510. Thede Loder

Email: bidemiologunde@gmail.com

In this episode, host Bidemi Ologunde sits down with Thede Loder, Co-Founder and CTO at Rewarded Interest, about how privacy, digital advertising, consent, and economic incentives collide across the modern internet. What does real consent look like when users are exhausted by cookie popups? Can people control their data without sacrificing convenience? Should users be paid when advertisers spend money to reach them? Thede explains how Rewarded Interest is rethinking consent fatigue, user-controlled identity, publisher revenue, and advertiser transparency through a model designed to reduce friction and better align incentives for everyone involved.

Transcript

SPEAKER_01 0:17

So thanks for joining me once again on another episode of the Bait Picture Podcast. I have a special guest from North Carolina, correct?

SPEAKER_00 0:24

Correct.

SPEAKER_01 0:26

Over to you.

SPEAKER_00 0:28

Yeah, thank you. It's great to be here. Yeah, thank you for inviting me to be on your pod. So I go by feed, which is uh pronounced uh like uh weed but with a th. And uh it's an old family name, it's short for Theodore. And so um uh I I say that because if anyone's listening or they see my name, at least they know how to pronounce it. I usually end up introducing myself uh in the in the business context uh in the same way, just because people look at it and say, okay, great, I'm gonna trash your name, so I wanted to say it first. So and for you, it's bidime?

SPEAKER_01 1:04

Yeah, yeah, or bid. It's just easier. Yeah.

SPEAKER_00 1:08

Cool. Well, bid, nice to meet you. It's a pleasure to be here today.

SPEAKER_01 1:11

Thank you. Thank you so much. So um we can just jump right into it. What first pulled you toward the intersection of technology, economics, and privacy?

SPEAKER_00 1:22

Okay, wow. First. So um I studied on my undergrad. I graduated in 1993, so I just turned 55 a couple weeks ago.

SPEAKER_01 1:31

Um look so much younger.

SPEAKER_00 1:34

Thank you. Um and so uh, you know, then I I really, you know, math and science or math and and in particular physics were really my thing as an undergrad. And I knew about entrepreneurship, um, but I didn't really have much experience and I didn't have much understanding. But um in 1990, while I was still an undergrad, I started using the internet. And I had a job um in a computer lab at the University of Rochester, and I was helping graduate students um use, learn how to use and do desktop publishing using a set of Macs and a set of uh Sun workstations. And I basically got hooked on the internet. I thought it was so cool. Um my dad was uh uh an oceanographer, and for one year he went to Australia and was actually doing research on the chemistry of the ocean waters in the Great Barrier Reef. And I urged him to get an account with the University of Queensland, which had a Unix machine there. And so he could dial into that Unix machine, and I could get on a Unix machine at my university, literally on the other side of the globe, and and I could type and he would see what I was typing, and he could type and I could see what he was typing. And I could run commands that ran on that computer literally on the other side of the globe. And I thought that was just the coolest thing ever. And so by the time I graduated from undergrad, this is '93, I just thought, whatever I'm doing, it has to involve the internet. And so that senior year, I had taught myself to program in the language, uh, language C. And so when I moved out to um to grad school, I went to Berkeley uh basically for one semester in the fall of '94. And um uh I was just started programming in C. And um I eventually just thought, you know, I the internet is about to happen, and it's it's gonna be something that is going to be used by everyday people, not just researchers and people who are working at universities. Like I saw the first, you know, I used Mosaic, which was the precursor to um uh to Netscape's uh browser, and uh, some of the same team members, right, uh who worked on Mosaic also ended up going to Netscape. And I just remember thinking, this is gonna be huge, it's gonna take off. And so um I didn't know much about the economics. Several years later, I went to Michigan to for grad school. And that time around, I thought, well, why don't I actually study computer science so I know a little bit more about what I'm doing? And, you know, long story short, I ended up doing some cross-disciplinary learning and classes uh in a group of um kind of people across a series of different disciplines that had been coalesced together by a couple of professors. And that exposed me to uh information economics and econ and game theory. Um, and that kind of got me hooked on infoecon. And so after I got a master's, I went back out to the Bay Area and had an idea for a permission-based email marketplace. This is now 2004 and 2003. And during that time, spam in email was actually starting to become a real problem. And it's still a problem to this day, right? But you know, Google and Yahoo! Mail and the other mail platforms have gotten pretty good at it. So that's a long-winded way to say um, you know, I got hooked on the internet and then I wanted it to do well. And that and I wanted it to be a useful thing for everyday people, right? Not again, not just for computer scientists and physicists and people who worked in the defense industry, et cetera. And so um, when I when I worked on this anti-spam product um that grew out of um the permission-based email marketplace that I was working on in the mid-aughts, um, you know, I thought, okay, there's still a lot of work to be done here. And um and so eventually I came to it. But I'll I'll pause there because that was a long-winded answer.

SPEAKER_01 5:41

Oh, no, no worries, no worries. And this is just gonna lead me into my next um line of next set of questions. So how did rewarded interest begin? And what was that problem you were trying to solve initially?

SPEAKER_00 5:57

Thank you. That's a great question. So it was in a way, it was an extension of of what I was trying to do in the mid-aughts. Um, but but some things changed in the market. You know, one was that programmatic display advertising and programmatic advertising as a whole, you know, grew from maybe just a few billion or even a few hundred million when I was working on my email marketplace in 2006 into a multi-hundred billion dollar a year industry. And consumers, you know, people went online in droves and started buying products and services and running much of their lives, um, a lot of their commercial life anyway, um, you know, through the internet. And so the scale of everything got bigger. The next thing is that um led by in part uh you know regulate regulations in Europe, particularly the GDPR and the e-privacy directive, um, and then shortly thereafter, you know, 2020, 2019, California's um the CPRA and the uh CCPA laws uh or regulations, those started to change two things. One, consumers' rights around privacy, and also consumers' awareness of those rights around privacy. So think of the cookie banners, the cookie consent dialogues that appeared on a lot of European websites fairly soon, right? The American or Canadian websites or you know, kind of the rest of non-European but still heavily commercial internet, you know, products and the websites advertising those products and publishers, they all started to have to show cookie consent banners. And so I thought, well, it's actually good for the economy if consumers are willing to share information that could allow for better targeting. It's ultimately better for them, they'll get better targeted ads. It's better for the producers and creators of products because the right products are more likely to get created and they're more likely to find an audience. And so these uh these concepts appealed to me after I had done my research in information economics while I was at Michigan in grad school. And so I thought this is a big problem, it's a valuable problem to solve. And as a consumer, I hate feeling exploited, right? When when websites and and the ad tech ecosystem would track and target me, but I didn't know it was happening, or I knew it was happening, but I had no visibility and I had no control, this really bothered me, right? And it it and it was it was it's funny. I I sometimes laugh with my today, my co-founder, because I I sometimes say, you know, I got into this out of anger, right? It was pissing me off. And and now I'm continuing it out of love, right? Um, and so that was sort of my my uh my transformation as as we got into this.

SPEAKER_01 9:00

Nice, nice. So what was that thing that you understood early that other people seemed to be missing?

SPEAKER_00 9:08

Well, that's okay, so I I let me try to formulate this this idea here. I I think what I recognized was um if you're gonna change, and I I had a little bit of experience. So in between um my startup in the mid-teens or mid-aughts and and uh early teens, I I worked on email security for a while, particularly enterprise email authentication. And I worked on and became the uh founding chair of an industry organization um called the Off Indicators Working Group. And it's changed its name now. It's called the, I think it's called the BIMI Working Group, uh, brand indicators for message identification. And this was, you know, this this kind of arose because it became clear that um email senders, particularly brands, think banks, PayPal, right? When they send a user an email, a consumer an email, it it's it's really good if those emails are authenticated in some way that the recipient of those emails can re can uh or the receiving systems that receive the emails on behalf of the consumer. So think Gmail, Yahoo! Mail, Microsoft, Hotmail, et cetera. When those infrastructure receive a message for a consumer, it's really important that that message can be uh uh validated to be authentic and potentially discarded or at least placed into the spam folder if it fails authentication. And what we recognize was that the biggest organizations, particularly the ones that were often defrauded, PayPal being the leading example, um, they they got this. They thought, okay, we want our brand to be carefully preserved, we don't want consumers to get defrauded, we're gonna go through the trouble and expense to cause all of our outbound traffic to be authenticated. And yet there were thousands of additional brands that also sent email to and from or primarily to consumers, and they had not made that investment. And so what we wanted to do was tie the brand or the budgets behind marketing and behind the brands with IT budgets that would actually allow those organizations to authenticate their outbound traffic. And so we had this idea, let's create an incentive for the marketing organizations to fund the IT organizations to secure the outbound traffic. And so we said, let's give them the ability to display a logo when that email, when those emails going out to consumers are actually authentic. And so that's how BIMI was born. So that's background to the insight here. And the insight is if you want a complex ecosystem with many actors to change their behavior, you got to do a couple of things. But one of them is you've got to align the incentives. You've got to make it clear why everybody in that value chain or that ecosystem, they're all better off if they play along or they adopt the new kind of thing you're trying to do. And so how that applies to rewarded interest is well, the ad tech ecosystem and value chain are complex or is complex. There are lots of different players. And so when Scott and I were getting going, we recognized, okay, we want to make um digital media, consumer privacy, um, commerce, we want to make these things all do better for all the parties involved, or at least all the key parties, the principal parties. And so we thought, whatever we do, it's gotta be better for all of the key players. They've all got to benefit somehow. So that I think was the insight from maybe earlier, an earlier kind of, I don't know, digression in my career, if you will, um, that that um that prepared Scott and I. And Scott knew the ecosystem and the value chain really well because he helped create it. I was new to it, right? And I still am by by many standards.

SPEAKER_01 13:12

Nice, nice. So um let's rewind just for a little bit and talk about cookie pop-ups. So we all well, everyone is familiar, I mean most people are familiar with cookies and saying, well, this site tracks cookies. Some of them don't even give you the opportunity to reject all. And the the only option is accept or exit. So, how did cookie consent go from a privacy safeguard to something most people experience as a nuisance?

SPEAKER_00 13:45

Yes. Um yeah, and I think you you I want to re-articulate that um because I think it's so important, right? And that is cookie banners and and the you know, there's a notion of notice and consent, right? Or, you know, if you notify somebody and then you get their approval, then that sort of covers people legally. And the trouble is uh an another concept that I don't know who labeled this, but I think it's a great label, and that is automation asymmetry. So publishers and other commercial website operators, they said, Oh, we've got this problem. We've got to put up a notice and we've gotta gather consent from the consumer. And so what was probably intended to be uh beneficial to consumers, giving them awareness, transparency, became a significant nuisance because it's it's kind of death by a thousand consent dialogues. And each individual um publisher or website retailer who desires to get consent, they don't coordinate with each other. Right. And there are probably some structural reasons for that, right? Getting you know, the consent platforms, the ones who write software that displays those cookie banners and gathers the consent and records it from the consumer, they don't want the consent to be used across all of the websites, and nor really do the do the publishers necessarily. But they're gonna charge for it, and so they want the consumer to have to see it and interact with it every single time. Turns out, as a consumer, that's a horrible experience. Um so I think the intention of the regulators might have been good, right? Which is to create awareness through that dialogue, um kind of force the um those who would who wished to perform the tracking and targeting and information gathering to disclose the fact that that's what they were going to do, and to give the consumer some agency around it, some ability to control it. Um But um, you know, the the trouble has been uh it became so prevalent, and really the the level of detail so high because there is so much data collection and there's a lot of nuance to it, that consumers simply just they they would start to check out or feel overwhelmed. So back to that concept of automation asymmetry, what the publishers did is they said, we're gonna use software for this. And so they put the software up. Instead of having one of their, I don't know, customer service representatives actually interact with the consumer, which would be prodigiously expensive. They said, let's do it all with software. But the consumer doesn't have any software with which to do the automation for themselves. And so that's where we come in because that's what our software does. So we think of ourselves as the great equalizer when it comes to that asymmetry that consumers experience. We're saying to consumers, basically, with our product, you don't have to be beholden to this anymore. You can tell us and our our software what your privacy preferences are, and then we will tell all those systems automatically for you. So you no longer have to do that work.

SPEAKER_01 17:01

Nice, nice. So you've talked about the distinction between forced consent and real consent. What does that actually what's that distinction? How do I know if my consent experience is being manipulated?

SPEAKER_00 17:18

Yeah, so um if I guess there's there's two two considerations there, right? One is, you know, can you trust that the third party who received a record of your consent actually upholds your privacy preferences? Right. And and I think the the you know the the in the long term, the answer there is have a durable and admissible record of the consent that was provided by the consumer's agent, that would be us, right? Our software, we can disclose what your consent choices are to that third party, and then over time audits need to be performed so that one can show by looking at their records that whatever your preferences were that were expressed and recorded, they were actually upheld in terms of their behavior. Right. So I think that's one thing. But another thing is much uh maybe a little more it's a little bit more subtle, but it but it comes into play very often. And that is today, when you visit a, let's say you visit a website, it's a publisher's website, um, usually you're going there to get some information, to make a purchase. You're you're kind of, and and maybe you got there and you weren't expecting a a consent banner. You're actually your mind is on whatever your task is. So when you see that cookie banner, that cookie consent pop-up, it's right in your face and it's simply not what you want. And so most of the time you're just like, this is in my way. I need to get to this other information that I can only get to right if I get this consent banner out of my way. And and because the consent banners traditionally they only apply to that site, what are most consumers going to do? They're just gonna click on any button as quickly as they can and then go straight and try to read that content. So asking a user, the way I think of it is asking a consumer at the time they're actually trying to get something very intentional, to now stop what they're doing, read a big document, and carefully consider their privacy settings doesn't do the consumer a service at all. And so we've designed, and this, you know, this was sort of a deliberate design choice on our part. We want to be able to have uh our users, our consumers, adopt our product, not when they're in the middle of trying to go to something else. Ideally, they, you know, they they install it, they understand what they're doing. Oh, I'm setting up a consumer's personal consent agent. This is gonna run in my browser or on my phone. And I'm gonna think carefully about what my privacy choices are because I'm in the mode of configuring this software, right? And making deliberate choices. Then the consumer has already thought about it. They've thought independently of that task that they were executing on, um, what they're what they actually want typically for their for their privacy preferences. So we think that time shift, you know, we call it a time shift, that time shift's actually really valuable. And we think that the choices reflected and disclosed by our product are probably more likely to mirror what the consumer's actual real choices are.

SPEAKER_01 20:28

Nice. Nice. So for someone hearing about rewarded interest for the first time, um, how does the extension actually work in everyday use?

SPEAKER_00 20:39

Great. Thanks, Piff. Um, good question. So it's really quite easy. It takes anywhere from, you know, I've seen a graduate student install it and configure it in less than 15 seconds, right? I think if you if you delve a little bit further into the nuances of the choices that we provide, and we provide a number of them, right? Um, you know, you might spend a few minutes kind of learning and understanding what your options are. But you know, essentially you can install, right now we we're available on Chrome and for Chromium-based browsers. So we support Edge. Um, we'll have Firefox and uh Safari sometime, probably in Q3 of this year. Um so you you know, you can you can navigate to our website or find out and get a link that takes you to the Chrome Web Store. And then once you're there, uh this is Google's you know kind of app store, if you will, for extensions for Chrome. Um you installing our product is as simple as clicking a button. Um so after you read about it and you think, oh, I want this, you click a button and it installs into Chrome. You have to um we present a terms of service. Um that terms of service is also available on our website, right? So anytime. And then we to walk you through a couple of steps to help you set up your initial configuration of your consent choices. And there's two Parts of our consent choices, if you will. One is concerning the activities or purposes that companies who want to track and target you or build a profile about you. It allows you to say which purposes are allowed, which you authorize. There's also some choices that you can make about which technologies you wish for them to be, these ad tech partners, to be able to use. And then we also let the consumer control which companies are allowed to do that tracking and targeting. And once that's set up, a user can actually make choices very quickly. They can just say allow all or block all or optimize for rewards. There's a sort of shortcuts. Or they can click on like a custom button and see a lot of detail. But again, make sure that the choices being expressed on their behalf accurately reflect their choices. So once that's set up, you know, everyday use, most of our users have told us, yeah, many times I forget you're installed. Right. Or they say, Oh, I love it when you give that little notice every time I visit a new website that you have applied and expressed my consent choices. Right. So once rewarded interest is installed in Chrome, it kind of fades into the background and it just works. And what that means is when you arrive at a new website, you don't see a cookie banner. You go straight to the content. And if it's a new a website you haven't been to before, we will express your consent and enforce it. We're actually able to block the setting of cookies. But we'll put a little, we call it a banner, but it's it, we call it a notification banner. We'll just have that little notification banner kind of appear for five, six seconds and then disappear on the bottom of the page. And that just says, um, hey, bid, this is the first time you're at this site. We're going to express our your consent choices to this site operator and any third parties that happen to be listening, and you can go about your merry way. So what what our users say is the experience of using the web just got better because it's not annoying anymore, they go straight to the content.

SPEAKER_01 24:13

Nice, nice. So um a lot of people associate um the fact that you can skip cookie pop-ups to the undermining of privacy. What's your argument against that? So basically, if I skip cookie pop-ups, how does that not undermine privacy?

SPEAKER_00 24:34

Right. Well, so that's a okay, great question. So I think if a consumer had a did wasn't using our product and they were just using some other mechanism to dismiss those cookie banners. I think by law, certainly in Europe, unless the publisher obtains express positive consent for tracking and targeting and those kinds of activities, they are not allowed to do it by law. So certainly that's you know true for Europe. Um that's gonna vary about whether that's true in the United States or other countries, right, who have, let's say, less evolved or less uh mature privacy uh regulations. With our product, though, it's a little, it's it's different. And it and so if you dismiss, if our product dismisses a cookie consent banner, what it means is the the consumer doesn't need to see that banner because they've already told our system what their consent choices are. Now we can surface our consent configurator, again, in our product very easily. And so they can change what their consent choices are that get expressed to a particular site that they're visiting. So if they wanted to change something to something other than the default choices they made, then they could do that. But what we do is our extension is smart and it's capable of publishing the consent choices you've made right into the page that the publisher created. And so the third-party software that also runs on that publisher page, for example, that might help with create building and enhancing a profile about you, or some of that software might call out to cloud services that help sell the ad inventory on that page, right? Those ad slots go out for bid, and somebody says, great, I want to reach this person. So they they come back with a bid and then the ad is shown. So all of those other parties who have software running in the publisher's page, they can read the consent policy that we've published. Right. And so we publish it using an open standard called um the transparency and consent framework. We also publish it using something called global privacy control, which is another early, early but uh standard that's getting some good support and good traction, gives consumers some some very kind of strong um uh teeth in terms of what they're willing to uh accept or not. And then we will be adopting, you know, as the industry adopts uh other forms of communicating consent. There's another one called Globe uh GPP uh that's being spearheaded by the US's IAB, uh the um uh standards org, we'll be publishing with that as well.

SPEAKER_01 27:25

Nice, nice.

SPEAKER_00 27:26

Sorry, that was a wrong answer too.

SPEAKER_01 27:28

No, no, no worries, no worries. You can tell these are the kind of conversations I like to have. And on average, my conversations like this run for like an hour. So we're not even close to halfway.

SPEAKER_00 27:41

Great. Keep them coming, right? I'm happy to share. Eventually I should tell you about the revenue model we have, but maybe that's where you're going with the question.

SPEAKER_01 27:50

We're actually gonna get to that, so don't worry about it. All right. So you give users a unique ID that they control. Um, why is user control over identity such a crucial part of your model?

SPEAKER_00 28:06

So we have I think it's not unique, but it's certainly unusual. We have an unusual perspective on on what actually is valuable to consumers in the context of digital advertising and how to give the consumer what I call maximal bargaining power. Okay. So um and the ID is really uh really um kind of front and center to this. So today, if let's say you're not using rewarded interest and you're using Chrome, third-party cookie support or end cookies, right, are on by default. It's an enabled feature of the browser. And what that means is, and cookies aren't the only way to track you, but let's we'll we'll we'll discuss it with cookies as an example because it's kind of the easiest thing. So when you arrive at a publisher website, they can basically take like a piece of sticky paper with a number on it and do the do the real world equivalent of like sticking it right on your back. So you're now walking around and you've got this little post-it note on your back and it's got a number on it. Okay. And when you walk in, you imagine you go now in the real world, you walk from the shoe store and you walk down the hallway or the the inside of a mall and you walk into the soap store. Okay. The shoe store and the soap store can both see this ID on you. Okay. And that means somebody else can, you know, maybe they both subscribe to the same tracking service. So the the soap store says, oh, hey, we just saw this guy. He was in the shoe store. Okay, that ID is basically it is it is this the analogy is exactly like a cookie. So when one of these cookies gets set on your browser, your browser just kind of coughs it up every time it interacts with another website or property. And it just provides it. And um, it's really important for e-commerce. You want your shopping cart to remember who you are. If you log into a website, you want it to retain a notion of who you are. So that ID can also be used for things like cookie for like shopping carts and memory of your authentication. But when it's a third-party cookie, it it works um again across various websites that may be unconnected in terms of the business owner. And that allows somebody to create a profile about you. So um now imagine that you have 20 different IDs on your back, each set by a different kind of cookie provider, third-party cookie provider. What that means is let's say you now go to your favorite publisher website, I don't know, um, the Wall Street Journal, Washington Post, New York Times. You go there, they're trying to sell all of their ad space. Okay. And so if that for the New York Times to get the highest price, what they want to do is find, you know, kind of uh spread the word as to who you are when you're arriving on a and you're reading an article about like the best spaghetti sauce. Okay. And so if they know that you're the same person or the advertisers who have the ability to buy that ad at New York Times, if they know you're the person who walked into the shoe store and then went to the soap store, maybe you didn't buy that bar of soap. But they decide, oh, wait, bid is gonna want that bar of soap. And so we think that we can outbid, you know, um, we can outbid any of the other buyers based on that information. Okay, so that's kind of how targeting works. And that's I left out a lot of details, but right, there's there's a lot going on. So, in essence, back to our ID. The ID gives the bidders, the people who are trying to decide how much to pay for the right to display an ad, it helps them understand and link back to information about you that helps them price that ad. Right. And so if they know something about you where you live, it doesn't need to be your name, it could be what you bought recently or what you didn't buy. That can help them say, oh, this person, you know, let's say you just bought a laptop and they know what laptop it is. That might help an advertiser sell you a bag to carry your laptop. Okay. Because they're, oh, just about a laptop, probably gonna need a briefcase or a carrying case. They're gonna want to protect it. Okay, that's like a complementary good. So they're gonna be able to bid high, and probably if they win that ad, they make they're gonna get a return on their investment, okay, because they've targeted you really well because of that information. So the ID is the way, it is the link. It is the way that those bidders can tie back to the information about you, which lets them know how to price that bid. So the data about consumers, as in the fact that I bought that laptop or I went to the soap store, or I went to the shoe store, the data is not quite as valuable in general. It can be built and spread around. And the system for doing that is already very mature. Okay. But if you can't identify that consumer at the moment they show up on the New York Times' website, the only thing you can do is provide a generic ad to that consumer. So that ID is very valuable right at that moment. So our ID is a consumer-held monopoly. Okay. So when you install rewarded interest, we block all the other IDs. All those pieces of paper that somebody else stuck on you, we take them all off and throw them on the ground. Okay. So now when you are, you know, when you navigate the internet, the only ID that's available is the rewarded interest ID. And what that means is if anybody wants to figure out who you are, they have to pay to use the ID. And so that's how we're able to charge for it, because it's the consumer-held monopoly. And that's how we're able to compensate the consumer when the ID is used.

SPEAKER_01 34:02

Wow. Wow. And of course, this naturally leads to the revenue model you brought up a few minutes ago. Um, one of the most striking parts of your model is what you just described that users get paid 5% of what advertisers spent for their data. Why was compensation an essential part of the design?

SPEAKER_00 34:26

Well, back to our earlier part of our conversation where we talked about the importance of aligning interests, making sure that everybody in the value chain gets something for this. And part of the challenge for advertisers and the ad tech ecosystem who've wanted the ability, the authorization to track and target and personalize ads to consumers. Meanwhile, consumers have the right to not be tracked and targeted. So if you want a consumer to agree to personalization, you got to give them a reason. And so, you know, there's risk having data out there about you, right? Not always, and not always a big risk, but there's a real there's risk, right? Um, and some consumers may say, I'd rather just rather be, you know, anonymous and not be tracked at all. And so, you know, as we were looking at at starting rewarded interests, we were doing some research, you know, how many consumers, maybe 10% of consumers, they don't want to be tracked whatsoever for any reason, even if you're compensated. There's other consumers, maybe 40%, who say, I'm I'm willing to be tracked and targeted, but primarily by brands that I trust. I'd really rather not everybody have, you know, carte blanc access to everything I've done online. And then about half of consumers basically don't care a lick, right? They're they they feel like anything from I know I'm being tracked and targeted, um, but I don't really know care that much. I don't think there's that much risk, or I don't feel like I can do anything about it. And so our product can speak to that whole 90%, right, of consumers. For you know, those who want you know granular level control, we've got that for them. If they think, okay, I really just want good actors to be able to reach me and track and target, that's good. You know, we've we've got that too. And for the rest of the consumers who say, I'd rather just get you know 20 bucks a year as compensation and feel like I'm being treated fairly. Right. And so I think our product can appeal to that audience as well. So we we by by adding in the ID and giving the consumer that monopoly, A, we can compensate consumers, which will help them feel better about allowing this data to be collected in the first place. Again, that's good for the whole ecosystem. It's generally good for consumers as well. Most consumers prefer a targeted ad over a non-targeted ad. Right. So now consumers get targeted ads, the right products chase you, or the right product, the right products find you is probably a better word. Right. And then the advertising community, the people who are creating products and services, they have a way to reach people who would actually care about their product. So consumers were kind of left out of the value chain of ad tech 20 years ago. And so our charging for this ability to, uh, or really the authorization of personalization and tracking and allowing the consumer to have control over that is like it's it's the agency that the consumer has needed. And because the ID belongs to the consumer, right? It's it's tracked by our platform, but it's tied back to that single consumer. We can also record and show our members who's actually targeting them. So we also give the consumer transparency and they can see who's advertising to them.

SPEAKER_01 37:47

Wow, that is actually something I've never heard described this way by embedding um the economics of value exchange into privacy conversations. So based on that observation, do you think the payments change how people think about content you know, um you know, we think of the payments the the compensation for you know authorizing um tracking.

SPEAKER_00 38:19

Um it's it's really you know, I don't know. In Europe there's there's there's sometimes what's called pay or okay, right? Or pay, you know, um as an okay to track me or I have to pay to read the content. Um we think that the ad-supported model is actually really good. It gets rid of a lot of kind of cognitive friction. So if a consumer can simply show up at a website, navigate around, find the information they're looking for, but not have to kind of fumble with the login, um you know, have, you know, um, let's say they surf widely widely, they might visit 100 different properties in a month. Do you as a consumer want to have a hundred different memberships, right, with all of those? And and imagine that you want to say, okay, great, I can't afford 100 memberships. I want to drop the lowest 80, you know, lowest 20% of them, right? You you'd have to go to all those places and kind of you know unhook yourself and free up your credit cards so you're not being charged. So um I guess you know, we we can see I think we think of the compensation as part of a transparent value exchange with the consumer. So the consumer can use our product without um uh the rewards, without enabling it. Um, but and they can use it and still get the convenience of uh not having to interact with and see the cookie consent banner. So we'll set them, we'll express their preference. Um we only get compensated when the consumer gets compensated, right? And I think long term, what that means is um what we will probably do is we will probably introduce, maybe when we get to a few million people, right? We may introduce the ability to use our product without rewards, where we'll charge a nominal fee, right? And say, look, if you don't want to use rewards, we respect that. However, you're now a cost center to our platform. And so what we'll do is we'll offer you rewarded interest at the exact same amount or you know, kind of the estimated amount of what we would earn if you had decided and opted in. And that way we can be ambivalent or kind of uh ambivalent's maybe not the right word. We can be um we won't care whether a consumer uses our product and opts in and earns rewards and we're compensated through rewards, or whether they pay us a dollar a month or whatever it is, um, and we get compensated that way. And that way we are indifferent, is the word I was looking for.

SPEAKER_01 40:50

Right, right. So a lot of privacy reforms um sound good for users by definition, but scary for publishers. So, how does your model protect publisher revenue?

SPEAKER_00 41:04

I'm I'm so glad you asked this question because it's it's something that um Scott and I feel really strongly about. Um Scott Spencer is my co-founder. Um there are other extensions out there that consumers can adopt. Some of them, let's say, are ad blockers. And by comparison to an ad blocker, we are much more friendly to a publisher. Right? An ad blocker literally blocks their ability to earn revenue for the content that they're producing, right? So meanwhile, when a rewarded interest adoptee, when one of our consumers using our product, when they show up on a publisher's website, there's like an 85% chance that they are opting in to allowing tracking and targeting and use of the ID, because we have a very high opt-in rate. And so for that publisher, it's great because they don't have to show a cookie banner, which means because they're already getting consent. So the consumer has a lower probability of bouncing, meaning not going further into that site. So right away the publisher sells more ad inventory because the consumer actually sees content that has ads around it. And because the consumer has opted in with the tracking and targeting uh capability with a high probability, right? The advertiser's ad inventory sell at a higher price. So the publisher also makes more money that way. And so we've we've uh modeled this. And so for some of the larger what are called publishers' rep networks or revenue optimization platforms that are out there, they this could boost their earnings by like $1.50 per user per year. And so um it is material to them, and especially in the day and age of where agentic modalities that consumers are starting to use are actually decreasing the amount of traffic that goes to the open web. Right. So um having a little extra uh revenue and being able to support their publishers with you know uh higher CPMs, you know, costs per thousands of the value of the ads, it's really important. So you could say we're very publisher friendly. And the other thing is we require no integration by the publisher. So publishers don't really need to do anything to pick up this advantage. And so that's also really important because a lot of publishers are strapped for technical expertise and adding something onto their website is is troublesome, and that can mean that it takes a long time. It has to kind of get in the queue and sit behind the priorities. So again, we we we basically help publishers earn more for their own product, um and uh and we don't interfere.

SPEAKER_01 43:57

Nice, nice. And from your Description of all the cool things you do. I get a feeling that this is a space that is shaped by law, policy, public pressure. How do you build something practical in an environment that is constantly shifting?

SPEAKER_00 44:15

Boy, I mean, I guess you got to start with having a pretty good understanding of the baseline of all the regulations. Right. So, you know, prior to starting with rewarded interest with me, my business partner, Scott, he was head of ads privacy and safety at Google. And so he was also, I think, uh there, the Google representative to the IAB Tech Lab. Um and so he, you know, uh and worked with people at IAB Europe, right, who helped develop uh the transparency and consent framework and interacted with a lot of the um uh the European DPAs, right, the data protection authorities. So he came, you know, kind of pre uh he brought to the table a lot of knowledge about uh the regulatory environment. We've also, you know, especially in the first year of rewarded interest, you know, we started this in May of 2023, so it's coming up on three years. We reached out to a lot of uh ex-regulators, XFTC, French Canil, CMA, and you know, the UK CMA. And and you know, off the record, we kind of just asked regulators and former regulators, how do you, what's your perspective of what we're doing? Right? We want to empower consumers. We think this is gonna be more transparency and agency for consumers, and it should reduce that that consent fatigue and and reduce the automation asymmetry, right? And I I would say across the board, right? It's probably one. If we talked to 20, there would have been one who said, I don't like what you're doing. We didn't talk to 20, right? Our N was smaller than that. But all the regulators we talked to said, look, we can't publicly say this and we won't. But in general, like what you're bringing is transparency and agency, and that's what we're about, right? That's what we're trying to do for consumers. So um, you know, knowing that, you know, we we were able to proceed with confidence, right? And we have to keep tracking what's going on. There's a lot of changes. I think there's, I don't know, 22 state laws now in the US, right? With with you know, several different kinds of families of different um of you of statewide privacy law. So we're paying attention to that stuff. Um and um, you know, what we had to do in designing our product is kind of design for the I'll call it minimum viable product, but in a different context, which is how can we give consumers, our users, as much reasonable, well, one level of detail if they want it, like varying levels of detail if they prefer not to go quite so deep. But everything we show and all those controls that they have, it has to be compliant with all these different jurisdictions. Right? So, you know, it does mean that your hands are tied in some ways in terms of the amount of creativity or the different user interface experiences that you can um that you're in uh allowed to use. So it sets some constraints, is probably the best word. But we've just tried to work within the constraints of the laws. Um and that way and you know, do the do the best we can amongst the constraints.

SPEAKER_01 47:21

Nice, nice. So let's briefly go behind the scenes. I will I want to ask a two-part question. Sure. What what has been the hardest technical challenge in building rewarded interest? And what has been the non-technical challenge in building rewarded interest?

SPEAKER_00 47:39

Okay. The technical challenge, I'd say with rewarded interest, um has mainly been around. You know, it's mainly been around um the a browser extension, right, can be very simple, but it can also be quite complicated. In essence, we have four different applications or you know, JavaScript runtimes that run within our extension. Really, we have you know two types that are singletons, and then we have two other types that are that there can be you know one per open tab. So you have a lot of communication going back and forth. The browser imposes you know constraints and restrictions on the information flows, and getting that right actually was a technical challenge. All of us who went into this, you know, my myself, my um my partner, our team members, our engineers, none of us had browser extension experience going into this. And so, you know, we we we had to, we tried something and we're like, that's not working. We threw it out and we had to to iterate. And so, you know, I think we're on like our third iteration of an architecture now. Um and you know, what would happen is we'd we'd march along and we'd we'd get work done and we'd add the features, and then all of a sudden our our team velocity would just start to plummet, right? Because we kind of got to the and we started going beyond the level of sophistication that that architecture was could could handle and that our engineers could handle on it. And then we'd have to stop and retool. So that that's that was the the technical challenge. I think um and and now I uh you know today I feel like we've really got it got it good, right? We we are um we're gonna be launching on iOS for mobile safari. Um that's gonna come. We're we'll be starting a pilot sometime in this quarter. Um it's our single uh most uh frequently asked uh feature, if you will, is like when can I have this on my phone? Um think of it like this like cookie banners are annoying on the desktop. They're even more annoying on your phone, right? The screen is smaller, the little X's that you have to press to get them dismissed, like chances are you're gonna fat finger it and hit the wrong button. So it's just an awful experience. So we're we can't wait to make cookie banners disappear for consumers when they're on Safari, right?

SPEAKER_01 50:03

Nice, nice.

SPEAKER_00 50:04

The non-technical challenge, I I think has been the the um I guess it's been the funding environment, right? So, you know, it's kind of hilarious, but like some of the largest companies in the world are basically ad tech companies, right? But ad tech as an in as a venture capital funded area, right, is is almost it's it's not quite non-existent, but it's kind of a cottage industry. There just aren't that many investors now who look at ad tech as a as a place to invest. And part of it is I think there were a lot of investments that people, you know, uh funds you've heard of, you know, invested in maybe the 2012, 2015 and in that area. And it it was difficult to get good exits. And so um what we find is we have to be hyper-targeted when we get in front of a would-be, you know, like an angel investor or a pre-seed stage or a seed stage venture fund, and that person actually understands ad tech, then as in they've got some experience with it, they know how the sausage is made. Then they look at what we're doing and they're like, oh yeah, like I know why you're doing this. I can see I know the problem with ID, I know how valuable it is. Um, and this could be a very big business, right? Um so you know, um the the I think I think display media, um, programmatic and digital advertising is a $600 billion a year industry right now. So there's a lot of money, there's a lot of marketers that are trying to reach consumers, right? And consumers are spending time online. So if we're able to crack this nut, right, it becomes a very big business. And that also means we're returning a good deal of of um of capital to consumers. So I think the challenge has been getting in front of those um investors who love ad tech and have experience with it. And once we do that, our story works, right? Um so yeah.

SPEAKER_01 52:10

Nice. So there's usually this gap um between what people say about privacy and what they actually do online. How do you interpret that gap? Is it apathy, resignation, lack of viable alternatives, and so on?

SPEAKER_00 52:27

I think it comes back to consent fatigue in some cases, right? So a a consumer uh well, and and and it's and and there's another dimension as well, which is trust, right? So, you know, if you're you're interacting with an advertiser, a brand who you already have an offline relationship with or you've made purchases for them through them before, then you might think, okay, they're asking me for my email address or they're asking me for my zip code or something else. You might think, cool, I'm happy to share that. I actually want to engage deeper with this retailer and I want them to know me better. Right. On the flip side, you might be looking up a, you look up a recipe, right, and the recipe site is asking to track and target you, and you have no idea who this recipe site is, um, and you know that you're gonna, you know, um uh you may regret you know sharing or giving that permission. And you have no real affiliation or trust with that brand. So I think I think consumers, we've we've all been trained to make somewhat in-the-moment snap decisions about um what level or what what amount of disclosure or what we do disclose in the context of being asked. Um and again, the best brands um uh build a trustworthy relationship with consumers, and they take it really seriously. So um, you know, I mentioned earlier one of the capabilities that our product has is having a what we call a site-specific policy, right? So you may have more conservative um disclosure choices, you know, in other words, consent choices, um authorizing certain kinds of tracking and targeting or uses of your information as your default. But if you have a brand who you trust much more, you could actually share a lot more, right? Or allow more uses of the data that they collect. Nice, nice.

SPEAKER_01 54:27

So do you see the principles behind rewarded interest applying beyond digital ads into other parts of the internet economy?

SPEAKER_00 54:37

Absolutely. Right. So, you know, today with our extension, we're we're going after the open web, right, as our first advertising ecosystem, if you will. Um there's also mobile apps, right? There's a lot of ad-supported apps that are out there. There's also streaming television, right? Connected TV. And um, you know, the the value or the kind of the return that advertisers see from um buying connected TV ads is is solid, right? It's high. And as a result, many advertisers are you know advertising more heavily and advertising on connective TV is is growing like crazy, right? Um the overall amount of advertising isn't going down, even though the advertising dollars being spent on on websites and traditional web publishing is declining, right? I I can't remember, I don't know how much, I don't have those stats handy. But um, in essence, our goal is to represent the consumer's interests, right, according to the consumer's will. So we want to be wherever a consumer can be, where they are either tracked or where they receive personalized ads. So if the consumer is on a medium like you know, mobile phone or let's say CTV and tracking can occur, what are they watching? Right, did they interact with an ad? Or, you know, did um uh or what ad were they shown? Did they then pick up their phone and actually make a purchase? Right? And being able to go cross-device, so I'm watching a show on on streaming TV, maybe I'm on Netflix, I see an ad, maybe it was targeted, maybe it wasn't. But then the advertiser, if I pick up my iPhone, right, and then you know, scan a barcode, or if I'm if I have rewarded interest installed, and my ID on that connected TV is the same as it is on my on rewarded interest on my iPhone. Now that advertiser knows this person just saw an ad and they just went and made a purchase. So that is the golden goose as far as advertisers are concerned. Ad agencies love this, the advertisers love it too, being able to connect across devices. So, yes, in essence, we want to be wherever a consumer is, where they can be, they can um they can authorize that tracking and targeting, and that's where the consumer can get compensated too. So if if the ad buys for connected TV are five times as expensive as a display ad when that same consumer is reading the website, why shouldn't that consumer then be compensated for the value of that ad in that context? So we need to be where wherever ads are, because our goal is to get the consumer their fair due.

SPEAKER_01 57:26

To start wrapping up here, I want to be mindful of your time. Um looking ahead, what do you think the next few years will reveal about privacy, digital identity, and the future of content?

SPEAKER_00 57:42

Wow. All right. One prediction is that consumers are going to recognize we're creating a new category, right? The consumer's agent, the personal consent agent. And so we aim to be that category leader. So we our goal in the next couple of years is for every consumer out there to know hey, uh, you don't have to sit there and interact with a thousand cookie banners a year. You can adopt a personal consent agent. It can work across multiple devices and contexts, and it can it can disclose and share your privacy choices. And the companies that that receive it, they're either barred from tracking and targeting you, or they have to do it according to your preferences. The internet and advertisers and the ecosystem that collects and performs this tracking, tracking and personalization, they need to adhere to the consumer's expressed policy. Right. They need to they they work for the consumer. They have to pay attention to what the consumer wants. That's what we want to see happen.

SPEAKER_01 58:44

Nice. Nice. Wow. This has been a really fun and insightful conversation. Um, thank you so much for you know sharing all your knowledge and all the cool things you're doing. And of course, I can't wait to see um the future iterations of rewarded interest. You mentioned the mobile safari extension.

SPEAKER_00 59:06

That's right. Yep. Coming Q2 for any of your listeners, right, we'll be running a pilot. Um, they can come to our website, which is rewardedinterest.com, and um they can sign up, right, uh, and indicate an interest in um using the uh mobile safari extension. And of course, they can also um adopt, you know, navigate directly to the Chrome store from our website and install uh in Chrome desktop. Um that that's working today. So um we welcome anybody to do that. We always love uh love feedback, right? Um anyone who wants to reach me, I they can, you know, I'm this may be crazy, but uh I've got a good spam filter. So, you know, uh I'm a feed at rewarded interest.com. So would love to hear from early adopters and would love feedback.

SPEAKER_01 59:53

Nice, nice. You just might see an email from me signing up on your website. Who knows? We'll see.

SPEAKER_00 1:00:00

That's awesome. Yeah, bid, um the nice thing I'll I'll I'll I'll say to you, right? You probably visit a lot of websites as part of your day to day. Yeah. And um rewarded interest will save you time.

SPEAKER_01 1:00:11

Nice, nice. Wow, thank you so much once again. Um talk to you soon.

SPEAKER_00 1:00:16

Hey, thank you, bid. Great, um, really a pleasure. Great questions. Uh, thank you. And you did your research. So I had a blast tonight.

SPEAKER_01 1:00:23

Thank you.