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I, I hope this doesn't seem like hyperbole, but I believe that the future of our democracy [laughs] actually rides on the ability for journalism- Yeah... to be able to have a model that succeeds.

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But if you layer enough slices of Swiss cheese on top of one another, you start to get a lot of coverage. So [laughs] the future is a bunch of slices of Swiss cheese. Does that make any sense?

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Yeah, it, it absolutely makes sense. I wanna advertise dog food, right?

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Like- [upbeat music] Welcome to the Rebooting show.

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I'm Brian Morrissey. This is a spotlight episode in which I have a discussion with the underwriting sponsor of the Rebooting.

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The last five episodes in this mini season were brought to you by Audigent, and I have known Jake Abraham, Audigent's president from my former job for many years.

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And I've enjoyed working with them to understand how Audigent helps publishers make their data a competitive advantage. I think too often the use of data in publishing and advertising is thought in very binary terms.

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First-party data is good, third-party data is bad. Contextual is good, audience targeting is bad. You know, the truth, publishing is like any other industry. It's gonna use more data, not less in five years' time.

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But how it uses that data is changing, and it's changing every day. Just look at the phase out of the third-party cookie and what a mess that has been, and also the various regulations that are coming into effect.

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I don't even think we know all of them just yet. Jake helps sort out what is happening, what matters, and why publishers can end up benefiting from this period of flux. To learn more, visit audigent.com.

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That is A-U-D-I-G-E-N-T.com. Hope you enjoy the episode. So I'm just gonna go right into it. Are you ready, Jake? I think as ready as we'll be. Yeah. Yeah, that's fine. That's fine. I like it. Yeah.

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When we talk Philly sports, Dave, just know this. Hell yeah. I don't know, James Harden, I'm still trying to get my arms around that idea. I guess. I don't know at this point. Anything's better than Tobias.

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All right, Jake, welcome to the program. Brian, it's so good to be here. It's great to finally be seeing you and hearing you after, uh, being a third-party listener for so long. Okay.

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Well, third-party, second party, zero party, we're gonna get into the data today.

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So we were talking actually before we started recording this, my general belief when it comes to the use of data in any field in our economy or society is that we're gonna be using more data in five years than we are now.

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I think that's a good bet.

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And yet, I feel like in the publishing and advertising world for a bunch of different reasons, we're in this period where people are saying, "Oh, they're gonna take away all the data because of third-party cookie," and stuff like this.

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And I just think the rules are changing slightly. But give me the lay of the land about where we are when it comes to the application of data in the publishing and advertising ecosystem. Sure. Big question.

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I've seen data be considered like an asset or an asset class. I mean, I think that for publishers, um, of all kinds, they create intellectual property, whether that's visual or audio or written.

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Those are all incredibly important intellectual properties to own. And then there's audience, and audience used to be pretty transitory, or you had a, a very static audience.

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But nonetheless, the ability to apply data now means that audience can be an asset as well.

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And I think that the platforms have understood that incredibly well, and whether they're the walled gardens or other large assets, they've understood the value of audience for a long time, and they've wanted to really hold tight to that ownership.

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And so I think there's a, a new world out there that has let audience move beyond just those walls, and so there becomes the big question of who gets to own those assets and, uh, how, what is the liquidity around that asset and, and how do we use it moving forward in a way that is both, uh, privacy-centric and done in ways that users know about and is also good for commerce.

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Okay, so with that as a backdrop and, and just to go further back, like what mistakes do you think have been made in this industry that have allowed the smart use of data to, at least in theory, personalize advertising to become widely construed?

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And I see this now everywhere. I have to run the data myself. But I believe surveillance advertising, if I do the Google trends, is gonna be going up, right? Like, people are using surveillance advertising.

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They're not using personalized advertising as much. The only people using personalized advertising work in the industry, I feel like. Well, certainly it would seem that what is classically considered retargeting- Yeah...

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has been one of the larger offenders, probably both on the industry side as well as on the consumer side.

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That idea that digital advertising is basically I go to a digital store or I consume a certain type of piece of content, and then I end up seeing display advertising for the very thing which I was looking at, uh, across the entire ecosystem.

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That I think has done a lot of harm because to many consumers, they see that as, I think, what you define as surveillance.

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You know what's, uh, interesting 'cause you, you brought that up, and I don't know if we've talked about this previously, but I can remember just in covering this industry for, for a long time, it used to be 20 years ago, like if, you know, my parents would ask me, they'd be like, "Okay, so why do I, why do I get all the pop-up ads?"

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I'm like, "Oh, I've been writing about online advertising." A-and then immediately normal people just asked about the pop-up ads. And now normal people ask about the retargeting ads.

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It's like, "Why am I being followed around by these shoes that I already bought?"

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And I think what's interesting about that to me, in many ways, I feel like the industry has done itself a disservice because it's, it's done things because they're tech-technically possible, but that there hasn't been enough thought placed on-How people will perceive that, 'cause a lot of people in the industry were a little bit flat-footed by a lot of these privacy concerns, thinking they were just whipped up by activists who did whip up a lot of hysteria around this.

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It's hard to find a victim. You're like, who gets victimized by cookies with no PII? There are victims all around, to be totally honest. [laughs] Are there? I think they just maybe are un- un- un- unknowing victims.

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Well, look, I think publishers are victims often. I mean, their margins are squeezed harder than ever before. They're creating content.

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I mean, I got into this business because I was a film and television producer for 20 years, and I've always been about protecting the content creators, and I think it's harder and harder to be a creator.

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And as the technology evolves and there's more and more middlemen, it's easy to lose sight of the fact that a publisher might be considered a victim.

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But I think it's very, very hard in this ecosystem to understand, uh, the technology and understand how those middlemen might be using the data and taking a VIG on, on the transaction.

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And some of them are pro- are providing super important great service. I think we do that. But there's plenty of others that, in a pretty unregulated industry, have found a way to insert themselves and, and arbitrage.

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And while that may not be illegal, it certainly doesn't provide a lot of, of value. A- and that's what people have commonly referred to as the ad tech tax or, or whatever. They basically, the, the idea that...

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I don't know if you rem- remember those commercials, like how a bill becomes a law. Like, I'm just a bill on Capitol Hill. [singing] I'm just a bill. Yes, I'm only a bill. And I'm sitting here on Capitol Hill.

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Well, it's so- Yeah, Schoolhouse Rock... long day. Brian, don't think I'm too young for Schoolhouse Rock. [laughs] I was just trying to flatter you.

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What I've always wanted to do is, like, "I'm just a dollar on Madison Avenue," and then it makes its way down Madison Avenue, and everyone takes a chunk out of it as it moves its way to the publisher, and that's definitely been real.

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And I feel like a lot of that has stemmed from the pendulum always swings too far. I feel like maybe it's in most fields, but particularly in this field.

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But it's swung so far to individualize one-to-one marketing and the promises that dog owners would only see dog food ads, not cat food ads and stuff like this, and it, it ended up devaluing context to some degree.

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And of course, the answer is both, right? Of course, the answer is both. [laughs] Yeah, absolutely.

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When you use that dollar, I, I'm reminded of something I think I still see all the time, the meme around how much of an advertising dollar goes back to the publisher, and it's three pennies.

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I th- I think that's a somewhat misguided look. It's the same thing as saying- Yeah... well, how much of a cup of coffee goes back to the producer?

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There's a lot of people in the chain that provide value between the guy that puts the plant in the ground- Right... and the barista who's actually grinding your cappuccino. These are not the same thing.

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So there's plenty of value in the chain to go around.

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The question becomes, how do we ensure that those that are actually in there with their hand out are providing value back to the publisher and hopefully to the advertiser and consumer as well? Yeah.

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That kind of statistic is what we call in journalism, too good to check [laughs]. [laughs] Okay, well, let's not start today. 'Cause it tells a good story, and people like stories at the end of the day.

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But it's been undeniable that a- as data has played a, a larger role in advertising, it has... Correlation is not causation, but it has definitely correlated with publishing business getting a lot harder.

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There's no doubt. And things are technologically potentially complex, and third-party cookies have not made that any easier.

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Third-party cookies were a hack or, or a crutch for the buy side of the industry that publishers glommed onto out of necessity, and, and here we are with what we have today.

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I, I came into the business as the third-party cookie was starting to have people looking at it as what comes next.

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And so Audigent was an amazing place to come and start really thinking about some of those issues, about what comes next and how do content creators hold on to, uh, a position or regain a position in the marketplace when, uh, there's an opportunity, when there's such a tectonic change under- underway.

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Yeah. So explain where Audigent sees the cookieless future. What does that look like? 'Cause I think we'll talk about how there's a lot up in the air right now. I mean, every day it's like FLOCH is dead.

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People had just learned what FLOCH stood for, now all of a sudden it's gone or going away, and, uh, there's a lot of uncertainty out there.

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I can remember a couple years ago, I, I had some, some art made for a story of a cookie being crucified, and some people told me we couldn't run it 'cause it [laughs] might be offensive.

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Hey, religion has never shied away from advertising. I'm like, well, that's what they're doing to the cookie. Yeah, it's a little provocative. Who's gonna complain?

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What is the mission for Audigent when it comes to helping the industry move to this cookieless future? Big question.

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Ultimately, what Audigent sees as a whole is the need to create liquidity, meaning, like the ability to transact, and I think that we wanna do that in a way where all players can play in the space, so that's publishers and advertisers and platforms.

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I think one of the things that's been hard to date is that there are certain giant platforms that have really dominated. We know that 79% of all non-search advertising goes to three different platforms.

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And so when we look at what's next, we wanna create a scenario where we can have liquidity around data, meaning the ability to use it in the ecosystem, uh, I would say democratically, meaning that whether it's a publisher or an advertiser, we understand, uh, what it is and who it is in a way that we've all agree is central to the privacy of the consumer.

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And consumers need to be able to continue to opt in, and we'll see how legislation and regulation all play out.

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We wanna be in a place where regardless of how all of that happens, we're able to continue to provide the types of tools that publishers need and the types of ways that advertisers need to buy, and we should be able to come together and do that.

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Yeah. So publishers, uh, mostly they, they talk about their first-party data like their children, like it's like they're the most beautiful, perfect things in the world.

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It, it seems like the reality is individual publishers themselves, most of them are not going to have enough data and a deep enough data sets to do the kind of targeting or personalization, if you want to, the giant platforms do.

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That is why most of the ad money has gone to Google and Facebook and Amazon, right?Absolutely. And I think that what we say to publishers all the time is that that next publisher isn't your enemy.

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That next publisher is your partner in this larger ecosystem. And I think that a number of publishers do see that.

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We operate as a cooperative, meaning that a lot of publishers can collaborate on data in order to achieve scale, and certainly with the kind of scale that we have, we see over two billion devices, we have the ability to certainly play in the scale game as well.

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So certainly as a niche player, an individual advertiser may not have massive scale, but that doesn't mean that they don't have partnerships and tool sets to be able to still deliver the way they need to satisfy advertisers.

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So how do you see it evolving? 'Cause I feel like there, a lot of times context is put in opposition to audience-level data, right?

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It almost seems like context is the alternative to, to targeting people based on their individual interests. It would seem like most things, the answer is both, the answer is somewhere in between.

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Like, you use both, right?

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I mean, it's funny you mention that, Brian, because it seems logical, and yet I don't see much of that discussion taking place today, and that's probably because their particular business is with interest.

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[laughs] If they're not selling that, then [laughs] they're not gonna talk about it.

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[laughs] So yeah, we see contextual, been around forever, and because it's certainly privacy compliant, potentially cookieless, depending on how you're operating, um, and the IAB has built a whole framework around it that's very simple, like contextual is back.

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[laughs] And, and it has plenty of use cases, and they're very broad. They're probably also going to be very commoditized. And then on the other end of the spectrum, we have what most of us call addressable. Yeah.

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Addressable is very interesting, too, whether that's a logged in user or s-some other way that we can one-to-one identify a particular-- There's addressable and there's certain identity platforms and demand-side platforms that have specific answers around addressable a-and those are good, too.

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Most people consider those to be relatively small swaths of the future because there's not that much of an addressable audience.

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It will be very premium, and we wanna ensure that publishers can, uh, play in that space, too.

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But to your point, we think there's a very sweet middle spot, I tend to call it, like, contextual plus, where the context of the page is critically important, but we wanna know the content of a page and who's consuming it, but then we wanna be able to deliver, uh, both on behalf of the publisher and into the advertisers, other important things about that audience, and that's what creates what we think the added value.

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And again, we think that we can do it in ways that will be future-proofed so that regardless of how platforms evolve, regardless of how privacy evolves, there will continue to be ways to deliver something more than just a contextual signal.

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Not taking anything away from contextual. It's an important part of what we do. But what more can we add so that we can provide more value and have our publishers getting a leg up, uh, on the competition? Yeah.

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So give me an example o-of publisher utilizing this. Well, it's interesting. Dave Rosner did an amazing job yesterday of helping us get part of our new story out around cookieless identity.

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There's the context of the page, meaning there's the ability to say, "This is a page about, uh, rock music or a page about hip-hop music," potentially different audiences.

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There's a particular interest that we can, we can glean.

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But there's also potentially other demographic signals or historical page signals that allow us to say something more about who this might be in a probabilistic way, and we think that not only does that not reveal who this is, this is not one-to-one marketing, where we're saying, "This is Brian."

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Yeah. "Brian went here. Target him with this ad." It's still very much what's considered like a flock-based, topic-based, v- they call it now vectorized idea of an audience.

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And so it's not that we're looking to use p-personally identifiable information, but we are looking to, to bring as much resolution as we can- Yeah...

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and do it in a way which has audience liquidity, meaning it has the ability to be understood in an ecosystem at large.

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Not just only understood on one publisher's page, but understood in a larger context so that people can actually bid on those things, right? Because when there's demand, then we'll be able to get, uh, more value. Yeah.

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So that sounds even more complicated, then. Like [laughs] like I read this book by Michael Lewis, like, about the, the pandemic.

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I forget the name of it right now, but he talked about the mitigation strategy that we ended up with as being, like, the Swiss cheese strategy, in that none of it is one hundred percent. There's giant holes everywhere.

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But if you layer enough slices of Swiss cheese on top of one another, you start to get a lot of coverage.

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So [laughs] the future when it comes to personalizing ads, targeting ads, or something like this, is a bunch of slices of Swiss cheese to some degree.

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We're gonna suck up a ton of data, and it's gonna tell us these exact things about this person, and then we're gonna use the, the, those signals to put the right ad in front of them. Does that make any sense?

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Yeah, it, it absolutely makes sense.

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I think the jury's out on what will be the most useful, meaning, like, we don't always see, to your point, content about dog food, dog food owner, dog owner, I, I wanna advertise dog food, right?

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In any way, how CPG advertising works, right? There's much more complexity to it. Digital has enabled that complexity. In the days of newspaper advertising and radio advertising, it was different.

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It was contextual with certain types of audience components based on the channel.

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Now, with digital and addressable, it's a, it is a much more complex ecosystem that has enabled advertisers to want more performance, more specificity, more targeting, and so that has been very advantageous to the platforms that have that massive footprint.

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We're trying to bring more tools to publishers so that they can play in that space and deliver more of that addressable or contextual or contextual plus solution without losing focus on their main mission, which is create amazing content so that they have the ability to drive audience there, right?

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Like, we don't even talk about that part of it much anymore. We're so interested in how do we drive value from the audience. What gets the audience there in the first place?

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Let's get that publisher focused on that and then let companies like ours and others in the ecosystem actually help for some of these more complex topics, as you said. Yeah.

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So what are the steps a progressive publisher has to takeIn order to be able to fully utilize their data assets.

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First of all, every publisher claims to be a premium publisher, but secondly, [laughs] I've never met a publisher that is like, "No, we're not premium." Um, but- Oh, I could show you a few, Brian. Oh, really?

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Those are good. Self-awareness- [laughs]... in this is one of the greatest, uh [laughs] You've never done a search and ended up on a less than premium page?

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What are the steps a publisher has to take in order to be able to utilize their data assets?

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Because again, every publisher says that, "Oh, we've got very powerful first-party data," and all this stuff like this, but in, in truth, very few I'm sure do. Look, first-party data is just a term, right?

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So, like, different publishers have different types of first-party data. I think there's a bit of a misnomer that first-party data has to be like an email address. First-party data can be lots of things.

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To us, first-party data means it's collected by the content owner, so the publisher is collecting their own audience's data.

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In the third-party space, it was different ways of collecting data where it was not the, the, the publisher who was necessarily collecting that data, third-party context.

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So first-party data can come from a number of different mechanisms.

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There's first-party cookies, there's other deterministic identifiers as we know, mobile ad IDs, and all sorts of things, so it doesn't have to be- So it doesn't have to be getting people logged in, a logged in state?

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That is a type of first-party data- Right... but it does not, that is absolutely not a requirement. Okay. So publishers that have been told that or believe, "Oh my gosh, I have to have a logged in user.

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I have to start creating sticky content that gets someone to log in," I m- I love that idea. I, I want users to be engaged with the content, and there are some companies doing really amazing work

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in connection with publishers to help them around, "How are we gonna g- move from this totally anonymized, uh, uh, fly by night audience to something that's more sticky that actually keeps an audience there and gets them to want to engage?"

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I think that's fantastic, but it's not an absolute requirement to have that login. So there's absolutely first-party cookies.

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There's a lot of misnomer or, or there's a lot of misinformation because people hear cookie and say that's going away. The truth is, third-party cookies are being deprecated by particular platforms.

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First-party cookies will continue to be an incredibly important part of the publisher's- Mm... toolkit. We work with first-party cookies on behalf of publishers all day long, so there's many mechanisms.

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A- and I'm sorry, just, just like a first-party cookie is, is simply like a publisher- Correct... in a browser, and it, it can be used to keep people logged in.

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It can do lots of different things, per, true personalization of content. Yeah. If you've set some preferences in- Yeah...

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a particular publisher, here's how I want my login to look, or here's how I want the homepage to look when I arrive, it will remember that on your behalf. That's not going away. Yeah.

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And third-party cookies, on the other hand, they were kinda in the background. I think that even if nothing nefarious is going on, there's a pool here.

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They insist on taking the credit card when you order, like, a cup of coffee, and they'll, they'll take it away for four hours, and I don't really like the idea that you're just taking my credit card away for four hours somewhere else, and I don't know what's going on, and generally w- Yep.

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Then you found a couple charges on your statement and you realized- [laughs] I mean-...

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actually it probably was not an amazing idea to leave it for so long And you know context is important, and since the context is Miami, I assume that people are running some kinda scam.

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But be that as it may, I don't think people like stuff going on in the background where they don't like under- they don't have...

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I think that was always the challenge of the way the ad tech system was architected, is that there were a lot of companies doing a lot of valuable things.

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By necessity it happened in the background, whereas the relationship was always with the place where the, the, the user went.

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Now, the downside of that is if we move to just prioritizing that, guess who's gonna take an even larger part of the pie? They might just take the whole pie, 'cause they have a direct relationship with all the users.

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Yeah, there's no doubt. It's probably a longer conversation than we have for this podcast to talk about how well the platforms have positioned themselves in relation to consumer privacy.

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I mean, it's kind of been like a master stroke of that positioning. I, I don't think that it actually leads toward the best consumer privacy moving forward.

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It's great that everyone signs up for the email, and the shared workspace, and the browser, and mobile operating system, and all of these things.

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It's a massive trove of first-party data that has been used to make companies like Google the top five largest companies ever created.

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That doesn't mean, though, that we can't work with publishers to build a infrastructure that allows them to compete in that space, and I think that search is one thing, but content creation is another, and if publishers lead into what they do best, it's competitive.

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As you know, Brian, you are a publisher. Mm-hmm. You were a publisher. You've been in that space, and it's about creating content and bringing audience to it, and, and that is easier said than done.

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There are legacy businesses that are still trading on a legacy name that need to refresh and update content, and then there's upstart players who have incredible content but haven't found that audience yet.

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They're all growing in new ways to take advantage of this ecosystem, which is content plus audience in an attempt to battle for ad dollars- Mm... with the biggest giants.

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So give me a scenario in which all of the changes going on right now, whether it's added together to deprecation of the third-party cookie, all the pressure on platforms, bills coming out against, like, surveillance advertising and whatnot.

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We, we don't know how the environment will change, but just to look in the, the crystal ball, is this a net positive for publishers creating quality content? 'Cause I don't really know.

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Like, I think a lot of people just assume because context will be m- more important, that publishers will benefit, but there's the other side that says that this is just gonna depress the overall market.

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Well, I think that volume of data is certainly increasing, and as that grows, the chance for commoditization grows, too. In fact, that took place in what I would call, like, version one of the internet.

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There was an incredible commoditization of relatively shallow insights. So the data wasn't valuable. It wasn't valuable for advertisers.

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It wasn't particularly monetizable for publishers, and it didn't really equate to, to, too much in the ecosystem.

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Now there's a, a next generation coming where with quality content you have the opportunity to grow your-Engaged audience. And, and engagement is important.

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So the more engaged your audience, the more willing they'll be, first of all, to follow your brand, your publishing brand, or even the influencers within your brand.

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Then you'll have the opportunity to both engage with them more on your platform, and if you're ad-supported, that's important. If you're subscriber-based, that's even more critical. And the ability to say, "Hey,

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we also use the relationship that we have with you to engage with you in other places." And that's the kind of audience liquidity or the ability to own that audience across the ecosystem.

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And the more that's understood, publishers, I think, can be more transparent about it and say, "Hey, we are in an ad-supported world, and your support means a lot to us. We create this amazing content,

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and we use the context of this audience in interesting ways across the ecosystem." That's very good for advertisers, and it's very good for publishers. It should be good for audiences, too.

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So I reject the idea that the content doesn't matter. The publishers, the super premium publishers we work with, Brian, they are all in the business of creating quality content. Some of it is UGC. You think about fandom.

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Yeah. Right?

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They create their own content, but they also rely on an incredible amount of community involvement in both content creation, moderation and, and commenting, and it's a super engaged community around mostly UGC, but also professionally created content to be the largest, you know, single independent entertainment publisher on the internet.

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They have super engaged fans.

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And whether it's a company like that or a company like Slickdeals who's providing a service to f-help audiences find the best deals on the internet, different kind of content creation, right?

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It's not beautiful slick imagery and beautifully written articles as much as it is deal finders and providing a forum for people to talk about discount commerce and where to find the best deals.

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And all of those things matter. Those are communities that have fans and absolutely rely on those publishers for information and community building.

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And so I think that those publishers have a big leg up on publishers that may not be working so hard on finding that audience- Mm-hmm... and finding who they're going to be engaged with for the next one, five, ten years.

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Yeah. Hey, how about on the advertiser side? Because I think there is a good case to be made. I'm a little cynical about it, but there...

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I think there is a good case to be made that the status quo has really benefited small businesses and challenger brands, right? Because it's an open system, and you just look at the DTC market.

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I mean, that stuff was built off of targeted advertising on Instagram and Facebook. A-and the question ends up becoming, like, is this...

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Because usually, look, as more regulations come, and regulations can be placed by governments, and these days, regulations can be placed by even more powerful entities known as platforms, um, they always benefit incumbents.

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I think in the history of regulation, incumbents usually come out ahead. They're like, "Oh yeah, sure. We got tons of lawyers. We got tons of compliance people. We've tons of resources. We can deal with this."

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But what's gonna be the impact on the advertiser side as the use of data becomes, I would say, more expensive? More expensive, to go back to our model- Yeah... addressable, expensive.

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If you think about, like, cost per acquisition models- Mm-hmm... who's able to afford those, right? Pharma, sports gambling, auto, right? Big, big spenders. But we see challengers in that space, too.

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We see the ability to be more targeted, and you have to place some bets. You can't be Procter & Gamble. You can't be everywhere at every time.

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But part of what's interesting about our jobs is that on the publisher side, we're, we're gathering data, but then on the advertiser side, we're really working to help understand not just the simple context, but also we work with small businesses.

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Where do we place bets around where do we think there'll be conversion? Where do we think people will actually be interested? And obviously, Facebook has done an incredible job over the years at that.

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If you look now, Facebook's actually struggling more and more with that as the pricing models change and as the targeting changes on Facebook.

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And we have small businesses coming to us all the time saying, "It was amazing. My first ten thousand customers- Yeah... on Facebook, yo, it was crazy.

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We did it for, like, a two dollar CPA, and then suddenly we hit ten thousand users and hit a brick wall." That's not by accident. That's by design, right?

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You're inside a platform, and you're totally subject to their math and their algorithms and their models. And, and that's great that they can get you hooked that way, but then what?

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And so I think in an open model, what we're banking on is the idea that we'll be able to use an open ecosystem and open data to help smaller businesses continue to find value.

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And they won't always be able to find it in addressable, where it might be more expensive, but if we're doing our jobs right on the buy side, we should absolutely be able to continue to drive value when a combination of context and targeting can provide what we couldn't provide before digital.

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Yeah. I think that platform model you describe sounds a lot like it was pioneered by drug dealers a long time ago. Um [laughs] I didn't know if this was the kind of podcast where I was allowed to say that. Similar.

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Some-sometimes you don't need- Which one's always free, right? You don't need to reinvent your go-to-market strategy when it's already been, like, honed over hundreds of years.

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[laughs] I, I know you say it in jest, but there is a lot of relevancy there. Yeah. And, and it's unfortunate.

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There's many conversations I've had with advertisers over the years who say, like, "Why would we work with you guys? We're in Facebook- Mm... and it just works."

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And it's always, I hate to say it, but like I told you, talk to me in six months. Yeah. Talk to me in a year, because it is in-increasingly harder to continue to find success there. And I think if...

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I'm not a Facebook expert- Yeah...

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but I think if you talk to folks that are, they find that it is more and more of a struggle, and Facebook is absolutely losing market share among small and medium businesses because of, uh, the experiences.Okay, Jay, take a stand.

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Is the third-party cookie going away good or bad for publishers? No on the one hand, on the, or on the other hand. Good or bad? Beyond good. Beyond good. Okay. Why? Beyond good. Great. It, it, it was a hack.

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I mean, the third-party cookie was really built and optimized by the buy side, and so a lot of how data transacts today, which is probably more friendly to the advertiser, uh, is based on a third-party cookie.

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So in a lot of ways we get a reset, and that reset gives the, the industry an opportunity to rethink a lot of things.

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And while it's messy in the middle, ultimately we come out with publisher as the source of truth, more transparency, better privacy, and more tools to actually do both what advertisers and publishers want. Yeah.

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It's the end of a basketball game if you're losing by like bunch of points and like it gets a little chaotic, hey, why not? [laughs] Oh, it's so brutal.

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The hackathons in the last ten seconds of an NBA game are just brutal. One of the big trends I think we're seeing in publishing, Troy Young had mentioned this in his newsletter today, was from CPM to GMV.

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And I believe at the basis of that pithy little statement, publishers used to just show ads to, but now they can actually drive sales, and it's better when your cost of goods sold than, than when you're a marketing expense.

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Yeah, look, I think that it's hard, but it also, the higher risk, higher reward. If you look at a publisher, like we represent Food fifty-two, amazing brand.

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Now they always created amazing content, but now they're moving from content to commerce. What does that mean?

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That means that they're not just selling other kitchen products, they now own their own, and in fact they've had so much success, you may have seen they recently had another big either VC or private equity dump of dollars to buy some more brands.

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They're buying older brands, renewing them- Yeah... and then actually driving their own commerce to, to the Food fifty-two store. But when you say brands, not like publishing brands, like making saute skillets and stuff.

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Uh, yeah.

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They, they bought like this amazing Dutch cookware brand that had lost a lot of value, and because they have the premium content, the kitchen influencers and the audience, they're gonna be able to drive revenue through their own products.

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And by the way, that has its own funnel, right?

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Meaning it's let me get someone engaged through a piece of content, let me get them to understand why this is something they should be interested in, and then be able to show them without leaving the ecosystem of Food fifty-two where they can connect with these products and then drive them into checkout.

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And with first-party data being available, companies like ours can actually help identify the cohorts and audiences that should be targeted- Yeah... for certain products and goods. Yeah.

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I think one of the most exciting things happening right now in publishing is that there's such a diversity of models now where it's not like the monolithic.

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It used to just be like, "Well, it's gonna be ads or a few things. It would be just subs." There's a whole variety of different levers now, and you can build your own revenue stack that matches whatever- Yeah...

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the publication is about. Yeah. Look, that's again, that's what excites me every day is I don't come in and do the same thing every day, right?

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Like, what, what fandom needs is very different from what Food fifty-two needs, right? But I wanna be able to have the products and services and teams that can service both of those. Yeah.

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And, and that's not true of all of our brethren out there. A lot of them focus in, in one particular area, so they do X really well or they do Y really well.

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Ours is maybe harder, which is we need to do a lot of things well because someone has a commerce business that has direct consumer brands that they're selling on platform.

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Others are big affiliate revenue where we need to understand what's happening once they leave our publisher's ecosystem so that we can have attribution within the digital ecosystem.

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We represent a publisher that does giant business in Best Buy and Walmart.

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Well, we need to know how is that revenue attributed back to our publisher so that on the back end we can tie who was that and how much was the checkout, even though it doesn't happen within our publisher's ecosystem.

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So these are all incredibly important processes that happen with data at the center, but they're very different in, in how they're applied.

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So final thing, it's something that's been on top of mind for me is the need to have effective advertising. I think sometimes we, we miss out on that. Publishers are really focused on direct reader revenue.

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Any one of us who goes around, we run into paywalls nonstop, and I think recurring revenue is an incredibly powerful part of a publishing model. I mean, it's not like a [laughs] breakthrough thought.

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But at the end of the day, the idea that credible or even just quality information should be a luxury good is a little worrying.

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And if, if the current state of advertising cannot support freely available infor, information and entertainment, then I'm a little worried in the future when we start upending this model in a way that's, that could possibly make the advertising even less effective, right?

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I, I hope this doesn't seem like hyperbole, but I, I believe that the future of our democracy actually rides on the ability for journalism- Yeah...

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to be able to have a model that succeeds, and that won't always be with a paywall, right? When we know there's a paywall, it certainly filters out a certain segment of the population that either can't pay or won't pay.

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And so we've had ad-supported journalism for a very long time in this country. Which, which by the way, at a best-case scenario is ninety percent of your audience.

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Of your audience, not of the population of your audience. Ninety percent are not gonna pay you a cent. So that's very real.

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A-and by the way, we don't work in like the high echelons of academia, but I read about it, and this is talked about quite a bit. Yeah.

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Like, truly, like at the Nieman Center, like they're talking about how do we ensure that there is a model that allows independent publishers to survive? Consolidation is real.

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Like, they're all of the things that are taking place in publishing we're witnessing right now.

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And television had a big renaissance when there was a cable model that took subscription dollars and ad-supported dollars, and it was an incredible renaissance for-television filmed content.

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There's no reason why that can't take place in digital journalism today. It's harder, and so we look at what are the models that can survive on both the subscription and ad-supported side.

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Obviously, we're working with publishers on the ad side, but I think your point is well taken. We don't know what the answer is, and it is an incredibly, um, tenuous time.

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So I think that the more that can be done to support those ad models, the better.

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I think that a lot of damage has been done with bad consumer experience and bad consumer messaging, which has really hurt this world in some ways, and there are very entrenched lobbies.

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If you look at who the top lobbyists in Washington are, you'll see [chuckles] where the dollars really lie. And so we're just gonna, we're gonna keep at it because I do think it's incredibly important.

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It's not just about being able to get your lifestyle content or finding about, about the latest game. There's actually real news- Yeah...

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that is important to, to get out to the population at this time, and w- we can't underestimate the importance of that as well. Yeah.

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They're both important, I think, you know, having access to just quality content of all kinds.

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And so I just think that people have retreated to paywalls and walked away, and almost walked away from advertising when it, it plays in a, a really... role, not just in supporting journalism, but in the economy.

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It's how we discover new products, I think. [laughs] Well, but look at the... If you have to- Which is how we continue capitalism, which is- But if you have limited resources, and 79% of non-search revenue- Uh-huh...

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ad revenue is going to three companies, at a certain point, you've gotta take that- Yeah... you know, and, and you've gotta, you... and you, and you're a publisher, and you have to divvy up resources.

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It's not always easy to stare down, how am I gonna compete there? So I think that... It, it wakes me up every morning.

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I'll tell you, it gets me out of bed to say, how am I going to either do the right partnership, sit on the right committee where we're talking about what the future of privacy and addressable looks like.

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All of these things have, have real-world meaning.

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Sometimes ad tech can feel rather insular, and it's tech-based, and it can be complex, but ultimately, there are some very real outcomes that, that we need to see take place.

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And for 20 years, I woke up every day because I was trying to make an indie film and motivate a team to go and, and, and lead the charge on the creative side.

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I am just as excited to wake up every morning and motivate a team to look at how do we help publishers move from where they are today to a world where they can monetize better, and there's tons of challenges, but there's tons of opportunities, too.

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Thank you so much, Jake. Brian, it's really been a pleasure. And thank you all for listening. We'll be back next week with a new episode. [outro music]