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So Human Ventures, like, so, so really- I mean, tequila does help humans. It powers a lot of humans in Miami. Yeah. Look, if you need to squint to make it fit the portfolio, hospitality is a core human thing.

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Gathering, joyfulness, revelry. Human Ventures was founded around this idea, Heather and I, Heather who really runs the show over here, around this idea of great humans are the ones who build the businesses.

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Welcome to the Rebooting Show, where we talk to those who are building sustainable media businesses. I'm Brian Morrissey. I'm very happy to have a new sponsor this week, and that's Bombora.

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If you don't know Bombora, it operates a data co-op that allows publishers to know more about the high-value members of their audience.

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The reality is, for all the talk of first-party data, and it's incredibly important, most publishers have about seventy percent of their audience that is unknown.

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And, you know, the challenge is, how do you monetize that seventy percent as well as you monetize the thirty percent that you know? Here's how Steve Lilly, uh, who heads the data co-op at Bombora, describes what they do.

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As it relates to our publishing partners specifically, there's two primary problems that, that our model solves, which is unknown audience.

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We still see just about every publisher we speak with has a massive percentage of unknown audience and no real cost-effective way to, to address that.

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The other in terms of B2B audience targeting is understanding what businesses are visiting your site and what those businesses are in market for.

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I'll be speaking with Steve on everyone's favorite topic, what comes after the third-party cookie, after the conclusion of my conversation with Joe Marchese. I want to thank Steve and Bombora for the support.

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And as always, I'd love to have your feedback on the podcast. Send me an email. My email address is bmorrissey@gmail.com. So this week, I'm joined by Joe Marchese.

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Joe is a longtime media exec who has operated on many sides of the business.

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You know, he started, uh, SocialVibe, which is an early social ad network that later became, uh, TrueX, that he ended up selling to, to 21st Century Fox. And, uh, there he ended up moving to the TV side, right?

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So he was the president of advanced advertising products at the Fox Networks group. And now he is an investor with Human Ventures as the executive chairman.

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And he's also a tequila entrepreneur on the side with Comos, a, a tequila that, uh, not only tastes amazing, but it has a very unique bottle. So, so look for it at your finest establishments.

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No sort of affiliate fee or any affiliate links to drop-ins, but I know Joe would appreciate it. So I've known Joe a long time.

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I actually went back and found an article I'd written for Adweek about SocialVibe back in two thousand and nine. I think, you know, in the episode we talk about it.

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I think I was writing about it, about, uh, you know, when they were focused on Facebook, but they even went all the way back to MySpace.

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I couldn't actually read the article because I don't have a subscription, but I wrote it. I just don't remember it.

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Anyway, I've known Joe to be very perceptive about how the media business works and how it doesn't, you know, in reality, even though people think that's the way it does.

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And so he brings that up, uh, in the conversation. A few things that stood out. One is that media is often a bad standalone business, but quite powerful as the front end to other businesses.

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We're certainly seeing that play out in TV. I mean, Amazon is winning Oscars, and there's, uh, Apple is out there, uh, with TV shows, and, you know, their business is selling iPhones and service plans.

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We're seeing that in publishing with, uh, places like Barstool that are really in, in essence like a front end to, uh, a gambling operation.

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And the other thing that stood out was that in, in a world of near infinite content, or at least it feels that way, you know, the authority to curate is more important than ever.

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And this is near and dear to my heart because more is just more. It's not better. Uh, and many media business models compelled the creation of more content, you know, which ends up simply lowering the value.

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You don't need, like, an advanced economics degree to know how that goes. So the role of the curator in this world of, like, you know, too much content is obviously a lot higher.

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And the way that you be- have that authority to curate is to really surround yourself and put yourself at the center of a community or a group of like-minded people. And there's a lot of value in that.

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So I think we're gonna see a lot of focus on this wor- on this... You know, the term is not great, but, like, on, uh, on curation.

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The third thing is that, you know, people love to complain about bundles until they have to endure the alternative. We're all going through this with streaming.

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I mean, streaming sort of broke apart into mini bundles, as Joe points out.

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You know, not, you know, pure standalone, but, you know, there's a lot of streaming services that have replaced the cable, uh, bundle, which was just an all-in-one mega bundle, if you will. And it's confusing.

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You don't know where shows are, and your bills, you might have complained earlier about your hundred and thirty-five dollar cable bill, but you're now paying more than that for all the different services you need in order to get, uh, the, all the different, uh, shows and sports that you want.

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So what is the end result? Well, it's always going back to the past, right? So we're gonna have, uh, you know, a rebundling that is taking place, and that is inevitable. And we're gonna see that in publishing.

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You know, the... I don't think that... I think Substack is amazing, but r- it's pretty clear that we're gonna need to see bundles and collectives emerge.

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We might even call them publications because people cannot or will not, you know, have dozens of these subscriptions.

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And the final point, uh, that I wanna bring up that, uh, that Joe mentioned, and it's something that, uh, we've talked about in the past, which isYou know, performance marketing is missing oftentimes the essence of brand advertising, and that's about aligning people with those who are creating culture, right?

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And that doesn't show up on a spreadsheet, you know, but it's always been a major economic value that media has produced, and it's not going away.

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So we can reduce everything just to, like, clicks or impressions on a spreadsheet, but, you know, ultimately, what, what creates brands, what creates sustainable brands is being able to align, you know, with culture.

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And so Joe and I talk a little bit about that, and hope you enjoy it. And please do stick around for ten minutes of my conversation with Steve Lillard. All right. Let's go, BC. Welcome to the Rebooting show.

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I'm Brian Morrissey, your host. I'm joined today, um, by an old friend, Joe Marchese. Uh, I knew Joe when Joe was just a wet-behind-his-ears entrepreneur who had this social ad network.

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There was this brief period of time when, like, there were these Facebook ad networks that were popping up, and, uh, Joe had one.

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And we used to talk when I was a reporter, and I-- uh, we stayed in touch over the years, and it's been great to see where you've gone because I think it's, like, it's an interesting-- I think it's an interesting story with as far as, you know, the media business.

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So, like, I wanna start, Joe. We'll go into your, like, background, but, like, do you have, like, a theory of how the media business really works 'cause you've been on a lot of different sides. Yeah.

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I mean, I'd start with, like, you know, the challenging the premise of the question, like, does the media business- Oh, God. God... really work? You can't do that. I- You can't do that. No, but- This is my podcast.

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I, I...

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Well, I mean, look, the history of media when you read the books, I mean, I don't know if you've read, like, The Master Switch, uh, which I like a lot, uh, from, uh, Tim Wu, but the, like, media has historically been owned by non-media businesses, right?

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Like, like, uh, you know, most of the radio programming that came out when the radio came around was, like, pro- by RCA 'cause they wanted to sell the radio devices.

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And then you have the joke where Cabletown owns the NBC Universal in thirty Rock, and it's because the media, the business of media has outsized influence and undersized monetization for the influence that it has.

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And I think it's so interesting 'cause right now this is all playing out again, where a majority of the media businesses out there, the large scale ones, you know, in my time as a twenty-first Century Fox, but, like, they-- the biggest media companies in the world right now, their main business isn't necessarily media, right?

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Like, Apple sells phones, Amazon sells everything else. Disney has parks and cruises. Uh, NBC Universal has, is owned by a cable company.

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And so, you know, it-- we're kind of coming back around again, and, and this is why Netflix now is kind of layering in, like, you know, it's gonna have to layer in, uh, theatrical, it's gonna have to layer in advertising in a way that works because, like, the pure media business is, I think it's not new that it's challenged.

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I think what's new is we thought everything was gonna be different with media being able to be direct to consumer, and I, I, I, I truly, I mean it, not tongue in cheek, not joking, I don't know that the business model for media works at scale without alternative business models.

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So explain the difference o- of being at, let's just say, like, you know, uh, Fox, you know, and being in that business versus being in the tequila business. [chuckles] That's funny.

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It's actually funny that, that there's a lot of parallels in, in, in the CPG world and media world, I think, actually, that are kind of playing out, which is you saw this rise in TV land and media just in general of volume, right?

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Like, like, you had the cable channels, like, churning out, like, a lot of reality, but we all know what happened in the middle.

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And then, like, then that got even worse when we got to the internet, and it was like, let's just feed Facebook and Google and, like, basically more content equals more impressions and more impressions equals more money.

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Never the mind that the impression quality kept going down, so the price kept going down, so you had to make m- even more content, and then I can't believe that didn't end up working out in the end.

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I don't know, like, like, when the same number of hours are in a day. The same thing happens in consumer.

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I mean, we basically, there was a period, uh, it's, this is a slight aside, but it's kind of a fun fact, where, like, the two richest people in the world were Jeff Bezos and, uh, Bernard Arnault.

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And basically, Bernard Arnault is the highest margin products in the world, and Jeff Bezos is, uh, your margin is my opportunity. Like, purely commoditized high volume.

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And so, like, consumer products, like, I kinda feel like have the same barbell that, that we had for media, and then the middle kind of got eaten out, and that just disappears.

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So, so I do think what's also interesting is, and especially in the tequila business is you don't sell directly to your customers. Historically, media has gone through cable operators or some intermediary.

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Maybe it's Facebook or Google or some partner. And for the tequila business, you have to create demand, but then you sell through distributors. Um, but at least you know who your customer is.

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At the end of the day, your end customer is the person buying the bottle of tequila, uh, gifting the bottle of tequila.

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Like, you make a quality product, you bring it to them, they ch- you charge a fair price, they pay a transactional fee for that's a fair price with margin, and you move on.

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And if they enjoy the product, they'll buy it again. Media has this, it just, it's so different in that we know that subscription isn't enough. Transactional or TVOD isn't enough. Just ad-supported isn't enough.

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And so, like, every media model is like, it almost, like, keeps reinventing that it needs multiple revenue streams to work.

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Uh, and then, like, this idea of, uh, I, I think it's so interesting what's happening in media right now is that, like, you know, Churchill's, I'll butcher this definition, but Churchill's definition of democracy is the absolute worst form of government except for every other one.

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Exactly. Well, I think, I think that the bundle was the absolute worst form of entertainment delivery except for every other one, right? Like, they're all bundles, and, like, now consumers are looking for a rebundle.

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And by the way, the, the streamers are gonna have some sort of rebundle coming and, you know, news and Substack has some sort of rebundle coming, you know, becauseYou just can't survive on the ups and downs of, "I delivered you a product, you paid for this one, are you gonna pay for the next one?"

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And so I think media's got, like, is going to reinvent everything that's old is gonna be new again over the next couple of months. Yeah. So what does that end up looking like, right?

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So, because I do think, you know, the, I think one of the other cliches of media, I forget who said it, it's like you, there's two ways to make money: unbundling and bundling, right? [laughs] And so- Yep...

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I feel like we went through, like, an unbundling phase in some parts of media. Obviously with streaming, everyone, you know, they unbundled the cable bundle. We all hated the cable bundle.

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It's like, "I don't watch ESPN, and I don't wanna pay-" Yeah... "$100 a month, so now I wanna pay $140 a month for [laughs] all these different services." Yeah. And I don't know where anything is.

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I don't know if it's on Amazon. I don't care. Yeah. I just wanna watch it. And I think we, you know, it's happened in, in, uh, on the publishing side, right? Yeah. So I think the question ends up being

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what does the rebundling look like? Right. But did we ever really unbundle? Like, like, Netflix was always a bundle. I don't watch every show on Netflix.

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I wasn't like, "Hey, I watch this show, but I don't watch Orange is the New Black. Why am I paying for Orange is the New Black?" Yeah.

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So it was just a different bundle, it just didn't include certain things, and we could have had the a la carte. The...

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I think what's interesting on the publishing side is who has the right to curate, like, and create a bundle? And like, like permission to curate means that, like, I trust you.

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Like, I've always been a big fan of The Skimm. Like, like, in the morning. Like, I'm not the demo for The Skimm, which is female-focused, like, kind of news.

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Everything you need to know for the day, like, making it easier to be smarter. But what they really have done is they've built a brand, and then a person can say, "Look, the internet is full of infinite choices.

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If you just tell me what I need to know for the day, it really... It's ac- " The value you provide is actually curating it down to this, right? Not necessarily the syn- synthesizing.

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And I think that, like, you know, The New York Times, this is what I mean by everything that's old is new again, The New York Times said, I think it's still printed on the paper, "All the news that's fit to print."

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That means a, a human being had to sit there and say, "This is what's worthy of your time. Here's the mix of information you need."

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And then the brand of it both conveys, like, you know, you can argue over, you know, trust in media today, but the brand conveys some sort of editorial integrity and like, "Fine, I can't see everything."

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And let's liken that to, like, you know, the web 1.0 days. Like, I don't wanna blow anyone's mind, but William Shatner didn't negotiate everyone's hotel rates in 2000. Priceline Negotiator.

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You see, I negotiate deep discounts on flights, hotels, and rental cars. Like, that was not what he actually did. Aw.

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It was a brand that they created for the Priceline Negotiator, so that when I'm on the internet and I search for, you know, a hotel room and it tells me this is the lowest price, I'm like, "Well, should I go check 14 other websites, or should I just believe that this is the lowest price 'cause it was just, you know, negotiated by the Priceline Negotiator?"

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And so brands matter for curation of goods and services so that people don't have paralysis of choice of, kind of infinite options.

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And I think brands are gonna matter again in publishing and in media because with infinite choices of content, like, like so much stuff to watch. Yeah. So many things coming out.

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That'll be the new, that'll be the new world. Now, to go back to your first question, is there a business model that supports that? It's so hard. Like, it's like the advertising model

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perverted and broke the internet because it didn't incent quality, it just incented volume at any cost, and then it allowed so much fraud to slip in there that quality publishing could never get a fair share for what its value was.

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So I don't wanna be doom and gloom, but I'm not overly hopeful that's gonna get solved in the short term. My God, Joe, it's sunny here in Miami. [laughs] It's l- not that hot.

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Like, you gotta bring this dark New York cloud to this... God dammit. So I like the idea of permission to curate, right? And I think that- Mm-hmm...

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usually you got that permission to curate, you know, there was a bunch of different levers that you ha- had to pull to have that permission as, like, an institutional brand, right?

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Like, you created this ethos and it was a lot of smoke and mirrors, right? [laughs] It was like paper, the magazines, and glossy, and stuff like this.

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I think what's interesting is, 'cause I think maybe it's a way out of this, is...

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And that's where I think the sort of personal brand kind of thing is resonant, is that, like, the permission to curate, there's a reason that Priceline struck that deal, which is a great deal for William Shatner, right?

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He, like, made a ton of money- Mm-hmm, mm-hmm... 'cause he took a lot of stock in Priceline. But, like, the reason that they used William Shatner is 'cause we knew the guy from TV, it was a normal, like, endorser.

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It's like, "Oh, this is, like-" Yep... "you know, the captain guy. Captain Kirk." Yep. "He's gonna negotiate my deal. I trust him." Yeah. He was friends with Spock. He always figures it out. But, like...

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But that's where I think it's interesting when we talk about trust and that permission to curate because I think you're seeing, like, it emerge in some areas of m- uh, of publishing, is that it's more about, like, a person, and it's, there's more human aspect to that.

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I mean, y- you're, you're- Yeah... you've been talking about attention and humans, like, you know- Right... a lot, and Human Ventures is your fund. So

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is that a way out, is, like, bringing the sort of human back into this? Because there's been a lot, we've mechanized a lot of the media industry, and it's- Yeah...

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led to less trust, more fraud, worse outcomes, terrible business models- Yeah... et cetera, et cetera. That's why I, I called this the reboot, 'cause I think it, we have to reboot. Yeah.

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Like, my microphone was not working ahead of time. Right. What was the first thing that we did? We rebooted the whole thing. [laughs] Right. Rebooted. Yeah. Yeah.

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Hey, well, like, I, look, I only know two way s- media, uh, companies and media epics go. They either boot or they reboot, right? And so it's like bundle or rebundling.

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And so for this one, I think the thing is, yes, individual brands can be the permission to curate and permission, you know, given, uh, convey trust. But they don't scale over time.

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Like, we've been watching, like, exhaustion in, uh, you read article after article about the exhaustion in the creator economy, right? Like, the people who, like, they're like on a treadmill.

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They've gotta keep creating at all times. And what is... I mean, we've heard a lot of people kind of do the same joke on Twitter- This newsletter game isn't for everyone, Joe, let me tell you. No, I know. Yeah.

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It's like I'm, I'm like Steve Prefontaine, you know?Do this to see who has the most subscribers. Mm. I'd do this to see who- Yeah... has the most guts. Yeah.

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It's hard out there on the on, on the newsletter streets, I bet. Uh, but the, but the... It doesn't scale, and the reason is, like, you know, all of a sudden you realize, hey, you know what?

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You know, there's a reason why you wanted editorial. Hey, there's a reason why you wanted, you know, shared financials, like, to do- Yeah... the long-form investigations that...

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And it really doesn't work for the TV landscape where the upfront costs are a fortune to, to make this content, and you're making big bets, uh, ahead of time. So, so I think that, you know, the things that I'm...

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Okay, if we want what I'm hopeful for, is that this, like, this idea, Facebook and Google and any performance marketers have convinced everybody, if you can't measure it, don't buy it, right?

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Which means that I think everything that's hard to measure is undervalued, right? Like a billboard is hard to measure. It's probably un- undervalued advertising asset.

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But the funny part was people don't understand how advertising really works. Like, like in television, like, it's a share of voice. I wanna be the halftime sponsor of the show.

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Like, okay, great, well, then you're gonna spend at this level. Okay, great, then we show a certain number of commercials to get that spend.

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And then the consumer sees, you know, truck ad 50 times, and that wasn't a mistake. That's just how they paid to be the sponsor, because we didn't know how to negotiate how you pay to be a sponsor, 'cause what's it...

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Like, how do you value that?

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So the same thing's happening with, like, newsletters and, uh, podcasts and all these kind of n- new formats where CPM rates just, they just don't make sense, and we probably never should have had them make sense.

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Like, let me put it this way. What brands really want to pay for is culture creation and culture influence. How do you price culture creation and culture influence? Like, every reader of your podcast is different.

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Like, if you convince one person to buy a SaaS or an enterprise service, like- Yeah... it pays for their sponsorship for years. That's why everyone should sponsor Rebooting. Sure. But the...

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I used to be in sales- Clip that Jay... so I can get back. [laughs] Clip that.

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But, but, but truthfully, it's like the real problem with advertising is that, is that no one wants to do the hard work of negotia- And they can't. We just...

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It doesn't scale ever since media became more fragmented, to negotiate what is the real value of this, and what is it worth to Lexus versus what's it worth to McDonald's versus what's it worth to, you know, Intel.

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I, like... It's ridiculous that we just blanket CPM price a thing, but it was the only thing that kept the market liquid in, in old TV world.

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Now, I think that's gonna get reset, and that's why I think CTV is in for a world of trouble unless it figures out, like, how to do kind of these sponsorships and integrated marketing deals. Yeah.

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I think, I forget, I forget the tweet. I think it might have been Howard Lindman who had a tweet that, like, you know, that much of the industry is moving from, like, one area that, like, hasn't had, like...

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doesn't have, like, solid measurement until [laughs] and then keeps, keep moving from, like, the new area that, like, gets a lot of heat- Yeah...

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but doesn't have good measurement, and then go in there, everyone goes in there, and stuff like this, and then people figure out that, like, oh, wait, nobody's watching this stuff, or the TVs- Yep...

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are off, or, like, it's the same ad- Oh, s-... repeated. So let's just stay- CTV... on, like, C- CTV- Yeah... 'cause, like- I know. Yeah...

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I've talked with people, and nobody says the quiet part out loud, and maybe since you're not, like, don't have a vested interest as far as I know in this, like, how much of this is fraud?

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Because, like, who is watching- [laughs]... all of this ad-supported- Yeah. Like- Yeah... I don't get it. Like- Yeah. Yeah. I, I will say, was it, it was Dillinger? I don't know if it's Dillinger or not.

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I'm just gonna say it's Dillinger. Now it is out on the internet, it's a fact. But- Okay... they used to ask him why he robbed banks, and he said, "That's 'cause that's where all the money is."

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Like, well, CTV is where all the money is, and it's really hard to measure. There's not a lot of third-party verification. And so I think [laughs]

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we took all of the worst parts of internet advertising and then brought it to the home television, which is actually pretty, pretty special. Like, somehow- And there's more money.

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And where there's more money, people are more motivated. Oh, yeah. And no one's really caught up to the how do we measure it all.

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Like, I would say that, like, the, uh, uh, most interesting thing is that in a, like, in a world, like, like, like, like movie announcer voice, where we're supposed to have dynamic targeting and we know what household is watching and we can just...

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The advertising experience is actually worse. Like, how did we get worse at advertising in a CTV environment than we were on broadcast television 40 years ago?

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And the answer to that, by the way, is because in television, you program the ad breaks. Okay, position A, B, C, and D, they're stitched together. We know that there's gonna be an auto ad here and there.

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And, like, in CTV, we've kinda magically been like, just like we did on the internet, oh, data, we'll just target based on data, and it'll be so much better for the user, and it really never was, right?

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Short of Google being demand-based and Instagram being interests, like as you're scrolling through, short of those experiences, internet advertising has never really been better than, you know, programmed cultural advertising.

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And I think that we'll have... When CTV will get better is when it swings back to context and sponsorship of programs. You know? Yeah. That's the... Again, everything that's old is new again.

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Like the first days of radio, you had a single sponsor for the show. Yeah. I think that's really interesting because, like, like, I was in, in Portugal.

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You were just in Portugal, but I was in Portugal before you were in Portugal, and I lived in- Not that it's a competition. I was in some [laughs] it was just so we... A lot of people go to Port- The, uh...

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But I was in some sort of vintage shop, and, like, I stumbled upon these, like, they were selling old Brazilian magazines, and there was a Popular Mechanics, and, like, the ads were, like, amazing.

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They were, like, amazing. They were telling, like, full stories.

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Not like the stories people say, and I'm like, it was, like, literally a cartoon strip of, like, you're gonna get this car, you're gonna, like, you know- [laughs]...

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have a glamorous life, you'll get the girl, and all this sort of thing like this. And, like, it was... And then you compare it to, like, you know, the world of, like, crunching data and, like...

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And look, it's, that's the world we live in. Yeah. Every industry uses more data now than it used 10 years ago, and in 10 years it'll use more data than it does now. But, like,

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I think sometimes people don't stop where it's just like, "Wait, what are we doing? The end result's-" Right. "... not better." Right.

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No, and the data, it, it's easy to interrogate data to the point that where it will lie to you.

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Like, and theIdea of figuring out, like, this is the big, the, like the problem I talked about before, we've overstuffed the bottom of the funnel. And as, as all these premium content producers, right?

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And anyone who's making, quote, unquote, let's call premium content anything where it costs you a lot of money to produce something, then you put it up on CTV.

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If they think the long tail of advertisers is gonna be able to go in the breaks and not ruin their stuff, they're kidding themselves.

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Because the long tail of advertisers don't have money to produce something, like, like even creative quality isn't there. But what's happening is we've just said, "Let's make everything direct response."

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And this was a, this was actually, the internet was so, had so much fraud that people threw up their hands and said, "Just show me that it's working. If you show me I get a sale, then I'll buy your ad space.

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Because if you can't show me ROI, then I can't buy it." Which is such a load of crap because that's not how advertising works. Like, you don't, we don't incept people into going out and buying a McRib.

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Like, it is, like every time someone sees something, it builds, and the human brain is just more complicated than that. Yeah. Like y- I got baby back whatever with kids. [chuckles] That's, no, that's Applebee's, man.

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Oh, shit. [laughs] Now you can't even go to McDonald's. McRib is, that is, ugh, that is sacrilegious right there. Oh. Now you're not even gonna be allowed in, I think. You gotta cut that out, Jay. [chuckles] No way.

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Keep the- I want that... keep the part about buying the ads on [chuckles]... we'll do it in. Sorry, sorry, partnerships. Uh, no, but no, but it's like this idea like, "Okay, great.

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Because there's so much fraud, I don't know what's real, I don't know what's not real. I don't wanna pay for space anymore. I'll just pay for ROI." So then what does the industry do?

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Well, let's figure out who's most likely to go buy a thing.

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Let's figure out who's most likely to buy a McRib, and then we'll just buy all of the traffic stream in between us and them, and then we'll show them a report at the end that said, "Look, your ads worked."

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And that just happens infinitum on, on the internet right now. And the only way to get out of it is actually, so for years, I would yell about this from inside the industry. Now I'm just helping brands beat the market.

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Like, that's why I think like, like the Human Ventures portfolio companies, the number one cost to any portfolio company other than its human capital is usually customer acquisition cost.

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It's usually Facebook and Google advertising or Amazon advertising of your CPG. Venture funding just going right back into them.

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I can't promise Human Venture companies won't waste any money, but they'll waste a whole lot less than others- Yeah... on brand building.

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So I wanna talk about that, but I, uh, but before, 'cause I think, like, you have interesting viewpoint in that, like you started on the sort of the digital side in the a- right?

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And then you went into, like, TV, which I thought was interesting. Yep. I remember when you were at Fuse. Yeah. I went to a Madonna concert with you one time, which was amazing.

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Like [chuckles] I, I never would've gone to a Madonna concert otherwise. And so thank you for that. You thanked me for those tickets. I know.

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[chuckles] So, like, what surprised you when you started to really understand how the TV business worked?

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Because I think a lot of people on what we used to call internet side then, like, had all these preconceptions about TV and are like, "Dinosaurs," blah, blah, blah, blah, blah. Right. Mm-hmm.

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But being inside of it is different. Right. Yeah. I think a lot of people threw stones at old media without knowing how it actually worked, right?

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And everyone was confused as to how- And how- How do the sy- And how efficient it is. Right. Exactly. Efficient. And it's like they're, yeah, no, yeah, well, yeah, what it is actually, I would say it's effective.

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So it's effective at scale. Like, each incremental impression wasn't efficient, right? Meaning, like, we didn't need to show that seventh ad to you. We've, like, we've already got it.

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You've seen the ad, you know how it works. But showing it to you the seventh time was because that's how we charge you for, like...

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What, it would've been fine to show it to you three times, but then it would've looked like your CPM rate was doubled, right?

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Like, so this, the, the real thing from the outside where they throw stones is like, "God, look at me watching this TV show and, uh, and, like, this is so wasteful. They could be more targeted to me."

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Which by the way, it, there's a whole separate rant on you don't wanna just target ads to the people who buy your product.

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Like, if you wanna build a brand, you need other people, like the people who are friends with the person who bought your product, the, you know, the spouse of the person who bought your pro- Like, brands aren't built by direct targeting, and that's what we're seeing is, like, people have over-relied on that.

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But let's move out that for a second. All of it was really negotiation of share of voice and with brands, and then what else can we do to help create culture around your brand?

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Show integrations, integrated marketing, like producing a halftime show where the truck comes onto the field. All this stuff that is culture-creating moments was just paid for in those commercials.

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And so yes, those commercials looked inefficient from the outside, and it looked like the frequency cap was too high or like, "Oh, what a dumb system to have, like, five ads in a break. This is so annoying.

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I never wanna watch cable." But we couldn't have taken the money because there was such an insistence in the industry to keep a CPM rate low.

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Like, that's why I'm, like, like my greatest hope is that Netflix comes into this market with a clean slate. They don't need to, like, reverse engineer into an old way of doing advertising- Yeah...

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and can just set it up the right way, and I think that's a big opportunity. Yeah. I'm interested to see 'cause Netflix has such an opportunity and stuff.

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I'm very interested to see how far down they go the performance marketing side versus, like, just doing the old, like I had said when they, so I was like, "Why don't they just do the old Yahoo homepage and just be like, 'What advertiser a day?'"

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And like, you know- Right... they would sell it out.

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I mean, look, I mean, all CTV, high quality stuff, Disney+ as it goes into it, Netflix, like, you know, a- I think, I do think NBC Universal is doing it the best with Peacock right now.

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Reduced ad load, sponsorship, brand advertising only.

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If you believe your content is culture creating, then you should be looking for advertisers that want to be part of culture creation, not, you know, "Can I sell you a pillow?"

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Like, at the, at the end of this ad, "And click here, and then I'll pay you on direct response."

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If you believe your content is direct response, meaning it's clickbait, then maybe you should have direct response advertising. Right. Yeah, that makes sense.

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Let's then talk about, like, you moving into, like, the investing side and the tequila side. Oh, I invested in tequila, so- Yeah, I guess... they're both the same. But they're very different.

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Well, the tequila's a little bit of an outlier to the company, the other companies, isn't it? [chuckles] It is a bit of an outlier. So, so Human Ventures, like, so, so really- I mean, tequila does help humans.

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It powers a lot of humans in Miami. Yeah. Look, if you need to squint to make it fit the portfolio- [chuckles]... hospitality is a core human thing. Gathering, joyfulness, revelry.

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No, like, I mean, y- like, Human Ventures was founded around this idea. Heather and I, uh, Heather, who really runs the show over here-Around this idea of great humans are the ones who build the businesses.

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We kind of forgot that. Like, I mean, you've seen it in the, uh, crypto space recently.

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But like, like, people build businesses, and at the end of the day, your product should then make someone's life better, and- Yeah... they should want to buy it for a profit.

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And so, you know, we kinda think of human needs economy, future of work, future of wellness, and future how people are gonna take care of their money.

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But I think a huge component of that is, like, how people are gonna just spend their time, like, what makes them happy. And hospitality, well, well tequila's an outlier for the, the portfolio.

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How people spend their time, where they travel, like experiential, things like that, it's a lot of what gets us excited, especially in a post-pandemic world. But that's, that's kinda how we got there.

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So that's how, like, something like, like Tribeca fits in. Yeah. Well Tribeca, I mean, Tribeca was a little different 'cause it wasn't a venture side investment. Yeah.

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That was a, uh, really led by James Murdoch, uh, and Lupa, uh, Systems that bought. But we partnered with them, and that's more on, uh, the hold co side of Human. Gotcha.

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But that's just like, like what, what Jane Rosenthal and Bob built with Tribeca is a perfect example of, like, kind of this idea of the attention economy where the brand has so much more culture creation, like, power than it monetizes for because, like, there's not impressions to sell, right?

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It's sponsorship, and like, you're creating these cultural moments. And so, like, we just...

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There is a series of these things that, that exist out there that I believe that their impact on culture are greater than their monetization. Ironically, Twitter's one of those things.

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Look, we're having the conversation now about whether or not Elon Musk ends up with Twitter. Twitter has so much global importance, and, like, the monetization doesn't meet the, its importance. And so I do...

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Like, there's going to be things like that out there that might have new owners at some point. Yeah. So that seems like a big, like, theme for you. It's like where, you know, where there's a delta.

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Since you're an investor, I'll talk, I'll do investor talk. Yeah. Oh, loud. Um. Yeah. Talk spreadsheet with me. Yeah, no, I could do it all. I could do it all. [laughs] I know my way around a Pivot table. The, uh...

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But, like, you know, where there's, like, a delta between the culture creation and the, like, the sort of value creation as far as the money goes- Yeah... right? Like [laughs] Yeah.

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Like, cultural impact versus monetization.

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And something I've thought a lot about is, you know, there are a lot of things that can't charge enough in advertising dollars 'cause it'll look like an outlier, but we know it has a lot of impact.

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So maybe we should be using that impact to build new businesses.

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Like, maybe we should be using that to, to launch new pro- The hard part is when you're a publisher, starting new businesses is like, well, you know, I'm not in the sneaker business. I don't know how to make sneakers.

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Like, if I can- Yeah. But, like, when you're a startup studio, like, you have founders come all day, and that you say, "This is a great product. I can help get you plugged into places that create culture."

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That was really where tequila kinda came in. Like, the founder's actually a, a very good friend named Richard Betts. He was a master sommelier, an amazing craftsman.

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They had done making tequila for 20 years and just kinda had this, like, wanted to make what is, you know, by some standards, the world's best tequila.

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And I said, "I can get you plugged into the places where culture is creative. You can make the best product in the world, and we can not waste money and light money on fire on advertising that doesn't work.

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We can be selective and pick our spots and advertise where it does work," and it's proven itself out. Yeah. So you're not doing, you're not just dumping a, a lot of money into Facebook ads?

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[laughs] I don't wanna, I don't wanna shock you. By the way, you, in the open, you said that, uh, I had one of those Facebook ad networks back in the day. No, my friend. I was gonna date myself more.

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I had a MySpace ad network when we first started. Oh my God, it was a MySpace? Jesus Christ. Yeah. It was... I don't, I don't wanna go back. I just wanna, you know...

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It was, actually, it was people could pick their own brand, put it on their MySpace page, and they would earn points for charity, and it was Social Vibe. Yeah, yeah, yeah. Like that was before- No, I remember that.

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I thought it was- That was before- I thought it was Facebook. I see. I'm like, I'm so confused. It eventually got to Facebook. Oh, it eventually got to Facebook when we found out people- Okay... like FarmVille in there.

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That, that, we went there. But like, oh, yeah, it goes back. By the way, everyone talks today about, like, uh, kinda community and why, you know, why don't, why doesn't the community get the value out of it?

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Like, that was MySpace at the, in the time. Maybe MySpace was the original Discords. Wait, what do you mean by that? Well, because...

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Well, I, and maybe not the Discord, the, kinda the crypto communities where basically- Oh, right... you were a publisher of your own page. You had your, you know, your friend graph on MySpace.

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And then it was very customizable to you, and we were trying to figure out ways to reward people for their influence, like- Yeah, yeah... inside of the community. But that worked out well. Yeah.

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[laughs] Well, it's all a process, right? You got there eventually. So, so if you were to look at, like, areas of publishing that are in a good position, gi- give me sort of the criteria that you would think of. I...

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So I think... Okay, so in the B2B category, I think that there's a lot of upside and a lot, uh, a lot of room to do, like, really good things.

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I think I, I've really liked what LinkedIn has done with their kinda publishing network, and I'll, I'll be interested to see where that goes because I think people have undervalued B2B advertising, B2B marketing, and just B2B publishing just in general.

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So Trades, Penske Media Group. I mean, this, uh, uh, the PMC, I, I think, has been one of the most interesting media companies to watch kinda come together. No, I think it is. I...

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Jay doesn't do a lot of, like, podcasts and stuff like my podcast right now. [laughs] But, like, you know, there, he's quiet a lot. The, the Times did a little profile on him.

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But for all the attention that a lot of others get, like, PMC has put together a really interesting portfolio, and they've run it really well from everything, like, I've heard. Yeah. It, it's a really good...

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And it's a B2B, and it's, it is this kind of... So I, I think that's great. You know, they just bought South by Southwest. That kind of fits into their ecosystem. You know, and then that's the B2B side.

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You know, I kind of think that the other side is brands that kind of produce premium content, and they have a strong enough brand that it attracts talent to them, and they get some credibility when they put their name on something.

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So, like, A24 has been doing amazing things. I also think Vice. I think people think about Vice as Vice pure publishing. But really Vice makes, like, Vice has a branded content agency.

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Vice has a studio that makes content for Netflix that wins awards at, you know, Tribeca or Sundance.

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So I think there's a bit of misconception, but I think why Vice is so good at that is that-It has this brand that some people might not even think of it

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in the right way, but it still conveys credibility to, you know, 'cause their news organization, like actually has people on the ground in Syria, or the people on the ground in Ukraine. Like the-- like that like brings

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energy to the brand battery, if you will, and then that charges like what it can do in other places. And so then directors wanna work with them or brands wanna work with them.

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So I, I think they're better positioned than most, but obviously right now, the media's tough. Thanks a lot for listening to that conversation with Joe.

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Up next, I have a, uh, ten-minute bonus conversation with Steve Lilly of Bombora about why publishers should be out there kissing a whole bunch of frogs in advance of the demise of the third-party cookie.

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Trust me, it makes sense in context. What do publishers need to be doing right now to prepare for what comes next? Because this is inevitably, it's happening, right? Yeah.

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I look at the household name publishers that have joined the co-op, use some of our data, and have some of the more complex data strategies, and you realize that we've watched some of them take several years to implement data-informed products or data-informed content creation strategies, whatever it might be.

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You realize that there's a big difference between espousing a data-centric model and actually being a data-centric model.

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And I think that the cookie going away just adds complexity to folks' data strategy, and yet you still have folks that aren't turning over rocks actively.

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What we see from our most sophisticated partners is that they started a long time ago.

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They typically have a stable of horses approach, and they're out kissing a lot of frogs right now trying to figure out, you know, what goes in the stable with an eye towards the short term and the long term being how much of this will be viable in a cookieless context.

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So yeah, preparing now is sort of actively being involved in testing and trialing folks that could be a part of this comprehensive, what really amounts to data transformation.

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I think cookie blocking has almost caused people to think, "Oh, that data transformation we've been talking about for a long time, we should get on it." But you're right.

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A-as soon as the date was pushed out, you know, everybody went cold, and we thought, "Gosh, you have plenty of time to continue to prioritize. You might have just enough time to get it done in eighteen months." Yeah.

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Well- And everyone's like, "Now we talk to you in six." Well, that was the funny part, 'cause it's like, like I, I know this as like a career journalist, right?

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Like literally, I don't think any stories would get filed without deadlines, right? Like, and that's just the reality of deadlines make a difference.

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So, but sometimes the deadlines are unrealistic and you're not prepared and you do have to push them and stuff like this. But I know how this works with deadlines. It's a human thing.

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And like everyone, not everyone, but a lot of players were saying, "No, this is too fast. We don't know what's gonna happen. We need to push the deadline and stuff." Deadline did get pushed. Guess what happened?

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Not a hell of a lot.

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It's surprising given what's at stake and the opportunity that, that there's just as much, since I'd say a third of every publisher that we talk with doesn't clearly state a specific data strategy or their s- data strategy is fairly narrow in focus, and you can often say it doesn't really include a, a quote-unquote, answer for cookies going away.

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What's really interesting is because you talk about data transformation, right? And this is like a subset of it, right?

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'Cause I think sometimes people go to like what's important tactically at the moment, and so like take GDPR or something. Like GDPR obviously completely flawed and imperfect and stuff like this.

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But what it should have been to me is it should have been the impetus, the catalyst to drive data transformation. Like every, every crisis is, is a terrible opportunity to waste. That's the way I sort of think about it.

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Yeah. I mean, and it's funny, what you saw is still, God, not too long ago, um, you know, eighty percent of the pubs we spoke to weren't TCF two point o compliant and didn't have a plan to be so.

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It was amazing how many people's answer was, "Well, we don't have a lot of international traffic anyway, so we're just not gonna do anything about it."

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But that's exactly the point with cookie blocking, and maybe that's the reason that the response is not as immediate, is that it's not as simple as just, are you gonna flip this switch or update the privacy policy, right, or add a consent management platform.

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To do it well and to think long term, it's hard to look at it all and say, well, there's sort of an overall data transformation that needs to happen.

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And that a lot of pubs talk about data-centric products or data in a way that is marketable, but it's not necessarily implemented as an enterprise solution where they're really thinking holistically about it.

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And so I think maybe that's part of the problem, and maybe we don't see the, like you said, a crisis that creates an opportunity, and you don't see more responsiveness. 'Cause two things.

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I think the household names, like I talked about, have started a long time ago being data-centric. They know it's a stable of horses. They are preparing.

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And the other end of the spectrum is who knows where to start on data transformation given the problems we have now and the challenges that, you know, you got a lot of pubs that have had market share and/or their valuations have declined.

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They don't have a ton of cash. And so I think that's where you see folks saying, "Well, let's see what, uh, The Trade Desk does or LiveRamp. We'll see what they do, and then we'll figure it out from there."

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Sort of like our data transformation will happen when the true crisis hits, which is we don't have a plan, the cookies have been blocked, and we'll just let emergency, uh, make our decisions for us.

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Maybe that's the reality that some folks have to accept, and there's a lot to be said for where does universal ID, and maybe some people want that to be what creates a true north, and they operate from there.

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But our, our biggest names started a, a long time ago being data-centric, I, I would say. Yeah. So the second topic that I wanna address right here, which is you've talked a lot about needing to kiss frogs, right?

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Like, and you know, what you're basically saying is, okay, if you haven't started now to be data-centric-You better start like tomorrow, right?

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But like, you got to realize that it's a journey because I think what a lot of people want to do, and this is my sort of notion of it, is they want to wait and allow other people to make the mistakes for them and then use the second or third mover advantage.

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Just be like, okay, well, you've gone through and vetted like all this 21 different, figure out which is the one and then I'll just adapt that one.

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And I just can like hang back until and draft off of the work that others do. Ah, first- Innovation by herd mentality? Yeah, that would never happen in business. Innovation? No. But first, am I anywhere in the ballpark?

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And second, if I am, why is complacency not a strategy? Yeah. So I think, I think you're right.

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Like I mentioned, we've had people literally quite a few have said, we're going to see what the UID folks do and then orient from there. I'm sorry for those who don't know, U-UID stands for what?

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UID, pardon me, UID 2.0 is the universal ID solution that The Trade Desk has been proposing is gets sort of grouped together with LiveRamp's alternative, which I believe is ATS. If I'm not mistaken, I should know that.

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And it becomes a placeholder for how do we have the equivalent of demographic

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profiling similar to third-party cookies through some kind of tokenized, uh, mechanics that, that associate an email ultimately with a profile with using a token as an intermediary.

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And I, I probably butchered that because I'm not really technical wizard, but you know, I think why is complacency not, not a strategy? I mean, A,

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I think it's foolish to think a couple ma-- a few massive platforms are going to come up with a tailored solution that truly maximizes the opportunities in a cookieless context for a publisher. It seems like,

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I mean, depending on who you ask, ad tech has either horribly commoditized everything for pubs or in some cases has created some efficiencies, but maybe the harm is equal to the good.

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The point is, why would you trust the folks that in many ways seem to have been ushered in an era of commoditization to be solving your problems or creating differentiation for you going forward in, in the future?

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I think the point is not to say that, you know, what The Trade Desk might bring to the table won't be part of the solution.

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We're trying to stay close to all of the options that are out there from major third-party platforms. Thank you for listening this week. We will be back next week with a new episode.

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The Rebooting show is produced by Podhelpus. Podcasts are a great way to expand your client base.

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