WEBVTT 1 00:00:00.100 --> 00:00:12.160 [on-hold music] This week's episode of the Rebooting Show is brought to you by Permutive. The rules of advertising are changing. Consumers are concerned about how their data is being used in advertising. 2 00:00:12.540 --> 00:00:22.780 Regulators across the globe are closing in, and browsers are blocking third-party data. Publishers and advertisers need to develop responsible marketing practices that protect consumers' data. 3 00:00:23.520 --> 00:00:41.120 Built on the core principles of privacy, consent, and transparency, Permutive's audience platform empowers publishers and advertisers to responsibly activate audiences without any third-party access to personal data, offering insights, modeling, and activation in cookie-restricted environments. 4 00:00:41.629 --> 00:00:54.100 The data decisions that are made today will impact your ability to continue to effectively execute digital marketing in the future. Join Permutive in the responsible web. Find out more at permutive.com. 5 00:00:54.220 --> 00:01:06.180 That's P-E-R-M-U-T-I-V-E. [on-hold music] Welcome to the Rebooting Show. I'm Brian Morrissey. I'm recording this intro from Madrid, just wrapping up a trip to Europe. 6 00:01:06.220 --> 00:01:12.440 It's five PM here, so people still have a good solid five hours before dinner. Quick aside on that. 7 00:01:12.580 --> 00:01:29.300 I, I read somewhere that a reason that the Spanish have, have these kind of weird rhythms to their days and nights is that they're basically in the wrong time zone, and, and I looked at it, and if, if you do look on a map, Madrid is west of London, and yet it's an hour ahead, so it's no wonder why everyone is eating so late. 8 00:01:30.120 --> 00:01:37.120 Anyway, uh, this week is an episode that is part of a series I'm doing with publishing leaders about the future of digital advertising. 9 00:01:37.400 --> 00:01:47.580 It started, uh, with last week's episode, uh, with Jessica Sibley from Forbes, and it's a series that's made possible thanks to the support of our sponsor, Permutive. And if you don't know Permutive, you should. 10 00:01:47.780 --> 00:02:01.680 In this industry, people pivot frequently, um, to whatever is selling at the moment, and these days, a lot of people are talking about the need to do digital advertising differently, be more mindful of consumer privacy, and have responsible practices. 11 00:02:02.340 --> 00:02:14.800 But Permutive's been advocating for this kind of privacy-centric approach for years. And as part of the series, uh, I'm having a special spotlight episode conversation with Joe Root, CEO of Permutive. 12 00:02:15.400 --> 00:02:25.500 Joe and I discuss what this pivot to privacy means for publishers. What I found interesting is how nuanced his take is, um, on the impact of regulations on the ecosystem. 13 00:02:26.210 --> 00:02:41.800 And rather than a sky is falling message that many have taken, you know, Joe points out that GDPR, and I have been consenting dozens of times a day over the past ten days, uh, to the use of my data, is not actually the disaster that many claim. 14 00:02:42.070 --> 00:02:51.040 And if you think about it, GDPR has definitely changed the operation of the overall tech industry and the digital advertising industry, and that was always the goal. 15 00:02:51.060 --> 00:02:59.420 And we also discuss the practical implications of a privacy-first approach and how publishers can actually benefit from it. Hope you enjoy the episode. 16 00:02:59.800 --> 00:03:09.470 We get into the weeds a little bit, but nothing too extreme, I promise. As always, send me your feedback at bmorrissey@gmail.com. Hope you enjoy it. [on-hold music] Joe, welcome to the podcast. 17 00:03:09.540 --> 00:03:14.980 Really excited to be, uh, talking to you today. Thank you. Excited to be here. Okay. 18 00:03:15.040 --> 00:03:24.080 So you founded Permutive about a little over eight years ago, and it was a totally different era when it, uh, it comes to the use of data in, in advertising. 19 00:03:24.180 --> 00:03:31.020 Explain, first of all, the, the opportunity that you and your co-founder saw in the market. Yeah. It's a great question. 20 00:03:31.200 --> 00:03:41.920 So we kind of saw ad tech as this enormous business creating huge amounts of value, hundreds of billions of dollars in spend every year. But I think there were two problems which we saw fairly early on. 21 00:03:42.450 --> 00:04:00.040 The first one was that, um, ad tech in its current structure was collecting, um, data on hundreds of thousands of people without their consent, and that regulators didn't like this, and the regulation coming out of Europe was gonna make that type of business model really hard to run, part one. 22 00:04:00.240 --> 00:04:17.680 And then part two is through various quirks of the early customers we had back in twenty-fifteen, we saw the earliest stages of Apple starting to remove the technology which was enabling kind of our data to be tracked and for our data to leak through the ecosystem. 23 00:04:17.760 --> 00:04:26.900 So we saw kind of the earliest signs of cookie removal, and when we started to dig into it, we realized, hey, there's this huge data security problem, programmatic adverts. 24 00:04:26.909 --> 00:04:35.800 Platforms don't like this either, and they're starting to break the infrastructure which underpins it all. Yeah. So I think we kind of saw these two huge forces and an opportunity forming around that. 25 00:04:36.240 --> 00:04:42.060 Yeah, because I mean, if we go back to two thousand and fourteen, it was, it was pre-GDPR, but the, the wheels were in motion. 26 00:04:42.120 --> 00:04:49.360 Like, and I think what was interesting going back to that time, we, uh, at Digiday, we had just started... I think we had just started up at that point in, in London. 27 00:04:49.400 --> 00:05:00.860 And, and just as like an Am- uh, American publication, or like we just said we were US-based, it was, it was good to have a different viewpoint, right? Yes. And the viewpoint from, from... 28 00:05:00.900 --> 00:05:07.300 I-- it's one-- It's weird because we're becoming more European in some ways. We've got like industrial power. We're like France now here in the US. 29 00:05:07.310 --> 00:05:19.240 [laughs] But it was interesting at the time because in the US, like nobody talked about that stuff. I used to joke about how the p- the privacy panel was always the, the last panel of the day. 30 00:05:19.460 --> 00:05:27.590 Like literally the like- I'm surprised there even was one. You know that joke, the terrible joke, the last thing standing between you and cocktails, that was the privacy panel. Yeah. 31 00:05:27.600 --> 00:05:40.660 Because it was n- it was never taken seriously, I feel like, because, um, i-in the industry here, I would always hear the same thing in covering this for so many years, no PII and the direct mail guys are sketchier. 32 00:05:41.640 --> 00:05:47.380 You know? [laughs] And GDPR- Great title. GDPR blew that up, right? 33 00:05:47.600 --> 00:06:01.780 And I think, you know, i-it-- we're in a, a different like era right now that, that I wanna talk about, and privacy, people have different definitions of it, is at the forefront, and it's no longer the last panel before cocktails. 34 00:06:02.864 --> 00:06:13.844 [laughs] Yes. Yeah, I feel like it's probably the fast now. Yeah. So fast-forward a little bit because I think you guys made big bets, and, like, right now it's a very uncertain environment, right? 35 00:06:13.884 --> 00:06:20.144 There are moves afoot from both the large technology companies and from governments. 36 00:06:20.184 --> 00:06:32.964 Um, so just paint a picture of where we are right now, because I think that will tell us where we're going to go when it, when it comes to the use of data to p- monetize content. Yeah. Yeah, it's a great question. 37 00:06:33.044 --> 00:06:43.144 So I think to me the thing which has kind of elevated the privacy debate globally over the past few years has more been cookies than regulation. 38 00:06:43.184 --> 00:06:50.844 So kind of Apple removed third-party cookies, all of a sudden ad tech breaks overnight and doesn't operate on Apple devices. 39 00:06:51.164 --> 00:06:58.504 So if I'm a CMO now, I can't really speak to anyone on an Apple device via my usual kind of digital marketing channels. 40 00:06:59.124 --> 00:07:10.184 And that's a huge, huge change in the ecosystem and kind of Google being forced to follow suit shortly after. I think a lot of the conversation today has been around what happens when cookies go away. 41 00:07:10.844 --> 00:07:18.084 We had this parallel conversation about regulation, like GDPR came out and then almost nothing happened, nothing changed. 42 00:07:18.124 --> 00:07:23.224 We kind of put up some pop-ups asking you for consent, but really nothing in the ecosystem changed. 43 00:07:23.664 --> 00:07:32.844 So I think the way most of us have been looking at this problem is a cookie-based problem, and we track really carefully what Google is doing and what they're planning. 44 00:07:33.284 --> 00:07:45.684 But I think actually what we're starting to see the earliest signs of in Europe now is regulators having teeth and forcing their perspective of the world onto the rest of the ecosystem. 45 00:07:46.144 --> 00:07:55.154 And I think going forward, we actually see regulation is far more powerful than platforms. We think regulators a-a-are bigger than Google and bigger than cookie changes. 46 00:07:55.564 --> 00:08:05.184 And then in some ways that is an unavoidable force which is coming our way, and the thing which is actually a lot more predictable than what does Google do with a privacy sandbox. Yeah. 47 00:08:05.224 --> 00:08:14.244 So explain that a little bit because I think a-again, like, we always keep repeating it here in the US, we don't pay attention to regulation because typically they don't regulate here. 48 00:08:14.364 --> 00:08:26.884 It's just the way we approach things with self-regulation, but that's changing, and I think a lot of focus right now is on Apple and app tracking and the disruption that has caused. 49 00:08:27.144 --> 00:08:39.864 But explain w-what's coming down the pike as far as regulatory moves. Yeah. So I think today the biggest kind of piece around regulation is this notion of consent. 50 00:08:40.424 --> 00:08:47.724 So if my data is going to be processed, I need to consent to that, and I need to consent to the purposes for which it's being... 51 00:08:47.804 --> 00:08:54.724 The problem which we have today is, in a way, the way ad tech has responded to that has been to say, "Okay. 52 00:08:54.804 --> 00:09:03.624 Well, we'll ask the user for consent, but in a way we're gonna make it as hard as possible for them to really tell us what they want when it comes to consent." 53 00:09:03.684 --> 00:09:14.593 So today we're gonna kinda list two thousand vendors behind a pop-up, which you can't really see, and you can't hit Reject All on it very easily. So in a way, we're kind of forcing the user to give consent. 54 00:09:14.624 --> 00:09:20.464 What's changing in Europe is actually regulators are starting to hone in on that and say, "That's not okay." 55 00:09:20.954 --> 00:09:28.864 And now that we're seeing consent actually brought up to the top and the user having real optionality, the opt-out rates are staggeringly high. 56 00:09:29.184 --> 00:09:40.364 And that's kind of the, the piece which is today a problem in maybe Italy or Spain, but fast-forward a year will be a problem through Europe and fast-forward three or four, it will likely be a problem globally. 57 00:09:40.684 --> 00:09:44.894 I mean, is this just because GDPR has failed? I mean, has GDPR failed? 58 00:09:44.894 --> 00:10:04.844 [laughs] Well, I mean, I just say again, I, I, I feel like I keep being like the, the, the American here, but like, you know, look, any, you know, here in the Wild West of Amer- in the, in the people's sta- Bitcoin Republic of Florida, you know, we go to, go to Europe- [laughs] -and like all of a sudden I'm like, "Oh, no, I gotta, I gotta close all these like consent boxes," and nobody's reading them and stuff like this. 59 00:10:04.884 --> 00:10:16.244 And the-- I know the, the typical American view of GDPR is total pain in the ass. And I don't know like what-- how you would judge its success or, or failure. 60 00:10:17.604 --> 00:10:25.184 So I think when Apple makes a change, it happens overnight, right? Yeah. So Apple removes cookies. You wake up tomorrow morning, the cookie's gone. 61 00:10:25.724 --> 00:10:37.174 Apple puts a consent pop-up for ATT, and all of a sudden tomorrow I turn on my iPhone and I'm getting asked do I want an app to track me or not. In that sense, platforms move immediately. 62 00:10:37.904 --> 00:10:48.424 I think what we've seen is regulation just takes a long time to build. And in the near term, no, it hasn't been as effective as the regulation maybe kind of promises to be. 63 00:10:48.804 --> 00:11:00.784 But actually now fast-forward kind of a couple of years of GDPR in effect, and enormous companies are being forced to re-architect their entire data infrastructure to adapt for GDPR. 64 00:11:01.244 --> 00:11:07.124 So Facebook, some leaked documents came out about how they're re-architecting for privacy and GDPR. 65 00:11:07.524 --> 00:11:15.724 They're putting four hundred engineers behind this project to re-architect all of their infrastructure, and that's a huge win for regulators. 66 00:11:15.764 --> 00:11:24.344 Facebook are changing the way in which they process and handle everyone's data. That's probably the largest processor of data in the world. Right. 67 00:11:24.404 --> 00:11:29.834 So y- this just seems like this fight that's going on at like a massive level. I mean like- Yeah... 68 00:11:29.834 --> 00:11:38.044 'cause in effect, you know, Google and Meta, if we must, but Facebook I like to call it, they're basically the equivalent of nation states to some degree. 69 00:11:38.164 --> 00:11:42.664 I know remember like MySpace used to claim that, but like literally Google and, and Facebook- [laughs] -are that way. 70 00:11:42.724 --> 00:11:51.924 I mean, but it, it's almost like these, these fights that are happening, it's like the old saying that like, you know, when the elephants fight, the grass gets trampled. And like- Yeah... 71 00:11:51.964 --> 00:11:53.704 we're seeing some of that trampling. 72 00:11:53.804 --> 00:12:05.544 You know, when you look at like the results from, from DTC companies that are public and just like what you hear from the private is like, you know, ad targeting was fueling a lot of businesses, right? 73 00:12:05.684 --> 00:12:20.064 And the ability to acquire customers basically cheaply was integral to their models. I guess the question I end up having isIs the cure, is the cure going to be like worse than whatever the disease was? 74 00:12:20.164 --> 00:12:30.743 Because like there are a lot of losers, and any regulation is going to benefit. As far as I understand, eh, almost all regulation benefits incumbents. They've got tons of lawyers. 75 00:12:30.774 --> 00:12:34.324 They've got entrenched, entrenched positions. It's a good question. 76 00:12:34.364 --> 00:12:46.783 So I think when we look at kind of Facebook or Google and kinda this growth of D2C, I think whether it's cheaply, I, I would maybe look at it more scalably as, hey, I'm the CMO- Yeah...of one of these brands. 77 00:12:47.204 --> 00:12:55.904 I put a dollar in, I know I'm getting five dollars back, and I can crank this thing almost into eternity. And that is changing from our perspective. 78 00:12:55.964 --> 00:13:10.084 If you look at what's happening is Facebook has built this amazing machine where it effectively is able to hoover up data and signals from across the internet and then overlay it on its own inventory. 79 00:13:10.113 --> 00:13:14.804 And because it has so much inventory, it becomes this place where you can almost do that forever. 80 00:13:14.964 --> 00:13:26.254 I think kind of as we've seen the unbundling of that, as we've seen Facebook lose visibility over those signals, it's not that the signals have gone away, it's just that you can't go to Facebook to get them anymore. 81 00:13:26.814 --> 00:13:36.884 And right now we kind of sit in this limbo where ad tech and technology hasn't caught up to give marketers the ability to go and access those signals where they're being generated. 82 00:13:37.444 --> 00:13:45.244 So I think we currently exist in a world where there's pain. It's not to say that this will be forever, though. Yeah. But I mean, so for marketers are gonna have to pay more, right? 83 00:13:45.554 --> 00:13:55.444 Like, I mean, at the end of the day, the costs are gonna go up as far as i-if you're gonna do granular targeting. Like one d-- Like I wanna find this specific type of person. 84 00:13:55.704 --> 00:14:02.824 I would guess overall, a lot of targeting is going to become a lot less granular, right? Yeah. 85 00:14:02.884 --> 00:14:11.544 I think there is always a trade-off with privacy and performance of some sort, but I don't think the trade-off is as extreme as people make it out to be. 86 00:14:11.624 --> 00:14:15.684 So today kind of retargeting is the thing which will suffer most from all of this. 87 00:14:15.704 --> 00:14:23.804 There's a big open question is like how much does retargeting actually drive the purchase versus it's just very good at telling you that- Yeah...it drove the purchase. 88 00:14:24.224 --> 00:14:33.864 So I, I'm a little bit skeptical- Yeah...as to kind of where the performance actually degrades in the way kind of people talking. Coming back to the original point, the signal continues to exist. 89 00:14:33.924 --> 00:14:36.204 You just need to go and access it in a very different way. 90 00:14:36.624 --> 00:14:47.824 So I think you can still use those signals with the granularity of you're reaching an individual user, but you don't need to broadcast that signal to a thousand other companies in order to be able to use it. 91 00:14:47.884 --> 00:14:53.744 So I don't think the regulation is getting rid of the signals. It's just saying, "Hey, you need to go to the original source for them." 92 00:14:53.784 --> 00:14:59.604 And in some instances that may increase prices, but I don't think it is kind of this piece where, hey, all of marketing degrades. 93 00:14:59.824 --> 00:15:11.534 It, it's, it's more that you're protecting a user's data from flowing into every single or into a thousand different companies' hands. Right. But like overall, it, it seems like the pendulum will start to swing. 94 00:15:11.544 --> 00:15:21.764 At least this is the sort of optimistic take from the publisher standpoint, that the pendulum was so far on the audience side. I'm gonna find this specific audience, and it sort of... 95 00:15:21.814 --> 00:15:36.644 To me, it like inevitably commoditized, um, publishers because like put-- they become empty vessels, right? For the, the... A-and pretty soon, like, you know, Hotmail is the same as, uh, The New York Times. But- 96 00:15:38.224 --> 00:15:39.734 Yes...it, it, it would seem that the pendulum is... 97 00:15:39.864 --> 00:15:50.314 And, you know, in media, pendulum always swings back and forth, but the pendulum is swinging back more towards context because- Yeah...context, it's like the original signal, right? Like I'm reminded- Yes. 98 00:15:50.314 --> 00:15:56.904 Yeah...it's like, it's like the Tour de France. It's like, you know, blood doping was the original, and then they got into synthetic and the EPO and stuff. 99 00:15:56.924 --> 00:16:10.504 And then they ended up back at, at, at good old-fashioned like blood doping. So- Yes. [laughs] It would seem like, like context is having a moment. Yeah. I think the contextual signals are having a moment, right? Yes. 100 00:16:10.564 --> 00:16:17.464 I, I don't think contextual is the answer to everything. When you chain contextual signals together, to me, you get audience. 101 00:16:17.524 --> 00:16:29.164 So when you start to observe kind of a pattern of behavior, it's kind of the chaining together those contextual signals tell you, "Hey, this user is in market for a car right now or is researching what mobile phone they want to buy." 102 00:16:29.244 --> 00:16:38.384 So I think like what we're starting to realize is contextual signals are hugely important because the industry is so used to having them packaged up as third-party data. 103 00:16:39.044 --> 00:16:47.904 And then the second piece is people starting to realize, hey, if I want access to those contextual signals in a post GDPR world, I need to go to the source. 104 00:16:47.964 --> 00:17:01.284 I need to go to, um, the place where the user has the relationship and is generating those because that's the only stable place where consent is going to remain. Okay. So that should benefit publishers, no? Hugely. 105 00:17:01.564 --> 00:17:02.504 I think- Okay. Thank God. 106 00:17:02.704 --> 00:17:20.784 I think what we see is, um, there is a very complex supply path between a publisher and an advertiser today, and that supply path takes an enormous amount of revenue, twenty, thirty, forty, fifty, sixty percent in some cases of revenue flowing through is going into that supply path. 107 00:17:20.844 --> 00:17:24.324 In that supply path, every single one of those companies is a controller. 108 00:17:24.924 --> 00:17:36.444 So even though an audience data company doesn't own the relationship with the user, they've packaged up all the user's data, and they're now saying, "Hey, I'm gonna sell this data on downstream." 109 00:17:36.524 --> 00:17:44.824 They become a controller in that. I think what we're seeing with GDPR is actually can that audience company get consent from the user anymore? 110 00:17:44.864 --> 00:17:51.384 And is the publisher incentivized to go and get consent for a company who's repackaging its data and selling it on downstream? 111 00:17:52.224 --> 00:18:03.864 And as those companies in the middle lose consent and as they lose the ability to be data controllers, all the power pushes out to the edge and fundamentally pushes out to the publisher. Yeah. 112 00:18:04.444 --> 00:18:20.148 So w-when-When you talk with publishers and they're thinking about the, the future state of their ad business, you know, and I know there-- it always depends in stuff like this, but let's, let's, let's assume it's like, you know, a publisher with, uh, a, quote-unquote, "premium publisher." 113 00:18:20.288 --> 00:18:34.728 I wrote about this this morning, but like high qual-- producing high-quality content, expensive, you know, they wanna have a-an, an ad model that's respectful of their consumers and doesn't like overwhelm them with pop-ups and, and autoplay this and autoplay that. 114 00:18:35.008 --> 00:18:41.628 What are w-- Like what are the principles that, that you encourage them to think about when they're thinking about crafting such an ad business? 115 00:18:42.968 --> 00:18:55.788 So I think fundamentally what we see is a shift to what we would call a responsible web. So I think if you look at the first era of advertising, open web advertising, it had three problems. 116 00:18:55.868 --> 00:19:04.268 It was built on top of data which wasn't consented. It had data security issues just baked into it by design. 117 00:19:04.328 --> 00:19:17.208 So when I arrive on a publisher's webpage and an ad request goes out to the advertising ecosystem, my data's just been broadcast to a thousand companies, and in order for an ad to be bought, my data has to be broadcast. 118 00:19:17.648 --> 00:19:25.088 And then part three is kind of ad tech grew very fat in the middle and actually created a very unsustainable internet ecosystem. 119 00:19:25.948 --> 00:19:32.328 We think kind of regulatory changes, broken consumer trust is moving us to what we would call responsible web. 120 00:19:32.808 --> 00:19:40.388 And when we talk about a publisher's advertising strategy, we really see that as, one, you need to build on a foundation of consent. 121 00:19:40.868 --> 00:19:50.788 So as you collect audience data, make sure you're collecting it in the right way, but also you have a responsibility. You have a responsibility not to give it away and share it with other companies. 122 00:19:50.868 --> 00:19:53.808 It's been given to you by the user. Don't break that trust. 123 00:19:53.948 --> 00:20:04.238 But also within there, when you build out these models, make sure that as you're integrating into the ecosystem as well, you aren't perpetuating those data security issues we've seen all along. Yeah. 124 00:20:04.288 --> 00:20:15.668 We kind of see those as the two sides of privacy. One is an ethics problem of consent, and the other is a data security problem of you're leaking your own audience data every time you sell an ad. Yeah. 125 00:20:15.708 --> 00:20:28.948 And I think pa-- I think the data security angle is, is an interesting one 'cause it's often not spoken about in that way because I know at least from a lot of ad tech people I've talked to, you know, that it, it serves their models and stuff. 126 00:20:28.988 --> 00:20:33.128 They're like, "Where's the victim? Where are the victims with the third-party cookies? This is not... 127 00:20:33.168 --> 00:20:44.048 You know, the real victims are, are, are, are victims of phishing and fraud and, and we're just using the, the humble cookie." Yeah. I think... I'm not sure. 128 00:20:44.088 --> 00:20:54.428 I, I actually haven't been able to see it because I'm in the UK, but apparently John Oliver had this whole segment- Oh, he did. Yes. -where he collected a load of senator's data or whatever else it is. 129 00:20:54.488 --> 00:20:59.238 Like right in some senses of it's not front of mind today, but it is a ticking time bomb. Yeah. 130 00:20:59.368 --> 00:21:10.658 I think we've seen kind of things like Cambridge Analytica show us the damage which can be wreaked on society as a whole if you enforce bad data ethics or, or if you have bad data security principles. Yeah. 131 00:21:10.688 --> 00:21:22.868 A-and I think like what's interesting is a lot of people's minds go, probably go into nefarious directions because so much is, is happening behind the scenes without active consent. 132 00:21:22.908 --> 00:21:35.148 And I think just people generally, it's kind of like, it's kind of like here they're finally stopping and for the most part taking your credit card and disappearing with it for like fifteen minutes at a restaurant, and you're like, "Hmm, that seems kinda strange." 133 00:21:35.228 --> 00:21:44.288 Wrap my head around that. [laughs] And it's not strange 'cause I distrust the server. It's strange because like I don't know what's going on back there [laughs] with my credit card. Yeah. 134 00:21:44.298 --> 00:21:53.838 And I think just that's natural and, and it's, it's trying to square the fact that, yes, it's a complicated supply chain like most supply chains. 135 00:21:53.908 --> 00:22:01.348 Most supply chains are incredibly complicated and, you know, we don't ask how the chicken breast got, thank God, got into our refrigerator. 136 00:22:01.388 --> 00:22:13.728 But at the same time, like it's really important to, to, to have that transparency. And figuring out that balance I think is gonna be interesting in the years to come. Yeah. Yeah, I couldn't agree more. 137 00:22:13.768 --> 00:22:16.588 I think- Because the consent, the consent manager stuff, like it... 138 00:22:16.668 --> 00:22:23.808 Which is funny to me, that's why I asked about GDPR because it's like when GDPR came in, like people were like, "Ad tech is dead," and all this stuff like this. 139 00:22:23.868 --> 00:22:33.788 I'm like, no, it just, it just popped up a new part of ad tech to do this consent manager. I'm like, ad tech always wins. That's my- Well, I'm gonna contest that. That's one of my organizing principles in life. 140 00:22:33.868 --> 00:22:39.728 I, I, I'm not sure ad tech can pivot out of this one. So I think like the GDPR has been slow. 141 00:22:40.028 --> 00:22:52.828 That's the thing, is like ad tech went and proposed its first version of it and it was like, "Hey, I'm gonna get consent for myself with this kind of pop-up." And now and only now have regulators said, "Hey, no chance. 142 00:22:52.908 --> 00:23:03.028 You need to put reject all on the front page of this. You can't be asking for consent for two thousand companies." [laughs] And now all of a sudden we're gonna see this collapsing in that vendor list, right? 143 00:23:03.568 --> 00:23:14.528 And who's going to survive? Who are the ad tech companies who publishers are going to endorse? Right now 'cause the supply path is so complicated, they don't know which ones they have to tick off in order to get paid. 144 00:23:14.568 --> 00:23:24.268 But like as kind of companies start to emerge saying, "Hey, I'm the only one you need consent for in this chain," you could see nineteen hundred companies drop out of this list. 145 00:23:24.908 --> 00:23:34.308 And can they pivot out of being data controllers into being data processors? It's all very unlikely. So I, I actually think a huge ad tech crunch is coming. 146 00:23:34.688 --> 00:23:42.208 It's happened in Italy and Spain, but we haven't seen it through the rest of Europe and eventually globally. So explain that a little bit. 147 00:23:42.288 --> 00:23:50.708 What are you seeing in like in Italy and Spain as a harbinger of things to come in, in other European markets and then eventually, I assume, the US? 148 00:23:51.768 --> 00:24:02.868 So the first thing is when you move reject all to the top of that pop-up, unsurprisingly, most users click it. [laughs] So- Yeah. Sounds attractive. Yes. 149 00:24:03.308 --> 00:24:13.748 They might- Sounds more attractive than going through two thousand ad tech companies you've never heard of. Exactly. So a lot of users, the majority of users are clicking this, is the first thing we see in Europe. 150 00:24:13.788 --> 00:24:24.884 When that happens-Ad tech stops running. So how are we gonna do advertising in, for, for users who don't provide consent? Huge problem. Today, only a problem in one or two European regions. 151 00:24:25.244 --> 00:24:31.284 It's soon gonna be a problem throughout all of Europe, and soon it'll ripple elsewhere. So that's kind of problem number one. 152 00:24:31.764 --> 00:24:44.244 The second thing we've seen in Europe is regulators telling publishers, "You need to trim down this list." If I'm a publisher and a user hits Reject All, I now don't make any money on advertising for that user. 153 00:24:44.924 --> 00:24:50.644 As a publisher, I'm now thinking, "Okay, well, I don't wanna list the two thousand companies a user's gonna hit Reject All to. 154 00:24:51.044 --> 00:24:56.124 How do I minimize this to maximize the number of users who accept what's put in front of them?" 155 00:24:56.764 --> 00:25:08.504 And that's forcing publishers to question which ad tech vendors they work with and starting to remove them, so they can get a really trimmed down version of something they can put in front of a user, which a user's likely to accept. 156 00:25:08.924 --> 00:25:22.643 It's a huge change. Okay, so it's like Hunger Games for ad tech. [laughing] Yeah. Maybe I should try to find the percentage of partners that have... That if that shrinkage has actually happened, right? Yeah. 157 00:25:22.684 --> 00:25:27.584 I mean, like it makes sense that it would happen. What are the un- what are the unintended consequences though of this? 158 00:25:27.744 --> 00:25:37.044 Because like, I guess, again, it's-- I come with an American perspective, and like, you know, I see our politicians, and I don't want them regulating the internet. 159 00:25:37.124 --> 00:25:47.194 Like I don't think they understand it based on their questions. But let's say, you know, the regulators have, have better ideas of stuff in Europe. Like these things always have unintended consequences. Mm-hmm. 160 00:25:47.234 --> 00:25:59.724 And I think one of the fears is, okay, one unintended consequence that, uh, it would be that it just makes the powerful more powerful, that Apple, you know... 161 00:25:59.884 --> 00:26:11.974 I think it's easy to be cynical about, about Apple's approach to privacy and digital advertising because, one, Apple doesn't have a giant, uh, digital advertising business. [chuckles] Yeah. 162 00:26:11.974 --> 00:26:25.144 [chuckles] And so, of course, they can take this-- they take this stance, and then two, uh, surprisingly, along with its moves to, to restrict how data is used in digital advertising, its own ad business is growing quite a bit. 163 00:26:25.214 --> 00:26:39.044 That's coincidental. Yeah. [laughing] [laughs] Yeah. So it's a great question. I think, um, what you said about kinda Google and Facebook benefiting, in some ways that's true. 164 00:26:39.104 --> 00:26:47.724 I think for Google in particular, this is a huge win. Like search data is like hugely predictive of a user's behavior. Now I'm gonna go to Google for a lot of that. 165 00:26:48.404 --> 00:26:59.164 I think when you look at the internet as a whole, I think, and maybe this is an unintended consequence, the top five hundred publishers in the world, this is gonna be an amazing change. 166 00:26:59.544 --> 00:27:05.664 All of a sudden, they have deep data, and that data only belongs to them, and advertisers have to go to them. 167 00:27:05.674 --> 00:27:12.944 For the long tail of publishing, though, if you're not in that top five hundred, how on earth do you monetize in this world? 168 00:27:13.284 --> 00:27:20.344 So I think there's this unintended consequence, potentially unintended consequence, that a huge chunk of the internet becomes unmonetizable. 169 00:27:20.884 --> 00:27:27.764 Now you could say like, "Hey, in there is a load of misinformation sites and everything else," but- Yeah... it's gonna have an impact, and I'm not sure people have thought that through. 170 00:27:28.644 --> 00:27:40.824 Yeah, because like, you know, I think one of the, the knocks on the current state of digital media, and I've written about it some, is that it's, it's the adversarial web. Like a lot of times... 171 00:27:40.844 --> 00:27:50.704 And you know, it's always to some degree had that. You know, we went through the eye blaster era of like [chuckles] trying to like chase something across our screen to close it down. Good times. Good times. 172 00:27:50.764 --> 00:27:55.724 But you know, the internet's almost like broken to some degree on a lot of publishing websites. 173 00:27:55.844 --> 00:28:06.154 I won't call out any of the sort of UK publishing sites that I end up on sometimes, and um, like my computer starts like heating up and making noises and stuff. [chuckles] Uh, because 174 00:28:07.504 --> 00:28:17.244 y- you know, couldn't this end up leading to like a, a, a worse like web experience? Like 'cause I, I think... Look, I think it's been oversold the fact that people don't hate advertising. 175 00:28:17.254 --> 00:28:24.844 They just hate like, you know, irrelevant advertising because I think, you know, retargeting to me is like a perfect example of that. 176 00:28:25.264 --> 00:28:35.144 Uh, it's absolutely like a great form of advertising, and like everything on the internet, anything that works gets, gets overdone to the point where it doesn't work. Yeah. And- Yeah... 177 00:28:35.184 --> 00:28:43.504 you know, I know in covering this industry for so many years, I always say like family members used to like ask me, "Well, why do I get all these pop-up ads?" 178 00:28:43.544 --> 00:28:53.184 And then they started asking me, "Why do I get chased around by whatever I looked at on, on an e-commerce site?" So it became synonymous with the worst parts of the internet. 179 00:28:53.224 --> 00:29:04.184 But won't, won't these publishers rather than say when you say you can't be monetized, they're just gonna load more and more untargeted ads on their sites, aren't they? Yeah, it's quite possible. 180 00:29:04.284 --> 00:29:09.784 To be honest, I, I actually... I don't know what the strategy is for long tail publishers. 181 00:29:09.884 --> 00:29:29.344 I think if you-- and I think this is kind of interesting, is if you have a couple of hundred thousand visitors who are really kind of dedicated to your type of content, I actually think kind of that pushes you towards this subscription-based model, is I think kind of these niche high-quality content sites will do really well from this. 182 00:29:29.844 --> 00:29:38.844 I think it's kind of the long tail, which has made its money via clickbait and has monetized by cramming ads on a page, is just not going to become sustainable. 183 00:29:38.884 --> 00:29:47.964 There's a limit to the number of pixels on a screen and limit to the number of ads you can serve, and those business models will just be unsustainable. So in some ways, I say it's a good thing, right? 184 00:29:48.004 --> 00:29:58.563 I think it should clear out a load of junk which has been like funded by like a really eccentric internet kind of advertising model and, and, and, and, and kinda economic model. 185 00:29:58.904 --> 00:30:07.804 So I think like that would be hugely positive. But yes, I'm sure the quality will degrade for a while until hopefully bad sites disappear. Yeah. 186 00:30:08.244 --> 00:30:14.464 So I also in, in, in covering this for so long, like the, you know, internet advertising growth has continued to... 187 00:30:14.624 --> 00:30:23.624 You know, there's been like a couple of like, you know, maybe after the financial crisis, it was the first time it, it, it didn't grow and then with, with COVID, but then it, it started back on its growth path. 188 00:30:23.804 --> 00:30:30.254 Won't this end up just sucking money out of the digital advertising system or will it- I think it, um-... 189 00:30:30.284 --> 00:30:42.268 just adapt?Yeah, I think we, we-- we're still spending more and more time online, and because of that, w-share of wallet should grow in actually kind of platforms which weren't digital are now becoming digital. 190 00:30:42.308 --> 00:30:45.008 So I think you will continue to see this growth. 191 00:30:45.648 --> 00:31:01.228 I think what we believe really passionately is as you move from kind of this open web of data leakage and unconsented data to responsible web of consented data and kind of strong data security principles, you see a new set of entrants. 192 00:31:01.388 --> 00:31:08.988 Before kind of certainly in the Western world, you either sold products or you sold ads, and that's changing really rapidly. 193 00:31:09.068 --> 00:31:18.408 We're seeing a whole new generation of company who used to only sell products now sell ads, and they're building some of the highest growth ads businesses in this ecosystem. 194 00:31:18.448 --> 00:31:23.658 So I think kind of the fact that Uber- You mean like the re-the retail, the retail media, like- Exactly. Yeah. 195 00:31:23.688 --> 00:31:35.958 Retail media or Uber or kind of broadcasters going digital, there is-- there are new participants and new entrants. So no, I don't believe digital advertising will, um, disappear or slow down. Yeah. 196 00:31:35.988 --> 00:31:39.608 I think it will continue to grow. It's just being reallocated. Yeah. 197 00:31:39.668 --> 00:31:52.808 The duopoly is, is RIP is, like, going to be like a massive oligopoly because so many of these retail, you know, they, they've all woken up to the fact that they're sitting on a ton of tremendous data. 198 00:31:52.868 --> 00:32:03.248 It's the actual purchase data. It's, it's so valuable. It's not like I can remember I was like, this is like my walk down memory lane, but covering be-behavioral advertising when it started. 199 00:32:03.308 --> 00:32:20.308 You know, th-they-- a-according to behavioral to-advertising, anyone who looked at like a site that like even mentioned a car was in market for a car and like [laughs] there was the, the segments for in-market car buyers were like fifteen times the number of cars sold in that [laughs] that period. 200 00:32:20.398 --> 00:32:29.358 Yeah. But, but like that's, you know, the sort of guesswork that's been involved in, in a lot of advertising. But with retailers, they know. Like they've got- Yes. 201 00:32:29.358 --> 00:32:44.468 -very good data, and they got it like through a, a, a direct relationship with the consumer. Exactly. So I, I, I'm very bullish on kind of digital advertising as it becomes responsible, actually kind of growing. 202 00:32:45.248 --> 00:32:48.208 I, I, I think the money is clearly being reallocated. 203 00:32:48.308 --> 00:33:04.848 I think this bias is towards the largest companies and the kind of companies who have the biggest user bases and collection of data, and it's probably the top thousand pu-publishers, websites in the world, apps in the world benefit from this, and the long tail will likely kind of find it tough. 204 00:33:05.728 --> 00:33:16.928 Right. Yeah. I like the responsible web framing too, because a lot of-- I feel like a lot of things in, in digital media, uh, have been... They've been done because they-they're technically possible. 205 00:33:16.958 --> 00:33:20.248 [laughs] But like there-there's been like, I don't know, like, I mean, it's, it's, 206 00:33:21.348 --> 00:33:29.998 it's obviously been driven by, by, by technology, but I felt-- I've always felt like there, there needed to be a little bit more like liberal arts and like, you know, understanding- Yes. 207 00:33:29.998 --> 00:33:31.868 -like human motivations and stuff. 208 00:33:31.948 --> 00:33:47.868 And like, it's the same way as like the very technical aspect is, you know, this is not a privacy issue, the, the cookie, it's third party and stuff like this, but from a, a, a how people think about things, when you add it all up, it's just a complete lack of trust. 209 00:33:47.968 --> 00:33:57.778 Because again, it's like- Yes. -it's disappearing into the background. There's the adversarial nature of like worrying that your, your computer's gonna be infected because there's so many ads. Yeah. 210 00:33:57.868 --> 00:34:07.598 I think it just all adds up. A hundred percent. I think like as consumers are becoming more aware about this and the John Oliver segment or whatever else it is- Yeah. 211 00:34:07.598 --> 00:34:14.948 -like it's all building and people are starting to understand, "Hey, this is what's happening to my data, and I don't like this trade-off." 212 00:34:15.108 --> 00:34:25.608 And I think kind of whether regulators started it or not, we're now-- I think the piece which I always used to hear from ad tech companies is, "This is what politicians and regulators want. It's not what consumers want." 213 00:34:25.988 --> 00:34:36.348 Actually, now that consumers are becoming hyper-aware of this, like I do really believe we're starting to see that sentiment change and you're seeing it in- Yeah. -popular culture. 214 00:34:36.968 --> 00:34:49.408 So final thing is, this is a little web three, but I feel again like there's cycles for everything and yet again, I-I'm starting to hear talk about people should be paid for their data. Okay? 215 00:34:49.648 --> 00:35:04.788 Tell me why this is like a, either a, a possible outcome or ridiculous. [laughs] Wow. This is, this is big Miami energy. Big Miami energy. I love it. That should be my spin-off podcast. 216 00:35:04.828 --> 00:35:19.168 That'll be my spin-off ad tech podcast. [laughs] I love it. Uh, I think it's interesting. Um, I think if people knew how little their data was worth- [laughs] -they'd be kind of shocked, right? Yeah. Is, um, like, 217 00:35:20.148 --> 00:35:30.588 yes, okay, I can set up this thing which maybe kind of leases my data to companies to use for targeting, but what I'll get a check cut for me for like a dollar a year or something. 218 00:35:30.608 --> 00:35:36.228 [laughs] Like I'm not convinced it's actually kind of people will benefit that much financially from it. 219 00:35:36.268 --> 00:35:44.928 Then the other question to me, I think often when I hear these conversations, people are also saying, "Hey, well, I can tell you what I want more than you can tell me. 220 00:35:45.108 --> 00:35:52.188 So like, let me tell you what ads serve and pay me for this." The earliest days of Permutive, we were doing content recommendation and- Yeah. 221 00:35:52.428 --> 00:36:02.028 -we would get everyone's kind of likes from Facebook, and then we would get all their browsing behavior on a publisher's website, and we were trying to build this model to recommend them content. 222 00:36:02.568 --> 00:36:11.968 And on Facebook, they say, "Oh, I like Aristotle or Socrates," but actually my browsing behavior shows that, like, what I'm actually interested in is the polar opposite of that. 223 00:36:12.008 --> 00:36:15.788 I'm interested in Married at First Sight Australia or Selling, Selling Sunset. 224 00:36:16.148 --> 00:36:28.368 So like I think kind of also this misconception that kind of what you know about yourself is more valuable, and I think actually kind of the data you're generating with a publisher is a much better insight for an advertiser into what you actually want. 225 00:36:28.848 --> 00:36:36.248 And you've already made this trade-off with a publisher of like, "Hey, if I'm getting your content for free, then you're kind of getting my data," and there's this kind of value exchange happening there already. 226 00:36:36.368 --> 00:36:46.630 Um-So long-winded way of saying like, I don't think people will want a dollar a year, um- Yeah In, in- All right. So actually, there's a bonus question for Big Miami Energy. Okay. 227 00:36:46.630 --> 00:36:58.500 This is also a Big Miami Energy question. Uh, is Facebook listening to us o-on the phone? [laughs] No. Ex-explain- I mean, we- [laughs] 228 00:36:58.840 --> 00:37:10.820 Because I promise you, every single person I've talked to in this industry confidently says no, but then at the same time, they admit to having several moments in which they have been like, "You know, that's really weird- Yeah... 229 00:37:10.889 --> 00:37:15.320 because I just talked about that." Explain why there's that. I don't know if you can explain in this. 230 00:37:15.360 --> 00:37:23.500 Maybe it's for the Big Miami Energy podcast, but like why those instances happen, where all of us have been convinced at some point that Facebook is listening to us. 231 00:37:24.420 --> 00:37:31.940 Because you throw off signals, I suppose, in your browsing behavior, which are indicative of also what you're then gonna go and talk about later. 232 00:37:31.980 --> 00:37:41.540 So sometimes, very rarely, the algorithm is like so smart that it, it figures this out. And I think people overvalue ad tech's ability to actually predict what you want. 233 00:37:41.580 --> 00:37:50.220 If they knew how stupid a lot of the systems were, I think they would be shocked. But every now and again, the system works remarkably well, and you think that you've been listened to. Yeah. 234 00:37:50.380 --> 00:38:00.680 I mean, I've asked this like question in like a room of like people in like the advertising industry, and like three-quarters of the hands go up for they're listening. [laughs] It's pre- it's pretty remarkable. 235 00:38:01.020 --> 00:38:14.150 But I think it actually speaks-- And, and this is, this is people in the industry, but I think it really speaks to what happens when everything is obfuscated, when there is like a lack of transparency because- Yes... 236 00:38:14.220 --> 00:38:25.100 you know, people's minds go, uh, to maybe like, you know, the worst. Like, "Hey, maybe they are listening to me." That-- You're so right. I couldn't agree with that more. Yeah. 237 00:38:25.560 --> 00:38:36.170 All right, Joe, we're gonna wrap it up there. Thank you for being a guest here, and you're gonna be the first guest on the Big Miami Energy podcast. [laughs] Thank you, Brian. Awesome. Thank you. Cheers. 238 00:38:36.260 --> 00:38:49.100 And thank you all for listening. We'll be back next week with a new episode. This episode was produced by Jay Sparks from Podhelp Us. If you are in the market for a podcast, I highly recommend you use Podhelp Us. 239 00:38:49.300 --> 00:38:56.260 Find out more at podhelp.us. That's podhelp.us. I don't feel like I need to spell that. 240 00:38:59.860 --> 00:39:14.920 [upbeat music]