A (3:51)

That's great. What would you say was the kind of catalyst or moment that sparked that shift?

B (3:57)

We always talked about advertiser value. It is important to yield as much value as possible and get the performance that we need. We always think that advertiser value is important and when we think about that, it's just like you go through stages, you go, okay, viewability needs to be important. Let's get viewability up to above standard, above average. Make sure our CTR is good, but it's high quality clicks. It's not just users just misclicking on stuff. Then you go through the lines and eventually you get to SPOs like make sure that advertisers know what inventory they're getting, access to, what they're buying and make sure that they're getting insights. The transparency is there. Then we've increase of the value of our inventory.

A (4:46)

Yeah, yeah, I mean, that's the key, right? Obviously. And you know, speaking of that, having made these changes, are you in a position to be able to see the kind of impact that they've had from a revenue perspective?

B (5:00)

I honestly I don't think I can. Everything, especially with these kind of stuff. What I've learned to say it doesn't change overnight, right? Let's say we remove all the reseller lines yesterday, today, likely the performance is going to drop initially and maybe things recover over time. But if there's so many moving parts that it's hard to associate the value towards spo. But, and that's, that's a lot of things that we do in this industry. But I think that's when we like to look at it as like, you know what, ultimately we are improving the quality of our inventory, so we will get rewarded at some point and that's how you kind of move forward. But with spo, I think the other side is that it's not just about removing reseller lines. You also have to market yourself and tell the advertisers that, like, hey, we have gone to in this direction, we have removed the reseller lines, all of our inventory is direct, it's clean. And that part is also hard to do. You know, like, we haven't spent a lot of time or resources into marketing ourselves. And that's why we talked about people may not know Valnet, but they know our brands. It's the same thing. We're now making a big push to let people know who Valnet is. And that's kind of going hand in hand with this stuff.

A (6:21)

In terms of that messaging around the surgery, as it were, you're doing on the supply path, does that land well with advertisers?

B (6:32)

I think it's always positively looked at. You know, when you tell them, it's like everybody's good, it's not, it's never negative, but I don't know if it actually is, if it's meaningful for them, you know, because at scale, they're buying at scale. So yeah, we're, we're a big publisher, but they are also buying at multiple publishers. Maybe only small portion of their budgets come to us. So it's positive, but I don't know if it's all that meaningful to them at least, like, that's what I've felt, you know? Yeah.

A (7:04)

So in addition to the spo, what other kind of tweaks or changes are you as head of monetization looking at to basically bring in that those ad dollars and keep readers satisfied? I suppose.

B (7:17)

Yeah. So there's three things I think we. So we looked at the advertiser value, but then there's a user experience and then the performance side. So always those three things, there's constantly affecting each other. Ad density is probably one of the biggest part of advertiser value and performance and user experience. So we are constantly trying to reduce our density. And we look at this metric, impressions per session and request per session. So we look at that and injections. Our injection is based on content length, you know, your paragraph breaks and all that stuff. So we'll try to work with the content team to create optimal breaks. We're kind of, I'll have a little sit down session with the content team. The leads say okay, this is how the ad injection works. And like how you break out your content really does impact because we won't break a paragraph in half to inject an ad. So there needs to be natural breaks for the ads to inject. So if you have massive paragraphs, we're going to have less ad injections which is fine if the content works like that. But they also need to think about how all this stuff works.

A (8:25)

Well, that's really interesting because I mean I think that sweet spot between not being the Vegas strip but also ads have to populate at the right time to have value.

B (8:35)

Filnet we've focused mostly on open market programmatic spend. We have a small direct initiative. This is something that we've been trying to grow. But when you don't have huge direct sales initiative and direct spend coming in, you kind of need the density because the CPMs that you get from open market is much lower. So we want to try to move away from that as much as possible. I don't think found that it will ever be a publisher where we drive like 50% of the revenue from direct sales. But we want to grow IT to maybe 15, 20% and once we do that we can yield higher CPMs which allows us to reduce the density which would be better for advertiser value, better for user experience and we still get the performance that we need to kind of go forward.

A (9:24)

So it's a balance.

B (9:25)

Yeah, yeah, I think we can. If we can drive higher CPMs, we would love to reduce density but it's always the constant battle between the two of okay, well we reduced the anc, we went too far. Okay, we gotta bring it back a little bit.

A (9:38)

How difficult is it to kind of innovate in ad tech? This is a broader question I guess given how fast things are changing, especially on the programmatic front.

B (9:47)

It's been very, very difficult. The rapidly changing environment is definitely one of them. And you have to adapt quickly. For example, the video definition of having in stream outstream and then now there's a third definition of accompanying that stuff. When it happened, the enforcement happened quickly. So we had to adapt quickly and that's difficult. But innovating is, I think, much more difficult than just adapting to the new policies and new rules, because there's so many different ways to innovate. Prebit, for example, you have the open source code, you build that, but there's so many customizations that you can do and even a single customization, you interpret how you should approach that topic and how you should build your tech. So you kind of have to talk to your developers and walk through. And our biggest challenge, I would say, was bridging the gap between developers and adopts. And I was like, because I am an ad ops guy, I understand programmatic landscaping landscape very well, but our developers do not. And I'm not a developer, I'm not a technical guy. Obviously for 10 years I've learned a lot of stuff, but still, if I needed to build something, I'm not going to be able to tell them exactly how to build it. So you need somebody in the middle that understands both sides, and that was the most difficult part. And eventually we did find resources that they were able to kind of bridge that gap and were able to build stuff. But ultimately there's just so many different ways to build your product. And you want to make sure that product that you build or tech stack that you build is gonna keep that balance that you need between the user experience, the performance and the density. Like everything that pertains to page speed as well. You know, if you build it to be too slow, everything gets affected as well. And that's harder to tell. So. Yeah.

A (11:37)

So you know how have some of these technical changes influenced your broader monetization philosophy?

B (11:43)

Yeah, so I guess one of the things, if we talk about authentication, we talk about cookie deprecation and why authentication became so important to majority of the publishers. And I remember our thought process around authentication was pretty pessimistic, I would say. But eventually we said, you know what, we can create content or value for the users that's going to want them to sign up and want them to get authenticated. So. And we said, we got to start somewhere. You know, ultimately maybe we've become a little bit more realistic about what critical mass of value would be. If we're looking at, if we're expecting 50% of users will log in, that's not going to happen. But 10% is still very meaningful. So it's a. It was about our philosophy, was changing, about our expectations changing, and still understanding that 10% could be very valuable and we can do a lot with that 10%. So we created more value to the users or more exclusive content, High quality content, high quality videos, all of that stuff became an initiative on the content side for us to deliver the premium model and for to give users incentive to authenticate a sign up.

A (13:03)

That's really interesting. I think one of the things also I'm hearing is that you kind of have different audiences, but you're getting to understand your audiences. I mean this strategy gives you more insight into who's coming.

B (13:16)

Yeah, we also created what we call threads. They can talk about the article, talk about topics that we're discussing and that really improved our engagement.

A (13:29)

As you look to the future, how do you think about kind of as it were, locking in some of these changes and this value that you see from this audience.

B (13:41)

So I want to go back a little bit about innovating and how difficult it is. So I went through the stages of okay, what am I focusing on to optimize to yield more value. And initially it was demand. We want to work with as many high quality SSPs as possible. But then you do work with all of them. There are going to be going to be one or two that come here and there, but generally speaking they're not going to create incremental value. They'll just take a piece of pie that was taken by somebody else. Not meaningful value. Then you work on ad tech, innovation, all that stuff and we'll continuously work on that. But that also has lots of limitations and you eventually reach a plateau point. It's like you're not going to find a lot low hanging fruits. So now we come to premium inventory which we need to learn our users, we need to learn who they are so we can offer these users to our advertisers to grow our PMP like programmatic direction as well as, you know, your conventional IO based direct deals. Because that's going to yield us higher CPMs.

A (14:53)

Yeah, I mean talk of premium inventory is, is kind of characteristic of the moment we're in. Right. When it comes to programmatic sales for publishers. Yeah, let's sort of like draw back and look at the, the big picture and some of the kind of industry context. I guess I think I'm correct in saying Valnet reaches more than, has more than 400 million sessions a month across its network.

B (15:17)

That's correct.

A (15:19)

And you know, how do you kind of, how do you think about that, you know that kind of scale when every property has its own audience profile and publishing rhythm?

B (15:30)

Yeah, it's, it's sometimes a bit overwhelming how, how much reach our sites have. But we, I always try to look at it as our advantage and this is the opportunity that hasn't been tapped into is that, okay, we're 95% of our inventory is sold in the open market and we have so much data that we could collect and leverage in order to drive higher value. And it's just looking at it, it's overwhelming, but you start to see the real value that hasn't been tapped into it. And that's exciting. But it's also very, very difficult to manage all that information, manage that data and use it properly. So yeah, I mean it excites me, but also I know how challenging it can be to create value through that. So we're taking one step at a time. Even first party data collection, I wouldn't say we're crazy sophisticated, but we're keeping it a level that we know how to manage and understanding it well first and then starting to kind of grow step by step.

A (16:45)

Yeah, I mean, I suppose the whole back and forth about third party cookies may have provided a spark. I know it lit a fire under the industry. Speaking of first party data. So that is a focus for you?

B (16:56)

Yes, yes. But I believe when it was really a huge focus for the industry was when Google had first announced that they're going to deprecate third party cookies. And we had the initial moment of oh, you know what, we also need to look into this. But we didn't want to panic. You know, our, our outlook was initially, I'm sure everybody went through the initial panic. We did too. But we didn't want to stay in that moment. And we said, okay, what's realistically going to happen for publishers like us? How much first party data can, can we collect and really sell? Because we don't have a huge direct sales initiative. And at that point we had none. Right. And it's not, you can't grow direct sales overnight. It's a highly competitive environment and you're entering that new market. You have to build relationships. You have to have crazy amount of salespeople that are constantly going out there representing balance inventory. And we weren't set up for that and we weren't willing to just fully invest everything into growing that at the time. So we said, well, maybe first party data isn't as important. Collecting first party data isn't as, isn't as important as just understanding how to go about direct sales. So that's what we worked on. Like we've hired salespeople. We entered that space. I was very naive about how direct sales worked and now we have a better understanding we have good salespeople that understand our values as well. We don't want to just go out and sell anything and everything. We want to understand the creative types that we're also selling isn't going to impact user experience horribly and negatively. You know, the high, high impact guys the site scans, you know, when they're done. Right. It's great user experience, but it could also go the other way. Right. So we want to build a baseline first and that's what we did the last few years. And now we can go after the first party data and in a more sustainable way for us.

A (18:56)

Let's talk about your acquisition of Polygon from Vox Media. You know, speaking of inventory, you know, that expands, you know, the, the real estate. How does that property fit into what you're doing?

B (19:08)

So Polygon, obviously we go through a lot of due diligences, we look at different opportunities and Polygon was an easy one to go through because we knew Polygon has great content, it has a great foundation of creating high quality content. So, and, but the difference was that Fox has a lot of direct sales. I think I, I can't remember the exact number, but it could have been 75, 80 of their revenue was generated direct sold inventory and then 20 was open market. And for us it would have been the other way around, flipped around even less. Maybe 95% open market, 5% direct initially when we acquired it would have been 100% open market. But that's also why it excite us, because it's a premium inventory that doesn't get seen in the open market. It doesn't. The buyers, open market buyers don't see the bid requests coming from that website as much. So we're super happy and. But we knew this was a high quality inventory, high quality website, and we knew that there was a very small chance that it was going to go poorly.

A (20:20)

Interesting. When you buy a property like that, you're actually buying an audience to a certain extent.

B (20:25)

Yeah, absolutely.

A (20:27)

Do you think about audiences as discreet to the publications or do you see crossover?

B (20:34)

Crossover, yeah, lots of crossover.

A (20:37)

All right, so like, I guess the big question here is like for other publishers looking to upgrade this strategy that we're talking about, you know, especially in this very complex environment, which is something you clearly understand very deeply. What's one piece of advice that you might like, offer?

B (20:54)

I think you have to think about realistically what you should go after, what opportunities you should go after because there's so many things that come up, you know, like right now, I think the big thing is curated media. Right? And on our end a lot of the SSPs and DSPs are doing the work for us and going out and curating our inventory for us and that's fine. But if you were to go after that and trying to grow it, but you don't really have the resources, it's easy to just kind of see everybody, whatever everyone else is doing, like, oh, I want to be, I want a piece of that too. But it's not going to yield the value, same value, if you don't have the right resources in place, if you're not focused on that opportunity. So my advice would be to understand which opportunities realistically are you able to get and have the right resources who are going to be passionate about that? Take accountability. That's huge, the accountability part. And that's not something you can just kind of force people. You have to believe that this person that's taking on this project can be really passionate and sink their teeth into it. If you got that, then go after those things. But it's too hard to go after every single opportunity there is. Even if seemingly it seems like a low hanging fruit. Nothing is really that simple in this industry.

A (22:14)

So that's for sure. So finally we're going to wrap this up with some what we call hot seat questions. So like what's one thing you're obsessed with figuring out right now?

B (22:27)

How to yield more value? No, no, no, I'll give a better answer than that right now. For me it's how to grow direct sales sustainably and scale it in a way that we don't get too bloated because through acquisitions one of the most valuable things that I get is insight. I get to see under the hood of a lot of publishers, small to medium to large, how they operate, what is their strategy and direct sales? I've learned like some of the big publishers do it extremely well. It's a well oiled machine, it's not bloated, they generate a ton of revenue, but some have a huge cost and that's what we were afraid of. And right now it's like it's very hard to do. So you need the right sales team, you need the right operational guys, you need the account representation, you need reporting guide and all this stuff. And right now I am trying to find a way to scale it but without having massive costs just kind of take over and then expect this to yield value in the next year or two. I want that line to kind of grow together and that's not an easy thing to do. Obviously. And we're just. I'm looking for the right resources, I'm looking for, looking to build relationships with, with agencies with limited guys. Just hustle, hustle through it and you know, offer them our inventory, charm them, whatever it may take. But yeah, that's what I'm currently obsessed with.

A (24:01)

Okay, what's still missing in the ad tech stack that you wish someone would build?

B (24:06)

I don't know if this would fall under ad tech stack, but I think we could really benefit from a bit more standardization around could be reporting and creatives. You know, maybe I'm speaking out of line because I'm on the inventory side. So I don't know everything that goes on the, you know, the buy side and the creative side. But it's what I see is that there's so many different creatives that just either break the page, the creator's broken, it's too heavy, it slows down the page and it's hard to target those and remove those because it can come through so many different channels. So if there is a bit more standardization around what kind of creatives are acceptable. I'm sure there is some standard already but needs to be honed in a bit more maybe.

A (25:00)

What's one thing advertisers misunderstand about monetizing publisher inventory today?

B (25:08)

So I thought about this and something that it's more of my frustration around advertisers perspective. I understand it. But a bit more frustration because it's hard to create context around it which is brand safety. I understand the brand side, advertiser side on why they wouldn't want to associate their brand with certain content. But brand safety is police by keyword list and it's very restrictive and some of the tool. Yeah. And it's like okay. And we have gaming sites that will. A lot of gaming natural will talk about shooting. Yeah. But some of the game developers won't want to associate with those articles. Like hang on, hang on now. But you guys also have games that are first person shooter and whatnot. You don't want to associate with those type of articles. There's a bit of a mismatch, you know, and I think it's just hard to manage that. So they go with a broader approach and I get it. But I think it's just there, there needs to be more about understanding the context of certain articles. And you know, it's like the shoot word. Shooting can be anything, everything. Right. So yeah, I like that.

A (26:23)

I've been hearing more about a shift from brand safety to brand suitability which Brings in the concept of context.

B (26:30)

Yeah, yeah.

A (26:33)

What's something unexpected you've learned from reader data or behavior recently?

B (26:39)

So I wouldn't say it's recent, but it's something that's always surprises me how the smallest change that I, from my perspective is like is that really going to do anything? But at our scale, the numbers change so drastically. You know, recently we were playing around with the video size, you know, because like, you know, our outstream unit will float once the user starts scrolling and the size of that unit, you know, obviously we want to give advertiser value so we want to make it as big as possible. But then user experience wise it could be very bothersome because they're as they're trying to read, there's a video playing. So we want to keep mindful of that and we're constantly testing the size of that unit and we decreased by 10%. And 10%. While it's significant, if you look at the actual size of the unit, to the naked eye you really wouldn't be able to tell what the difference is. But the CTR of the that video unit changed drastically. It was cut in half actually. And that's the thing is like okay, users are really sensitive to these things and to me it's not. Maybe I'm looking at it too often, but that's always like that boggles my mind and it always catches my by my. Catches me by surprise when I see the numbers like wow. I did not expect that. I did not expect users to behave this way.

A (28:00)

That's amazing. The details really matter.

B (28:02)

Yeah, big time.

A (28:08)

And that's it for this edition of the current podcast. We'll be back next week. The current podcast is produced by Moulton Heart. Our theme is by Loving Caliber and our associate producer is Sydney Cairns. And remember, I like to think of.

B (28:22)

Us as a publishing powerhouse. We started very small. Our motto is humble and hungry. We like to remind ourselves that it's always good to keep a humble mindset.

A (28:34)

I'm Damian and we'll see you next time.