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the Vox Media Podcast Network, this

1:08

is Channels. Peter Kafka, that is

1:10

me. I'm also the Chief

1:12

Port Respondent at Business Insider. And

1:15

today we're checking in on the ad business, because

1:17

it seems like the ad business should be in

1:19

for a world of change. TikTok

1:21

could go away. Google

1:24

and Meta might be broken up.

1:27

And there's a worldwide tariff for

1:29

about to start that could make

1:31

the economy not great again. So

1:33

that's why I wanted to talk to Laura Desmond. I wanted

1:35

to get a sense of how the ad business

1:38

is actually thinking about summer, all of these threats.

1:41

Desmond is someone I often chat with when

1:43

I want to get a snapshot of Adworth.

1:45

She's an ad veteran who used to run

1:47

StarCom Media Best, the giant ad planning company.

1:50

And now she runs Smartly, a company that

1:52

works specifically with digital ad buyers to help

1:54

them figure out where and how to spend

1:56

their money. So she's got a very good idea

1:58

of what's on the mind of ad buyers

2:01

at any given moment. She is also

2:03

an ad industry executive who's interested in

2:05

being somewhat candid when you talk on

2:07

the record with her, which is pretty

2:09

rare indeed. You definitely got to hear

2:11

Laura Desmond talk her book in this

2:13

conversation. She's going to tell you that

2:15

the ad business is doing well. Her

2:17

ad business particular is doing great. But

2:20

I think you are going to come away with

2:22

a very good sense of what's actually on the

2:25

minds of the ad industry today for now. Okay,

2:28

here's me and Laura Desmond. Laura

2:34

Desmond, welcome to the show.

2:36

Hey, Peter. Great to be here. Thank you. Good

2:39

to see you in person again. Before

2:41

you explain the state of the ad business,

2:43

you're going to tell us why you know

2:45

about the state of the ad business, i

2:47

.e., you're not going to go through your

2:49

whole resume for us, but you are going

2:51

to tell us what you're doing today. Prior

2:53

to this job, you used to run StarCom

2:55

MediaVest, giant ad business, giant ad

2:57

business. That's the correct way to put it. Now

3:00

you are running a company called Smartly. Give

3:03

us give us the elevator pitch for smart

3:05

no not the elevator pitch give us the

3:07

plain English explanation of what smartly does I

3:09

will do my best I think the

3:11

best thing I can do that sets

3:13

up the conversation about why I think

3:15

smartly is in the center and and why

3:17

it makes sense for me to be leading

3:20

it as the CEO is

3:22

my career is spanned

3:24

marketing service advertising service

3:26

advertising technology And

3:29

that meant it started at the dawn

3:32

of the internet era through to digital

3:34

transformation, the mobile

3:36

revolution, and now

3:38

into the era of AI. What

3:41

smartly is, is a software

3:43

company that builds technology for

3:45

brands and advertisers. We

3:48

place and generate more

3:50

personalized, more relevant creative across

3:52

all the digital channels. So

3:55

what does that mean? That means When

3:57

you're scrolling on Facebook and you see that

3:59

ad for Nike shoes that you

4:01

love, that's us. So Nike's

4:03

a client. Yes. You're not

4:06

their ad buyer. No, software.

4:08

So you are doing what

4:10

for them? So we enable

4:12

them with our software to

4:14

place and generate highly relevant

4:16

creatives across the digital channels

4:18

that they believe will drive

4:20

revenue and growth and

4:23

purchase for them best. So you are helping them

4:25

figure out, all right, we know we need to

4:27

be at Google and Meta, et cetera. How

4:30

is that gonna work? What are the

4:32

actual ads we're gonna run? You help

4:34

them with all of that. Exactly, and

4:36

it starts with knowing consumers. It starts

4:38

with knowing and having intelligence around where

4:41

audiences are. What are they spending

4:43

time with? What are they engaging with? And

4:46

our software, sits between consumers

4:48

and brands and also the agencies

4:50

that brands might use because agencies

4:52

use our software to our software

4:54

sits between brands and agencies to connect

4:56

brands to the people they need

4:58

and the people get to see a

5:00

chance or get a chance to

5:03

spend time with the brands they love.

5:05

This is great because you pitched

5:07

smartly, which is great. And you've also

5:09

now explained to the listeners why you

5:12

know what's going on in the

5:14

ad world because you are watching where

5:16

the money goes, you're watching where

5:18

the ad dollars go, you're watching what

5:20

kind of ads are going, specifically

5:22

to digital platforms. 100%.

5:25

So to me, it kind of

5:27

goes back to Watergate and the

5:29

Godfather. If you want to know

5:31

how anything works, Watch

5:33

where the money goes and our platform was

5:35

leave the cannoli was the godfather Well, it's

5:37

to yeah, take the gun leave the cannoli

5:39

for sure and be careful about tollways Toll

5:42

gates in Long Island a bunch of oranges.

5:44

You're probably gonna die. There's a lot of

5:46

lessons you can learn. It's a great business

5:48

movie great I think but not a wartime

5:50

console. Yeah, we could we could do God.

5:52

I use that all the time You need

5:54

a wartime. You need a wartime CFO. You

5:56

need a peacetime CFO I use that all

5:58

the time. Um, so I have a sort

6:01

of stock list of questions when I talk

6:03

to you or anyone else in the ad

6:05

business housing going and I was going through

6:07

it just now I realized oh wow this

6:09

is so obvious but all the questions I

6:11

want to ask you about almost all of

6:13

them relate directly to the federal government and

6:15

the Trump administration. That's exciting Peter.

6:18

It's exciting but it's also that's weird that

6:20

is a that is a that is a

6:22

new state of play for the ad business

6:24

I think. Have you ever been in

6:26

a place where One administration,

6:28

really, one man had so much

6:30

influence over your business specifically. I

6:33

don't buy that thesis, to

6:35

be honest with you, now.

6:38

I'll make my thesis for you, first of

6:40

all. So it's tariffs. That

6:42

impacts your business. The two big

6:45

ad platforms, I know you work with Google,

6:47

you obviously work with Meta. We do. Are

6:50

being sued by the Trump administration. Yes.

6:53

Theoretically wants them to be broken

6:55

up. Right pretty impactful. So let

6:57

me start at the beginning. Yep,

7:00

because when I didn't even get

7:02

my last one may or may

7:04

not ban tiktok Let me start

7:06

the beginning. Okay You are right

7:08

in the sense that there is

7:11

a lot of action in the

7:13

advertising media and digital space You're

7:15

right, but what really drives the

7:17

market are people are consumers, you

7:19

know one of the reasons that

7:22

We watched, you know the executive

7:24

order play out for

7:27

TikTok is we've seen... The executive

7:29

order that overwrote a law and

7:31

everyone said, sure, that makes sense.

7:33

We saw people love the platform.

7:35

They love to spend time on

7:38

it. And that

7:40

is an incredibly important part of

7:42

understanding the state of advertising in

7:44

general and the state of advertising

7:46

today. Brands

7:49

are ultimately chasing consumers to get

7:51

them to buy. with

7:53

more relevant creative with with messaging

7:55

that works for them and increasingly

7:57

that's privacy first because consumers don't

8:00

want to be chased and targeted

8:02

and retargeted with the same old

8:05

stuff and That's an important piece

8:07

of this the other important piece

8:09

of this is the antitrust actions

8:12

that are happening are happening but

8:14

they're in you know relatively at

8:17

this moment in time invisible to

8:19

consumers other than TikTok, which obviously

8:21

was a very, very big story.

8:24

And that's important for every

8:26

digital platform to ensure. not

8:29

I'm using Google search or

8:31

scrolling through Instagram has nothing

8:33

to do with what's happening

8:35

in court today. It's

8:37

invisible to the consumer. Right.

8:39

And it is something that

8:41

brands care about and they

8:43

want to ensure too. One

8:46

of the reasons that I got into advertising

8:49

is because I actually believe that

8:51

advertising supports a free market. Buyers

8:54

who come to learn about the

8:56

goods they care about, the services

8:58

they want, the products they need,

9:00

and brands and marketers who need

9:03

to sell things in order to

9:05

make a living, whether you're a

9:07

small business or you're a Fortune

9:09

500 company. Advertising

9:11

supports a free market system.

9:13

It supports a marketplace of

9:15

goods and services. And

9:18

that's incredibly important. And that's an

9:20

underpinning of, I think, a free

9:22

democratic society, Western civilization,

9:24

and all the things. That's

9:26

one of the reasons that I wanted to

9:29

get into the business because I thought it

9:31

was meaningful. And it did matter. And it

9:33

matters to give people what they want and

9:35

what they need to buy, what they want

9:37

to buy. And it matters that brands and

9:40

marketers have a chance to make that connection

9:42

and build those relationships. So

9:44

I get that... end, the advertisers

9:46

are going to go where the

9:48

eyeballs are. We're in a place

9:50

where theoretically those eyeballs could be

9:53

moved around by the government, right?

9:55

The government could say you just

9:57

don't have access to TikTok right

9:59

now. In theory, the government

10:01

could restrain or change the way Google and

10:04

Meta operate their platforms, and that would have

10:06

an effect. And it sounds like part

10:08

of what you're saying is all that stuff is in

10:10

the future. My business is in

10:12

the present and my job is to make

10:14

sure my advertisers want to spend their money

10:16

now reach the people they want to reach

10:18

now and none of us can spend a

10:20

lot of time thinking about what might happen

10:22

six months or nine months or I don't

10:24

know What's the what's the timer on the

10:26

tiktok band today? Whatever it is 75 days

10:28

75 days minus however many days it was

10:30

before is that sort of the mindset of

10:32

the industry broadly that look we cannot be

10:34

spending time doing scenario planning for what happens

10:36

if Google has to unwind its ad stack

10:38

or people who are paid to go, we

10:41

do have to spend that time because it

10:43

could be really gnarly. Absolutely.

10:46

Which one? It is business as usual

10:48

for brands to be focused on their

10:50

business, what they need to sell, how

10:52

they need to build campaigns, have

10:55

companies like Smartly orchestrate those

10:57

campaigns, and focus on business.

11:00

Focus on the job to do. That is the

11:02

state of planning. are spending money on TikTok today

11:05

are not coming to you saying, do you have

11:07

a plan for if TikTok goes away this summer?

11:09

I can only tell you what we've seen. Was

11:12

there conversations like that with

11:15

some of our customers? Yes.

11:18

Were they significant or dominant

11:20

or overwhelming? No.

11:23

And that's because our technology gives advertisers the

11:26

opportunity to shift in real time if they

11:28

felt like they needed to. Right, it's one

11:30

of the feet, right? It's not like the

11:32

way ads used to be where you would

11:35

buy months in advance, sometimes a year in

11:37

advance, right, for television up front. So we're

11:39

gonna show you Next Fall's show, shows this

11:41

spring, and you're gonna commit a bunch of

11:44

money that you'll spend throughout the year on

11:46

us. That doesn't exist. They can change it

11:48

on the fly. That's the era of mad

11:50

men, and we are no longer in that

11:53

era. We still have up fronts, amazing. There

11:55

will be up fronts in about a month,

11:57

and I actually think that in about a

11:59

month, will know. how tariffs are going to

12:02

play out. So let me pivot to the

12:04

question around tariffs because I think that you,

12:06

Laura, because that was my question. So that

12:08

is the now. That is the now. That's

12:11

a very legitimate issue. We're recording this on

12:13

Thursday, April 24th. Things can change. But I

12:15

was listening to Comcast earnings this morning. They

12:17

asked them about that. And they said, we

12:20

have not seen any effect yet from what

12:22

we're calling uncertainty. We have not

12:24

seen any effect yet. You are not seeing

12:26

it at all. We are not. Even though

12:29

I'm reading that manufacturing is changing and you

12:31

see these charts about, you know, Xi 'an

12:33

and Timu ad spending has cratered, that seems

12:35

like that's a real change. Well, a lot

12:37

of that has to do with the fact

12:40

that there's very little shipping going on between,

12:42

you know, China and the US now. But

12:44

that seems like a meaningful change, right? It

12:46

a meaningful change. filters all the way through

12:48

to all of your clients. It is a

12:51

meaningful change. It will. I think the next

12:53

month to six weeks, Peter, In all seriousness,

12:55

the next month to six weeks will be

12:57

key to watch. You saw

12:59

a couple days ago, the big

13:02

box CEOs from Walmart, Target, et

13:04

cetera, you know, talk about

13:06

a real concern over shelves that will not

13:08

be full because product will not be able

13:11

to make the stores. And again, Donald Trump

13:13

can, again, like I said, we're recording this

13:15

a few days before you're going to hear

13:17

it. Donald Trump can change his mind multiple

13:19

times throughout the day and offer different messages

13:21

throughout the day. So it's. In a lot

13:23

of ways, it fools Aaron to sort of

13:25

figure out where this is going to go.

13:27

On the other hand, it is your job

13:29

to do some of that. Well, our platform

13:32

allows our customers to have optionality. That

13:35

is what the benefit or

13:37

the value proposition of a

13:39

technology platform in today's world

13:41

is. You can

13:44

make real -time decisions using

13:46

the software. And if

13:48

you see audience moving from Metta to

13:50

TikTok or you see TikTok audience moving

13:53

from YouTube or CTV on the rise,

13:55

as I said, it starts with people,

13:57

it starts with consumers. Then

14:00

what our technology allows is for

14:02

that to occur if a client

14:04

wants to make that call. Scenario

14:07

planning around tariffs is real

14:10

in the sense that it

14:12

could seriously impact any

14:14

company operating big and small,

14:17

and what we're seeing is digital

14:20

spend is resilient. Let's

14:22

talk about why digital spend is resilient.

14:25

It might be that some

14:27

of the traditional television spending

14:29

exports, and

14:31

by the way, 93 of

14:33

the top 100 programs in

14:35

traditional television are sports or

14:38

sports related. Not just sports.

14:40

It's the NFL is like 86. I was

14:42

gonna say it's like, yeah, about 75 or

14:44

so. But the

14:46

point here is digital

14:49

spend tends to be

14:51

more resilient because it's

14:54

loved by consumers. They

14:57

engage. It's trackable. You

14:59

know what, you know, a purchase

15:01

looks like, where it comes from

15:04

and how it occurs. And so

15:06

you can make more precision decisions

15:09

about where to put the next

15:11

dollar or what kind of personal

15:13

or more relevant creative will work.

15:16

In you know against a brand or

15:18

a campaign or promotion that you have

15:20

that you really have to. To make

15:22

sure it's a success so digital spend

15:24

tends to be more resilient in general

15:26

in times like these. And

15:28

with so much digital spend

15:30

now commanding the budgets of

15:32

big brands and even medium

15:34

size brands you look at.

15:37

you know, you look at them continuing

15:39

to spend, I think we will continue

15:41

to see it hold up. The

15:44

next four to six weeks

15:46

will be a big decision

15:48

point because if there's no

15:50

product on the shelves, then

15:53

that's going to change anybody's

15:55

advertising campaign. you don't

15:57

have anything to sell you, we're going to

15:59

pull back our ads, right? Yeah. The consumers

16:02

might not feel as good about spending. Does

16:04

that increase or decrease ad spending? If people

16:06

are more reticent to spend, do the advertisers

16:08

pull back and go, we're going to leave

16:10

you alone or we're really going to double

16:12

down now to extract this money from you?

16:14

All indications are right now is that consumers

16:17

want to be resilient too. And

16:20

while sentiment is going lower and

16:22

lower by the week, spending

16:25

that our clients

16:27

are telling us

16:29

about is staying

16:31

solid. A

16:33

lot of this depends. We're still

16:36

spending, but we're going to pause a

16:38

little bit or we're going to delay

16:40

a decision for a week or a

16:42

month. because you want to see how

16:44

this shakes out? I think there's scenario

16:46

planning that largely is happening now that

16:49

will be kicked into gear if it

16:51

needs to over the next four to

16:53

six weeks, four to eight weeks. But

16:56

the point on consumers, I think, is important.

17:00

If interest rates go back

17:02

up, that is

17:04

going to cut into pocketbooks.

17:07

That's going to cut into people's

17:09

ability to feel like they can

17:11

purchase one more thing. or have

17:13

one more experience or take one

17:15

more trip, and that

17:18

will directly impact advertising.

17:21

Some of the data that I've

17:23

seen, you know, just general smart

17:25

research companies looking into what would

17:27

the impact of tariffs be, if

17:30

digital ad spend is predicted to

17:32

be around plus 12 % for

17:34

2025. And we haven't

17:36

seen a lot of down ticks to

17:38

that, maybe a point or two, if

17:40

then scenarios. But if tariffs

17:43

really kick in across the board, as

17:45

sweeping and as large as what we've

17:47

been hearing. If what's on the table

17:49

today is true in a month. You

17:51

could see advertising forecasts drop as much

17:53

by 50%. Five -zero. Yeah. And that

17:56

includes digital, right? Digital does not get

17:58

out of this unscathed. Yeah, you could.

18:00

You could see it. Is

18:02

that a likely scenario? I

18:05

wish I had crystal ball. shoulders. Yeah, this is not a

18:07

video podcast. I wish I had a crystal ball. You do

18:09

too. And

18:12

then so day to day, then, we're just

18:14

plugging ahead. We've got plenty of stuff to

18:16

take care of. We just cannot spend time

18:18

thinking about what might happen in a month

18:20

or week. Hey, that's a CEO mindset. That

18:23

is a focused mindset. Control what you can

18:25

control. And

18:27

do your best to scenario plan.

18:29

Understand where going to spend your

18:31

next dollar. Understand how you're going

18:34

to make your creative even more

18:36

effective so that it converts consumers

18:38

and people engage. And

18:40

that's what you do if you're a CMO.

18:42

That's what you do if you're a CFO

18:44

and your CEO. And that

18:47

is what we're seeing across the

18:49

board. We'll be right back with

18:51

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And we're back. There is a cliche that in

20:28

downturns, the first thing to go is advertising marketing.

20:30

It's the easiest thing for a company to

20:32

say, we're going to cut back. You're shaking your

20:34

head. Why is that not true? Not always. What

20:39

we've seen over the last 10

20:41

to 12 years is the rise

20:43

of the direct to consumer. growth

20:45

companies. Uber is a great example

20:47

of that. Spotify is a great

20:49

example of that. These are

20:51

customers, you know, smartly knows well. They've been

20:53

part of our journey for a long time.

20:56

You know, these brands

20:58

started to build profitable

21:01

revenue growth and commerce

21:03

directly with consumers via

21:05

their online website or

21:07

their app. From

21:11

a C -suite point of view,

21:14

if you can continue to advertise

21:16

and drive profitable revenue growth, you're

21:18

going to do that even in

21:20

downed markets. You know

21:22

what, this relates to a question

21:24

I've always had about when... Targeting

21:28

when Apple screwed up targeting for everybody

21:30

else and specifically for meta There was

21:32

this big debate about how much it

21:34

would impact meta and I talked a

21:36

lot of folks who used to say

21:38

look we I used to reliably put

21:40

a dollar into Instagram advertising and get

21:42

$1 .40 in orders back so it

21:44

was a really straightforward decision and it

21:46

was trackable but the changes to the

21:49

Targeting blah blah blah made it more

21:51

expensive more difficult blah blah blah and

21:53

so we've pulled back and I kept

21:55

thinking But your business is to sell

21:57

widgets, shoes, whatever. If

21:59

you're getting $1 .20 back on your

22:02

dollar, you still have

22:04

to spend it, right? And there

22:06

was some disconnect between what they were

22:08

saying and my question, or maybe I'm

22:10

just dumb. What am I missing about

22:12

that trade? Because you did see a

22:15

lot of dollars, at least for a

22:17

while, leave meta because targeting didn't work

22:19

as well as it used to. I

22:21

think it's obviously climbed back. What was

22:23

happening there? Well, the first thing is

22:26

you had, you know, a series of,

22:28

you know, decisions around,

22:30

you know, allowing

22:32

apps to track, right? You

22:35

know, Apple iOS 14 ushered that

22:38

in. And a lot of people

22:40

decided to say yes, track. And

22:43

a lot of people more than

22:45

overwhelming majority said, No,

22:47

don't track. And so that

22:50

caused meta to have to

22:52

rethink how it would provide

22:54

the the targeting data that you know brands and

22:57

others yeah they were on their heels and they

22:59

had to like reformat stuff i call it on

23:01

their heels i would just say they had to

23:03

reframe they had to rethink how they were going

23:05

to offer that confidence around targeting they said it

23:07

had they said it made a big hit to

23:10

their business and maybe you could say they were

23:12

playing it up a little bit to go after

23:14

apple but it's certain i was talking to folks

23:16

it seemed like They didn't think

23:18

it'd be that big a deal or

23:20

they didn't think it would really happen.

23:22

And when it did happen, it seemed

23:24

like it was really impacting their business.

23:26

It caused a whole rethink about how

23:28

you target and how you add value

23:30

to the experience. And in a

23:32

way, I think it's led to a renaissance. It's

23:35

led to a renaissance around creative

23:37

engagement. What all of

23:39

the social platforms will tell you, and

23:41

Amazon will tell you this too, for

23:44

Prime. and for their ads

23:47

business, engaging creative,

23:49

creative that's more personal,

23:52

more relevant, is driving

23:54

performance much more than

23:57

just the targeting alone.

24:00

And in that regard, that's

24:03

good news for this

24:05

industry. It's good news

24:07

for us as people

24:09

and for people in

24:11

general because an ad

24:13

supported media company, is

24:15

one that's going to be better for

24:17

people, better for creators, better

24:20

for the value exchange

24:22

over time. But it

24:24

has to offer a value exchange. And

24:27

that to me was actually

24:30

the silver lining in the

24:32

iOS decision, which is it

24:34

pivoted the publishers and brands

24:37

and technology companies like mine,

24:40

like Smartly, to start

24:42

to think how to make

24:44

advertising more engaging because the creative

24:46

was personal and relevant, much more

24:49

than just the targeting alone. But

24:52

it seems like that change directly affected

24:54

how people spent their ad money. And

24:56

that's the part that's confusing to me.

24:58

It'd be one thing if there were

25:00

lots of other places the size and

25:03

scope of Meta, but there really is

25:05

one, right? It's Google and they offer

25:07

a different product. It's not really replaceable.

25:09

If you're drop shipping t -shirts out

25:11

of China from a basement in Michigan

25:13

and the business used to be really

25:16

good, now it's less good because the

25:18

targeting is not as good and maybe

25:20

it's more expensive to reach those customers.

25:23

You don't have other places to go, right?

25:25

That's where I'm hung up on. Well, let's

25:27

break it down. So when

25:29

iOS made that decision? It was hard

25:32

to determine what was working. So $1

25:34

.40 became $1 .20 or $1 .40

25:36

became another number that no one had

25:38

confidence for because they didn't have a

25:41

baseline for. So then

25:43

you say, as a

25:45

marketer a brand, okay, I

25:48

have to get the best ROI or

25:50

return on ad spend I can. Where

25:52

do I have data that will give

25:55

me confidence? And that

25:57

is what happened over that year to

25:59

18 months. a lot

26:01

of dollars shifted from

26:03

social to Google search

26:06

to YouTube and to

26:08

iOS search. But once

26:10

the reframing around more

26:12

personal, relevant creative happened,

26:15

once Meta started and

26:17

others like TikTok too,

26:19

launching products that made

26:22

the targeting shift and

26:24

allowed a much more

26:26

trackable series of metrics around

26:28

ROAS or ROI. Those

26:31

dollars started to shift

26:34

again, but social isn't

26:36

just meta anymore. People

26:39

drove change too because they love

26:41

to spend 90 minutes of their

26:43

time on TikTok, which

26:45

is actually more than the average on

26:48

Netflix a day. And

26:50

so there was a couple

26:52

tectonic shifts going on. There

26:54

was a targeting shift, yes,

26:57

but there was also a

26:59

fragmentation shift of new entrants.

27:01

So there are alternates for

27:03

the person who was spending

27:05

money on Instagram reels. They

27:07

are other places they can

27:09

go. Absolutely. Look at Reddit

27:11

and Pinterest. Reddit and Pinterest

27:13

right now are very high

27:15

-growing, fastest -growing platforms today

27:17

because audiences are going there.

27:20

Ad spend is always going to follow

27:22

audience. And so, audiences

27:24

fragmented at the same time that

27:27

the measurement changed. And

27:29

that's why it was a big event. But

27:31

it's also now shifted, I think, to

27:33

a better place, which is let's focus

27:35

much more on the messaging and the

27:38

creative to actually engage. The other aphorism

27:40

I use all the time was that,

27:42

yes, the ad dollars follow the audience

27:44

and the eyeballs, but there's often a

27:47

really long lag time. In some cases,

27:49

years and years, right? I've been spending,

27:51

I've been spending. a good part of

27:53

my career online. And for

27:55

a long time, it was very obvious that a lot

27:57

of people were online, but the ad dollars were not

27:59

there. They were on traditional media. And

28:02

even today, TV has a huge

28:04

amount of advertising, even though everyone

28:06

knows that audience is going, going,

28:08

gone. Do you think the speed

28:10

in which people on your end of the business

28:13

have figured out how to find the eyeballs and

28:15

get in front of them that you guys have

28:17

caught up, that your clients don't

28:19

need to wait several years to realize

28:21

that TikTok is a major platform and

28:24

they should be there or pick your

28:26

spot? Understanding

28:29

how fast consumers shift is way

28:31

better today than it was three

28:33

years ago, five years ago. But

28:35

the ability to take action on

28:38

that isn't significantly improved because you

28:40

need technology platform like what we

28:42

do to understand in real time

28:44

what consumers are doing, where they're

28:47

shifting to, where that audience is

28:49

available, and then make real time

28:51

decisions. Sometimes it's not just the

28:53

day. I mean, it's certainly

28:55

not the week, certainly not the month.

28:57

It's sometimes not just the day, it's

28:59

what's happening in platform or across platforms

29:01

in an hour. So this is another

29:03

question I wanted to ask you about.

29:06

One of the big moves is supposed

29:08

to be from traditional TV advertising to

29:10

connected TV, right? People are still watching

29:12

lots of stuff. They're still watching lots

29:14

of stuff on their television set. Instead

29:16

of turning the dial or flipping the

29:18

channel to ABC, they're watching Netflix. They

29:20

may even watch an ABC show through

29:22

Hulu or whatever. CTV,

29:24

connected TV, is supposed to be

29:27

one. Great because it's the old

29:29

TV advertising people are familiar with

29:31

high value and it supposedly has

29:34

all this data that allows you

29:36

to target really well and in

29:38

theory the the viewer should be

29:41

happier about that too. I

29:44

watch a bunch of Hulu live

29:46

and the ads that are notably

29:48

Dumber there's a lot of repetition

29:50

There's a certain kind of ad

29:52

I don't see on rather a

29:54

lot of pharma ads that I

29:56

won't see my son and I

29:58

would watch a Bob's Burgers reruns

30:00

and there would always be Some

30:02

ad featuring some older black blues

30:04

musicians selling some kind of I

30:06

don't know cancer prostate drug It

30:08

shows multiple times per episode. I

30:11

think something is wrong here. The

30:13

targeting is not so good. I

30:15

still get ads all the time in Spanish. I

30:17

don't speak Spanish. What's the disconnect

30:20

here? What's what's not happening? Or maybe or

30:22

it's all of what I'm saying is true

30:24

and it doesn't matter because it still is

30:26

better than not doing it. There's tremendous untapped

30:28

potential for CTV. I think the

30:31

industry you wanted to talk about advertising in

30:33

the state of the industry. I think the

30:35

industry is pivoting now around three things. Social

30:38

people's desire to go

30:40

and connect. Commerce people's

30:42

desire to actually shop

30:44

discover take action When

30:46

they want how they

30:48

want and then entertainment

30:50

That is long -form

30:52

video a movie a

30:54

television series or a

30:56

15 -second tiktok that

30:58

you spend 90 minutes

31:00

looking at Those three

31:02

things are really changing

31:04

and shaping this industry

31:06

social has thrived with

31:09

a business model

31:11

that allows personal,

31:13

relevant, creative. And

31:17

people want that. More people

31:19

today want personalized, relevant, and expect

31:21

relevant, creative than ever before. It's

31:23

about 10 points in the last

31:26

three years. People want to

31:28

lean in and shop or discover and

31:30

do things that allow them to have

31:32

the ease and the comfort of not

31:34

always having to be shopping in a

31:36

mall. It's the online experience

31:39

that works so well for them. Entertainment,

31:42

CTV, has largely not

31:45

tapped into those two worlds. And

31:48

that is the untapped potential. A

31:52

lot of it just has

31:54

to do with brands and

31:57

marketers saying, okay, I

31:59

know I'm losing a lot of audience

32:01

to people who just want to watch

32:03

the same show, but on demand. So

32:06

I'm going to use CTV to do

32:08

that. And that was revolutionary. But

32:11

the advertising didn't change. The

32:13

spots themselves didn't really change. The

32:15

messaging didn't really change. And

32:18

that's largely, with some enhancements, been

32:20

the state of play the last

32:22

several years. What you're

32:25

now seeing is the ability to

32:27

take the shopper data, the

32:30

ability to take experience,

32:34

and technology platforms, and start

32:36

to serve more relevant advertising

32:39

within that CTV experience. Is

32:41

it happening or is it

32:44

coming? It's coming, and

32:46

it has to come. Because everything I

32:48

see seems like faints and nods towards

32:50

it are like pick which ad experience

32:52

you'd like, and I don't want either

32:54

ad experience, but I'll pick on the

32:56

one where there are the progressive insurance

32:58

people around a campfire. Just so I

33:00

can get to Bob's Burgers, I don't

33:02

care either way. You can tell me

33:04

that I'm now more engaged as I've

33:06

picked which ad. But I was trying

33:08

to get to my thing that I

33:10

wanted to watch. 100%. But over time,

33:12

the technology will get better, the personal

33:14

and relevant creative will get better. And

33:16

I think what you will see is

33:18

some of these CTV companies

33:20

and we're seeing it a bit

33:22

with YouTube even today. We're seeing

33:25

it with Amazon for sure. You'll

33:27

see these companies figure

33:30

out how to provide

33:32

a seamless experience that

33:34

is easy to discover,

33:37

shop or connect and

33:39

have personalized creative that

33:41

is entertaining and offers

33:44

that value exchange in

33:46

an ad supported world.

33:48

So who wins? People

33:51

are going to win. If

33:53

the brands, the marketers, and the

33:56

industry do the job that I

33:58

believe we can all do together,

34:00

people are going to win because

34:03

people will get what they need,

34:05

which is information, knowledge, awareness, the

34:08

ability to be entertained, and the

34:10

ability to shop and buy. But

34:14

people will win with the

34:16

companies that actually lean into

34:18

being an ad -supported company.

34:22

I don't think the business models

34:24

are really favorable if you're not

34:26

going to be ad -supported in

34:29

this space. The real

34:31

cool opportunity for a company

34:33

like mine is to be

34:35

able to help Nike, Disney,

34:38

Uber, Spotify not only create

34:40

advertising that engages in delights

34:42

in terms of awareness, but

34:45

then helps create advertising that

34:47

is more you know, personalized

34:50

so that those offers, those

34:52

interruptions, they actually work and they

34:55

work where people want to come

34:57

back again and again. And that's

34:59

what I'm getting to is when

35:01

is whomever gonna realize who I

35:03

am, who my kid is, or

35:05

vaguely understand that even though there

35:07

might be people who speak Spanish,

35:10

eight blocks down the street from us, that

35:12

we don't speak it, and not to serve

35:14

us an ad in Spanish, and,

35:17

you know, to get closer to that level of

35:19

targeting. The level of targeting that freaks people up,

35:21

by the way, on their phones, they said, my

35:23

phone is listening to me, and that's why they

35:25

were able to serve up that ad that knows

35:27

the way. They were listening to me talk about

35:29

my trip I'm taking to Italy. I'm like, no,

35:31

you Googled Italy at point. There is hope for

35:33

you, Peter. There is hope. I believe it's going

35:35

to get a lot better. It's going to happen.

35:37

Okay. I believe it's going to get a lot

35:39

better. One platform you've not discussed with me here

35:41

is Twitter slash X. We

35:43

all know about advertisers fleeing the platform after

35:45

Elon Musk bought it. It was never a

35:48

big ad platform to begin with. There

35:50

are stories. I'll read them that say brands

35:52

are coming back. I don't see evidence of

35:55

it. I'm on Twitter all the time. The

35:57

ads I see are from literally like actual

35:59

Twitter users trying to boost their posts or.

36:01

really, the China stuff has dropped off for

36:04

obvious reasons, but just really weird sort of

36:06

bottom of the barrel ads. Maybe

36:08

it's the feed, but how

36:10

are your clients thinking about

36:12

Twitter slash X? So

36:15

again, the starting point is

36:17

people, consumers, their audience, their

36:19

audience is roughly stable. They

36:22

have some real bright spots in the

36:24

Middle East, in Asia, and

36:26

they've boosted, you know, male

36:28

audience quite a bit, which

36:31

is, you know, an important

36:33

part of, you know, the

36:36

population that isn't always engaging

36:38

in media like social media.

36:41

So they, you know, their audience is

36:43

stable. The

36:45

larger challenge is

36:48

not around just

36:50

awareness though. The

36:52

larger challenge is, you

36:54

know, where are

36:57

those always on dollars?

36:59

coming from. And we've

37:01

talked about this in

37:03

terms of targeting personalized,

37:05

relevant, creative. And

37:07

so X has done a lot

37:09

to build that kind of business

37:12

out. But when they were founded

37:14

and they, you know, when IPO,

37:16

you know, 10 years ago, they

37:18

did it largely as just sort

37:20

of this awareness play to begin

37:22

with. Yeah. And so that's the

37:24

opportunity for them. You

37:26

know, you're going to reach influential people. If

37:29

you want mass reach, we know you're going to go

37:31

to Facebook. We know you're going

37:33

to go to Google. We're not in that game.

37:35

You want to reach people on the coast, basically.

37:37

You want to be in that conversation. This

37:40

is a place for you. Those people

37:43

have left. Do you think they

37:45

come back? Do

37:47

you think they come back for real,

37:49

not just because they're scared of Elon

37:51

Musk or Lynda Yaccarino or Donald Trump?

37:53

I mean, the audience is stable. And

37:55

so I'm not sure you can In

37:57

aggregate, it might be stable. It's

37:59

certainly a different composition of audience. That's

38:02

something I'm not in a great

38:04

position to comment on in the

38:06

sense that we have advertisers who

38:09

are using it, they find value

38:11

in it, looking for the audiences

38:13

that they're looking for. And

38:16

so it's hard for me to kind of,

38:18

it's hard for me to do a blanket

38:20

statement about, well, these types of segments of

38:23

left and these type of segments are there.

38:25

You know, it is for our, you know,

38:27

for our clients to decide how they want

38:30

to use it. We'll be right back with

38:32

Laura Desmond, but first a word from a

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39:36

only has 24 hours to

39:38

sell his car. Is that

39:40

even possible? He goes to

39:43

carvana.com. What is this? A

39:45

movie trailer? He ignores the

39:47

doubters, enters his license plate.

39:49

Wow, that's a great offer.

39:51

The car is sold, but

39:54

will Carvana pick it up

39:56

in time for? They'll literally

39:58

pick it up tomorrow

40:00

morning. Done with the dram.

40:02

Done with the dram. I'm

40:05

gonna ask about AI. I know you're gonna tell

40:07

me that AI is gonna be great for me.

40:09

because I'm a person who consumes media and it's

40:11

going to help me somehow. It

40:13

seems to me that it's a real

40:15

challenge. It challenges lots of industries. It

40:17

certainly challenges my industry. It seems like

40:19

it really challenges your industry. It seems

40:21

like a lot of work that is

40:23

currently done is some of the first

40:25

stuff that's going to is and is

40:28

going to be automated and is going

40:30

to lead to more consolidation, fewer jobs.

40:32

How do you feel about that thesis? I

40:36

think it's a tremendously exciting opportunity.

40:38

for the industry. But

40:40

I think it's exciting for us as human

40:42

beings and people. It's going to shift work.

40:45

It's going to shift how we

40:47

spend our day. It's going

40:50

to shift how we learn. For

40:52

marketing, AI will shift

40:54

how brands make relationships with

40:56

consumers. And that is

40:58

something that mobile did. That

41:00

is something that the digital revolution

41:02

did. It's something that AOL did.

41:04

at the dawn of the century.

41:07

If we go to a world

41:09

where the queries I used to

41:11

put into Google, which then resulted

41:13

in ads as well as stuff

41:15

I wanted to know about, are

41:18

now a chat GPT query

41:20

or pick your platform. Do

41:23

you assume that... is

41:25

going to manifest in a chat

41:27

GPT response as well, or

41:29

does that just shrink the available space

41:32

for an advertiser? Because in theory, Google

41:34

will be less attractive to your advertising.

41:36

Super good question. What

41:38

AI is showing us, what chat GPT

41:40

is showing us, by the way, what

41:42

Llama is showing us, what Gemini is

41:44

showing us, is that

41:47

conversations with consumers on a one

41:49

-to -one basis are now possible.

41:53

And in a world where people

41:55

do want relevant, personal, creative, that's

41:58

a big opportunity. And

42:02

that's something, honestly, on our product

42:04

roadmap, in terms of what we're

42:06

building and what we're doing every

42:08

day, what I'm personally most excited

42:11

about this year is a launch

42:13

of a whole new series of

42:15

ad products around conversational ads, where

42:17

you can see the ad in

42:19

the news feed. or in your

42:22

TikTok scroll, and

42:24

you can click, but instead of

42:26

clicking and just going to a

42:28

homepage where you're not sure if

42:30

you want to buy or not,

42:32

you can click and get more

42:34

information and then have a conversation

42:36

with the brand based on decision

42:38

trees and AI -like, chatbot -like

42:40

conversations. I'm excited

42:43

about it because it's

42:45

going to change eras.

42:48

The last 20 years have been about one to

42:50

many. One to few.

42:53

The next 10 to 20 years are going to

42:55

be about one to one. And

42:58

that is a huge

43:00

opportunity. And that

43:02

will open up a lot of cool stuff

43:05

so that hopefully you don't get Spanish language

43:07

advertising if you don't want to see it

43:09

or Bob's Burgers if you actually want to

43:12

go to Hardee's. That's

43:14

cool. It's a

43:16

fun time to be in this business. I

43:18

got to show you Bobsburgers. It's a great

43:20

show. I would like to see it. It's

43:23

not hard. I would like to see it

43:25

But that's cool and so I asked me

43:27

the follow -up to this so so that

43:29

is great for you and maybe for me

43:31

if I'm in somewhere where I see one

43:33

of these ads and I want to engage

43:35

with it and all of a sudden I'm

43:37

now having a conversation with a chatbot or

43:39

whatever it is I get that theory of

43:41

the case, but what if I'm

43:43

going to chat GBT and there are no

43:45

ads there because it's not an ad product.

43:48

Do you just assume that those, that the

43:50

chat GBTs of the world are gonna incorporate

43:52

advertising one way or another? It's just a

43:55

matter of how? Yes. Are

43:57

they talking to you about that? Or

43:59

the platforms themselves saying, this is our

44:02

roadmap. Here's how we think advertising plays

44:04

into this stuff. No direct knowledge. But,

44:07

you know, you start to think about,

44:10

well, first of all, let's put this into context. I

44:13

think there are 14 billion searches

44:15

a day on Google. And

44:18

the vast majority continue to be similar

44:20

to the searching we've always known, links,

44:22

click. Basically

44:24

the business model that the open web has been

44:26

built on. And a lot more are Gemini based,

44:29

the answer in the text box. There

44:32

are 400 million users of chat

44:34

GPT. It's an incredible skyrocket. Nothing

44:36

has ever gotten consumer love and

44:38

adoption like chat GPT and that

44:40

includes Spotify and that includes mobile

44:42

phones and TVs. It's

44:44

an incredible viral product, but you

44:47

know put it into context, right?

44:49

But Google certainly is worried about

44:51

it. That's why they have reoriented

44:53

their entire business, right? And that's

44:55

why they were willing to risk

44:57

putting out stupid answers to queries

44:59

like how to put glue on

45:02

pizza last year because they were

45:04

so afraid that consumer behavior was

45:06

going to shift radically to chat

45:08

GPTs and the like. And this

45:10

is why I think it's important,

45:12

again, to talk about this in

45:15

the sense that these companies have

45:17

supported advertising, supported creators, supported brands,

45:19

marketers, in real

45:21

relevant personal ways. You

45:25

look at what's possible

45:27

and I think most

45:29

of Fortune 500 brands

45:32

and even the mid

45:34

-market SMB companies would

45:36

say, my livelihood is

45:38

based on winning on

45:41

these leading channels every

45:43

day. a

45:45

lot of it is just driven

45:47

off of consumer interaction and exchange.

45:50

And that is what the

45:52

AI companies have an opportunity

45:54

to capitalize on if they

45:56

want to, because of that

45:59

one -to -one interaction, the

46:01

data of the audience. So

46:03

I have no direct knowledge,

46:06

but I think just thinking about

46:08

the last 20 years and how

46:11

advertising has been a huge flywheel

46:13

to the economy, thinking about how

46:15

it has helped support the largest

46:17

companies in the world in technology,

46:20

like Meta, Google, Amazon.

46:23

It feels like it's going

46:25

to happen. And I

46:28

asked you about how AI affects

46:30

literally the work you guys do

46:32

and the job impact. Would you

46:34

tell a young, ambitious person leaving

46:37

college to get into the ad business.

46:39

There's a lot of opportunity there where you say it's

46:41

going to be less opportunity than there would have been next

46:43

number of years ago. You should think about something else.

46:46

I think there's a ton of

46:48

opportunity and I'll tell you why

46:50

because I think AI is going

46:52

to usher in a whole new

46:55

age of creativity and the explosion

46:57

of content and the ability to

46:59

empower creators to get to their

47:01

idea or versions of their idea

47:03

faster and faster. It is not

47:05

going to replace creativity. It is

47:08

not going to replace a human

47:10

being in the sense of ideation

47:12

and contextual understanding and being able

47:14

to partner with brands to bring

47:16

those brands to life and a

47:18

big idea that matters and is

47:21

meaningful. But it

47:23

will shift work. I

47:25

want to make sure everyone knows

47:27

it has to shift worked ethically.

47:29

These models have to be trained

47:32

ethically. They have to respect IP.

47:34

They have to respect creators' rights.

47:36

This is job one. This is

47:38

what needs to be done. But

47:40

I think it's tremendously exciting time

47:43

to be in the advertising business.

47:45

Let me say one more thing, though, about any

47:48

business. So a lot

47:50

of our engineering is in Helsinki.

47:52

That's where Smartly was founded. And

47:55

I was talking to our head of

47:57

people and our talent recruiter in Helsinki

47:59

along with my chief technology officer when

48:02

I was there about a month ago

48:04

having dinner with them. And

48:06

we were having a real

48:09

conversation, real talk about

48:11

what is AI doing to

48:13

the average engineer, the average

48:16

coder today, coming out of

48:18

college. There's a lot

48:21

of code that can be written by

48:23

AI. I asked, you know,

48:25

what is it doing to them? And

48:28

they all said quickly and

48:30

unanimously, it's forcing engineers and

48:32

coders to become more creative.

48:36

They realize that the value add

48:38

is not in just the line

48:40

of code. The value

48:43

add is what you can do with it

48:45

and what you can build on top of

48:47

it and how you can solve problems faster

48:49

and faster. And that gives

48:51

me That

48:53

gives me some cause for

48:56

optimism. This

48:58

is a disruptive technology, but

49:00

in a way, it's no

49:02

more disruptive than the technology

49:04

we saw in the Industrial

49:06

Revolution. That's a

49:08

pretty big change, though. So

49:11

was the Industrial Revolution. That's what

49:13

I'm saying. And it disrupts a lot

49:15

of people, right? And you and I

49:17

have seen a million. You've

49:20

seen a million of these statements and had

49:22

a bunch of these conversations with people, at

49:24

least publicly, they say, it's not going to

49:27

put people out of work. It's going to

49:29

find new creative things to do. And with

49:31

the horse and buggy people had to adapt

49:33

when the car showed up, that's what's going

49:35

to happen here. And I

49:38

also know that one of the reasons people

49:40

are excited about this technology is it's going

49:42

to allow them to replace people to say,

49:44

we used to need 10 people to do

49:46

this task. Now we need one or zero.

49:49

So it is it is going to strip

49:51

out work from a meaningful number of people.

49:53

I think it's gonna shift work And I

49:55

think for the one for ten you're gonna

49:58

have nine other opportunities to do more We

50:00

started this conversation with Donald Trump We're coming

50:02

back to it. One of the things you

50:04

would hear about after last fall's election was

50:07

it wasn't just that Donald Trump was elected.

50:09

There has been a vibe shift in America

50:11

and you continue to talk about that and

50:13

to justify whatever they're doing. Some

50:16

people believe that the country really

50:18

has meaningfully changed and that lots

50:20

of things have to catch up

50:22

to that change like media. Do

50:25

your clients believe that? Do they believe

50:27

there has been a vibe shift? And

50:29

if so, are they trying to adapt

50:31

to that? I think they're just focused

50:33

on delivering the business. One

50:36

thing I have thought a lot

50:38

about as it relates to the

50:40

presidency in general, whether it be

50:43

Obama, Trump, Biden,

50:45

et cetera, is that

50:48

a president's ability to

50:50

command media, the president's

50:53

ability to personalize and

50:55

make relevant their messaging

50:58

by channel has always

51:00

done well. And

51:02

that ability to day part, right? To

51:05

have messaging for traditional media

51:07

that comes across one way,

51:10

use social media perhaps a different way,

51:13

use podcasting, if I could

51:15

dare to say, a different

51:18

way. That ability to day

51:20

part, that ability to adjust

51:23

and shift, is a key

51:25

part of what we have

51:28

seen. And we will continue

51:30

to see it like you saw you know

51:32

Nike ran Colin Kaepernick ads and then they

51:34

got a bunch of blowback and there was

51:36

the Bud Light thing was it last year

51:38

two years ago With it with a trans

51:40

influencer and there was a meaningful change in

51:43

Bud Light sales right if I'm hoping to

51:45

get the beer right and so you saw

51:47

brands going all right We have to sort

51:49

of step back from some stuff. We thought

51:51

was good for us Are they talking to

51:53

you about that kind of stuff or at

51:55

this point? It's just look we know we're

51:57

selling this many, we know we need to

51:59

buy this much ad. Do they

52:01

talk to you about that sort of stuff? Or is

52:03

it more sort of transactional? It's not

52:06

transactional at all. I mean, what

52:08

they're talking to us about is

52:10

how do we take all the

52:13

knowledge that we have on your

52:15

platform about what audiences and people

52:17

are doing and reach them at

52:20

the right place, right time with

52:22

a message that's going to engage

52:24

them. And that's a

52:26

critical part. of driving profitable revenue

52:29

growth. That is really what's on

52:31

their mind. I

52:34

think anyone who, what you're

52:36

speaking about in regards to the examples

52:38

is a lot of influencer media. It's

52:41

a lot of user -generated

52:44

content. And I

52:46

know most marketers who are

52:48

engaged or using that, they

52:51

understand you have to put

52:53

brand guidelines and

52:55

governance in place to

52:57

ensure that you don't

52:59

have some big misses.

53:03

But they also understand the risks.

53:06

But some stuff where brands would

53:08

spend a lot of money on

53:10

pride, the gay

53:12

pride, June, right? All

53:15

kinds of stuff. And over the last X number

53:17

of years, you saw bigger and bigger corporations, one

53:19

that you never would see aligning themselves with anything

53:21

that had to do with gay or lesbian people,

53:23

say, oh, we support this community and we're putting

53:26

our money there. And there's a thought that you're

53:28

going to see less of that. in 2025. Not

53:31

your business, obviously. You're not involved in

53:33

pride stuff or pride parades, I guess.

53:36

But do you see any evidence of that

53:38

shift? No, if anything, it's the opposite. What

53:41

marketers are really interested in is

53:43

how do I create more relevant

53:45

personal creative? How do I reach

53:48

all these important target segments the

53:50

way they want to be reached

53:52

with the information about the brand

53:54

or the product that will make

53:57

them want to lean in and

53:59

buy. And that

54:01

is why I'm optimistic about

54:03

AI. That is why I'm

54:05

optimistic about the general state

54:08

of digital media is because

54:10

over time, it's proven to

54:12

be very effective at that.

54:14

And anything along the technology

54:16

front that will help creators

54:18

create more, help marketers shift

54:20

in real time, help

54:23

brands get in front of the right

54:25

target at the right moment with the

54:27

right brand, and the right variation of

54:30

a creative message is gonna win. And

54:32

to bring it back, I believe

54:35

when advertising does its job,

54:37

brands find buyers, people

54:39

find things they love and need,

54:41

and goodness happens in a free

54:44

market. Laura Desmond, you are optimistic.

54:46

It's April 2025. I will

54:48

take optimism in any form I can find it, and

54:50

I'll take knowledge in any form I can find it.

54:52

So thank you for coming by. Peter, thank you. It's

54:54

been a real pleasure. Thanks again

54:56

to Laura Desmond. Very nice

54:58

that she can come into the office

55:00

for that one. Thanks to Jelani Carter

55:02

who produces and edits this show. Thanks

55:04

to our advertisers, all of our advertisers

55:06

who make this show available to you

55:08

for free. And thanks to you guys

55:10

for listening. I'll see you soon.