Marketecture: Get Smart. Fast.
00:35:13 · Ari Paparo
[00:35:13] S0: There... There's some themes. Right? So obvious theme number one is open web. I talked about it five minutes ago. The so called death of the open web, the more exposure you have to web based advertising, the worse your earnings are gonna be. We we actually don't have on this list Taboola, which was also had a challenging but optimistic corner... Quarter. You know, I think they were down, like... Don't I remember exactly the numbers, but it was... Them as a leader in their space also had a down quarter. The t... The Teads 37% is just atomic bomb level, especially because of how much debt they have. The stock is trading at 19¢, and that is just not a great situation. So that's theme number one. Maybe Criteo can be swept into that theme a little bit. The other theme here, CTV, very exciting. Right? So CTV is the growth area. It is relatively open. You can participate in it. The value is there. The advertisers love it. Even with the bad earnings, Mountain was up eight... 15% year over year. So that's a second theme. And then the third theme is just, you know, performance. People want performance then. So that's where AppLovin crushing it. You know, they're just tweaking the algorithm and getting better results. They're they're up a little bit because they had a challenging last quarter, and they blame the last quarter on the algorithm. They said the algorithm didn't improve as much as they expected, so they missed the quarter. Well, they started whipping the engineers and whipping the data centers, and they got the algorithm to work again, and suddenly they're explosive. It tells you kind of the nature of the of the mechanics of that business. It's much more like a... Like the way Meta does business than it is like some of these other names who are still, you know, largely humans in the loop trying to sell stuff.
00:36:57 · Eric Franchi, Ari Paparo
[00:36:57] S1: Yeah. It makes a ton of sense. The one thing I think John from tip sheet dot ai, had this in in his post. They're not yet breaking out, like, core mobile gaming, mobile downloads versus e com versus, you know, CTV, which I I think is, you know, still burgeoning. It might not be... Not not even be live yet. So that would be interesting as well. Like, is there any shifts happening under the under the the the hood, so to speak? [00:37:22] S0: Yeah. I think also, some more color here. So the Mountain earnings are interesting because Mountain is very exposed to political, and, obviously, we just... They had the election. It should have been a huge quarter for them. So the fact they're up 15% probably is really bad compared to where they may have thought they were gonna be because they... The political was such a tsunami of spend, especially on CTV. There was there was a separate story that I don't think we have in our notes that CTV exceeded linear for for political this year. [00:37:52] S1: Did it really? [00:37:53] S0: I'm pretty sure it did. Maybe That makes total sense. Yeah. It's just, you know, the local targeting. Targeting by zip code is just everything. Right? So that that weak mountain earnings just is terrible and, you know, kicking the CEO out is a pretty dramatic step. I could only imagine what happened in that boardroom. So that's really not fantastic.
00:37:53 · Ari Paparo, Eric Franchi
[00:37:53] S0: I'm pretty sure it did. Maybe That makes total sense. Yeah. It's just, you know, the local targeting. Targeting by zip code is just everything. Right? So that that weak mountain earnings just is terrible and, you know, kicking the CEO out is a pretty dramatic step. I could only imagine what happened in that boardroom. So that's really not fantastic. [00:38:14] S1: Yeah. Yeah. For sure. Also on the on the CTV front, maybe just like quickly transition to this, but I thought this was interesting. Walmart is now making first party audiences available in Vibe. So you can see where this CTV thing is going. To your point, it's the way, you know, to scale geo. It's gonna be the way to scale commerce. AppLovin, it's the way to scale, you know, kinda like all their data, like, very clearly this idea of c t of performance TV is is is that now thing. It's no longer a future. [00:38:46] S0: It is. And Walmart data was already available on the trade desk and Yahoo, and, you know, Target data has been available in a lot of places historically. So this is like a vertical integration story with Vibe. Makes ton of sense. And, you know, Amazon's been doing it for, you know, for a while with Fire TV and stuff like that. So it it makes a ton of sense to get those ads on TV from small and midsize advertisers with performance metrics.
00:38:46 · Ari Paparo, Eric Franchi
[00:38:46] S0: It is. And Walmart data was already available on the trade desk and Yahoo, and, you know, Target data has been available in a lot of places historically. So this is like a vertical integration story with Vibe. Makes ton of sense. And, you know, Amazon's been doing it for, you know, for a while with Fire TV and stuff like that. So it it makes a ton of sense to get those ads on TV from small and midsize advertisers with performance metrics. [00:39:11] S1: Yeah. Agreed. Alright. Let's take a little bit of a departure and talk about Reddit. This was interesting. In their... I believe it was in their earnings call. Reddit said that they would be testing in certain markets and then ultimately rolling out login as a requirement. So like right now you could land on Reddit and there's a, you know, there's a declining amount, but there's a ton of I think search referral traffic that you go to Reddit and you can kind of read things anonymously. You will have to log in. What does that mean? Means they will obviously collect first party data for improved ad targeting, the product likely becomes better, and then interestingly, they drop this line that will protect them from AI crawlers. So this is very clearly kinda like, you know, number one, you put this in the notes, kind of rebuke to Google. Right? Their search traffic they mentioned dropped by 1,000,000 referrals a week in October, like incredible numbers. And then number two, you know, AI that is not licensing their their data via an agreement.
00:40:12 · Ari Paparo, Eric Franchi
[00:40:12] S0: Yeah. I think the publishers of the world are in the mode of accepting the future. Like, they've got out of the denial phase, and now they're in the phase of, like, wow, this is a new world, and licensing our data is the only thing that we've got to look forward to out of our core businesses. And you saw this with people when they did their earn... When they did their earnings announcement and they announced layoffs, they also talked about how licensing is really the future. I've spoken to other media executives who have said effectively the same thing, like, they're just all in on licensing. And related topics is that the whole concept of, like, the real time exchanges for content that we've talked about in this pod, like, last year, it's kinda stalled. Nothing's really been happening there, and nothing's happening. Right? And so it's all about these publishers, you know, using Cloudflare, using whatever to stop the bot, and then going to Silicon Valley with their hands out saying, hey, you own our content, you gotta pay us. So that is a very strong dynamic that's happening right now. [00:41:14] S1: Yeah. I think the one thing to keep your eye on is this idea of, I don't know if it's bots, but agents and robots and all non human things as an audience because publishers still have plenty of that. We're actually at our at our summit next week. We're gonna have Jordan from Movian present some of the data around, like, you know, what they're seeing and how they're they're doing this. I I gotta think that's gonna be an interesting one over time.
00:41:14 · Eric Franchi, Ari Paparo
[00:41:14] S1: Yeah. I think the one thing to keep your eye on is this idea of, I don't know if it's bots, but agents and robots and all non human things as an audience because publishers still have plenty of that. We're actually at our at our summit next week. We're gonna have Jordan from Movian present some of the data around, like, you know, what they're seeing and how they're they're doing this. I I gotta think that's gonna be an interesting one over time. [00:41:43] S0: Yeah. I think I think everyone's really excited to hear about that because we all saw the press release with Time, and that's kind of the last thing we heard. So is it working? Is it not? Is it being blocked? I have no information. I'd love to hear what Jonah has to say. [00:41:57] S1: Next week, my man. You'll see it. One positive, on the on the Reddit front, but their their ad revenue up 54% year over year. So, like, they're crushing it. And they're joining the S and P 500 in q three. So I mean, lots to lots to be positive about in terms of Reddit and surfing this wave, I think, positively. Let's talk about AI. Gotta talk about AI before we end this thing. So two interesting notes here. So neither of which I think are conf... One was confirmed by ChatGPT or OpenAI. What one was it? So in a interview or conversation with, Alex Kantrowitz, who we had on earlier this summer with his newsletter, must read, an OpenAI exec said they are 20% of Google's search volume. Not not search volume going to Google. 20% of the amount of searches that Google does is happening on OpenAI.