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A
This podcast is brought to you by audiohook, the leading independent audio dsp. Audiohook 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 addition to CPM buys, they offer the industry's only pay for performance option where brands can scale audio and podcasting with peace of mind mind knowing they are only paying for outcomes. Visit audiohook.com to learn more. That's audiohook.com
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quick break this surprised me. The most useful advice I get now doesn't come from experts, it comes from regular people on TikTok. What works, what doesn't? No filters. Download TikTok and see for yourself. Welcome to the Monopoly Report the Monopoly Report is dedicated to chronicling and analyzing the impact of privacy, antitrust and other regulations on the global advertising economy. If you are new to the Monopoly Report, you can subscribe to our bi weekly newsletter@monopoly-report.com and you can check out all of the Monopoly Report podcasts @monopoly report pod.com I'm Alan Chappelle. I'm outside counsel and a fractional CPO to a whole bunch of tech companies and am the Principal analyst at the Chappelle Regulatory Insider, which is a monthly report that shares strategies and insights for digital media worldwide. You can find a link to a sample copy of the Chappelle Regulatory Insider in the show Notes this week, my guest is Mark Naples. Mark started the strategic PR firm Wits strategy in October 2002 after having been a CMO Director of Investor and Relations and a privacy officer for 24.7Real Media. I love that they combine those things way back then. Since founding WIT Strategy in 2003, Mark has led strategic efforts on behalf of more than 500 companies ranging from startups to publicly traded multinationals, including dozens of corporate and product launches, complete company repositioning campaigns, and more successful crisis suppression than anyone else in the business. He was one of the authors of the Self Regulatory Principles that became the backbone of the DAA self regulatory program in 2010. Mark is an old friend. We met back in 2005 and like many digital media bromances, Mark and I met while doing a panel at a Media Post conference and I think we were talking about trust in the ad space and how adware was ruining everything. I was just starting my law practice And Mark was getting which strategy off the ground. And we often compared notes on what it was like to start and grow a business in this space. He's been a close friend and someone whose opinion I really respect. We'll get into a bit of the history of self rig in the ad space. The NAI's origin in 2000, the DAA's launch a decade later, the gap between policy intent and technical reality. The cookie opt out mechanism. And because I won't be able to help myself, I'll ask the uncomfortable question of whether the industry's self regulatory efforts were genuinely protective of of consumers or just good enough to keep Congress out of the room. We also get into AI, the death of innovation in ad tech and what Mark thinks the industry should be talking about right now, but isn't. So let's get to it. Hey Mark, thanks for coming on the pod. How are you?
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C
Alan, it's good to see you, man.
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B
Good to see you as well. And where is my audience finding you today?
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C
I am in Philadelphia. You know that Philadelphia is not just the city of Brotherly Love by a motto that Philadelphia literally means brotherly love in Greek.
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B
I did not.
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C
This, this city was a social engineering experiment by the Quaker son of a British admiral who was granted all this land, all of Pennsylvania. And William Penn's best friend was George Fox, the founder of Quakerism. And they, they decided to try a social engineering experiment where they put all the churches on the same block and see if people would get along. That's the genesis of the name of Philadelphia really.
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B
And it pretty much worked. And then Ben Franklin got involved and
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C
then I don't know that it worked or not. I know that they put all the Protestant churches here, they put the Jews over there and they put the papists over there. Not the Catholics, mind you, the papists. And that was four blocks away. And then they burned it down. Maybe not as much brotherly love as was advertised.
- [04:46]
B
No, no. That's. Wow. Okay. Well, at some point we're going to draw an analogy from the current digital media environment and we'll bring it to Philly. I want to jump in. And, and because we've got a whole bunch of things to talk about here. And. And I want to start with the NAI in 2000, which kind of is. That goes way back 25 years now. But towards the end of the dot com boom at a moment when most consumers had no idea that the browsing behavior is being tracked. Like take us back to that moment. What was the political and industry climate that made the NAI feel necessary and who were the real power brokers pushing it forward.
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C
So obviously DoubleClick had a very different business model than the other major ad servers. DoubleClick was aggregating data data behind, you know, all the publisher serving. I was working with Real Media at the time and Real Media's model was wholly different. It was siloed. If you licensed the Open AdStream AD server as a publisher, you owned the data exclusively. If you licensed Open Advertiser, which was only available in Europe until 2002, I think then the Advertiser owned the data and there was no aggregation of data. It just didn't happen. So newspapers and the business that Dave Morgan and Gilbert came out of was newspapers. They all wanted to work with Open AdStream. DoubleClick had a very different model, as I said, and their technology was better. It was more nimble. You didn't have to sell the way that newspapers had to sell. It was Almost as though DoubleCub was saying, this is the way the Internet's going to look. And Open adstream was like, well, you know, brochureware works just fine for these guys. Right? That's kind of the comp, if you will. So if it's 2000, Congress comes back in the fall, 2000, I think there were 16 privacy related bills introduced that year. And I had only started at Real Media during that year. And George Simpson, old friend George Simpson, had been doing their pr and I wasn't involved with PR at the time. I had done some in the past and I'd been a Senate Commerce lobbyist and done a lot with the FTC and the Telecom Reform act in 1994 and 5. And I was at AOL in 96 as the managing editor and had a lot of exposure. But I didn't necessarily understand what we just described, the difference between DoubleClick and Open AdStream. George says it's really a privacy thing, so why don't we talk about privacy more? It was a big turning point for the company and for me personally, because data exclusivity and ownership and privacy are two sides of the same coin. So fast forward NAI starts. Trevor's doing great work with nai.
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B
It's not necessarily Trevor Hughes who now runs the iapp. Yeah, right.
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C
Thank you. And NAI was established for the companies and for the companies to be able to come up with a solution together, which was notice and choice. And at the time, it did make a lot of sense. It did seem like it was a big concession. And from Those of us in the industry looking out, it was like, well, this is, this is the best we're going to be able to do to a consumer. It didn't make any difference, didn't make any sense. It didn't. It was, I'm not going to say pearls before swine, but it was over their head at the same time. People were always worried about opt outs. Opt outs were never a thing ever. You know, like, I think, I think the FTC that year had something like 16 complaints from consumers in the entire year. There was no hue and cry. There was no big demand about this. I mean, this 26 years ago, I think about this now. It's kind of funny because there were so many bills because industry and business press were talking about this. But by and large, consumers didn't get a shit. They just didn't. So for the NAI to be coming out and doing what they're doing seemed very noble at the time. It seems like at this point, much later, it seems like it was kind of a half measure that was going to, it was designed to protect the interests of the business, but at the time it sure didn't. It seemed like it was really breaking, you know, groundbreaking stuff.
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B
Well, just conceptually, the, the idea that there needs to be at least some transparency around data being collected, if you put that into the schema of like the past 70 years of the direct marketing industry, that's a pretty significant change. Just, just the idea that you're going to explain to people what type of data that you're collecting. I know now that seems like, you know, table stakes, but, but it was sort of a, you want to acknowledge that they did move the ball forward, at least initially.
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C
No doubt. You know, I, I wasn't big, I was a big supporter then. I'm, you know, as I said a second ago, like, it did seem like it was noble stuff, you know, and they did. Nobody else is doing it by, you know, let's, let's face it, you know, nobody else was communicating that way. I started to really trend Prys and communications wise toward the transparency stuff because of my relationships with folks at the FTC, especially Peter McGee, who was special counsel to Moselle Thompson and ended up being the primary author of Can't Spam and Do Not Call and really just one of the smartest guys I've ever worked with. And Pater never, he would always remind me, nobody here cares about privacy. We only care about transparency. Work with the companies that are going to enable transparency and you'll never regret that. That he might have had that conversation with me in 2005, 2004, something like that, you know, and he was right, obviously, you know, and that, that, that brings us to, you know, what was going to happen down the road after that. Remember, I think one of the first conversations you and I had was about Nebuad.
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B
Yeah, yeah, it was form, the other one, Nebuad. I think those are really the two major ones.
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C
Yeah.
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B
And they changed their names a couple of times, so. But I think those were the most known names.
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C
Always a sign of something, right?
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B
Yeah. Peter Clario, whatever.
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C
But the you, I remember sitting with you and talking about, you know, what, what, what can be done with these guys and, and talking to you and talking to Pater. And then we, you know, we'd all say the same thing. Like, it's not about privacy, it's about occlusion, it's about what they're, what they're hiding.
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B
You know, also though, I think that, that in hindsight, what ultimately killed form and Nebuad was that it was ISP behavioral targeting, it was non media, and there was a concerted effort, I mean, Dave Morgan might have even been the leader of this charge to say, no, you are not media, you don't belong here, you have no right to insert yourself here. And I'm not saying Dave was wrong, but I am saying that what ended up growing over the last 15 years or so may ultimately have been worse than the things that the ISPs had been contemplating way back when.
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C
You're right. And stuff that's, you know, we talk about behind the browser. The conversations then were about what's happening behind the browser. Right. There's a lot more insidious stuff happening further, deeper down.
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B
Yeah.
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C
Okay.
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B
So we talked a bit about transparency and that really brings me to my next question. So, you know, the DAA and the Ad Choices icon launched in 2010 or thereabouts, and they launched with a lot of fanfare. So walk us through what the original DAA code was designed to solve, because I think a lot of people conflate interest based advertising disclosure with privacy protection. And those can be very different things to some of your earlier points.
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C
Right, right. So all these conversations take place. There must have been hundreds of them in the years after we just described. And what was then called better advertising is being conceptualized by Scott Meyer and others. I don't remember who connected Scott and
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B
me, but I think it was me.
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C
Was it you?
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B
Yeah.
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C
Was it, Was it you?
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B
Yeah, yeah. I, I, so I, I sat down I had a really good meeting with, with Scott in the. The Warburg Pinkus offices. This is a long time ago. And he. He was like, look, I. I'd love it if you come onto my advisory board. And I said, listen, I am pretty convinced that you and I are going to be in a position where we need to make different decisions over time. And. And I don't. I feel like that's going to be a conflict. However, if you really, really want to understand these types of issues and want to really kind of own the narrative, Mark Naples is the guy to talk to. And so I'm not just blowing smoke, but that's exactly what I said to him.
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C
You did such a good job of receding from that with Scott. And you and I've been friends a long time. I'm embarrassed that I don't remember you're the one to connect to this because obviously that became a major partnership, you know, and I leveraged everything that I had worked with, worked on before and every insight from the likes of Pater and others to gather the industry coalition that we gathered and to draft the principles to get the principles ratified. I mean, there was this inference that we were doing something as an industry, much like what the NAI had done. And I was being very transparent with Pater and other folks at the ftc, like, this is. This is where we're going. This is where we're going. What works, what doesn't. I mean, there were edits. I don't know how many levels. Let's say there were 60 different levels. Ultimately, we got it done. And at the same time, obviously, I'm serving my client. And the entire backbone of what became the DAA program was that technology, was the EBITDA technology, predominantly because of his introduction to David Cancel, who had put together Ghostry.
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B
Right, Right. Yeah. David created this cool little piece of spyware called Ghostry that. I mean, heck, I still use it today. It's a fantastic tool. If you want to take a look at just as a dumb lawyer or as a caveman lawyer, and you want to understand, hey, look at this site. What pixels are firing? And are those pixels firing outside the cmp? Ghostery is still a fantastic tool.
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C
Then there's all this intrigue about what's happening behind the browser. And a lot of people are saying different things. And as you and I just surmised from, from years ago, what's happening deeply is the really scary stuff. But at that moment, there were hundreds, literally hundreds of companies that would track consumer behavior behind the browser so if it's my job to help otherwise, you know, less informed reporters understand this stuff. Ghost Tree became this fantastic smart bomb. I'll never forget I'd been mentoring Emily Steele for years. I'd worked with her on a number of different stories. I'd done a ton of stuff with Joy Anguin, helped her with her book on MySpace. I had really deep relationships with the Journal and I wanted Emily to own this story. So in the lead up to what became the what they Know series, what I thought was going to be maybe a two or three part series that ultimately became a 12 part series, Emily's on this briefing with Scott and me and we literally had her download Ghostery on the call. And she says, oh, oh. It was this amazing moment from this completely unflappable. Emily was the best ever at getting people to say things they didn't want to say. And she was so coy. But when she saw what was happening on her own bio page, on the Journal behind a paywall, there were something like 60 trackers. It was the most amazing thing. So what was going to be a little story became this huge series. We did 38 briefings in support of it. Julia ended up really demonizing one of the companies that I didn't want her to demonize. I thought that she was going to just leverage what she learned from them. And I scolded her about that because we'd worked so closely together on other stuff and she didn't need to make a victim of this individual and this company. So it ended up going even deeper and they used ghostfree data for all of it. It ended up, you're right. I mean, it ended up being this turning point for people to be able to understand people in the industry. That was the thing. People outside the industry were now beginning to understand, but people in the industry now were beginning to understand in ways that they never had. I mean, the vast majority of people, we even sit in immediate conference had no idea what the hell we were talking about with regard to privacy. And now they did.
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B
So do you have a sense for, you know, was the DAA in retrospect, a success?
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C
It was. It was for one main reason. Primary directive was to keep the federal government from regulating our industry. And it did. It worked. You know, the data ecosystem is obviously this enormous thing now. Companies that were playing then have had their liquidity events and been reacquired and, you know, axiom went from this little thing to morphing and becoming this other much bigger thing. All the data companies now there are so many more data companies. There's data companies that didn't exist then that have had $600 million exits since then. The data ecosystem is thriving and all media depends on it now.
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B
Okay, so I'm going to just take a contrarian position here. And by the way, I'm not even 100% sure of what I'm about to say. That happens a lot with me. So like, but here's the thing, like I'm going to make a Rudy Giuliani argument here where one could argue that the federal government was never going to step in to harm or to over regulate the Internet anyway and that all of this theater, all of it did was protect a status quo that was probably going to happen anyway. And if anything enabled the unchecked growth
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C
of Google, that is a really good take. And you know, along comes Facebook with their double opt in and you know, makes all the notions of transparency and choice moot. Right.
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B
That, that was really it, like when it was what, 2012, 2013, and you had all of those little buttons and widgets all over the Internet. So you really would, you know, and, and this gets me back to the forum nebuad thing. It's like if the concern was the web wide collection of data, well, that ship is long ago sailed, probably as early as 2012 and 2013.
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C
No doubt, no doubt. And I think again, if you have your head down then and you're starting this thing and you're trying to get all the major associations to agree and what you get them to agree on is 60% of where you want to go and you want to keep the federal government out of it, then. Yeah, success looking up from then, definitely success. If you had told anybody involved with that that we'd be where we are now. I don't know. A lot of people that were stakeholders then have gained quite a bit, of course. And the federal government since then has tried to go after Google and doesn't really understand how to you go after the search thing instead of the display thing first. It's like guys, you don't really understand, you know. Yeah.
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B
And then, and then the whole, well, you should divest Chrome, which I think would have been the right policy, but it kind of felt like that was a throw in and I think Judge Mehta recognized it as that. Yeah. And which is.
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C
I agree, I agree. And that, that's always been to me anyway, like we talked about Pater before. Such a, such a smart guy and he would have been the first to say then, you know, you really don't want legislators getting involved with this shit. You really don't want the regulatory effort to be what you have to respond to. You got to do this yourself. So keeping it safe for us to thrive and grow was, was the mission. It's tough to broker backwards on that because who knows what regulation or, you know, meaningful legislation would look like and who knows how the hell they would have enforced it.
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B
Yeah, Yep. Yeah, Fair I want to make, by the way. I don't want to sound like I'm beating up on the daa because I think there's a compelling argument that what they did was net positive. And, and here's what it is. They were able to get advertisers and publishers and ad techs to discuss, to negotiate, to work together as a combined unit. Now, it wasn't easy. It took way longer than it probably should have even to get the icon on the ad. But that was sort of the beginning because prior to the daa it was all like, just let the ad techs deal with it. And I don't think that the, that I think that the industry would have been much worse off had we not at least had some semblance of cooperation and coordination. And then the second point I'm going to make is that from a transparency standpoint, the DAA code was definitely a step in the right direction. However, this gets back to Evadon a bit. Evadon had built a tool that when you click on the icon, you could see the advertiser, you could see the ad techs who were involved. It was a true transparency tool. For better or worse, most advertisers are really. The marketplace decided that, well, why don't we just click on the icon and that'll take us to an opt out page. Which is fine except for it doesn't really provide that level of transparency. And that was what the trustee or trust our guys were, were mostly pushing. So I always like to frame it this way. Evanon was creating, had created a Cadillac and the marketplace said, you know what, I don't really mind driving a Hyundai. And I think that was a huge missed opportunity for the industry.
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C
Yeah, I could see that it wasn't as simple as it could have been. At the same time, I remember that we did a report around the first six months of the icon and the click through rate, not just the opt out rate, the click through rate was less than 1/10,000th so it wasn't like oh, it was like 00001. Right. And the opt out rate was 00001 of that, I mean, it was in the double digits of how many consumers of the gajillion, bajillion ads that had been seen and the billions that had been clicked on, there were something like 32 opt outs total. Right. And that gets back to the whole business around transparency versus privacy. It kind of proved the point around consumers do have some limited interest around transparency, but nobody really gives a shit around privacy. And what is the worst thing that's happening to you online? You're getting tracked because somebody wants to drop an ad in your browser.
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B
Well, at the end of the day, what percentage of consumers are perfectly willing to give, you know, their mother's maiden name and their Social Security number for $0.05 off a big Mac?
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C
It's higher than you think.
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B
It's a lot higher. And so that's the reality.
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C
I've only done that with everybody but McDonald's. I do burger King, I do Wendy's.
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B
So I'd love to talk a bit about the cookie opt out mechanism, because I think that this is sort of where the gap between policy intent and technical reality becomes a bit problematic. So the industry told regulators, consumers, you can opt out, but then the opt out lived in a cookie. So that means if you cleared your cookies, your opt out disappeared. And so, you know, that seems like a poor, poor design feature, yet it's persisted for something like 25 years. So how do you think the industry know, and using air quotes here, let that happen? And why was that allowed to go on for as long as it did? And then maybe we can talk about do not track, but that's its own little ball of wax. Yeah, I.
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C
The cookie has always been this bugaboo, right? It's kind of like when you hear people talk about the defense of electric cars. Now, if there were such a thing as only electric cars and somebody wanted to introduce gas combustion engines, who would ever go along with that? Right? Like, it's ridiculous. We are so wed to the cookie. And if there had been some other better mechanism, you know, for the last 30 years and somebody introduced the cookie, you know, who the hell would go along with that? It's Kluge. You know, it is, it's Kluge. And the opt out makes it. The fact that it also has to reside on a cookie makes it even more cloogy. I had been wondering if, you know, for like six, seven years there it was going to be the next year of Mobile, and then HTML5 was people saying it was going to make the cookie obsolete. You weren't going to need cookies anymore. And then Google comes along with the sandbox and we're going to have these other different, you know, solutions. We're going to sunset cookies and all the rest of the stuff. And all that, all that made happen was Google own a lot of IP around alternatives that, you know, they may or may not ever leverage. And oh by the way, we still have the cookie. And oh, by the way they're still the largest data broker in the world, right? So.
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B
Well, I don't know if they're a data broker. They're not registered in California as far as I can tell.
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C
Yeah, yeah, yeah. Whenever I hear complaints about the cookie and you know, our industry has grown to be this, you know, behemoth, it's like me think they dot protest too much. You know, it's, the shit has worked, it has worked and there's no more complaints now than there were. So walled gardens be being what they are. You know, does Amazon grow to the way it does without it? Does Facebook grow the way it does without it? You know, I don't think it would, I don't think it would.
- [25:42]
B
I think, I think you're right. I'd be curious, I wonder if E marketer or somebody is going to do a study of like what is the average persistence of an opt out cookie. I mean, is it, is it 45 days on the high end?
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C
I was, I was going to say that'd be high. I was going to project, I was going to say 30. Yeah, yeah, yeah.
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B
So like, you know, I mean the NAI got out of the opt out business so almost a year ago because, and I don't speak for them, but, but the, the idea that it just didn't seem fair to be offering a tool that you knew it didn't work and, and you know, shame on, I guess the industry collectively for not maybe taking that stand five years ago when it was almost as bad. But, but we're now to the point where we just sort of know that these things aren't working. And it's just, I, candidly, I was hoping in my discussion last week with the FTC commissioner that he might give the industry a nudge towards, you know, moving away from that. But then that begs the question, you know, what do you move towards? And is that a, you know, is it global privacy control which is, you know, owned and controlled by the browsers? I mean, we've been down that road before, right?
- [26:48]
C
I, it was fascinating though, you were so nimble on that panel when you didn't, what you didn't Ask and what you, you know, the response is you have to really be careful. Of course, he's a very different guy than others that we've worked with in the past. This administration's obviously very different. You know, and I wonder if some of the really smart folks that have been in that role over the years, like, if they had their wish list, what it would look like, you know. Yeah, it'd be kind of interesting and how, how much more egalitarian the web would be. My, my, my problem with the industry that we're in now is the triopoly and what it's done to squelch innovation and opportunity and what it's done obviously to what we now live in, the Post Truth Society. That's the real tragedy for me. You know, someone like Bezos can arbaces, can own what he owns and make the money he makes and not be able to afford to run a real media operation. With the Post.
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B
I want to talk a little bit more about the global privacy control because I think that's the, the thing that a lot of us are sort of pointing to with some trepidation, but as the thing that like, well, okay, this at least we know works. And for people who don't want it, they can remove it, they can get rid of, you know, targeted ads, depending on how I guess all that gets defined. But like, one of the challenges I'm seeing is like, you know, we've been down this road before. Most browsers have their own competing ad production. And to date, you know, California is the bastion of this idea. And to date, they have not chosen to take on the idea that, you know, browsers may have a conflict of interest that needs to be regulated or reined in. I think they maybe just assume, well, they're getting rid of tracking, and I don't like tracking, so the heck with it. And, and I think, and I'm hitting on that intentionally because this is a today example of potentially repeating mistakes of 10 to 15 years ago, where I'm hopeful and I've been talking to Tom Kemp and wonderful guy, super smart, great hire by the, by the agency. But I'm hopeful that those guys sort of realize that just focusing on the tiny data brokers and the tiny ad techs to the exclusion of other public policy goals, including, you know, reigning in big tech, which is the thing that you sold everybody on five years ago, might be a problem. So how does the industry need to be positioning this? You know, you're a PR expert. How, how should we be thinking about this?
- [29:21]
C
There's two things. There's a corollary here that I think about all the time when I think about how big tech is just run amok. Easiest corollary for me is the Second Amendment. The gun lobby did the most unbelievably effective marketing around gun rights. They got people to unders to accept that the first and most important element of the Second amendment didn't exist in order to maintain a militia. The Second amendment was never about everybody owning a gun. Never. It was around readiness to arm a militia. Nobody knows anymore, right? Facebook and Microsoft, to a lesser degree, Google and others, they convinced the regulatory world and legislators that they're not in the media business. Again, like, how the. How'd they do that? I don't know how they did that. How do they. I mean, all these companies make money in advertising and media, okay, the backbone. Okay, fine, okay, so social media, they don't hire reporters. Fine, whatever. It's still media. They're still selling advertising, whether it's based on data or based on impressions or based on whatever the heck it's based on. If there were a movement in our industry led by whatever association, I know the OPA has tried to do this, maybe not so much recently, but that'd be a movement I would get behind. They wouldn't even have to pay me. Let's call this media. And by the way, while we're at it, let's get back to a fairness doctrine. Let's get away. Let's get back toward, you know, get away from the post truth society. Because that's what tech has enabled. For Facebook to claim that it's not media and for people to believe that it's like, the sky's not plaid, guys. You know, sky's blue. Look at what that has fermented in our political discourse, in our, you know, our society, our societal crises now, it's. It's terrible. And it's not surprising. You know, that part that trickled down from all this is not surprising to me. You know, I mean, I. There was a time in the middle of the 90s that I was doing some bagman work for the State Department after the first Gulf War and trying to suppress stories and, you know, really learned a lot of the craft around those people from those people. Really, really smart people who are committed to the country, you know, and I just. I don't want any part of that shit. You can't believe anything we're told now because they're telling you that. They're telling us from the get go that it's not media. Of course it's media. You know, it should be regulated like media. And if that's the only thing that happened, then we could work toward a global standard. We could work with the eu. We could. But without that, I don't know how you do it because the browsers are going to, the people that own the browsers are the ones with all the money.
- [31:58]
B
Yeah, that's exactly it. And so yeah, it's a, I don't even know where to go with that because I, I agree with you. I think some of that plays into the, you know, like I get that section 230 needs to exist and I, I push back on the attempts to take it down. But section 230 was also based on the premise that if you had it in place, that platforms would in good faith regulate. And that wasn't always the case. And it's gotten increasingly worse over the last five to 10 years.
- [32:30]
C
Yeah, it's the, the level of power. Let's just think about Google for a second. Google's in house counsel would be the 9th largest law firm in the world. I, I, I had a piece you talked about Emily Steele before. She was going to do a cover story in 2013 on the FT. When she was briefly with the FT, she wanted to live in London, so she got a job at the ft. She was going to do a piece that I helped her with using Ghostry data on how Google makes money in porn because the, all the pornographers use DFA, the free version of DFA. And DFA's privacy policy for the free version basically said Google owes all your data. So you'd have how much, how much of web traffic is pouring?
- [33:09]
B
40%.
- [33:09]
C
Whatever it is, it's some big number, 45%. So you have all this information that Google can then use to make a much more robust profile for all these, you know, consumers, all these individuals. It's really dispositive. When you look at the log files, you look at the data, look at how it works, you see how Google does this. Okay, so she's going to do this piece. It's got all this detail from Ghostery. It's going to be the breakthrough piece. I got a call like a week before it was going to publish, probably one in the morning, something like that. She had one of their lawyers from Australia on the line, the guy that was responsible for that privacy policy. And Mark, he really wants to talk to you. Okay, let's go. And I was wide awake pretty fast because he said, mark, Mark, you know I seem like an awfully nice guy, a reasonable guy, but I have to warn you, if this appears the way it looks now, I'm going to close your business, I'm going to close all your clients businesses. What was your name again? Yeah, I mean, it was a shakedown. He's beaten both me and Emily up. She ended up doing a much more sanitized piece without any of the dispositive data, you know, without any of the real proof. And the world went on. And you know, if I talk like now to 10 people who are hires up higher ups in our business and I told them that Google makes maybe a billion dollars a month from porn just because of what they're able to do with the data, they'd be like, oh, you're wrong, Google. Google would never do that.
- [34:37]
B
Yeah, we can look back and there's probably a couple of very clear points where if things had gone the other way that we, we might have a very different web.
- [34:46]
C
But yeah, yeah, yeah. And so now the incentives are where they are. And unless you break up a Google, unless you break up a Facebook or you know, regulate them as media, nothing's gonna happen. We could have the same conversation in 10 years. And those companies own more. I guess. I mean, if you were, we have launched something like, I mean, we've had 500 and some odd clients over the years. We've launched maybe 250 companies. I used to get inbound literally every week via VCs, via, you know, happy clients from before who know somebody, et cetera, et cetera. I mean, it's, it's dried up. There's no innovation now. There's, there's nothing happening. I, I, I probably haven't had six inbounds in a year and a half.
- [35:27]
B
That actually gets me to my next, my next set of questions. So AI is as I think, fundamentally changed the mechanics of how PR works. And you got content generation, media monitoring, sentiment analysis, even drafting pitches. But it's also changed the media landscape with AI generated content flooding the zone and making it harder to break through with a genuine story. So from where you sit, running a strategic PR shop, is AI a net positive or net negative for the craft of communications?
- [35:57]
C
It's a net negative for the critical thinker, it's a net negative for anyone who wants to convey insights. And it's a net negative for reporters because you're not going to learn anything. You can churn, copy all you want, but you're not going to learn anything. I, when, when these tools became available, I said to my team, I welcome you using them for discovery. Anybody that uses them for composition is fired.
- [36:23]
B
Period.
- [36:24]
C
I'm not going to, I'm not going to debate with you. If I can tell, then anyone can tell. And we've, we've stood by it. We really have. Some of our competitors leverage it deeply. I mean, deeply.
- [36:37]
B
But it's so obvious. That's the thing I don't really understand is it's sort of like, you know, back in the day, I could tell when somebody was, somebody was writing a story about privacy like that they didn't know anything about privacy because you could just kind of tell the way words are. And that's sort of how it is with a lot of this AI stuff. And look, it can be a great tool, by the way. I don't know if we're just, you know, whether we like it or not, we're those envelope salesmen from the Direct marketing association circa 1999, complaining about the new technology coming in. I don't know, the jury's still out on that, brother. But. Yeah, but, but it, but it baffles me why people would take the easy route because it's so obvious if you don't care. Like, I post pretty frequently on LinkedIn. Every single thing I write has a thought behind it is an invitation to start a conversation amongst smart people. And a lot of the AI stuff ends up being like, you know, it's all, look at me. Anyway, I don't know, I'm ranting here. So I guess we're both agreement. Net negative.
- [37:47]
C
Net negative. It has to be net negative. And I've used the term post truth society a couple times. It's just going to continue to add fuel to that. I tell clients we do a lot of bylines. Obviously something like 20% of all the bylines just earned bylines you see in our trades come out of our shop and I tell them, if you can't make a provocative point, what's the, you know, there's no reason to do it. You're not trying to promote, you know, you're trying to inform and provoke. You can't do that with AI. That's right, right. Right from the get go. There's no such thing as inactionable insight. If you're going to use AI, it's just, just going to regurgitate what it finds out there. That's what I mean about being able to tell. I don't regard myself as some great writer or some great insightful anything, but if I can tell, and I can almost Always tell, you know, I mean we're, we're old, right? We're old guard. Maybe that's part of it. We, we've been around, we've seen the. We, you know, we, we know the difference. A lot, a lot, a lot of people don't know the difference.
- [38:43]
B
No. And there's tells and, and by the way, there's tells in major publications that portions of these things were written and look, I'm not going to be here to, but beating up on publishers, they've, they've, you know, I don't know if you've heard. Yeah, yeah, but, but there, there's, there's a lot of, there's a lot of very, very lazy writing out there.
- [39:05]
C
Think of some of the news titles that you're familiar with, like you could find in pretty much anywhere. Anywhere. But I would say the Journal, the Times, you're going to find, if you look hard enough, you're going to find AI generated content. You're going to find at the Washington Post, you're going to find it. Philip Inquirer, you're going to find it. The LA Times, you're going to find it. It, you're gonna find it. Unfortunately, it's there, you know, and the, the more people use these wire services for optimization or whatnot, you're gonna find it for triangulation. You're gonna find it all the time. And it's garbage. It's just garbage. I, I, I worked for an Adobe venture company in the late 80s. I'm sorry, in the late 90s that streamlined regulatory filings. And in pharma and in, I was, I ran a business unit for regulated industries like energy. Right. For nuclear and whatnot. And one of the complaints I would hear from regulators is that these used to be two page filings, now they're 30. Yeah. It's not like there's more information, there's just more words. Here we go.
- [39:58]
B
Yeah. There's an art to synthesizing stuff down to something that is manageable. I try to do that with my little regulatory insights reports where it's like there's so much real stuff going on and so many narrative threads to keep track of. And if you're, and so you need to figure out how to get that into, into digestible bites so that people will read them.
- [40:18]
C
Yeah. One of the things that AI seems to do quite a bit is syllogisms and passive voice. You get to the first two paragraphs, it's like, okay, seems like they know something. And you and I get that cleanly. The vast majority of people who are doing the buying out there have no idea what I just said.
- [40:39]
B
Mark, where can people find you?
- [40:41]
C
I'm in Philly here. I'm in New York every week. Our site is WitStrategy.com I'm pretty active and social. Not on Insta, but on Facebook and on LinkedIn. Which strategy is. We've been around 23 years and we ain't going anywhere.
- [40:55]
B
Fantastic. Mark. Thanks so much for coming on everybody. Mark Naples it's really fun.
- [41:00]
C
Alan thank you man.
- [41:03]
B
That was a fun discussion. A couple of moments from this conversation that I think are worth emphasizing. The first is Mark's framing of the DAA's primary directive. Keep the federal government from regulating the industry. By that measure, it worked. The data ecosystem grew. Companies had their liquidity events. A bunch of ad tech companies appeared, scaled and exited for hundreds of millions of dollars. The cookie, clunky, fragile and architecturally absurd as an opt out vehicle, kept right on working. And here we are. Now, I want to be fair here. The DAA did something genuinely hard. It got advertisers, publishers and ad tech companies to sit in the same room, negotiate, and agree on something that had never really happened before. And the transparency principles, even if the implementation fell short of what Evadon had originally built, well, they were really a huge step forward at the time. The bigger issue, and this is where Mark and I landed, is that the industry spent enormous energy building frameworks to manage the behavior of smaller players, while the largest platforms quietly redefined the rules entirely. At the time Google bought DoubleClick, it seemed like more people in the industry were worried about form and Nebuad and the ISPs using behavioral targeting techniques than anything Google was contemplating. Some may call that irony. In hindsight, I think it's fair to ask whether the industry was policing the wrong neighborhood. The AI conversation was also worth noting. So many are complaining about AI slop. Mark's rule for his team is pretty simple. Use AI for discovery, not composition. Anyone who uses it for composition is fired. No debate. I respect that position, and I think Mark's right that the tells are obvious to anyone who's been reading and writing in this space for a long time. The passive voice, the syllogisms, the paragraphs that circle meaning without ever really landing on it. Everyone loves to call it out generally, but maybe, just maybe, we need to call out the individuals who are using it to pollute LinkedIn and our industry opinion pages. If you found this episode useful, please share it. We've got a bunch of other fantastic guests coming up on the Monopoly Report podcast over the next few weeks. I'll have some folks from the Mozilla foundation on to discuss the future of browser monetization, and I'll also have legendary journalist turn entrepreneur John Battelle sometime in April. As I like to say, it's going to be a party here on the Monopoly Report. Please subscribe to the show@monopolyreportpod.com or on Spotify, Apple, YouTube, or wherever you listen to your podcasts. And thanks for listening.