Episode 44: Gavin Dunaway talks fraudulent ads and AdMonsters. Plus a Freewheel update and earnings.

Welcome to the Architecture Podcast. I'm Ari Paro. I'm here with Eric Frache and Gavin Dunaway of The Media Trust. This is gonna be a great show. We have a lot of great things to talk about. We are going to talk about Google getting rid of IP addresses. We have some follow up on last week's FreeWheel News. There's earnings roundups, there's plenty of earnings to talk about. So we have some really interesting topics. First I want to talk a little bit about housekeeping. So

So.

week, if you're a subscriber to Architecture's Podcast, feed on either Spotify or Apple, you'll see some changes. so first of all, we're moving Justify Your existence. Our new, our new segment on startups, which has become very popular. We're moving it off of this podcast to its own publication schedule on Wednesdays. So you can get those startups in your inbox pretty easily. If you're gonna get tired of listening to us, just pop right in there. And secondly. podcast feed currently has short versions of the in-depth vendor interviews on architecture. We're changing that. We're gonna put the full versions on the podcast. so they will only be live for about a week. So if you are a architecture subscriber to architecture tv, you'll have access to all the interviews, hundreds of hours of interviews but the podcast listeners will be able to get the latest and greatest each Monday. Hope that's not too complicated. Email me if it's too complicated. Anyway, enough. Housekeeping. Alright, so Gavin Dunaway, Gavin's a sort of a legend in our industry. He people, a lot of people probably still know him as the ad monsters guy also a musician. currently at the Media Trust, not Media Trust. The Media Trust. You must include the, so Gavin, thanks for being here.

I, you know it. Thank you for having me. First off, you know, I, I don't know if I'm known as the Ad Monsters guy. I feel like sometimes it's like the other Ad Monsters guy. 'cause you say the Ad Monsters guy and they're like, oh, Rob Beeler. And it was like no, no, no. That the, the tall guy that used to lurk behind him and was like, yeah, that's me, Gavin.

That reminds me we should have, we should have Beeler on the show.

Oh, you should totally have Beele on the show.

get rid of you. Put on

Yeah, yeah, yeah, yeah. Only call him up, but I'll put him on speaker phone. He can go through my microphone.

No, we love you, Kevin.

Oh wow. You're just saying that 'cause I booked you for a keynote once. It was a good keynote,

enough. That'll do it.

All my predictions came true.

so why don't we start with the media trust. We had we had a great interview on architecture TV that you could listen to in depth on the media trust. Been around for a really long time, real stalwart of the industry,

Oh seriously. Stalwart, not dinosaur. I like him. When people say that

Yes, all works a positive, I think kind of So, so what's going on in the world of security and protection in, in ad tech? It feels like a subject. We don't talk about that much, but what, what's the latest and greatest.

Yeah. You know, it's interesting, I don't, you know, it's not like say in the days of 2002 16 2017, where, you know, when I would hear from like publishers all over every week, they were getting just Killed with the redirects with the, the Walmart gift cards, Amazon gift cards, stuff like that. Those are still around, make no mistake. But we're not seeing them in the same force that we used to. There's a lot more devious stuff going on these days especially a lot of it targeted specifically at elderly people. One of the interesting things about media trusts being so old is that we built up this massive infrastructure of devices all over the world over the past, almost 20 years now, and we use those to go hunting from malware and also to analyze tags from our various clients as well as the sites. And we have set up specifically profiles that are, that look like elderly people going to do many things that elderly people do, and they are constantly targeted with certain malware stuff that's even making it onto CBS CB S's 60 minutes. Tech scam malware. Where Yeah, they tell you there's something it's this old school too. It's crazy that it came back into fashion. Redirect pops up, say, says there's a virus on your computer. Call this number. You call the, call the number. It's a fake tech support. And next thing you know, they're telling you to install something on your computer. And, and yeah, they they freeze it up.

That's crazy how how Proli proliferated is this, like, is, you know.

Oh, that one. I do have some numbers coming up. I mean, it's just, it's we see, I would say hundreds of unique versions of this attack. We call it dolos. You know, I can bore you with, what we've written about it online but we see it from all kinds of DSPs, SSPs. Typically there is cloaking involved. There will be they'll use a different creative or a different landing page in order to get past any DSP audits, SSP audits, and that's how they ends up on major publisher pages.

So you said something I wanna follow up on. How do you teach your bots to act like an old person?

Oh, we send them, we program them. We and you know, it's not, you know, it's only somewhat of a bot. It, we've got people behind the screens behind the scenes that are In there Working on our profiles all the time. We've got ones for for children as well as different age groups. The children. One is particularly helpful because we use that also to verify kapa compliance

but do you like go down to Florida and to a mall and grab a bunch of old people and give them laptops and say pretend

well.

web.

We have some other secrets there. I can't get it too much into it, but we do we do have actual devices and houses that various people we know the demographics for, and we can use the we use these use crawlers out of these devices to mm-Hmm.

happened to be in Florida.

yeah. Florida, Virginia, anywhere in the country really?

advocate, isn't it? Okay. If everyone

Mm-Hmm.

scammed, I mean, do we really care?

Oh, whoa. Hi.

what? How, what's the role of law enforcement here? You said they call a phone number, so there's a phone number that the grandma's gonna call to install this stuff. Presumably, that's easy to track down who registered the phone number and what

Mm-Hmm.

are involved, et cetera.

Well, I think the, you know, as we've seen, I think with robocall and all the scam phone calls, there are many, many ways to, to mask a true phone number. So that, that definitely goes outta my purview 'cause I'm more in, in on the digital side. But yeah, no it's, it's really, really difficult because first, it's the, the scams have to be basically called into, on the federal level to the FTCs I think they call it scam guard better business bureau groups like that. And then they chase them down. If it's not big enough, it's not really gonna get that much attention.

Scam guard sounds like a scam. Like if you, if you got a

right.

call scam guard, you would tell, tell your mom not to click on it.

It's, yeah, no, the law, law the law enforcement part is a real is is a real, real pain because it, you know, there's all kinds of problems with jurisdiction. The feds if it's too small of a case, they're not gonna take it on. Local pe you know, you call up your local police, police department and they'll kind of like shrug your shoulders, like, I guess I can do a drive by. And it's like, ah.

have you seen some really bad stuff state sponsored actors or, or stuff or stuff like that?

We you know we had a great, we interview, we had an article in ad exchanger and we had, they did a follow up with Mike Lighten, who is the head of basically malware and MAL advertising for tag talking about we, it's hard to prove. That it's a state actor. We know something is going on. Ukraine, we had our devices aimed the ones in Ukraine, recreating Ukraine, citizens experiences. We saw a massive spike in phishing schemes right before the the invasion. Right afterwards, we saw tactics switch around from, from, you know, pushing out like the gift card schemes, the old, old school things switching over to actually hacking well-known news publications and sending malware out through that way. And a lot of times it was just to steal credentials of some type, because mal advertising's typically one part of a lar larger chain. It's about getting certain pieces of data that you can take back to the dark web and resell. Then people can put together bigger attacks, and that's where you kind of get into like the ransomware groups that you read about, take downs and stuff like that.

last week we had a really great conversation about MFA made for advertising sites. so

Ooh.

Kane was here, he gave sort of his usual, you know, masterclass and that sort of thing. But I'm interested in the correlation between site quality and site safety. As a consumer, I would think the worst the site, the more likely it is to be unsafe. I.

100%. The, I, it's, it comes down as simple as, as, as. If you care more about your content, you care more about your, your audiences engaging them, building relationships, you are going to want better ad experiences. You're gonna be far more concerned about malware. Not only are you gonna be concerned about MAL for izing, you're also gonna be concerned about weird ad content, low quality ad content, stuff like that. And so you are going to take, you are going to take far more precautions to make sure your audiences are safe.

Right. And that includes doing business with sort of third tier or let's, let's not say SSPs, let's say demand sources. You may put all kinds of weird tags from less reputable companies, and then that chain is easier to get to a bad actor.

Oh my goodness. Yes. And you know, the change themselves can also be vulnerable. We've seen over the past couple years a huge rise in attacks well redirects and other mal advertising delivered via URL sinks. A lot of what I like to call zombie ad tech, where what happens is my favorite ones was choice Stream. Anybody remember them?

I remember the name. Yeah. What was that?

I can't remember exactly what they did and what their, what their thing was. I know I interviewed the CEO years and years ago, but they went outta business, I think in 2 20 17. A couple years ago, we start seeing mal advertising redirects delivered on ads, on, I'm sorry, on websites with no ads, and we're like, what is going on? We realized there was an audience sync. There was AURL sync with Choice Stream, and a a bad actor had bought out the old Choice Stream URL and was now sending malware through it.

Wow, that's not great

No, and I will say you know, one of the things we see with a lot of publishers, they have all these old URL syncs with companies that no longer exist on their archived pages. So people will go on those archive, you know, publisher pages from like seven, eight years ago. It might be something I don't know about the best hot springs in Arizona or New Mexico. And yeah, they'll get hit with a redirect because there's an old, old URL sink on there.

and the page is still around in search results, and you just get this long tail of crap.

Right. And there's nobody going in to take out all this old junk code because what's the point? How many people actually go to that page?

So, so you just got back from the pre-bid summit? Unfortunately, the architecture, travel budget did not allow me to attend. The what, what's going on in pre-bid world?

Tons and tons of stuff. I mean they've got a lot of innovation on, on their part. Great deal of talk about the future of video. Some interesting stuff on the Mobile app front. And trying to trying to incorporate, better incorporate, I think the, the ad networks that kind of, that, that rule the space a bit too much. And in other words, give publishers a lot more monetization choice. But lots of talk about identity and what exactly is how much identity they need to support What's gonna happen in Q two 20 20, 24, and a lot of confusion over. Yeah, I mean, where are our advertisers gonna go? And tons of frustration where like right now, I think buy side and side, sell side just cannot tell what IDs are actually performing. Definitely the sell side can't tell what IDs are performing and which ones they should gravitate towards.

So publishers are putting all kinds of IDs in their bid bid responses or bid requests, and and whether that turns into more yield or not is pretty hard to determine.

Exactly.

I'm not super into pre-bid, like in at a technical level. I probably should be a little bit more, but it feels as though pre-bid is kind of on a different track from the sandbox, and the two things aren't, like reconcilable, like the sandbox browser's gonna be doing stuff.

That was a very interesting comment that Garrett McGrath from mag Knight and one of the chairman Chairpeople of pre-bid. I'm not quite sure if he's like vice or not. I'm, I apologize if I miss did his title. But, you know he said, what are friends at Chrome is doing is important and we can work basically in harmony with that.

Hmm. Harmony that does, that's not a very technical word. Harmony.

It was not.

yeah, because I, I mean, pre-bid has a, has a, is a machine. It, it makes, you know, all these requests, gets all back the responses, does all this stuff. And now the sandbox proposal is a totally different mechanism by which will be returned to the browser and then to, and then to the ad server. And I feel as though we're in like a, you know, a relativity versus quantum mechanics kind of situation here.

I love that. I love that. And it's you know, I will say with the buyers in the room and all at the other, all the other conferences I have been to, I have not heard one buyer say a thing about the privacy sandbox.

Nothing. They don't, I mean, it's so hard to understand. They don't know what's gonna happen. So, so earlier you had texted me that or put in the notes that you felt the at the pre-bid was sort of sour. That Q four wasn't looking so good. And meanwhile, we're, we're gonna talk later, the about gangbuster earnings from the, from the big guys. What, what's, how's that feel?

You know, I, I was just getting the vibe, especially from publishers, some of the supply side partners that I, I came in that they're not expecting a good Q four, that it's gonna be rough not as not as rough as last year. But in general, publishers were really kind of sensing they were seeing a lot of slip traffic slippage and definitely we've seen I mean, I don't know how high Twitter, Twitter was. Definitely, I, I still wanna call it Twitter. I can't deal with X. Twitter was good for news sites in particular, but that, you know, it's obvious there's throttling going on meta, it's definitely slipped off on, on all those platforms as well. Definitely a feeling, a bit of a traffic traffic squeeze.

That's interesting. So this is not a demand issue per se. This is actually a supply issue. Like publishers don't have enough to sell. I.

I think it's, I think it's both sides. I, I feel like many, many of the publishers I was talking to definitely have decent, premium, decent direct businesses as well, and they were not they, I don't think they were satisfied with what they were seeing coming, coming through for the next few months. And from what I understand, yeah. The buying patterns aren't looking promising.

I'm a little worried that we're through loss of identity and also through the growth of AI that publishers may be finally at the big disadvantage versus the Googles and Metas that they've, that has been coming for a long time.

The race to the bottom. We finally, we finally found it.

No, it's, it's a, it's an arms race in terms of capabilities, I would say more, more properly.

That's true.

I wanna talk about AdMonsters. We always like to talk about kind of history of ad tech on the show and other like old stuff 'cause we're old guys. You know, my first to AdMonsters, I was a product manager, double click, and they asked me to speak and I had never heard of the heard of it yet. I went into a room and I literally knew every single person in there. And there it was. It felt like the scene in Lord in the Hobbit when all the dwarves assembled for the mission, you know, is like A hundred percent men, a hundred percent. Ad ops wanted to like you know, wanted to go off into the forest and serve some ads. It's a weird conference. So

Oh yeah.

us, tell us your perspective. How do you get involved and am I wrong in my characterization?

Ha. Well, I think things definitely changed. I mean, a monsters does have a long history. Some people may not know, but it was founded in 1999 by Bowen Dwelly. And he was an ad ops guy at Yahoo. And basically he got together with a bunch of friends and they had a they went out to a resort and complained about all the, the problems they had. They did it three, four years in a row. And then he started realizing like, actually, you know what? There may be a business here. And eventually he brought in he brought in Rob Beeler and they even, I came in in 2011 and we, we realized that three, three of these publisher forums a year made a lot of sense and we're helping out a wide variety of publishers. How I got actually into digital advertising. That, that's an interesting one. I, I was always a journalist. But I didn't wanna do mainstream political journalism, anything like that. I preferred industry journalism, partially because I liked having a regular paycheck and free time so I could. Do my musical pursuits in the background. 'cause I have been in many touring bands over the years. I'm actually, I'm, I'm going over to England in a couple of weeks to do a quick tour with another friend. So

the show. Plug the show. If you want us. If you wanna hear Gavin live, go to where.

I would go visit yeah, and this is also part of the problem. Now, I, I, I'm pretty sure this band doesn't have a website. Look for the planes, NYC on on Instagram,

All right. You heard it here first? so, so how'd you get in? Jim Cramer was involved.

Jim Cramer was involved. He fired me I worked

Hold on.

He fired me for native advertising.

explain.

Okay. So I moved up to New York in 2008. Wonderful time to move to New York, you know the, the financial world's crashing down. And I got a job as a copy editor@thestreet.com and I was focused on their subscription product which included Jim Kramer's blog posts and so why would use that

Real money,

Real money?

money.

Wow.

I, I'm, I'm, I'm not proud to admit I paid for

As long as you didn't do the thing that the baseball player that was nails on the numbers it was I, the baseball player who eventually got thrown in Ja Lenny Dykstra. yeah. I nails, I had to edit a couple of his options pieces. And I was just like, I have no, is this,

He was illiterate, basically.

is this, this is not English

Yeah. All right. Anyway, Jim.

Go on

Okay, so I, and this included editing Jim Cramer's blog posts and you know, a lot of times it looked like he just mashed some stuff out on a Blackberry because this is 2008 mashed some stuff out on a Blackberry all caps and just like screaming. And I was basically told to turn that into something that, that, that resembles. A blog post So I did this and it was kind of quietly suggested that you should put in like a sentence somewhere just about promoting some of our other products the real money products. So, yeah, you know, we, we would just kind of sh. Hush hush. Add a little sentence here and there, like, if you like, that you should check out this other piece that we did by this author and subscribe to that. Well, one day one of our, our people apparently beat Charlie Gasparino. I'm named drop dropping all over the place. Totally beat him to a some kind of scoop. And I mentioned that in one of my, in my native advertising pitch. And well, Charlie called up Jim Kramer and said, what's that about? And Jim was like, what are you guys doing to my pieces? And yeah, I was out on the, I was out on the street

Wow. It caused a beef between Charlie Esperino. I, I met Jim Cranmer when I was an intern at Hearst

Wow.

was some free food sitting out and he just wandered in and started eating our muffins. And, and the secretaries came over to me 'cause I was the intern and they were like, who's that guy eating our muffins? And I was like, I'm not sure. I think I've seen him before. And so, anyway, that's my low tube Cramer story.

Gavin Gavin, what, what what is it about Ops that makes it for want of a better term? Ad ops people are cool. the, i I, I really enjoy like, you know, hanging out in the ad ops bullpen or something like that. What I'm, when I'm at a company that's, they're very They, they're like problem solvers. They typically have a good sense of humor. Do Do those type of people, are they attracted to ad ops? Does ad ops screen for, you know, like people like us? It's I've always wondered.

It is, it is a really good question. 'cause I, I thought the same thing be before I jumped over to AdMonsters, I was writing a blog. I was employed for a blog writing all about advertising technology. And I ran into Rob Beeler at a conference and I said like, dude, does any of this shit actually work? And he was like, I have the people that can tell you that. And the answer is no. So, yeah. And that's when I started meeting pub ad ops people. And they're all just really, really cool and fun. And they all have lots of diverse interests. And yeah, I've met a ton of musicians like myself and yeah, I, I'd nerd out with people on guitars all the time. I, you know, I think it's ad ops kind of. Grabs them. I, I feel like it's, you know, Rob was Rob Beeler was a film major. I, I, I was a journalist, but I, I was more of an English and a lit guy. I think it it, people that kind of don't quite know what to career path to go to, they find something extremely interesting in this. And it's also, I, I, you know, maybe it's just my own feelings with, as like a guy who was a journalist, It's about helping media and the fu trying to build the future of media because it's gotta be monetized, there's gotta be ads somehow. I, I think there's just something that feels slightly noble about it, even if sometimes, you know building the future of media includes putting in God knows how many chum boxes at the bottom of your site.

Man, it could be thankless sometime, but yeah, it's just, it's fascinating. Shout out to ad ops

Oh yeah.

I learned so much on that.

It's really fun. I love that one.

is a, you know, I think there's a government sponsored international Day of Programmatic. We should have a day just for ad ops. The I think it was like a, that was a, I have to look it up. Some company, maybe VT caused there to be a programmatic day Congress declared it or

Oh yeah.

all right. Anyway there's, let's take a break and we'll come back with News of the Week. There's a lot to talk about. I. All right, we're back. So first I want to address FreeWheel. So last week we talked about the anonymous blog post that was accusing FreeWheel of of having duplicate bid requests which is a, a anti-pattern, I think, in a lot of programmatic. And I spoke to some folks who will remain anonymous but have Knowledge of the situation. And the the context around this ha is specific to video and is specific to the fact that a 32nd spot can also be filled with two 15 second spots and a two minute. Spot, a two minute ad break can be filled with any combination of ads. And in the current state of video ad serving and video programmatic open RTB doesn't support that until version 2.6 and 2.6 is not adopted. So the point of view here, and I won't say it's FreeWheel's point of view, but I'll say the point of view here is that. Video, ad serving is actually quite common to have ad requests based on possible combinations of different lengths of ads because that's the only way you're going to get the demand. If the demand requires a 15 second instead of a 30. So I just wanna throw that out there. I'm not gonna endorse that point of view and I'm not going to endorse the blog post either. I'm just giving the information 'cause I think it's an interesting subject to cover. Now I'm gonna take off my journalist hat. It's very odd that I'm a journalist now. let's talk about some interesting stuff. Okay, so Google ha put out a little blog post today that seemed pretty innocuous, but actually could destroy the universe, which is that they're rolling out Anti IP address feature in Chrome. So it's an, so what they said is it's opt-in, the US only, and a small number of users will have it set automatically. And what this feature does is obscure your IP address through a proxy similar to what Apple came out with, with their relay product. But Apple's product was tied to being a premium subscriber, their cloud services, whereas Google's is just in Chrome. And the interesting thing I thought was that it's very focused on Third party domains. So they're really kind of targeting ad tech here. In, in this rollout. They're not, they're not going to sites rely on IP address for all kinds of things. And they're, the focus here is on third parties. So based on what we know should people be freaking out?

The question is, what is the manner by which they're going to seek opt-in? Is it gonna be like the Apple pop up? Do you want this app to track you all over the web? Which, you know, we've seen the, the outcome there on, on mobile, or is it gonna be something different, more elegant, more in the, more in the background? I think that that determines the answer to everything.

It's a very important question. I think we won't know that for quite some time because I think this is really an experiment. So but so many companies rely on IP address for the, for their probabilistic IDs for their across device. For their conversion attribution when cookies aren't available. This, this is a, this is a fairly big deal, I think. Gavin, any thoughts about

Yeah, for for sure. And I'm, I'm kind of curious to ask you about you know, I feel like I hear a lot of lip service. Maybe it's just lip service at conferences about Moving away from IP and this idea that, yeah. You know, IP is gonna be next on the list, is that more just is, is it more empty talk or or are people, have people actually been making the plans?

You know, I, I don't think they are because I think that when you ask a lot of vendors about what they're doing in the lack of third party cookies, the answers IP somewhere in the middle of them, even if they don't say that. And and I think that this would. This would take down a lot of approaches that people are currently betting on. To give one example, connected TV has a lot of vendors who who now use the IP address of the connected tv, which would not be affected by this 'cause it's not Chrome. But then they correlate that to the ipss of users who shop on websites and that would be affected. So this would've a pretty big blast radius.

So yeah, theoretically, yeah, that could be, I would it be much of a punch for retail slash commerce media

Yeah, I think the retargeting offsite targeting without cookies is very dependent on IP address.

Any cross site, any cross device, right? So if it's, you know, within a given, you know, walled off environment, whether that's on site, whether that's on CTV in app, no. Once you try to figure out how to leverage that across. Devices footprints, then then it's subject and yeah, I mean, to Ari's point, this is a pretty significant part of the overall pie, so that's why it goes, it go it to me, it goes back to the question number one, like how, how exactly are they going to engage with consumers on this?

Yeah, it's, it's a very open question. And this is definitely something to keep your eye on. another news story that a lot of big advertisers that have stopped spending on XI don't think anyone finds this surprising. But the report came out that's showing that kind of the big advertisers have really dropped off their spending on X. Gavin, are you still using

I am for, for my work life. Not really. I mean it's just I found that long has been my thing. I will go to many events and I will, I. I used to live tweet, whatever I was seeing whatever I was doing and try to throw in my own commentary whenever I could. But I found over the past year that when I would do this, I would not get much engagement anymore. And I started asking people why? And they're like, oh yeah, I don't use that. Especially as I started going to more retail media events they, the retail media people wanted nothing to do with Twitter. So I, I took it to LinkedIn instead. And what do you know, I am just blowing up all the time. Yeah, no, not for, not for work stuff. And it's really sad because ad tech Twitter is absolute used to be an absolute joy. Yeah, we had a lot of, a lot of funny conversations on there. Yeah, my personal life, I, I still I, I like to just kind of get out some pop shots here and there. Vent, a little frustration but mainly about, you know, music and, and non-work related stuff.

Yeah. Eric, what, what's your thought on advertising on Twitter?

So to this story, it's interesting because it contradicts what Linda Aino said. Said and I don't remember what offhand, what the percentage was, but you know effectively the big brands, the big spenders are coming back. And then this company, I believe it was Ubiquiti. Who did the study said if you look at the data, that's not correct. So I think that's kind of interesting. And then advertising on Twitter, we've, we've, we've beat this to, to death. You know, I think it's good that they're experimenting with programmatic channels. I think that's super important, particularly in light of this data, know, whether or not it's correct or not is thing one, thing. Two, you know, they need to continue to innovate on ad formats and be able to. At the same time, bring in, you know, DR dollars. Because that's where, you know, the, the competitive set tends to get most of their business. And then number two, solve for the nature of X, which is live and what's happening now. And that needs to be some sort of video.

we, we can't say anything bad about Linda Eino in this podcast because Matt Barish will come to our house and beat us up. or he'll beat me up. Eric could probably take him, but he'd beat me up.

But can I say on that, you know, there, there's a couple of interesting things. One, the ads I do see on Twitter, there are some really good, like Dr ads for like products. I'm like, oh, hey, that actually looks pretty interesting. And I, I, I have clicked through because and I think smaller advertisers, it's, it's actually pretty useful. but the main thing I've seen lately is a terrible amount of the frequency capping just the same ad. Twice in a row, everywhere, and it's like, oh my God, really?

was a report I think a week ago that we didn't link to it but that really focused on vertical videos and ad formats, and I think that's a very smart move. Depending on how they implement it might be really annoying, but, we'll, we'll see what they do there. I. The big news this week are the earnings reports. So Google Snap, Microsoft and meta, all, all had interesting earnings reports. I want to talk about Google because it's my favorite subject. So Eric Suer this chart that I thought was awesome, which shows that for the first time ever, network segment, which is the ad tech segment, more or less. Was smaller than the YouTube segment. so the lines crossed YouTube's bigger than all the stuff we talk about all day, and we never talk about YouTube, so maybe we're wasting our lives here. But the other thing is that YouTube gained 12.5% in ad revenue which is you know, a really nice return to growth. YouTube was stalling out for a little bit. So kudos to Neil Mohan for for turning that giant ship around. A lot of that has to do with football, I think.

Yeah, I was wondering that that includes YouTube TV revenue.

Yeah, that

Oh, yeah.

and they have that exclusive deal for the NFL. Their, the premium NFL packet, I forget what it's called. that

Sunday ticket.

ticket.

Yep.

dollar line of business.

Huge.

but meanwhile, the Google network, which is effectively DB 360, ADX GAM, and all that stuff fell by 2.6%. So that's a declining business at this time. implies that they should really spin it out and make me president of that company. That's, that's Google. If you're listening, you got my number. I'm ready to run the Google network for you people.

Two. Two thoughts on that? Maybe two and a half thoughts on that? Number one, perhaps this can connect to what Gavin said earlier, because Google and the network is such a important piece of the pie for publisher revenue. You know, is this a little bit of a canary in the coal mine that that shows that as thing one? The other thing is if you take a step back. Revenue is up 11%. That means on a, just a raw basis, that's a $77 billion advertising business, $77 billion. Like, yes, this is slightly down, but between search and YouTube and, you know, all of the ad tech, I mean, it's massive. And then number two, and we should talk about this as we get to. Meta and the others the one thing that they, they did call out two things. You know, number one, you know, where where they are seeing, you know interesting improvements is in commerce and, and retail. And that's being driven by Pex. And they said specifically that customers are seeing 18% more conversions on average. You know, cost to cost be being, like, if they're not using PMM Max. So I think that, you know, might be l slightly down, might be, you know, flat, arguably. But there's changes happening under, under the hood that I think are like super interesting and indicative of what's to come.

Yeah. Eric, do you wanna keep going and talked about meta? 'cause meta also had great results and they were very much driven by AI and their and their systems that don't give advertisers a lot of choices.

Yeah, yeah. Talk about meta in two seconds. So Snap was up 5%. Microsoft ads was up nine, 9%. Spotify was up 24%. like largely, you know, the quarter was good for these companies. For Snap, for Spotify, are first party walled gardens, right? So I think that's where, you know, a, a lot of the momentum is meta crushed it. 24% year over year increase in ad revenue. this is, and shout out to, to Brian Weezer, friend of the pod. This is $6 billion of incremental ad growth. Brian actually said this in his newsletter, and I, you know, if I was, wasn't on a standing, you know, standing desk, I might've like fallen off my chair. So, to give you some context, $6 billion is more than the annual revenue of any company outside of the top 10 ad sellers. So just the growth that meta is taking out of the market is super now. They pointed to Advantage Plus, which is Meta's version of P max. And the Advantage Plus shopping ads being at a $10 billion run rate. if you take a $10 billion run rate and you just go, you know, super simple, and a half billion dollars was in Q three. means nearly half of Meta's growth from Advantage Plus. What does that mean? That means that this set it and forget it. AI driven, like just give us the keys and we're gonna drive results for you. Is driving half of the growth for, for meta at this point, like months after it was released like wow B, Zuck is back. C, it's about AI D. This is what I'd love to sort to get, you know, talk about with, with, with you folks and, and also hear from everybody else. mean, is this the beginning of what we're seeing with what the, where the market is going, which is AI driven, set it and forget it. campaigns and very few people involved, quite frankly, turning the das the dials thoughts.

Yeah, I, I think, I think it is, I think, I think that our industry has been talking about AI and machine learning for 20 years, or people like rocket fuel. They, they have ma machine learning. There's nothing against them, but this is different. And the combination of machine learning plus the loss of signal is make, going to make it really hard for independent adtech over the next couple of years.

Yes, this is all being done in the face of loss of signal by Apple. Meta is continuing to just clean up and crush it. That's a really good point. I. And the other thing that's so interesting is I did attend a couple of things, you know, private company stuff during, during a advertising week, which was, which was last week in New York City. And you know, for folks that are not at these companies or working on ai, they're still talking about ai. Like it is the future oh, it's going to do this, it's going to do that. People, it is eating lunches right now. So like, it's like this, this is now, this is not in five years. Just like, you know, blown away. What, what meta and, and frankly I think what, what's happening with Google as well.

Yeah, you really have to ask yourself if even a really scaled ad tech company, like the Trade desk, if they can match the AI prowess of a meta.

Give 'em 50% of the AI prowess of meta, which I believe they can get to, or 25%. I mean, the results would be transformational.

Well, or the other hand I was thinking the negative side of that, which is are are they going to, are they going to have their lunch eaten despite their incredible position? Are, are you gonna have conversations like, we love you. Your, your app is great. Your service is great. We've been using it for 10 years, but the delta between the results I get with you and P max is just too big. I just don't need ADSP anymore.

Yeah, that was the first thing that came to my mind because I was thinking about, you know, at Pre-Bid Summit and a couple of the events I went to before that, I heard lots of Advertiser buy-side skepticism about P max. But then you see these results and it's kind of like, well, okay, yeah, you're complaining about you want transparency and this and that, but if you're getting the results, what are, are you really gonna complain or are you going to optimize your spend towards where you're getting the results?

I'm gonna take the other side of this, and mainly this might just be where I spend my days. There's so much happening with ad tech as it relates to startup innovation and where that is gonna be applied outside of I. Meta and, and, and Google alphabet that I think there's going to be like real adoption and real, real results being driven outside of it. But it's ha it's gotta happen fast. Otherwise they're just gonna continue to eat the, eat the market.

I think the point you made about a AI being here now is kind of the most important thing that, that we've been talking about. A lot of folks are like, maybe I should do a startup to do AI creative. It's like, no, no, no. You should have done that two years ago.

Yeah. I find it very interesting what you said about the startups too, because yeah, I, I have been running into, you know, there, there's a couple names, like, you know, chalice gets out there a lot, but you know, there are these companies already, I. Trying to be a more independent ad tech that at the same time can offer brands the transparency that they say they crave. There's, there's definitely a market here and I, and it's, yeah, I, we should be watching this space for innovation

Yeah, shout out to Chao

berg. Interesting.

of ours.

I

Not of mine.

I didn't know I had 50% of you covered with that. I swear.

It's just a bit of a sore subject that, that that podcast we did with Adam like two or three weeks ago. That I probably got more comments on that than any other, any other one people want us to do, like a cage match or something. We actually get along fine. We're, we're perfectly friendly. So one other thought I, I thought was interesting about the earnings reports. We, you mentioned Spotify having a very good quarter. Their growth was in. Music advertising, not podcast and we're a big fan of podcast advertising and, you know, we're partnered with, with Sounds Profitable, which you know, is the leading voice of podcast advertising. But it just, their bet. Spotify's bet a couple years ago does not appear to be really paying off.

Fascinating. Yeah. I've always, you know, it's a weird thing for me personally as I'm a guy, I'm a musician at heart. I don't listen to podcasts. I listen to music and, you know, the whole podcast revolution. My wife on the other hand, like nonstop podcasts. So it's, you think they went too far in the podcast direction and, and maybe now they're bouncing out a bit. I.

They invested in a lot. They invested in content. They, they bought anchor, they bought they bought a content management system. They, they really did a lot. And I think they wanted to be the Google for podcasting. You know, wrapping up the ecosystem. And I think consumers didn't act that way. Consumers are sort of. to a player, either Apple or Spotify or YouTube, and it was hard to get them off that. I, I think it's also interesting that YouTube so Google Sunset Google Podcasts recently. But at the same time, YouTube is adding better podcast support. So it's another example of how YouTube is kind of eating up all, all these kind of random initiatives inside Google.

on the podcast thing, it's twofold. I think it's, you know, number one. Audio, you know, and as it relates to both, like, sort of like terrestrial radio and you know, digital radio, IE music dwarfs podcasting. A factor of 10. I think that's number one. Number two, can more easily run ads on music just like you do with terrestrial radio. So I think the, the growth is just coming from terrestrial and, and podcasts are they're hard, they're harder to scale because the best ads are host read. You know what, they're harder to scale and they command an incredible premium as well. So, you know, I think you're, you're right in that the, the bet was that you'd see more mass adoption buy it, but I think it's a, it's still a great market and and I think where a lot of the future for podcasting is, is actually video. There is a, a, a real surprising number of podcasts. You know, Rogan being an example, but there, there, there's plenty, plenty of others that you know, they've got like incredible numbers on YouTube and that's not gonna be podcast ad budgets. That's gonna be CTV and digital video budgets. So I think, I think the market is actually large, but it's how, how can it be scaled?

Yeah, I, I think you're right. The video gives you the availability of, of many different channels, including YouTube, as well as TikTok and other things like that where you can monetize that audio doesn't. But I'm a big fan of, of podcast and as if you've listening to this, you probably heard a couple of ads if you would like to put your brand in front of. Thousands of incredibly well qualified ad tech professionals who listen to this and related podcasts, please call me or email.

Wow. That was, that was smooth ad insertion from the master

you know, it just, I gotta, I gotta fill the empty slots. You know how it's Alright. This was an awesome conversation. Let's wrap it on that. Gavin, thank you so much for being here.

Hey, it's been an honor to be here with two great minds of advertising. Loved every moment.

Eric, always a pleasure

Thank you gentlemen.

a reminder, we will not have an episode of Justify your Existence After that, it will be coming out next week and following every following week on Wednesdays. So thank you for listening.