Marketecture: Get Smart. Fast.
00:28:32 · Eric Franchi, Ari Paparo
[00:28:32] S2: a big move. Right? This isn't just about, like, you know, facilitating the buying of CTV. This isn't... You know, it's about, you know, kinda like, you know, having access to inventory. This is like, you know, actually like having a, you know, root level access to the inventory, you know, being in front of the consumer, having deep integration with the the the the TV players, like, I think that this is a is a move that is appropriate for a player of TTD scale. Like, this would be a very big exciting move. That's my take. What do think, Ari? [00:29:05] S0: Yeah. So number one, ACR data. It's the gold standard in TV, and they... It's controlled by other people. Number two is user data. So they're trying to convince all these players in the TV business to give them IDs. And if you have the login at the TV level, it's a lot easier. And number three is disintermediation. They're having to negotiate with a, you know, a hornet's nest of companies, every single one of which has its own advertising division and wants to not work with Trade Desk ultimately because they'd rather keep the margin themselves. So the whole future of the company is dependent on cooperation among these global behemoth companies who have your worst interest at heart. So I like the swing.
00:29:05 · Ari Paparo, Eric Franchi
[00:29:05] S0: Yeah. So number one, ACR data. It's the gold standard in TV, and they... It's controlled by other people. Number two is user data. So they're trying to convince all these players in the TV business to give them IDs. And if you have the login at the TV level, it's a lot easier. And number three is disintermediation. They're having to negotiate with a, you know, a hornet's nest of companies, every single one of which has its own advertising division and wants to not work with Trade Desk ultimately because they'd rather keep the margin themselves. So the whole future of the company is dependent on cooperation among these global behemoth companies who have your worst interest at heart. So I like the swing. [00:29:46] S2: And just a point on the on the fragmentation. I did a a couple of searches, you know, lead... Leading up to this. Like, you know, it's not like the mobile or web market where there's, like, one player to rule them all, I e Chrome and then, you know, Safari and then a couple others. The operating systems is so fragmented. So Android TV has 6%. Samsung Tizen has, you know, just over 6%. Roku TV has 6%. Fire TV has 6%. Smartcast by by Vizio has 6%. So it's like a super fragmented space. So, you know, one would expect that if they can be that ads SDK layer for everyone, this could be like a a really exciting bold move.
00:29:46 · Eric Franchi, Ari Paparo
[00:29:46] S2: And just a point on the on the fragmentation. I did a a couple of searches, you know, lead... Leading up to this. Like, you know, it's not like the mobile or web market where there's, like, one player to rule them all, I e Chrome and then, you know, Safari and then a couple others. The operating systems is so fragmented. So Android TV has 6%. Samsung Tizen has, you know, just over 6%. Roku TV has 6%. Fire TV has 6%. Smartcast by by Vizio has 6%. So it's like a super fragmented space. So, you know, one would expect that if they can be that ads SDK layer for everyone, this could be like a a really exciting bold move. [00:30:28] S0: But it's Yeah. And they might they might be their success at five or 6%. Maybe that Yeah. You know, getting the ability to capture some portion of the audience and to have leverage over their distribution partners might be the end game here. [00:30:39] S2: Yeah. That's a that's a really good point. So hopefully hopefully, more to come on this. And shout out to Janko, who became, like, really famous in ad tech after I don't think anybody had ever heard of Janko before. [00:30:51] S0: Nice job, Janko.
00:30:51 · Ari Paparo, Eric Franchi
[00:30:51] S0: Nice job, Janko. [00:30:53] S2: Yeah, Janko. Come on the pod. Okay. We'll continue on the theme of of TV. So there was a long and perhaps gossipy story from Insider this week about at Netflix's ads leadership, the hunt to replace Peter Naylor, the conflict between programmatic and direct product and sales at Netflix. So you should all check it out. It's really, really good. This is, like, pretty fascinating how publicly this thing is, is is playing out. And I'll, I'll pull a quote from the piece just to, you know, kinda give some more additional context. People who had conversations with Netflix and said Reinhard, who's the the head of sales, appear to still be deliberating on topics like how much Netflix should rely on automated versus direct sales, how much the company should use outside partners to jump start growth while it builds its own ad server, how much should it share price customer data, like household income with advertisers, like real existential questions on, like, the biggest TV platform out there. Ari, if if they hired you to be the consultant on this and there was these big questions around, you know, like, build a direct sales team versus programmatic or in addition to programmatic, give up the user data measurement, like, of these things, like, what would you tell them to do? [00:32:13] S0: I don't know, man. This is a tough one. [00:32:15] S2: Who do they hire? Okay. Let's start with who do they hire? Who do they hire? Do they hire a media person? Do they hire an ad tech person?
00:32:15 · Eric Franchi, Ari Paparo
[00:32:15] S2: Who do they hire? Okay. Let's start with who do they hire? Who do they hire? Do they hire a media person? Do they hire an ad tech person? [00:32:20] S0: Well, that depends on the strategy. So so I think the theme in this article, which I think is accurate, is that Naylor was brought in to be more traditional ad sales oriented. They mentioned a couple times John Whitacomb as the head of product being more sort of programmatic leaning. And I think the senior execs don't know which way to go, so there's obvious conflict between those two. And then on top of that is this need for them to show results quickly, while they, frankly, are new, don't have a lot of clout in the marketplace. They would like to be Hulu tomorrow, but they aren't Hulu today. So so it's... That's the transition. What would I do? I'd probably go open to start to juice the revenue. I'd probably just be as friendly as possible to the programmatic world, have a have a senior sales force for big upfronts, but get a big portion of revenue in the most liquid way possible, and then just start... As we gain market power per country, start tamping down and and allowing less and less access over time to get back to where we think we should be ultimately. That... That's just my general take, but I think it's a pretty hard problem.
00:32:20 · Ari Paparo, Eric Franchi
[00:32:20] S0: Well, that depends on the strategy. So so I think the theme in this article, which I think is accurate, is that Naylor was brought in to be more traditional ad sales oriented. They mentioned a couple times John Whitacomb as the head of product being more sort of programmatic leaning. And I think the senior execs don't know which way to go, so there's obvious conflict between those two. And then on top of that is this need for them to show results quickly, while they, frankly, are new, don't have a lot of clout in the marketplace. They would like to be Hulu tomorrow, but they aren't Hulu today. So so it's... That's the transition. What would I do? I'd probably go open to start to juice the revenue. I'd probably just be as friendly as possible to the programmatic world, have a have a senior sales force for big upfronts, but get a big portion of revenue in the most liquid way possible, and then just start... As we gain market power per country, start tamping down and and allowing less and less access over time to get back to where we think we should be ultimately. That... That's just my general take, but I think it's a pretty hard problem. [00:33:28] S2: Yeah. It is. What... Beyond the the the the go to market strategy, the the sort of obvious being able to, you know, turn on a bunch of revenue in that way, would you focus on the customer data? Would you focus on ad formats? Like, what what are what are the things that you think are interesting that can, you know, help Netflix be what we all believe that it can be?