The Exchanges

Q And did you found this company and sold it to ISPD, or how does that relationship work? How'd you get involved?

A Yeah, I wish I found it. No, it's actually, um, the, um, the, uh, family in Spain is actually a hundred percent owners of the company. It's the Rodez family. Uh, Fernando Rodez, who's our chairman, uh, used to be for many years, the chairman and CEO of Havas Media. And then, uh, about seven or eight years ago, the Rodez family started buying up marketing services firms, uh, around the globe to kind of, and now they've consolidated this all under ISPD. So I joined a couple of years ago. I had previously worked at Uh, both Aegis and the Aegis Densu Network, as well as Omnicom, uh, for maybe 10 to 15 years. So I've always been in the kind of the agency holding company space. And since 1998, I've been in, uh, in digital marketing. So way back when, when digital was primarily, uh, email marketing and affiliate marketing, and then, uh, search took off in 2003 or 2004. So I've always been in the digital space.

AI assessment note: “Yeah, I wish I found it. No, it's actually... the Rodez family”

Q What do you mean? What do the complaints sound like?

A Well, the complaints are, um, you know, the, the real disclosure of all the different cost structures that lead into, um, a potential media buy, right? So, you know, across, um, the, what I call across the Luma scape, when you go from the, the brand all the way to the other end of the spectrum, the publisher, there's DSPs, SSPs, there's like six intermediaries involved, and they're all taking a cut where, um, a couple of different consulting firms have, you know, have done studies on this to show that somewhere between You know, 50 to 70% of the working media dollars are going towards commissions for all these people in the Lumiscape, as opposed to going towards working media to reach consumers. Um, it's actually quite honestly why, um, Facebook and Google have done so well, because their models almost from day one were, you know, most of the dollars, you know, upwards of 80 or 90% of the dollars are going towards reaching the consumers and working media, where I think in the programmatic space, historically, it's been a small fraction of that. So what we did is we actually changed our model where we have a pricing model. We still have our CPM pricing model. And then we have a second pricing model where you can just pay a tech fee of say like, you know, 10 or 15% and maybe a services fee for us to do work. We have another model where you can just use our technology as a self-se…

AI assessment note: “the complaints are, um, you know, the, the real disclosure of all the different cost structures”

Q Okay, and so are you, the reason I asked about that is from a timing perspective, are you generally seeing growth in this space, or is it really a flat business for you, because people are bringing stuff in-house, or they're going direct to Facebook, cutting out middlemen, etc.?

A Yeah, it's interesting. So a lot of studies, at least in the U S have shown that, um, something like 90% of the new, uh, digital dollar dollars going into digital have been going to Facebook and Google. Um, hence Facebook and Google stock price keeps going up. But in the programmatic space, I think programmatic is taking dollars away from other media channels, still taking dollars away from print TV and radio, uh, because it can be very niche focused. Um, so no different than, uh, Google and Facebook. If you're looking to find, you know, women between the ages of 30 to 45 who love ice hockey and, uh, are looking to buy hockey skates, you know, you can really, you know, using second and third party data, Blue Chi data, and other data sources, You can find these really niche audiences in programmatic, especially people who are in market, right? So I think your programmatic is still seeing dollars flow into the channel.

AI assessment note: “I think programmatic is still seeing dollars flow into the channel.”

Q and it drives down, drives down, drive down, and whoever has the most volume absolutely wins because you can just put the other people out of business. So people are now trying to launch SaaS companies, right, on top of the volume play. So where are you guys? Are you still purely percentage based? Do you have a SaaS kind of BI product? What's the, what's the model look like?

A Oh, great question. Okay. So, um, up until about a year ago for the last seven or eight years, it was more of like an ad network by on a CPM price basis. So we would agree on a CPM price and, uh, and then the margin between the three dollars CPM and what we buy the inventory for, let's say we bought it for two dollars, that margin between two and three dollars, the dollar per CPM, we would keep as our profit margin or our gross margin. But what we've done is because of, um, you know, kind of the movement away from what I'd call, you know, I'd call that, um, non-disclosed, um, you know, media buying. And there's been a lot of, you know, negative publicity about non-disclosures, especially at the holding company level in the marketplace. So now we actually have like three or four different price offers.

AI assessment note: “So now we actually have like three or four different price offers.”

Q a little Gmail pop-up window. Send me an email, and I'll reply immediately with the income report, and you can see how I'm buying and growing small B to B SaaS companies. That's www.thetopinbox.com. Totally free to try and use. www.thetopinbox.com. Do you own the relationships with the publishers where you find that inventory for your buyers, or do you pay somebody else who owns a relationship with the publishers?

A Yeah, so um, the DSPs, um, In, in many cases, they don't, uh, they, they work through what are called SSPs, which are the tech side of, um, the, the publisher relationship side. So these things called SSPs are tied into, you know, most publishers around the globe and publishers nowadays, they're either selling their inventory through a Facebook network or the Google network or more and more, even an Amazon network. And then the rest of their inventory is being sold either through, um, their sales forces or Or through these SSPs. So as a publisher, you have these four or five options where, uh, the inventory is being sold. And then what we're doing on the DSP side on the buy side is accessing all these different platforms to, um, to find the right inventory to, to, to reach the consumer on behalf of the brand. So it's kind of, I mean, it's, uh, unfortunately I, and that was about as simple as I can try to make it. And if, um, if you had an expert listening to this podcast, They would certainly disagree with what I just said, and they would go into about an hour dissertation about how it really worked. Um, but it, you know, it's, and that's, and that's actually quite honestly the problem between the publisher side of the digital media ecosystem and the platform side. So you have the publishers around the world who don't have one aggregated platform like a Facebook, Google, or Ama…

AI assessment note: “they work through what are called SSPs, which are the tech side”

Q on the show that are doing, I mean, billions in volume. You're doing 40, so maybe you have a master plan to, like, get to number one or two spot, but let's say you don't. I mean, if somebody not comes and offers you one X, right, your annual revenue, do you get rid of this part of the business and put your brain power towards something else at ISPD?

A Yeah, I mean, so it's a great question. So I think, well, at ISPD, the overall goal of ISPD is to build out an overall global agency services set. So, you know, the holding companies are great, the WPPs, Publicis, Omnicoms of the world. But, you know, as a six or 700 person global agency, we can be kind of a smaller alternative to the holding company. So if you're a, um, you know, kind of our sweet spot is You know, if you're a fortune 500 company nowadays, or fortune 1000, you're probably either, you've either built in, or you've probably, you're in the process of trying to build an in-house agency. Or you probably work with one of the major holding companies, but if you're a, let's say a fortune, 1000, a fortune, 5000 company, do you want to be a small fish in a big sea where you're the, you know, 100th or 200 largest client of WPP? Would you rather work with a midsize holding company that can bring, you know, the same skill sets and technologies to the table on behalf of a brand?

AI assessment note: “the overall goal of ISPD is to build out an overall global agency services set”