Lightly edited for readability. Speaker 1: Welcome to the Business Marketing. My name's John Horsley, I'm the host of the show today. We are at Cannes Lions, uh, and we're in the beautiful surrounds of the Depat Garden. Uh, I have the absolute pleasure of being joined by Michael Lehmann, who is president at Americas for Equativ.
Speaker 2: Yeah.
Speaker 1: Welcome to the show, Michael.
Speaker 2: Thank you, John.
Speaker 1: Uh, I would normally ask this as a kind of a starting question-
Speaker 2: Yeah
Speaker 1: ... but what got you interested in this world? So at Cannes we've got tech companies, we've got the ad Tech, MarTechs, Creative Tech-
Speaker 2: Yes
Speaker 1: ... marketers, uh, advertisers, brands, et cetera. What attracted you to this universe in the first place?
Speaker 2: I'll, I'll give you the very honest answer, which is that I sort of fell into this world unintentionally. I was not looking for it. I had no-- It, it was not really on my radar in any sort of meaningful way. Um, my plan very early in my career was to go to business school, and I was interested in developing a story that would be compelling on a business school application. And at that time it was sort of, uh, you know, somewhere between 2000 and, uh, close to 2010.
Speaker 1: Okay.
Speaker 2: And tech was booming and the tech industry was growing across the board. And I wasn't targeting AdTech specifically, but I was looking for a tech job that would teach me the ropes of this booming industry where all this investment was going, and then I could tell the story I wanted to on my business school application. And I got introduced to a person who worked at a company called Rubicon Project, which has ever since, through a number of acquisitions, been rebranded to Magnite.
Speaker 1: Yep.
Speaker 2: And I got a job as what was called a yield manager at the time at a company I had no idea what it did. I read the website, it could have been in Chinese. I, I did not know what I was stepping into, and I got there and I sort of immediately fell in love with it. I fell in love with how dynamic it was. I fell in love with how fast-moving it was. I fell in love with the cultural component of it. I just became very fascinated by it. And the sort of -- At that moment, the concept of business school disappeared, and I was in AdTech ,and I've been in AdTech ever since. So it was-
Speaker 1: Yeah
Speaker 2: ... it was very serendipitous in that kind of way.
Speaker 1: Yeah. I mean, you've worked across obviously a n-number of venture-backed companies.
Speaker 2: Yeah.
Speaker 1: They're probably a great example of one. Um, private equity-owned businesses.
Speaker 2: Yeah.
Speaker 1: Um, companies that are heading for sale.
Speaker 2: Yeah.
Speaker 1: Again, they're a good example of one.
Speaker 2: Yeah.
Speaker 1: Um, so how does the idea of growth change across those particular settings or dynamics?
Speaker 2: Well, I think, you know, you, you described a few different kinds of companies, right? VC-backed companies, PE companies, in a lot of instances public companies. And, you know, growth, growth depends on a number of factors for these companies, and their growth objectives look a lot different. And there's a lot of, you know, when you're looking at a company and you're thinking about sort of the strategy that will lead to growth and lead to longer term success, there are a lot of specific factors. I think a lot of folks approach business with sort of a, a templated approach. They say there's a blueprint for growth and that's what we need to follow, and it's very much not the case, right? I think some of the factors that matter for a company are the stage of the company, right? So an early-stage recently founded company that's VC-backed, they are primarily organizations like that, organizations like Rubicon Project when I got there, even organizations like TripleLift when I got there too, were very much looking for product market fit and a story around, you know, does the product meet the market and is it generating revenue? And that's the sort of signal of ear-early-stage growth that's really compelling for a business and really matters for a business. Um, later-stage companies, kind of like what you're describing around PE-backed companies, those are organizations that are looking, yes, at product market fit, yes, revenue growth, but also a degree of sustainability and also a degree of profitability. And so other metrics start to matter more, like metrics like EBITDA, profitability that I m-uh, mentioned previously, the ability to maintain clients, things of that nature. Um, and then there are other sort of external factors that matter as well, like sort of the state of the market. So, you know, in early markets like AdTech from 10 or 15 years ago, um, again, it was such sort of a nascent growing market that top line revenue growth was really important 'cause we were trying to sort of prove that this was a growing market, that dollars were pouring into digital, that agencies and publishers needed platforms, right? This notion of product market fit. But in more mature markets like AdTech today, again, more sort of baseline metrics like EBITA and net revenue matter a lot more. So you have to sort of consider all of these factors like the stage of the company, um, how mature the market is, honestly, the incentive the, of the invent- of the investors. Like early-stage investors are looking for sort of bigger, more moonshot outcomes, larger multiples on their investment. PE investors are usually looking for sort of different multiples, and so the strategy looks different there as well. So, you know, again, you can't really think about like what's a one size fits all approach to growing these businesses. You have to think about these circumstances and then sort of design a strategy accordingly.
Speaker 1: Sure.
Speaker 2: Yeah.
Speaker 1: When you come into a, a company that's perhaps at an inflection point-
Speaker 2: Yeah
Speaker 1: ... that, you know, they're, they're scaling up, they're, they're, you know, they, they're going for growth at this point in time, um, what is it that tells you whether there's a problem around demand, products, as you say, product or product market fi- pricing, or perhaps it's something to do with execution within the business?
Speaker 2: Yeah. So the d-the data should tell you that. So th-the company should have data. If, if it's sort of a, a well-oiled machine, they should have internal data, sales velocity metrics, KPR, KPIs that they're tracking, things of this nature that can answer a lot of these questions. And if they don't, then ther-it's an execution issue to your point, right? So if you come into an organization and you look at the data and you go into the CRM and you see that like, you know, we're winning business for this reason or we're losing business for this reason, that should very quickly help you identify like why are we winning and why are we losing? Um, and then you can adjust accordingly. It doe-it doesn't mean the answer is easy, by the way, right? In, i-in this market today, uh, AdTech is unbelievably competitive. So even if your strategy makes a lot of sense and your product is really good, it's just harder to fight your way in today So, you know, the data should tell you that where you wanna focus. And again, like if you don't have that data internally, you need to sort of rethink how you're organizing your commercial efforts, how you're organizing your business analytics, um, what sort of data you're tracking internally, and then you can start to organize a picture accordingly.
Speaker 1: Mm-hmm. At, uh, Nativo-
Speaker 2: Yeah
Speaker 1: ... I guess what you, you did there is you, you kind of reset that business, yeah?
Speaker 2: Yeah.
Speaker 1: Um, and as a result of it, you led it into record performance, you know, versus certainly where it was at. Um, it'd be really great to understand when you first started on that, what did you look at first and, and where did you-- Uh, where and how did you decide where to focus?
Speaker 2: Yeah. It's a good question. Um, we looked at a few things. The first thing we looked at was: Where are internal resources being deployed? Where is their personnel and financial investment? And where is the business growing, right? So this is like an important thing that y-you see, by the way, a lot of companies that are sort of transitioning from early stage VC back to more mature companies, like sometimes can take some time to identify, which is that your initial product where you initially saw traction and what you initially built the business around is not the same product or suite of products that's gonna take you into the future, and there's a transition there that needs to happen, right? Teams need to evolve, resources need to evolve, et cetera. So that was one of the initial things we noticed is that, like, where a lot of the people and strategy was being focused was not actually where the future of the business and the future of business growth was gonna be. Um, so we made that adjustment. And the second thing was that th-there were a number of sort of, um, I think for lack of a better terms, just sort of like easy wins that the business had that they had not yet taken advantage of. The product was really compelling. It was very differentiated. Uh, there was, I think, a real market opportunity to, um, uh, tell that story in a way that was gonna resonate, and I think the company just hadn't fully taken advantage of that.
Speaker 1: Hmm.
Speaker 2: So I think there was sort of a, a resource shift that needed to happen and a simplified story that needed to happen, and just doing those two little things, um, I think really led to a very meaningful unlock.
Speaker 1: Hmm.
Speaker 2: And, and I think to sort of your initial question, um, you know, a lot of the time organizations think that a reset or a path from sort of plateauing to growth requires this like enormous organizational reset or this r-meaningful restructure or a huge pivot, and often the time it's not the case. Often the time it's slight tweaks that could actually help get the company moving in the right direction, and that was a lot of what we sort of, um, implemented in Nativo, and it really worked.
Speaker 1: Yeah.
Speaker 2: Yeah.
Speaker 1: One of the things you described there is the idea of, you know, A to B-
Speaker 2: Yeah
Speaker 1: ... is not necessarily the same as C to T.
Speaker 2: Yeah.
Speaker 1: Yeah.
Speaker 2: Yeah.
Speaker 1: Um, and you talked about the fact that it could be, you know, organizational wh- You know, y-the company's got to this point-
Speaker 2: Yeah
Speaker 1: ... uh, of growth. Um, perhaps now we need completely different crew on the board, you know, different staffing. How do you look at that? How, how do you decide what decisions to make, uh, when a company's at that inflection point?
Speaker 2: Um, eh, you know, at the risk of being like overly rudimentary-
Speaker 1: Yeah. I'm thinking from the point of view of teams.
Speaker 2: Yeah. No, no. But I thi-, uh, so this is like, This is i-in a lot of ways like maybe seemingly an oversimplified answer but-
Speaker 1: Uh
Speaker 2: ...I think it's where a lot of companies get things wrong is like you have to have a strategy, right? You have to have a belief in where the market is going. You have to have a really, really informed and confident POV on the space, and a lot of companies n-don't necessarily have that. What a lot of companies have is like, you know, to my earlier point about you're just looking initially for product market fit. They have a product, it's making them money, and they-- That's sort of their business. But they don't have a more sort of evolved perspective on like where is this industry going? Where's the market going? Where's the economy going? How are we gonna build something that's gonna be compelling and sustainable over a longer period of time? And you need to define what that is. You need to announce at the executive level, "This is our view of the industry. This is our belief in the direction the industry is going." And then you need to communicate that to the organization. Like everybody in the organization, whether it's a twenty-person startup or a thousand person more established organization, every single person, if you pull them aside in the office and you say, "What's the company strategy?" They should be able to answer that question very clearly. And just honestly, like that's usually not the case. I think that's not the case for a variety of reasons. But companies have a hard time defining and then articulating their strategy in a way that resonates with the company, right? And if you can do that, that's your most critical first step, right? 'Cause if your teams don't understand the strategy, the market will never understand the strategy. So you define the strategy, and then from there you can create objectives for the organization that makes sense. You can tell the sales team like, "This is why we're organizing you in the way we, we are," right? "This is why we want you to tell the story we want you to tell." You say to the marketing team, "Here's the story we need you to define on behalf of the sales team." You can help the product organization understand why they're building something that maybe doesn't necessarily initially generate revenue, but we have this very confident POV that it within two years could be like one of our dominant, uh, offerings in this space right now.
Speaker 1: Mm-hmm.
Speaker 2: You help the engineering team organize themselves around why they're building something that the client isn't initially asking for but we believe in the future will, right? Et cetera, et cetera, et cetera. Because if you don't do that, if you don't have that strategy that all these sort of objectives across the business tether to, then teams within the organization just get whiplash. They feel like you're constantly changing direction. They feel like here's our new strategy for the month, like the team is asking me to sell this thing but it actually is not making us any money. That doesn't align with my goal, right? It leads to a lot of internal confusion and can lead to, I think burnout and dissatisfaction within the organization.
Speaker 1: Right.
Speaker 2: To, like restate this point once again, I know I've said it a few times, like I cannot, I cannot overstate how important it is for these companies in an incredibly complex ecosystem. It-it's not always easy to define strategy with an ad tech, but I just cannot overstate how important it is to have a simplified POV on the market and a strategy for the organization that the full team can recite and, and organizing from there. I think that is just step one every time.
Speaker 1: Yeah.
Speaker 2: Yeah.
Speaker 1: Do you feel that's due to perhaps the CEO being not-- You know, not being the chief storyteller at the same time? Um, that they haven't empowered the, the leaders in the business or really haven't, haven't brought them on board enough in terms of the mission, the purpose, the strategy, um, behind the company.
Speaker 2: I, I th-I think it's gonna be sit-
Speaker 1: Why do you think this is?
Speaker 2: It's situationally dependent. Like some CEOs are product CEOs, some CEOs are sales CEOs, some CF—CEOs are CFO CEOs, right? So like CEOs have different skill sets and I think good CEOs are like highly aware of that. Uh, a-and they hire teams and leaders around them that sort of complement their skills.
Speaker 1: Mm.
Speaker 2: Uh, and, and I think it would be unfair to just blame it on a CEO. I think CEOs in our space are under enormous pressure in today's market to operate very complex organizations in very uncertain economic times, right? We-- So, a-and one thing to appreciate right now is like the market is changing. Any organization that's been around for more than five years has felt the expectations of the market change from being, as I was saying before, sort of more growth oriented to now more profitability and EBITDA oriented.
Speaker 1: Hmm.
Speaker 2: And companies have to evolve their strategy and structure and a variety of other things to sort of meet the market in that moment. And so if you're a CEO, you're trying to juggle a lot of these different things. You're trying to juggle the, you know, sort of your investor expectations, the economics of the moment. You need to have a product strategy. You need to have a sales strategy. Um, and so it's an organizational responsibility. It's not the CEO's responsibility specifically. Um, uh, and I think the CEOs I think that have performed really well in this market appreciate that and understand that, and empower the right people to define that strategy and help them understand the needs of the market.
Speaker 1: Mm.
Speaker 2: And I think maybe the companies that have struggled have not done that.
Speaker 1: Yeah.
Speaker 2: Yeah.
Speaker 1: I mean, I've, I've been speaking to a number of ad techs down here.
Speaker 2: Yeah.
Speaker 1: And, you know, some of the conversation has been around the structure of their business.
Speaker 2: Yeah.
Speaker 1: Perhaps how they're restructuring areas of the business.
Speaker 2: Yeah.
Speaker 1: Um, silos that they're looking to eradicate to a certain extent.
Speaker 2: Yeah.
Speaker 1: Um, you know, where do you feel that ad companies are still two-sided between, you know, commercial services, products, you know etcetera?
Speaker 2: I, I think that's the prevailing position for ad tech companies right now. And, and actually in this interesting way, I think for a long time the belief -- And, and there is an analogy here, I think, to what we're seeing with AI. But I think the l-the belief for a long time for a lot of these agtech companies was that the offering was entirely product, it was entirely sort of engineering and automated in nature, and companies were going to use them entirely for this automation. And I think what's happened obviously is that with the rise of AdTech and the benefits that it's brought the industry, uh, it's just become incredibly complex. Like in a lot of ways, if you were a media buyer, your life was like a lot easier fifteen years ago, and if you were a publisher, your life was a lot easier fifteen years ago. And now you need a very complicated tech stack to help power your ad business and there was a sentiment early on that that was gonna lead to just sort of full automation, to your point. And I think really what we're seeing is ad tech companies that have performed really well are the ones that can also, um, provide strategic insights to their clients, offer managed service in a lot of ways, help give them direction, hold their hands in a lot of ways. Because media companies, publishing companies, agencies, brands, like these companies, their DNA primarily is not tech, right? And so they need that sort of support. Um, so I think companies that are performing real-really well right now provide very robust tech offerings and can build differentiated tech offerings and can add value doing that, but also just help their clients navigate the ecosystem, help their clients understand how to use the tech, help their clients make decisions with the tech. Um, and I think that's gonna be the case for AI as well. I think companies that are building AI offerings will need to help their clients understand how to use them, uh, and help their clients understand how to build strategies with them and this sentiment that like the robots are taking over, we are automating ourselves out of a job, uh, uh, the, the sort of human necessity and human need in our space is going away. It just does not seem to be the case, and it's never been the case.
Speaker 1: Mm.
Speaker 2: Um, and so those are the companies I think that will, will sort of position themselves successfully.
Speaker 1: Cool. Yeah. Well, I'm gonna come back to that.
Speaker 2: Yeah.
Speaker 1: Uh, I'm gonna also come back to the, the client side, uh, and the fact that clients are innovating as well.
Speaker 2: Yeah.
Speaker 1: Um, just one quick question before that 'cause you mentioned burnout and kind of, kind of interested in that.
Speaker 2: Yeah.
Speaker 1: You know, you've, you've led teams under huge amounts of pressure, for sure.
Speaker 2: Yeah.
Speaker 1: Um, and you've, uh, led sort of global commercial operational teams through massive amounts of change within a business.
Speaker 2: Yeah.
Speaker 1: How do you kinda keep the, the ship steady, watch for signs of burnout, make sure that, you know, that you're doing the best for the wellness o-of the, of the crew, right?
Speaker 2: Yeah. Uh, I, I think there's two answers to that question. I think one, um, from a leadership standpoint, I, I don't think there's one like playbook when it comes to leadership. Uh, in the same way we were talking about CE-CEOs, right? CEOs have different skill sets, they have different competencies and like I think there's a variety of different leadership, um, uh, styles that work really effectively with teams. But I do think authenticity is really important, and I think teams have to feel like they are within an organization where leadership is authentic and is telling them a real story and believes the story they're telling them. So I think just like organizations that try to Position themselves a certain way to their employee base and their teams, or sell them a certain vision invariably will lead to a dissatisfied team, right? So I think you need to figure out what your authentic voice is and what your authentic story is to the organization. I think that's critical. And then the other piece is like a lot of what we were talking about previously, like the organization has to have a strategy. If the organization has a strategy, the team can align around it. If you have a vision of the market that is smart and compelling, the teams will feel that, right? This is not a market where, like only one of these companies is under pressure, right? All of the companies in our space are under a certain amount of pressure at this moment, so it's not like any of these organizations are at an advantage or disadvantage in that capacity. Where your advantage comes is can you tell your team a compelling story that they wanna start to build their career around? And if you can do that, they will be motivated, they will be inspired, they will believe in leadership. They will, uh, ideally want to put in the extra effort that's required.
Speaker 1: Well-
Speaker 2: And, and candidly, if they don't, if they're not sort of on board for that vision, then I think that's okay too. But at least they're, they're not on board for a reason that makes sense, which is like you've told them the true direction the organization's going and your true belief in the market, and you're gonna find the people that really fit and really wanna work extra hard for that. Um, and so again, it's like this clarity around strategy that I think is just essential.
Speaker 1: So let's talk about the client side.
Speaker 2: Okay. Yeah.
Speaker 1: Um, my understanding is obviously clients are innovet-- innovating more and more rapidly at this point in time, certainly with, you know, proliferation of AI-
Speaker 2: Yeah
Speaker 1: ... and the tools that they have-
Speaker 2: Yeah
Speaker 1: ... available to them. Um, does that mean that their, their demands, their expectations are also shifting in terms of the partnership that they would have with companies like your own?
Speaker 2: Oh, yeah, certainly. Certainly. I think, um , well, I think, yeah, I think there's probably a few things going on here. Um, as I was saying previously, I think clients and customers across the ecosystem, 'cause I think it's important to represent that, like where we sit, there are publishers, there are tech companies, there are agencies, there are brands that all need support and all need partnership in this market. And I think companies that are successful across the board know how to meet all those customers where they are and speak to their needs, et cetera. So yeah, ac-across the board, um, I would say it's an essential question. And you know, the thing to, I think appreciate, as we were talking about previously, is like with the complexity of the ecosystem, partners need -- Or, or I should say, clients need partners that they really feel like they can trust, and they believe in the product vision overall. And so organizations getting close to their clients, learning them from the inside, learning their needs, and learning their perspectives on the market help those partners build to their needs, understand the market better, and align over a longer period of time. And I think one thing that maybe has happened in the space, and this is due to like, um, I think nobody's misstep, but just sort of the relentless pace of innovation that exists within adtech and martech overall, is that, um, you know, I think a lot of probably clients have fee-have felt over the last ten years or so, sort of let down by their partners. They felt like a lot of the offerings that have been brought to them, a lot of the products that have b-been bought to them have not lived up to the hype. Maybe some of the stories around the direction the market is going have not lived up to the hype. And again, this is not necessarily the fault of tech organizations. Tech organizations are trying to build to the future as well, and when you try to predict the future, like you will miss sometimes. But there is a little bit of, I think, a degree of trust that in certain instances have been, has been lost. And I think that's why primarily we're seeing a lot of clients in our space cut down on the number of tech partnerships that they're working with, uh, look to refine who they want to partner with over a longer period of time. And the organizations that can tell the right story in tha-in those circumstances are the ones that are gonna have long-term partnership and really be able to add value. And so, um, so that's sort of, I think, the degree we see this thing going. More robust offerings, better innovation, but fewer partners, uh, per client.
Speaker 1: Yeah. Um ... Yeah. I mean, ther-there's many reasons why, you know, company's being sold-
Speaker 2: You did-- Can I say, you did smirk a little bit when I said certain clients have felt let down by partners.
Speaker 1: Yeah.
Speaker 2: Yeah. You felt that.
Speaker 1: That's what I was just about to say.
Speaker 2: Yeah. No, no. Yeah.
Speaker 1: So, um, you know, there's many reasons, right? So could've been sold the dream.
Speaker 2: Yeah.
Speaker 1: But, uh, you know, the tech was never gonna ach-achieve that. But the sales guy obviously needed to make his numbers.
Speaker 2: Yeah.
Speaker 1: Um, that's on one end. Uh, it could come down to customer care, um, imparting the knowledge and the expertise that's within the, the tech co.
Speaker 2: Yeah.
Speaker 1: Um, and making sure that the client gets up to speed. Um, it's often down to, well, it could also be down to, on the client side, will. Yeah. Uh-
Speaker 2: For sure. For sure
Speaker 1: ... and the drive and the motivation of the team there, uh, and the expectations p-put upon the team. It's a whole multitude.
Speaker 2: For sure.
Speaker 1: And yeah, I-
Speaker 2: I agree with you
Speaker 1: ... I, I would say I smiled. Not necessarily sm-maybe. Maybe. But I've heard-
Speaker 2: Well, I thought you said smoke.
Speaker 1: Smoked.
Speaker 2: Yeah, smoked. Yeah-
Speaker 1: Yeah
Speaker 2: ... for sure. For sure.
Speaker 1: Um, I've, I've heard the story time and time and time and time again. Uh, I've sold technologies.
Speaker 2: Yeah.
Speaker 1: Um, I've consulted with companies that are technology businesses.
Speaker 2: Yeah.
Speaker 1: I've consult with, with brands over the years as well.
Speaker 2: Yeah. Yeah.
Speaker 1: Um, and you know, there, it's always one of a, a multitude of reasons or a combination of.
Speaker 2: Yeah. Yeah.
Speaker 1: Um, for sure. Um-
Speaker 2: But I, I think your poi-
Speaker 1: And it's, it's twofold responsibility normally and where responsibility lies.
Speaker 2: I think that's right. I think your point is a good one, which is that everybody is somewhat responsible.
Speaker 1: Yeah.
Speaker 2: Um, and I think that's an important part of partnership, and I think that i-in my experience, when, when I have seen really, really, really successful engagements with customers, clients, agencies, DSPs, publishers, whoever they are, it's when there is this sort of mutual investment across the board on building towards the future. I think a lot of the times To your point, that doesn't happen, right? Like objectives get pushed on an organization, they sign up a partnership, and then those expectations go away or the organization pivots-
Speaker 1: Yeah
Speaker 2: ...or this person is too scattered or they have too many different objectives or whatever it might be, and there's not a mutual investment. And so yes, to your point, like, uh-
Speaker 1: Mm-hmm
Speaker 2: ...true alignment and true partnership requires this sort of investment on both sides. Yeah.
Speaker 1: I, I mean, I love the idea of mutual investment.
Speaker 2: Yeah.
Speaker 1: Um, you could almost talk about co-enterprise-
Speaker 2: Yeah
Speaker 1: ...to a certain extent. Um, I love the idea of things being accelerated because of AI now-
Speaker 2: Yeah
Speaker 1: ....uh, whether it's on the client side and, and them building their own technologies, perhaps those technologies around orchestration, uh, as an idea, uh, or workflows or various other things that they need in their business to better interface with the ad techs, the martechs-
Speaker 2: Yes
Speaker 1: ....uh, and other platforms that they're using, uh, to be match fit for their own requirements.
Speaker 2: Yeah. Yeah.
Speaker 1: Is that something that you're seeing within, um, the changing landscape today?
Speaker 2: As in more, more investment and partnership?
Speaker 1: Yeah.
Speaker 2: Yeah. I, I think to my previous point, I, I think, like, the, the perspective that we hold that I'm hearing a lot about this week is very much that clients want fewer partners and deeper partners.
Speaker 1: Hmm.
Speaker 2: And I think, y-you know, you can chalk it up to a variety of different things. I think a, a, a gentle take is just that, like, the past however many years has been a lot of a, a period of, um, experimentation in a lot of ways. Like clients, organizations are trying to learn this space. The technology is so novel, it's so new, um, it's so undefined that it's required a lot of testing. And I think we've gotten to the point where the space is maturing in a certain extent. I think AI will require a new degree of testing, but the space is maturing and companies are now looking-- Clients are now looking to pick their partners, pick best-in-breed partners, and go particularly deep with them.
Speaker 1: Hm.
Speaker 2: And that is a, that is overall a win for the space, right? That is, like, a very, very good thing. Uh, you could use the word consolidation. That might be too aggressive of a word, but fewer, deeper partnerships, more successful engagements is just better for the ecosystem in a variety of different ways. So I'm very bullish on sort of this next phase of investment and partnership overall.
Speaker 1: Mm-hmm. I'm thinking about publishers as well. So I mean, you obviously work-
Speaker 2: Yeah
Speaker 1: ...with agencies, publishers, clients-
Speaker 2: Yeah. Yeah
Speaker 1: ...you know, et cetera.
Speaker 2: Yeah.
Speaker 1: Um, and I'm also thinking to a certain extent, uh, AI has not necessarily been their best friend, um, in terms of it's an attack on, on their business. Um, certainly the AI answers and, and so on and, you know, there's been a, a ruling in the UK recently by the CMA that-
Speaker 2: Yeah
Speaker 1: ...publications can block, remove their content from, you know, AI answers and-
Speaker 2: Yeah
Speaker 1: ...and so on. I'm not sure that that's the right way to go. Um, you know, I, I-- In the background, I'm building a, a media business, so it's B2B. Uh, there's AI first.
Speaker 2: Yeah.
Speaker 1: I want all of the content to be-
Speaker 2: Yeah. Yeah
Speaker 1: ...in the answer engines. Um, but are you seeing a fundamental shift on the publisher side, um, ways that they're looking at monetizing? I mean, frankly, they're gonna have to change business model, but-
Speaker 2: Yeah
Speaker 1: ...are you having those discussions now?
Speaker 2: Yeah, certainly. Certainly. I, I, I would say that the first, the most important thing here is to, uh, define the market a little bit. So, you know, publishers are not, they're not a monolith. Uh, it's a very, very broad spectrum of different kinds of companies. And I would agree that for, you know, small publishers, long-tail publishers, uh, it would be impossible to deny that, like, the road ahead is very challenging. AI, LLMs is gonna make their life very, very challenging. Um, I think the data on that is already pretty clear. I don't think anybody would debate that. But there are a lot of other kinds of publishers in the space, larger publishers with more recognizable brands, and I think there's a very reasonable chance that those publishers, larger, more premium publishers, have reason for optimism in the age of AI. Their strategy, I mean, to your sort of initial question-
Speaker 1: Mm
Speaker 2: ...their strategy will need to entail non-advertising revenue streams, and really successful companies and publishers are doing that already. They're finding ways to generate revenue for the organization outside of ads. Uh, New York Times to me is, like, just always the canonical example of a publisher that's done that really well, but you see other organizations following suit. So you need non-advertising, uh, revenue streams certainly. But additionally, you can see this world of course, where the digital ad market is not getting smaller. That's not part of the discussion, right? The digital ad market only continues to grow, and there are environments that are highly insulated, at least, at least at this point, highly insulated from AI, right? Like CTV, you cannot go on ChatGPT and watch whatever, the next episode of Yellowstone, right? Retail, you cannot go on ChatGPT and buy something from Walmart. Uh, digital outofhome, et cetera. So there are these channels that remain highly insulated. And then additionally, there are these media brands, publishing brands that consumers will still go to for specific opinions. Now they're gonna need to sort of evolve their experiences to be more agentic, but you could see a world where, like, if the digital ad market continues to be the size it is and, and grows, which it most likely will, medium-size and more long-term publishers goes away. What that really means is that there's just more market share for premium publishers to access ad budgets from, right? So premium publishers can take a larger percentage of the remaining ad budgets. Uh, my belief in talking to brands and agencies this week is that open internet continues to really matter to them. They don't want all their money going to Facebook. They don't want all their money going into, you know, chat GP- or, uh, LLM environments.
Speaker 1: Sure.
Speaker 2: And so in that world, like, premium publishers could really stand to benefit. So I am, I am optimistic actually that like Some of the CPM and revenue erosion that these publishers have seen in the age of programmatic could somewhat be reversed, and it could actually be-- This is kind of a, uh, I think an unorthodox take, but it could sort of be a boon time for premium publishers in our space-
Speaker 1: Yeah
Speaker 2: ... um, particularly those that have the appropriate strategy, and figure out a way to continue to connect with their audiences. They could do-- they could perform really well.
Speaker 1: Yeah.
Speaker 2: Yeah.
Speaker 1: I, I'm, I'm feeling the same. Um-
Speaker 2: Good
Speaker 1: ... and I'm also feeling that they push, you've used the word premium, obviously there's premium publishers, but, um, the quality always rises to the top-
Speaker 2: For sure
Speaker 1: .... plus, and, and that's valued. Um, and I've seen a number of publishers reduce the volume of ads that they serve, but increase their, their yield.
Speaker 2: For sure. And I think for, you know, for you, I would say it's like a-- So you're a media owner, you're building an AI-first company, and I think the thing that companies need to be wary of is that the second—and we just know this as consumers, right? The second the consumer feels that the content is AI generated, they will disassociate, right? And I think we, we all know this like, you know, when I get a Slack reminder from the Slack bot, I ignore it, right? When I get it from the CEO, I respond to it. Like we all are inherently, I think, built to ignore robots a little more than we do people, and I think consumers in like an online or digital environment are gonna do the same thing. And so, um, the authentic voice of the editor, the authentic voice of the publication does really matter. Um, and you know, even though media companies do need to take advantage of AI tools and AI capabilities, you know, having your own POV and voice and not sounding like an AI bot or one of these sort of essays that are posted on LinkedIn that's clearly generated by ChatGPT will attract audience and will continue to maintain a connection with your, with your consumer and your, your audience overall.
Speaker 1: Yeah, 100% agree.
Speaker 2: Yeah. Yeah.
Speaker 1: Um, and I also love the idea of community as well.
Speaker 2: For sure. For sure.
Speaker 1: Look, E-you've been a fantastic guest on the show today.
Speaker 2: Oh, thank you. Thank you.
Speaker 1: Uh, I've got one last question for you that I-
Speaker 2: Yes
Speaker 1: ... I would normally al-always ask.
Speaker 2: Yes.
Speaker 1: And that is advice for a younger individual, uh, either looking to enter the industry as a first job, or perhaps at the start of, of their career.
Speaker 2: Yeah.
Speaker 1: They might be looking in the world of media, ad tech, marketing, et cetera.
Speaker 2: Yeah.
Speaker 1: But what piece of advice would you offer them?
Speaker 2: Yeah. My advice -- I'm giving you very simple answers to things, but my advice right now is get in however you can get in, and just do a really good job. Whatever your job is, just do your job really well. I think it's very easy for people - and, and this happened to me early in my career, to get preoccupied with the wrong kind of things, like promotions or raises or the kinda clients I worked with or, ah, you know, was I getting enough face time with the CEO, or whatever it might be. Like early in your career, your mind can be occupied with a lot of different competing thoughts about how you're gonna get ahead, and I think if you get into an organization and you just do your job really well, people will notice, and you will perform well and you will move forward, and you'll learn a lot. So I would say keep it simple, get in, do your job well, and good things will happen.
Speaker 1: Fantastic.
Speaker 2: Yeah. Yeah.
Speaker 1: As I say, you've been a, a wonderful guest-
Speaker 2: Oh, thank you, John
Speaker 1: ... yesterday.
Speaker 2: Yeah, yeah, yeah.
Speaker 1: Um, hope you have a very successful and fun time at Cannes.
Speaker 2: Thank you.
Speaker 1: Um, and uh, yeah, maybe we'll have you back on the show in future.
Speaker 2: Yeah. It was a pleasure, it was a pleasure. Stay cool.
Speaker 1: Thank you so much.