouble can be debiased through AI and through just smart strategic AI thought partnership.
- [19:25]
Mike Shields
So a couple of thoughts there because you've seen the early again, it's very early. You've seen some of the early iab, had a survey like gets cut what who wins, who loses or and it was like the less provable things seeming like social video and gaming and things like that. Are you saying it might not be as blunt or it'll be much more data driven than previous, call them recessions, downturns, whatever, where brands just kind of cut bluntly and arbitrarily?
- [19:55]
Jay Friedman
No, I think, I think it will be blunt and arbitrary in cases not with us, but in most cases I'm.
- [20:01]
Mike Shields
Yeah, okay.
- [20:02]
Jay Friedman
We're sharing how, you know, how we're thinking about this because I think humans are the best species in the world, convincing themselves that they are really smart and have thought through everything. And the reality is they most often or never have. And so I think we have this wonderful opportunity right now and especially with the degree and level of uncertainty to take a minute here and say let's look at everything throughout history that we need to, to properly contextualize what's happening. Right. And we have the benefit now of loading into models the Smoot Hawley tariffs and what happened in the 1890s.
- [20:44]
Mike Shields
Yeah, think about that.
- [20:45]
Jay Friedman
Right. And so now that we have the benefit of all of Ray Dalio's books and writings about the great cycles and the small cycles, we can load all that up and start asking questions rather than trying to make an assumption and basing $100 million decisions off of it.
- [21:02]
Mike Shields
You know, there's been lots to talk about the growth of, you know, as much as generative AI is exciting, AI media buying has, has happened faster or seeming at a bitter, bitter impact faster. Do you think the tariff economy is like, like, like the pandemic accelerated certain things? Does this accelerate the use of that, of those tools?
- [21:22]
Jay Friedman
I don't know. I think, I think the challenge is, number one, is changing people's behavior. Right. And this is one of the reasons I, I love advertising is because the objective is to influence someone's behavior. And I think that the most poorly understood phenomena in the universe are like deep space physics and string theory and human behavior. And like as much as we think we understand human behavior, like every they they run Some experiment where you can have $1 or you can take $10 away from the guy you don't like and give it to charity. And like universally people would be like take it away from the guy at all, you know.
- [22:01]
Mike Shields
Right.
- [22:02]
Jay Friedman
And so the human behavior component of change management and transformation, you know the holding companies, they do some things really well. I, I think there's a lot they don't do well but like, but they're not going to lose all of the major brands overnight because they haven't transformed fast enough.
- [22:19]
Mike Shields
Yeah.
- [22:20]
Jay Friedman
So there is a really important change management component of this. The other thing is, I will tell you, I am as steeped in AI as anybody. I literally, like, I think it is the next electricity, the next Internet, whatever it is and the value that comes from AI. Like we've had automation forever. We've had business process automation, you know, the consultancies have been doing that forever. The fact that you can now type launch my meta campaign rather than click launch the meta campaign. Okay, cool. But I don't think that in and of itself is changing the world. The whole MCP multi context protocol, I think component of protocolizing, if that's a word probably not of the agentic space, will be a massive deal because I think most people probably don't know what HTTP stands for. Right?
- [23:10]
Mike Shields
Yeah, they recognize it, but they don't. They couldn't tell you what it means. Yeah.
- [23:12]
Jay Friedman
Nor do they know what it serves. Right. But like it's a protocol that allows web pages to communicate with the browser. You know, TCP IP on the email end allows for communication. And so the protocol component of AI and agents is going to be massive.
- [23:27]
Mike Shields
Okay, so then, and this, I guess we'll wrap on this. Talk about the, the least AI more human behavior event than I could think of is the, the upfronts are really coming at a weird time. What will that be like amidst the tariff thing hovering over us and what you're describing about all this need for transformation?
- [23:48]
Jay Friedman
Yeah. So I will tell you, I am like very by side, you know, in my mentality. If I am a really large advertiser right now, I believe I'm holding the chips. And I'm holding the chips because if I normally commit X hundreds of millions of dollars to this publisher for upfront or even, you know, 50 million or whatever it is, I think that can wait. And, and I.
- [24:14]
Mike Shields
You got the cards right now and.
- [24:16]
Jay Friedman
Yeah, and I, and I and I, and we, you know, we are advising what's waiting two months gonna do and I think you can slow play this. So that's number one. Number two is if I'm a CPG or anything sold, sold through retail. I am trying to approach my upfront with every publisher with as much retail data as I can.
- [24:38]
Mike Shields
You need more information before you can make calls right now.
- [24:41]
Jay Friedman
And the idea that, you know, like, I love the folks over at NBC Universal and they've really been open to like leaning in working on something like this, I think that if I am a CPG brand, I want Dollar General or Walmart or Target or whatever it may be to come to NBC Universal with me and to help set me up with data driven everything. You talk to the dog food brand and One of the CMOs said if I ever show another ad to someone who doesn't have a dog. Right. And I think at a minimum you could work across some retailers to funnel to all the major CTV providers, the major audio providers. Just. Can we cut out all the people who don't have dogs? I, I think there is the opportunity for CPGs right now to be so much more strategic in their upfronts. It's not happening yet.
- [25:37]
Mike Shields
Right. So what, what you're describing does not lend itself to going fast and just making huge deals and locking stuff up. It's much more like let's take our time and, and, and rethink how we do this thing.
- [25:46]
Jay Friedman
Yeah. And it contrasts with the Byron Sharp of just get the reach.
- [25:50]
Mike Shields
Right. Right.
- [25:51]
Jay Friedman
You know, I, I think it depends, like, you know, for bread, you might just want the reach. Maybe you suppress the gluten free folks or something.
- [25:59]
Mike Shields
Yeah, yeah.
- [26:00]
Jay Friedman
You know, but, but I think there are enough CPGs out there that would benefit from a more strategic approach. And we're working on it with brands, but it's a change.
- [26:11]
Mike Shields
Yeah, yeah. This is the kind of thing that nudges them forward.
- [26:14]
Jay Friedman
Yeah. All right.
- [26:14]
Mike Shields
Well, Jay, awesome stuff. We talk forever about these million topics. But thanks so much for your time and let's do this again sometime.
- [26:19]
Jay Friedman
You got it. Thank you.
- [26:21]
Mike Shields
A big thanks to my guest this week, Good Ray Groups, Jay Friedman and my partners at Elemental tv. If you like this week's episode, please take a moment to rate and leave a review. We have lots more to bring you, so please hit that subscribe button. We'll see you next time for more on what's next in media. Thanks for listening.