Welcome to the Blood, Sweat and CPMs Podcast presented by Freestar. Our host Kurt Donnell, President & CEO of Freestar is here to add levity and provide helpful pointers for anyone navigating the world of Ad Tech. In each episode, he will interview thought leaders across the industry to get their perspectives on what matters most to them and their take on hot industry topics. Visit our website, freestar.com for more information. Enjoy!

Episode 43

Chris Kane (Jounce Media)

In this episode, our host Kurt Donnell chats with Chris Kane, Founder of Jounce Media, an industry leader in programmatic supply chain management about why Jounce came to be, what it takes for true supply path optimization, and the tipping point of bid jamming. 


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Note: Due to voice recognition software, sound-alike, and misspelled words may be contained in the documentation.

[00:00:04.330] – Chris Kane

I’m interpreting what I hear from those companies, but what I think I hear from them is that they think of Made for advertising as like the junk food of the Internet. And it’s sort of like we’re a grocery store and we’re going to stock the organic apples, but if we don’t stock the junk food, people are just not going to shop at our store and we got to put it on the shelf. We might not feed it to our families, but we have to put it on the shelf.

[00:00:29.210] – Kurt Donnell

Welcome back to blood, Sweat and CPMs. I’m your host, Kurt Donnell. In today’s show, I had the pleasure of speaking with Chris Kane, founder of Jounce Media. Chris founded Jones Media in 2015. Today, Jounce Media is an industry leader in programmatic supply chain management and is trusted by the world’s largest marketers, media companies and advertising technology platforms to enable high efficiency programmatic trades. Chris was previously Chief of Staff to the CEO and CFO at AOL. Prior to AOL, Chris managed a portfolio of enterprise accounts at Turn. A pioneer in the DSP category, he started his career as a management consultant at Oliver Wyman, where he focused on the converging media and technology sectors. You’re truly in for an incredible show today. Without further ado, chris Kane. Awesome.

[00:01:18.620] – Kurt Donnell

Chris, thanks so much for joining me here today, man. I appreciate it.

[00:01:21.290] – Chris Kane

It’s good to be here, kurt, thanks for having me.

[00:01:23.770] – Kurt Donnell

For those of our listeners that may not know Jounce Media, why don’t we start off by you giving a little bit of a background. We’ve had the chance at Freestarter to start working with you, I guess, pretty closely over the course of the last year, and it’s been wildly beneficial and it’s been such a nice partnership. I feel like we’ve learned a lot from you. Hopefully we’ve been able to help out filling a couple of gaps for you, but so grateful of what you’re doing, frankly, for the industry. So maybe give a little bit of background for the listeners on everything you’re focused on.

[00:01:47.270] – Chris Kane

Sure. Well, I appreciate you saying that. And big picture, Jounce Media is a consultancy with an extremely narrow focus. The only thing we think about is how money moves from DSPs to publishers. We don’t spend much time thinking about the walled gardens. We don’t spend much time thinking about cookie deprecation or Attribution. It’s just how does money move from a DSP to a publisher? Across web, mobile app, and CTV inventory. And we built a whole bunch of data systems to be very rigorous about tracking supply and demand. Across web, mobile app and CTV inventory. Some of that’s on the back of public data like ads, text and sellers, JSON some of it’s on the back of private data sharing agreements that we have with large programmatic buyers. And the combination of all of it is under the hood. We’ve built a data set that rebuilds every day and quantifies supply and demand across a million websites, half a million mobile apps, and 50,000 CTV apps. And we think that is a very unique data set that allows us to have sort of the buyer’s view of the supply landscape. And so we do a handful of things on top of that data, but the main thing that we do is operate a Market Insights product.

[00:02:53.830] – Chris Kane

And the purpose of that Market Insights product is similar to kurt, what you were just saying. It’s to enable buyers and sellers and ad tech platforms to just have access to the facts. This is what’s currently happening in the supply chain. This is how money is moving. Insert our opinions about the ways in which the movement of money is continuing to be pretty irrational and just try to drive a conversation in the industry to help buyers focus on the most needle moving supply path optimization initiatives they can undertake. And implicit in that avoid. Some of the supply path optimization projects that we’ve just seen don’t really move the needle. And so we think we can remain very focused on that and it’s a long road, but it seems to me that the industry is clearly moving in a direction that is increasingly rational over time.

[00:03:49.770] – Kurt Donnell

I agree. And I will give the plug right now if you don’t already subscribe to Chris’s Monthly or the John’s Media Monthly Report. It is absolutely fascinating and full of insights and I will say actionable insights. You mentioned something a moment ago that you guys have an opinion. It’s one of the few things that gets published that actually has a little bit of a it gives you the so what and a little bit of a what should I do with this and how should I think about things. We were chatting earlier and it feels like sometimes people toss things out without much of an opinion and I think you guys have done a very nice job on that.

[00:04:19.300] – Chris Kane

Well, there’s sort of like a Venn diagram of people with opinions but not facts and people with facts but not opinions. A lot of people shouting a lot of opinions on Twitter, but it’s like, let’s back this up with some evidence, please. And you get the opposite as well. You get the incumbent measurement companies who are very focused on reporting the facts. Was this ad served to a human? Was it brand safe? Was it viewable? But that kind of misses some basic business judgment. Having opinions about whether inventory that meets some of these standards is actually high quality and the opposite inventory that maybe fails a brand safety standard on a premium news outlet is probably high quality and a missed opportunity to block. And so I just think there’s this missed space in the market for companies to have a combination of data and facts, but a willingness to form business judgments and have opinions on top of those facts. And we’re trying to fill that space.

[00:05:22.100] – Kurt Donnell

I think you guys have done a good job and make it very digestible that’s the other piece is every month in the dozen or so pages of the initial portion of the program. Obviously, it’s more of a data appendix side of it toward the back end, but it is a very easy to consume thing. And I think there’s an element where marketers sometimes don’t want to get into the minutiae of our industry. And you guys do a very nice job of digging in there and giving them the broader picture, but with enough detail to understand what they’re doing.

[00:05:48.380] – Chris Kane

Frankly, there’s a lesson that we took too long to learn there. I love the minutiae. I’ve been in Ad tech for more than ten years now. I was at a DSP for a while, I was at AOL for a while. I’ve been running Jouts for eight years. I love all of the little ins and outs of auction dynamics and supply chain transparency. I love it. I love it. I can’t get enough, and thankfully our clients love it too. Freestar seems to engage lots of other companies on the sell side of the market, ad tech companies, DSPs, marketers don’t want to engage in all the minutiae, and they shouldn’t have to. And I think to a large degree, same goes for agencies. I wish I’d recognized that earlier. I think because I enjoy the details and because the companies subscribe to our research, enjoy the details, I assume that that means that brands and agencies want to engage at that level of detail, and they don’t. And so number one priority for me, and just more broadly for the Jounts team this year is to take everything that we’ve learned studying the supply chain over the last five or so years and up level it in a way that’s meaningful to marketers.

[00:06:57.410] – Chris Kane

And we’re trying to do that in a variety of ways. Probably the most tangible one is a white paper that we published on our website called The Marketers Guide to Supply Path Optimization. Ten pages of what matters, which we think sort of speaks in a language and a level of detail that’s meaningful to brands and agencies. But we want to do more to just make all of the supply path optimization work that we’ve done over the last five or so years accessible and sort of digestible to brands and agencies.

[00:07:23.330] – Kurt Donnell

I do think it’s starting to resonate at that level where I think for a while you even said the word supply path optimization, the buy side would sort of shake their hands or shake their head, kind of say, what are you talking about? I was an event a few weeks ago that had a very interesting mix of large supply side players and large buy side players up to the agencies. And agencies really were pushing this pretty hard and pushing it at the holding company level down to the individual agencies so I feel like we’re finally making progress on this goal of true supply path optimization. I think we’ve been talking about it for years. It feels like just in the last twelve months we’ve really made some progress there. If we were going to say zero is the starting point and 100 is sort of perfect supply path optimization, where do you think we’re at on that journey at this point in time?

[00:08:07.900] – Chris Kane

Mainly I feel like the target keeps moving. And so I’ll give you an example, like back to what you were talking about with brands and agencies starting to engage around supply chain efficiency, I think we have reached consensus on the benefits of transacting through maximally direct supply chains. And it was a little startling to me three or four years ago that not everybody agreed on that we would get pushback from SSPs about why they resell some other company’s auction. They’re like, oh, we have this benefit and that, but I don’t hear that anymore. There’s no one any longer claiming that multi hop reselling is beneficial. The IB Tech Lab has done a bunch of work to not only sort of like help the industry get to consensus, but then put out a bunch of new standards to make it easy to verify which supply chains are direct or not. And now that whole notion is at a level where the investment team at a large agency can say no multi hop reselling and that’s like a meaningful statement. They’re not going to get spin from ad tech companies about pushing back against that idea and there are just like clear steps you can take to enforce that business choice.

[00:09:14.650] – Chris Kane

And so along that dimension of directness we made a lot of progress. I don’t know, 50% done, 70% done, we’re getting there. But as we’ve reached consensus as an industry and been able to operationalize this challenge around Directness, a bunch of other things pop up. We were talking just before we started recording about made for advertising inventory that’s exploded in the last couple of years, some ways of sort of injecting low quality supply into the connected TV supply chain that’s just popped up. And we’re so early there that we’re still at that stage of having to educate brands and agencies, deal with the, in my view, sort of empty pushback from ad tech companies about why these things can be valuable. We will get there. I kind of know I’ve seen this movie before. We know how this is going to evolve, but it will take years. And I’m reasonably confident that as the industry starts to form consensus around Directness and Made for advertising inventory and certain types of CTV intermediaries, that there will be two new things that pop up. So it just feels like the target keeps moving.

[00:10:24.870] – Kurt Donnell

I do think the MFA side of things, a nice euphemism for Arbitrage mainly is getting a little better. It does feel like as I talked to the demand side, they’re at least calling it out. And I think everybody’s turned a blind eye for a long time because everybody’s making money along the way, which goes to the advertiser side, honestly, to some extent, where they’re just trying to go deploy budgets and not being as efficient and dedicated as they should be, maybe to quality inventory, but then culling out some inventory that shouldn’t be there. And I think that’s a tough one. I do think the fact that it’s getting a little more light shown upon it is important to ever cleaning that one up because it is robbing dollars from the high quality publishers on the internet. Which kind of breaks my heart because our whole business, real quality publishers and maybe it feels like it is getting bigger, but I do think there’s a bigger light shine upon it by the trade desk and yourself. And so at least people are talking about it. So thank you for that piece.

[00:11:20.800] – Chris Kane

Well again, I appreciate you saying that and I think it is getting better and it just to be clear is mainly web publishers who basically have no organic audience manufacture clickbait content and monetize the hell out of landing pages to recoup their traffic acquisition costs. That’s what I mean when I say made for advertising. And so in some ways, yes, I think we and the trade desk and some others have made a good dent in being able to raise awareness and educate brands and agencies about the ways in which that inventory probably isn’t actually advancing their business goals, even if it is brand safe and high viewability and so on. Having said that, the math would say this problem is not getting better, it’s getting worse. We track this up pretty closely and the portion of the bid stream that leads to made for advertising inventory has doubled in the last two years. It’s a good business and it’s a good business because there’s just an enormous opportunity to capture irrational demand. And so for every DSP that is sort of forward thinking and blocks Made for Advertising, there’s another nine that don’t. For every agency that says we’re really committed to blocking Made for Advertising inventory there’s another nine that don’t.

[00:12:35.190] – Chris Kane

There’s just a big opportunity to capture irrational demand. And I think what’s been most eye opening for me is to see the way that exchanges sort of wrestle with made for advertising inventory. I’m interpreting what I hear from those companies. But what I think I hear from them is that they think of Made for advertising as, like, the junk food of the Internet. And it’s sort of like we’re a grocery store and we’re going to stock the organic apples, but if we don’t stock the junk food, people are just not going to shop at our store, and we got to put it on the shelf. We might not feed it to our families, but we have to put it on the shelf and the exchanges I think are in a really tricky position because they do have to put it on the shelf. They do have to monetize this made for advertising inventory. They do see that it’s a growing part of their business which I think gives them all a bunch of heartburn for sure. And so on the one hand they have this financial requirement almost to monetize this junk food of the internet.

[00:13:27.910] – Chris Kane

On the other hand, these exchanges are building deeper partnerships with brands and agencies, and they’re having these sort of awkward conversations with brands and agencies where someone sits down with an agency investment team and say, like, look, don’t. Tell the pub dev team that I told you this, but you really don’t want to buy from this publisher that we work with. And we can help you manage that. But these are companies are having to play both sides of the market and it’s a very delicate dance that they’re attempting to navigate at the moment.

[00:14:00.890] – Kurt Donnell

It’s fascinating. I will admit I had not thought of the morality of stocking the organic apples and junk food of the internet exactly in that way. Do you think this is on the buy side due to a lack of an understanding of it a laziness in a certain way and maybe that has too much of a negative connotation. But is there a way that we can help the buy side get better about this?

[00:14:24.960] – Chris Kane

I think the number one thing that the buy side can do is move away from sort of like what we call domain oriented or property oriented media planning towards seller oriented media planning. If buyers think of the internet, let’s focus on web inventory. If buyers think of the web as a million websites then they won’t even start attempting to know what those websites are. You can’t, you’re not going to know about a million things. You have to automate it, right? And so you build a bunch of automation for brand safety filters and viewability optimization and so on. And when you do that you drift into made for advertising inventory. If a marketer says hey, I need to run video with $4 CPM and 80% viewability well guess what? You’re not going to find that on any legitimate right, legitimate throne on any reputable publisher. You’re going to find that on this sort of low quality clickbait inventory. And so when you think of the internet as a million domains or when you think of the web as a million domains and then you automate quality controls, you drift away from premium supply in a sort of counterintuitive way and into this junk.

[00:15:30.470] – Chris Kane

But you don’t have to think of the internet that way. You don’t have to think about the internet as a million websites. You can think of the internet as a few dozen publishers. Freestar we would think of as a publisher. Handful of other sales houses we think of as publishers. Collectively, those sales houses represent 20,000 different domains. You don’t have to think of 20,000 things you can say, like, oh, there’s this company called Freestar. They’re very reputable. They’re a signal for quality. I trust them. If they’re selling it, I’m buying it. Similarly, you can think of conde nas and dot, meredith and hearst and discovery, and you can say, oh, these are portfolios that I trust. I don’t need to check every domain in the hearst portfolio. Hearst is just this company I trust, and I’m going to buy from them. And if you do that, you stop having to think about the internet as a million microscopic little websites, and you can think of a few dozen very scaled publishers that you want to do business with. If you do that, if you just literally just make the logo slide of, like, who are the publishers that I buy from?

[00:16:24.650] – Chris Kane

And you share that with senior people at an agency, senior people at a brand, decisions get made very differently very quickly. And I think that’s the number one sort of like, shortcut that buyers can take.

[00:16:36.990] – Kurt Donnell

Well, for our listeners on the demand side, there’s a cheat sheet of that logo slide, and it’s in chris’s report every single month. So another reason to go download that. He’s kind enough to include us, but it’s because, honestly, we’ve made some changes based on the feedback you’ve given us. There’s a couple of publishers we had that we didn’t realize had some copyright issues, or a portion of the site was to UGC or something. And so we’ve very intentionally cleaned up our own supply so that we can be a reputable source and we don’t have those weird outlier things. And so I think that’s a good thing for every publisher to do, whether you’re in sort of the ad management space where we play or even a big publisher yourself, where you acquired some website and there’s a chunk of that site that’s not maybe up to the standards of the rest of your things. It’s getting noticed now. And so I think looking yourself in the mirror and making some short term taking short term pain for some long term gain for the publishing side is actually a good thing to clean up your own supply, and I know you advocate for the same.

[00:17:30.690] – Chris Kane

Well, there’s just one thing I want to react to there, which is sometimes when I say this, the thing I just said, oh, you don’t think about a million websites, you can think about a few dozen publishers. It seems like baked into that is a recommendation to shut off the long tail. I don’t think buyers should do that at all. I think it is in the buyer’s self interest to continue to buy tens of thousands of domains deep into the long tail. But the quality publishers in the long tail are not going it alone. They are partnering with a company like Freestar and so that’s the way you reach into the long tail as a buyer with confidence. And so it’s important to be funding these high quality independent content creators, local news, mid size publishers. But just the direction of the industry has been this move toward aggregation where companies like Freestar aggregate the high quality, small and mid sized publishers. And now I can think about Freestar as the signal for trusted inventory, rather than having to vet each of those publishers individually.

[00:18:32.530] – Kurt Donnell

It’s been interesting to see the market shake out. And we had not really talked about this, but what was the role of the DSP on the buy side and then the SSP portions of what the SSP originally was? Set out to do was aggregate that supply in the way that Freestar and Cafe Mediavine, being probably the three largest players in the space, have now done. So it’s been interesting to see the market shake out and now SSPs and DSPs a little bit in a turf war to a certain extent. It’s just interesting to see how all.

[00:18:58.430] – Chris Kane

Of this, the SSPs of 2010, which is when I got in the industry, honestly looked more like freestyle. Today they were the exclusive representative of a certain publisher. But with the advent of header bidding and header bidding like things, well, now it’s no longer the case that publisher A partners with Exchange A and Publisher B partners everybody partners with everybody. Yeah, the financial requirement of a pure play exchange is to literally work with every publisher on the internet. And so any scaled exchange now sells the very best of the internet and the very worst of the internet. They sell the whole thing. That’s how you get to be a big exchange. That actually can be the case in some cases with sales houses as well who have non exclusive partnerships. But when we look at the Freestar portfolio, you are the exclusive representative of these publishers, you functionally are the publisher, you’re their agent to the buy side. And yeah, I think you’re right that that probably is what SSPs should have been or could have been, and it’s just not the way the industry evolved.

[00:19:59.700] – Kurt Donnell

Yeah, I mean, through no fault of their own. I mean, header bidding obviously evolved over time and jeez, we’re still seeing that in the in app ecosystem, there’s still not full transparency in the bids and all of that stuff from a real time bidding standpoint. So the industry continues to evolve. You mentioned CTV earlier, and that is a relatively nascent market. Again, do you think that space is learning from the mistakes we’ve made or maybe mistakes the wrong way, the evolution of the desktop mobile web business? Or are they falling into some of the same traps?

[00:20:30.930] – Chris Kane

Well, what’s happened in CTV is we’ve taken a bunch of web concepts and we’ve shoehorned it into CTV. And in some ways that’s actually been I’m framing like it’s a very negative thing in some ways that’s a very advantageous thing because we can just move faster as an industry. And so, for example, like the basic ability to validate authorization, we’ve spent years with an inability to do on the web and rapidly that’s getting adopted in CTV through app, ads, text, and a bunch of other variations for that in CTV, that’s a great acceleration. We borrowed a thing we learned on the web, brought it into CTV, might have designed it a little bit differently if we had thought it from the ground up on CTV, but the benefits of moving quickly were worth it. There’s a bunch of other things where we’re like really awkwardly shoehorning web concepts into connected TV, and I think two things fall out of it. Thing one is that there are supply chains on CTV that would meet quality standards on the web, but just like to the point of having basic business judgment, just like fail basic business judgment, like a direct path to a monstrously scaled pool of CTV supply from a publisher that no one’s ever heard of.

[00:21:44.450] – Chris Kane

It just doesn’t quite check out for me. So there are some things where applying web standards to CTV has allowed low quality inventory to be transacted and sort of like pass all the quality checks. And the opposite is happening as well. There are pools of CTV supply that the more that I learn about them are obviously high quality. Typically cases where a company that’s sort of like loosely analogous to Freestar in the CTV space, who has exclusive representation rights for a content owner, is trying to monetize that inventory but gets treated by DSPs. And frankly, companies like not companies like us, frankly, Jounce Media specifically, we say, oh, that’s a wasteful intermediary. And I was like, no, you got to take the time to actually learn who these businesses are. And some of them are wasteful intermediaries, but some of them really have exclusive representation rights for quality content that’s syndicated into these multichannel apps. And I think right now in CTV, there’s space for a whole bunch of shenanigans, which there is not as much space for on the web. And unfortunately, in an attempt to sort of clamp down on those shenanigans, we’re doing a little bit of not successfully separating the wheat from the chaff.

[00:22:58.170] – Chris Kane

And DSPs are blocking high quality supply.

[00:23:02.170] – Kurt Donnell

I think this is a good reminder that humans will always have jobs and machines won’t take over everything because we do need people to make actual judgments about things and we leave it to machines. There’s a lot of false positives or false negatives.

[00:23:16.350] – Chris Kane

Is so understated in the industry. Everybody’s so data driven. Good for us. But marketers need to be marketers and agencies need to act like agents and they need to just make some business judgment calls about whether they believe this is quality supply. And like, you know what? Your intuition is usually right. It’s more right than it is wrong.

[00:23:38.020] – Kurt Donnell

Yeah, I think it goes back to the human nature of sort of risk aversion and a loss feels worse than a win feels good. And being able to say that I partnered with XYZ verification Company to pass this check and everything. There’s a CYA element that the person can look at the client and say, see, look at this report. I did all the things versus, hey, I actually won. And I improved your ROAS by 15% by doing this, that, and the other thing. I think it’s just a CYA endeavor more than anything, to be honest.

[00:24:07.680] – Chris Kane

I think that is it is large. That is largely the service that verification companies provide. It’s their scapegoats and that is a real value that they really do provide to brands and agencies. They’re the throat to choke when something goes wrong.

[00:24:20.240] – Kurt Donnell

Yeah, that’s sad. I wish we’d get more value out of that as I ponder this a little bit more. But yeah, I appreciate this. As we record this. Anyways, you’re getting close to publishing your State of the Open Internet Report. Are there any nuggets that you can share with us in advance of that coming out here imminently?

[00:24:38.780] – Chris Kane

Sure. The themes I don’t think will be a surprise to anybody who sort of reads our research on a regular basis. We talk a lot about Bid Stream Bloat and how there is just this seemingly never ending movement toward publishers issuing more and more duplicate requests for the same impression and how we are potentially approaching a tipping point where the buy side is going to forcefully push back on that. And I do believe we’re sort of at a tipping point there for a variety of reasons. Maybe we come back to so that we talk a lot about Bid Stream Bloat and how the industry is on a very unsustainable course, economically unsustainable course, regarding bid request duplication. We also talk about blind spots and what blind spots in the bid stream do to marketer economics and publisher economics. So to be specific about that, growing blind spots around addressability and in CTV, growing blind spots, or maybe not growing, but persistent blind spots around content, understanding exactly what content you’re going to buy on a connected TV device. But I think that the macro here is particularly on that point about blind spots. The walled gardens, every time we’ve written this report, just take more and more and more share from the Open Internet and that’s slowing down.

[00:25:59.200] – Chris Kane

That is still happening, but that is slowing down in a really marked way. And I think advertisers are recognizing, in my judgment, largely because of Apple At T, that they are now fully saturated on some of the walled gardens. They are fully saturated on Facebook and Instagram, they are fully saturated on YouTube. They just can’t spend more in a way that they can justify because it’s becoming harder and harder to recognize which impressions are valuable and then measure. Whether those impressions actually create outcomes. And so implicit in that there is a rebalancing of investments toward the open internet, which is something I wish I could have said in the last five reports we wrote. We just couldn’t. And it really is happening now. Marketers, particularly smaller marketers, are just increasingly aware that they have to get smart at buying the open internet and they just cannot continue to rely on every year increasing their YouTube investment by 30%. So that’s encouraging for me, but I also think that the bloat in the bid stream the existence of really low quality supply, multi hop, reselling, chronically non viewable inventory. It’s hard to be a smart buyer on the open internet.

[00:27:05.850] – Chris Kane

Like it’s frankly not that hard to be a smart buyer of YouTube inventory. It’s hard to be really good at buying the open internet. And I think if the industry is going to compete on a zero sum basis like oh, publisher A needs to steal share from publisher b, well, the incentive is to just do a bunch of underhanded tricks that at the margins squeeze a little extra spend out of a DSP. If the industry wants to grow, it’s going to be really essential to build a supply chain that buyers can trust.

[00:27:36.050] – Kurt Donnell

Yeah, I think the wall gardens have had a bit of an easy button on them right where you knew sort of exactly at least where it was going. The targeting was so dialed, you had a pretty good understanding of that and it was easy to do. And I don’t know if those similar easy buttons exist across the open web or haven’t been built as much or we haven’t told the story or taken enough of the waste out of the supply chain to make it.

[00:27:59.210] – Chris Kane

Well, I think to go back to sort of the number one thing that I was sort of suggesting that buyers should be doing, the open interest is not that hard to buy. If you pick 50 trusted publishers and we work with marketers who spend approaching $100 million a year individually and only buy it from 50 publishers, you can scale massively with 50 large publishers. And if you do that, you just don’t need to worry about all of the traps in the supply chain. Like Freestar is not going to bamboozle you, neither is Hearst, neither of these other 48 trusted companies. And you can just start to think like a marketer and say like, oh, none of these companies have the scale of YouTube or the scale of instagram, but hey, collectively I can spend $100 million with these 50 publishers this year and I don’t now need to obsess about fraud verification and brand safety. This and viewability that I can focus on, I can focus on my creative optimization, my audience definitions. That I think is the basic recipe to buying with confidence on the open internet.

[00:29:02.250] – Kurt Donnell

I love to hear it. And as a company that helps support the open internet has been the biggest believer in that deserving more of a share of wallet I’m cited for that. I love to see that pendulum swing back and it’s something we’ve been hearing about a little bit, talked about probably in this podcast in the past, and I’m thrilled to hear that you’re seeing that. The data too. I think it’s a good sign for the internet as a whole that it’s not stuck in three or four big publishers hands. That’s a good thing. The one thing you had mentioned here maybe circle back to was that tipping point on bid jamming from a publisher standpoint, and I will say we’ve fallen in this trap for a while. There was a belief that the more places you’d said something the better, because we saw better results because of it. We saw financial gain coming out the other side of traveling as many paths. We on the Freestar side, have trimmed that back materially here over the last twelve months and we’ll continue to do that. But there has been an actual financial benefit for publishers.

[00:29:52.710] – Kurt Donnell

So I don’t know if you have any advice for publishers or data you’ve seen that say actually there’s ways that you can win by not doing that, or at least not materially hurt yourself while making your supply more valuable because you’ll gain trust from the buy side. Is there any data you’ve looked at on that?

[00:30:07.190] – Chris Kane

Just to play this back to you, I think what I hear you saying is, hey, when you get really carried away with this, the math doesn’t work. But adding one more header bidding partner really does help you make more money. And I think we hear that over and over again from every publisher who’s willing to be honest about it. Now, there’s some publishers who are not willing to be honest, who go on stage at conferences and say we’re going down to three SSPs and they can say that, but the data would suggest no one actually does that and then no one actually does that because you would leave money on the table. And I think this is the perfect example of where we need as an industry to sort of get clear on like are we fighting a zero sum game where publisher A needs to still share from publisher B or are we growing the industry? The thing that is collectively rational is for every publisher to work with one, maybe three SSPs and obsess about creating ultra high efficiency connection points through those one two, three connections to every DSP. That would put the most money in the pockets of publishers overall.

[00:31:12.910] – Chris Kane

It would also be very beneficial for buyers and it would reduce the unit economics of these ad tech companies who could then reward publishers and buyers with lower take rates. Sure, that is individually irrational for any publisher. The rational thing for any publisher is be obnoxious about having 25 different SSPs that you work with, integrate every one of them through prebid n tam and open bidding, just blast DSPs in order to occupy as much of the bid stream as you can, because that is what maximizes your yield. And so there’s just too many publishers, they’re all going to hold hands and say, let’s do this thing that’s collectively rational, they can do this thing that’s individually rational. And I don’t see a way for publishers to unwind this. Buyers have to unwind this. The change has to come from the buy side. It could be DSPs making decisions to only transact with each publisher through one supply chain, building publisher direct connections. It could be agencies saying, oh, I’m going to run my whole business through these three SSPs. There’s a variety of ways to sort of come at this problem, but the change has to come from the buy side.

[00:32:16.200] – Chris Kane

And just to say it in a slightly different way, the buy side has to starve low value supply chains of demand in order for it to be rational for publishers to turn off those supply chains. And it is happening. But I just think I hear over and over again from publishers of frustration that they want to control this change, they want to drive this change and they just can’t like it’s just change it’s going come from the buy side.

[00:32:42.850] – Kurt Donnell

I mean, we know that anytime we turn something off, there was some level of incrementality to it. Measuring that can be challenging and it may be infinitesimally small, but if a bidder was winning something, there was incrementality to it because it beat everybody else in that instance. So it is hard every time to do it. And there’s reasons probably outside the scope of our chat today, whether it’s sort of solvency and financial stability of certain partners that are good reasons to turn them off, or the account management just isn’t juice, isn’t worth the squeeze to keep managing that partner. But there is incrementality that goes away every time you turn off a bidder in today’s current landscape as it exists at the moment.

[00:33:19.710] – Chris Kane

So play that out, play that out. Just I think two steps further. The first is publishers artificially keep SSPs on life support. Publishers tolerate past due invoices from SSPs. It allows the failing ad tech companies to stay in business a little longer. And if you play that out and then one step further, what that means is that we really have seen consolidation on the buy side of the industry. The trade desk is winning, google is winning, amazon is winning. You just see other DSPs having a hard time reaching that level of scale. There really is consolidation happening on the buy side of the market. There’s not really on the sell side of the market now. There are winners that are starting to emerge. It will happen, but it happens really slowly because publishers are just so motivated to maintain as many connections as they can for as long as they can.

[00:34:22.200] – Kurt Donnell

Yeah, I think it’s fair and I do think we are seeing the changes. I mean, EMX obviously a casualty of late. I do think the tier two, tier three SSPs are in a challenging spot here going forward and we’re making business decisions as a result and probably making their lives worse. As I say this, I shouldn’t mention out loud, but I mean, we have to as a business well, it moves.

[00:34:43.700] – Chris Kane

Very slowly and then it moves really fast because once publishers start to turn off certain partnerships, you really accelerate the decline of that business. And we observed this with EMX, it was sort of like a business that was active with certain publishers until it wasn’t and then it was like bang, bang, bang, bang, bang. Lots of publishers turn it off, you want to be the last money out and it wouldn’t be surprising if there’s more of that that happens in the next year.

[00:35:10.280] – Kurt Donnell

Yeah, sadly there will be. This has been fantastic, Chris, and I appreciate the opinions, as always. Somebody will come on here and share actual thoughts, which is lovely. And so I do need one more thought from you, which is, what is some advice the current version of yourself would give? A younger version of yourself? I’m sure there’s some good stuff.

[00:35:28.380] – Chris Kane

Well, I think I’m, from a career point of view, lucky in a lot of ways, but mainly I feel like there are a lot of people around the industry who have been sort of frustrated by trying to do the right thing. And I’m talking about sort of like senior managers all the way down to junior traders trying to do the right thing and believing that they will be rewarded for it. In a lot of cases, just not like the long term, so far away that if you play for the long term, you often sort of take a personal or a company penalty for having done that. And I feel really fortunate to just been in a handful of positions where I could just kind of make a commitment to sort of just trying to be an honest broker, don’t have an agenda, don’t sort of do the hustle, just be honest and it’s going to work out. But boy, I’ll tell you, especially during COVID and even earlier in my career, there’s a lot of heartburn that I had of like, am I setting myself up? Is trying to be an honest broker a flawed strategy?

[00:36:35.560] – Chris Kane

And it wasn’t, it’s working out nicely, but boy, it would have been nice to sort of hear that from the future, that this will work out fine if you just try to do the right thing and try to be honest about it and present the facts, it’ll all work out.

[00:36:48.850] – Kurt Donnell

It is a long game and it’s tough to know that in the moment, but a former coworker of mine, I think it’s maybe a Beatles quote of something, but the classic, it all works out in the end. If it hasn’t worked out yet, it’s not the end. And I think you got to remember that in your career at times, and being able to put your head on your pillow at night and sleep well, knowing you’re going to be on the right side of history, means a lot and you do get rewarded. It takes a long time. There’s a lot of folks that made a bunch of money doing MFA or whatever it is, in between those moments, but it is the better way to live your life, and I try to do that. I think our company tries to do that and certainly you do, and we’re grateful for that and I appreciate you calling out the people that maybe aren’t as much right now. So thank you so much for joining me today, Chris. It’s been an absolute pleasure chatting with you. I will say it again, if you don’t download or get his emailed reports every single month, you are missing out.

[00:37:36.450] – Kurt Donnell

They are fantastic information and really appreciate your time today.

[00:37:40.150] – Chris Kane

Kurt thank you.

[00:37:44.610] – Kurt Donnell

Thank you again to Chris for taking the time to chat with us and thank you to all of our listeners for tuning in. If you have a spare moment, please check us out on Spotify, Google Play, itunes or your listening platform of choice. Please leave us a review and subscribe to make sure you never miss an episode. For feedback or suggestions for guests, you can reach us at podcast@freestar.com. Special thanks to Matt Hanlein for our music and to Caroline Romano for helping with the editing production and making sure people know this podcast exists. Until next time.