Ever wonder why Amazon seems to always be ahead of the curve while Google seems to be playing catch up? Join me and James Hercher from AdExchanger as we pull back the curtain on the lucrative yet often under-discussed world of e-commerce and D2C. We dive into the intersection of commerce, media, and advertising technology, highlighting why Amazon's risk-taking approach grants them the edge ahead of Google and how human input continues to be pivotal in automation-dominated platforms.
Can you imagine AI taking over creative tasks and producing original content? As our conversation evolves, we delve into the stagnating ad market and the rise of AI, specifically its influence on businesses. James shares intriguing insights on companies like Colgate-Palmolive, which are leveraging AI for dynamic product listings to shape future customer experiences. We explore the potential and limitations of AI in the creative space, igniting a stimulating debate on AI's capacity for originality.
As we examine the future of advertising, we touch on the increasing role of cloud computing. We consider the impact of tech giants like Amazon and Google in developing services like identity resolution and data clean rooms. We also evaluate the implications of automation on customer service and the potential opportunities that companies like Google and Pinterest have in retail media. This episode offers an enlightening exploration of the ever-evolving world of e-commerce and advertising technology, packed with insights and observations that you won't want to miss!
Ever wonder why Amazon seems to always be ahead of the curve while Google seems to be playing catch up? Join me and James Hercher from AdExchanger as we pull back the curtain on the lucrative yet often under-discussed world of e-commerce and D2C. We dive into the intersection of commerce, media, and advertising technology, highlighting why Amazon's risk-taking approach grants them the edge ahead of Google and how human input continues to be pivotal in automation-dominated platforms.
Can you imagine AI taking over creative tasks and producing original content? As our conversation evolves, we delve into the stagnating ad market and the rise of AI, specifically its influence on businesses. James shares intriguing insights on companies like Colgate-Palmolive, which are leveraging AI for dynamic product listings to shape future customer experiences. We explore the potential and limitations of AI in the creative space, igniting a stimulating debate on AI's capacity for originality.
As we examine the future of advertising, we touch on the increasing role of cloud computing. We consider the impact of tech giants like Amazon and Google in developing services like identity resolution and data clean rooms. We also evaluate the implications of automation on customer service and the potential opportunities that companies like Google and Pinterest have in retail media. This episode offers an enlightening exploration of the ever-evolving world of e-commerce and advertising technology, packed with insights and observations that you won't want to miss!
Welcome to Growing Ecommerce. I'm your host, mike Ryan of Smarter Ecommerce, also known as SMECH. Today, I'm joined by James Herger of AdExchanger. He's a senior editor covering the intersection of commerce, media and advertising technology. It's our first time bringing a journalist on this podcast, and James explains why he thinks e-commerce and D2C are underreported. We also talk through a range of topics, including the investor hype around AI, overshadowing advertising, the challenges of getting issued addressed by players like Meta, why Amazon succeeds where Google fails by taking big risks, and the ongoing importance of human work in highly automated platforms. All right, let's get into it, cool. So, james, thanks so much for joining us today.
Speaker 2:Sure thing, glad to be here.
Speaker 1:Absolutely. You read before the call. You were telling me you're on vacation in Cape Cod right now. I'm a Massachusetts guy myself, so I hope they're treating you kindly.
Speaker 2:Yeah Well, I'm a Met's Giants fan, so I'm not in the Jets Yankees hatred, although I guess Giants and Pats have our own thing. But yeah, it is like a running joke that whenever we come up here with New York plates we're going to get pulled over.
Speaker 1:Yeah, well, I mean, most of our neighboring states call us like mass holes. So we don't have to wait on the best reputation, especially not for driving, and when I moved to Austria, I had to like relearn how to drive. Well, that's.
Speaker 2:New York experience.
Speaker 1:Yeah, but James, why don't you kick us off with some of the few words about yourself you know? What are you interested in, what seems kind of interesting? What are your skills?
Speaker 2:Sure my skills. I'm a fine juggler, look on this front. Yeah, so I work at AdExchanger reporter and editor and have been covering data-driven advertising technology for eight, nine years now. A while came up really, started with programmatic companies and much more recently I'm on the sort of commerce retail beat. You know, I feel like they sort of trespassed on my terrain really and started coming into my like core DSP and ad tech area and so, yeah, started with sort of getting into the retailers as they got into the DSPs and the categories, getting into D2C, legacy, cpg as they get a little more data sophisticated and into the ecosystem. So yeah, I've kind of tracked all these companies in and now I'm really sort of finding myself on this sort of grocery, retail and e-commerce beat.
Speaker 1:Yeah, that's one of the reasons I wanted to have you on here, since you know, this is, after all, the growing e-commerce podcast and I mean, yeah, I'd love to hear anything that you want to tell us about like that evolution on the DSP side and on this programmatic side, because, like I'm typically like personally, my kind of core confidence and where I'm more located is on the paid search side and I'm always really interested to hear more about how things are evolving in some of the parallel channels like programmatic.
Speaker 2:Well, we've always, you know, really is not to limit ourselves. We sort of define programmatic very broadly. I think probably, when people are talking about like programmatic as a channel, they're really thinking like open web, third party ad tech, buying the sort of like the trade desk as the you know, kind of like big image that everybody knows, and we think more of it as like data driven, kind of automated, machine led advertising. So so, yeah, that's really how like we think about it, like we have like programmatic IO and that's not really just like programmatic tech as people think about. We try to be more like, okay, think about this as like data driven advertising.
Speaker 2:But I do think that this category in particular, aside from, as I said, just like trespassing on my native turf, is very interesting, clearly like a big, burgeoning category, and it's one that I don't think has much reporting. Like in the programmatic space there's this really like strong, vibrant field of publications and you know if I'm chasing a story in programmatic, you know it's really interesting and juicy, like I know, you know digiDays on it at age ad week, like I think, like I have a feeling of like Laro Riley and Ronan Shields and like people who are like right behind me, you know. So there's always this like fire boiling under the kettle and in ecommerce like there just isn't the same like field of reporters. So that partly is what I think interested me to it Like I think there really is a need for a stronger reporting field in this, like you know, just like growing ecommerce. To you Like, when I show you this title, it's like but yeah, like, in this category I do think that there is the big like it. It sort of is missing reporting, and I think that the thing in like DTC and ecommerce, people don't even sort of think about a lot of the time like oh, these companies, they sort of don't, you know, or this, this tactic or something it doesn't really stand up to scrutiny but it doesn't have the same kind of like you know, like doesn't stand up to a rigorous approach, and I think that is they aren't really sort of sharpened and tempered by sometimes like adversarial press, but like a press that is going to be critical in a constructive way.
Speaker 2:You know, like I think learning about things in this space, like you asked about that, like I learned from you and I learned from there, are lots of great operators and consultants who post their own material and often it's very like original and insightful, like it's an actual you know it's it's you or whoever actually posting that content and doing their work to you know the info is great, very useful for me. But I do think that that's you know. If you're sort of someone coming up in the space, it is just like other CMOs who are like, or marketers who are posting their stuff, consultants and agency folks, but it isn't really press and I think that it people like it's just not a healthy diet, like even though it is really sort of incredible that people do that, like it isn't something that we saw in programmatic people like from a DSB like oh, here's our numbers, here's like something really injured like original and interesting coming out of this. It's a total step up from like the just totally blog day like white papers and case studies that we're used to. But I do think you know, when it's without the actual like reporting side, without a really strong like news field, it's just sort of you know it's not a full diet Like. It just kind of feels like toothless in a sense, like I think people who read all that stuff and find it very useful when it's all you have. It's like at some point.
Speaker 2:It's just, you know, push comes to shove. That is all content marketing and I think that kind of does come through, like, even though a lot of this is so useful, it's not from, like, a field of people who are going to be really critical and I do think it is a problem. Like all you know, a lot of things like comes through this prism, in a sense, of operators and consultants and it comes back to advertisers and it's kind of sort of sterilized, like it's. It is a field of people who, push comes to shove, like really need Facebook and Google and, you know, won't cross them in a way. Or, you know, I hear a lot of people who, in private, like when there's something we know, when Facebook has some big issue like Facebook is like, you know, glitches cost them a lot of money and I see the public persona that they're putting out there and I see the private messages that they send me off the record and, yeah, you know, I think there is a sort of a gaping need for journalism in the space.
Speaker 1:Yeah, I mean to listeners. You can't see, I'm like nodding my head to hold and listening. So I mean, first off, I 100% agree and I'm glad you mentioned this that it's just under reported. It's just under reported, I feel like you know, the only time Wall Street Journal just I'm just just to name, draw a name out of that bag like a big mainstream media, investigative kind of journalist approach, only time they're going to mention Google shopping is like you're back when there was some fines levied here in Europe or they'll. They'll look at. They'll look at Google shopping once in a while as how competitive is it to Amazon? Or something like that.
Speaker 1:And this is a very narrow kind of constrained understanding, I think, of the channel and the venture point. I mean, yeah, like I do a lot of primary research in this space, but you're right, it is content marking you at the other day, I'm not a journalist, it is. Everybody has their incentives and actually I'd love to speak to you a bit about incentives and stuff like that in the journalism space as well. But ultimately it is a is a form of brand marketing and, like I was inspired, just just open up, show you, show you my cards, like there was. There was this huge US agency, north American Agency, merkel, and they were like publishing this thing quarterly, the digital marketing report, the DMR they still do and like, well, there's nothing like that here in Europe. That would be cool to just kind of start publishing some data.
Speaker 1:And then I think I dig a lot deeper than maybe some laws reports do. But at the end of the day, that's kind of the inspiration for something like that, and there's a different level of like independence and rigor that will come from actual journalism. Like to the point about cross-eater platforms or not, you know, google's a partner of ours and I'm I, I do, I am critical. I will call them out when I think what they're doing is a right. I think that there's insufficient transparency and control of some of their platforms. But I'm not out there trying to like draw blood and like start to be kind of. I don't want to be testifying in front of Congress six months from now. You know what I mean.
Speaker 2:So, yeah, I'm like what Facebook had, that Sunday Glitch right. There was that Sunday, when you know, morning when they just, yes, blew past their Daily budgets and like cost caps it was, yeah, there's probably like pens or even hundreds of millions of dollars that they sort of like just misappropriated. Then, over the course of like some weeks, they kind of sorted this out, ended up dishing back like credits, for the most part for for what they kind of like mistakenly taken from people, and I do think that it's sort of like you know to take that as an example like, I think, a lot of For the actual advertisers, like the buyers, you know, but client of yours, client of an agency or whoever you know, kind of come back to them and like the impression that they got like a month after that was like, oh, like Facebook, you know, did okay with the firm by us with that, like we got our credits like, and I think that that just sort of comes back to them all through this, like frism, like I said, of companies that are dependent on Facebook and you know that are even more than dependent on that relationship with the With the advertiser, and so you know, when that comes back and it's like, oh, like Facebook like stepped up and did the right thing here, like you should be sort of happy with how this settled out, and I think that's just a very different thing than if that comes through, like when that was going on I was I was the only reporter on that like that was that Sunday that I I started sort of getting these messages from people like whoa, something's up with Facebook, something's up with Facebook and, and like when it that Sunday, I was like whoa, this is gonna be a huge thing. Like I I was kind of like preparing, like oh, should I get on this, maybe even try to write something up on Sunday, or like have it ready to try to be first.
Speaker 2:In my head I was like no way, this is gonna be like Bloomberg, financial times, new York times, like sometimes there are these stories that are, like you know, clearly, like I've stepped up out of the trade press and it's, and that's what I thought, like this was gonna be a huge National level like Facebook story and it just Holy, just they just skated by that, like literally, that just got barely covered, no understanding of what happened there.
Speaker 2:And I think that, yeah, facebook just kind of came out clean because there wasn't Reporters to be like whoa, like you know, I was just kind of like a loon, like sitting there alone, like pulling my hair out it's how it felt to me. But yeah, it was just. That was a situation like advertisers, like if you're an advertiser and it, you know what you the impression you had after that was like oh, facebook did right by us, like that was okay. It's like whoa, no, that came through a prism that was just miscommunicated to you. Like that was a horrific Business violation you should have been like up in arms about and that the it was just missing reporters.
Speaker 1:Yeah, definitely. I mean, especially considering how many, how many these advertisers are really small businesses where that's a big deal. I mean let's, let's talk about you know? Just, I want to zoom out and talk about a couple trends. Lately, like we've been seeing that the, that the ad market has stagnated a bit, the last two in recent quarters, the recent quarters, the numbers started to kind of flatten out or improve recently, I mean. And yet, like I really enjoyed you you had some coverage of, like Google's numbers for Q2, amazon's numbers for Q2, and I thought it was very interesting a couple of callouts that you made, like it was the first time in a couple of years that there was no Q&A related to Amazon advertising and all they wouldn't want to talk about was AI and and with with Google. Yeah, I mean it also. It seemed like it was somehow beside the point. So what do you think is going on here with, like, the Amount of attention and where it's allocated right now, like if we're talking about AI, for example?
Speaker 2:I Mean this is. It's clearly the big Thing right now. Ai, like we see it on, you know, on all fronts. I'm like we have an ad exchange or awards, like the submissions are all, like you know, have clearly like subtly changed their, their, their wording to be like, oh, like these, like AI Products, blah, blah, blah. And clearly that's where, like, the investor interest is. It is.
Speaker 2:It was sort of funny, like Google, you know, that the Executives were sort of trying to like pull the conversation in other directions and all the people wanted to, all the investors wanted to talk about, was AI and, yeah, amazon too. It was interesting that, like Amazon I mean Amazon advertising just didn't come up, had a great, great quarter, great year, but but yeah, just doesn't like I think it's just been swamped off the radar just by like AI and cloud stuff. I it. I do think it clearly is not like. I mean, like I remember back in I don't know, 2017, maybe it was, and I was like big on blockchain for like a year. I was like, oh, like I kind of feel like okay, like I bid on that and just covered it and that didn't really like baze out. That was like another big investor, I don't know quite mirage, but something like that. When they clearly there was the whole like crypto, web 3 stuff. I do think it is more like it has already established itself as having more like true utility and use cases, like, clearly, individuals that companies are using these products themselves in in all sorts of ways, even even inside, from where, like you know, like a company, like a robot, like Colgate, like going through a test with one vendor, but I clearly like just people are using these things to Drop memos, do little bits of like, are like all that you know, just time-saving things, and so I mean these are clearly going to Stay.
Speaker 2:I do think that there is there's at some point there's gonna be like a tough reckoning because the costs of all these things are sort of being covered right now, like all these Amazon, google bar, like Microsoft, they're sort of in growth mode and so Almost like an Uber or a Lyft or something like it's easy for something to just like blow out when they're in growth mode and they're just not operating profitably.
Speaker 2:Like at some point they're gonna just turn the dial and then everyone's gonna Like you know it's not gonna be them covering the cost, it's gonna be pushed on to other people and I don't think people understand like truly the costs of the data that's being consumed here. So so, yeah, it's like at some point it's gonna be like oh yeah, we're like testing these really interesting generative AI. Like all of a sudden, you're like snowflake, or AWS Bill is just through the roof and you're like whoa, what's going on here. So so, yeah, I do think that that, like that other shoe hasn't quite dropped, it's gonna be like a tough thing once. Everyone's Like you know, these companies are getting everybody like used to these products and reliant on them, and then they're gonna turn the monetization Levers. So so, yeah, that's that's just sort of an interesting thing that I'm like keeping an eye out. I think we'll be big, probably more like any year.
Speaker 1:Yeah, I mean it's a good point and I have Questions there. I mean, so I I recently got like in one of these GPT like pro accounts, and so the reason why I finally wanted to check out this code interpreter plugin and it's Really impressive, but also so weird. Like you know, I'll use it to just help me. I don't know Is it saving me time writing a formula in you know Google Sheets or Excel or whatever, but it's so fascinating because you'll you'll ask it to do something, and then it's like it's making mistakes and it's realizing that I made a mistake, and then it like it just has multiple steps to it and it'll be like, oh, I realized I made this mistake.
Speaker 1:And then I'm just wondering, though, what kind of data this is like, how intensive this really is. You know how bad for the planet is this, when I could have just, more or less in a carbon neutral way, used my brain to write a formula, to take a little bit longer. I mean, I think there's a lot of questions here about that when you see it sort of troubleshooting its way through requests, and it's a weird technology, it's just, it's so interesting.
Speaker 2:Yeah, I don't really know on the sort of the coding side, in terms of like the writing. We definitely do see, like especially sort of earlier on, when it was like new and kind of gimmicky, like we would get a lot of press releases, and at the bottom it was like surprise, like this was written by chat GPT. And every single time I'm not surprised, like we knew like two lines in it was like yeah, like hard, like the new team is sitting there and being like calling out, like I'm pretty sure I have one from chat GPT, you get the bombs. Like this was written by chat GPT or something, and it's like yeah, so it isn't really. There is a very like a kind of form, like it's not really original in a sense, like it you can spot it and it's just very blasé. Like no one really could write a good column for us, like you couldn't really prompt it, like he could sort of give you maybe an outline or a sort of a starting point or something like that, but like it definitely would require a person to sharpen at all.
Speaker 2:Like you know, it's just not just picking up like very general sentences. Our executive editor, when it kind of came out, just says like you know, learning experience showed us how it, you know, if you ask it's like, oh, like, write a story about CTV in the manner of an ad exchanger article, like it's interesting, it clearly like goes back, read all the ad exchange articles and says like OK, here's the style of like ad exchanger and picks up on some of our like copy style guide stuff that we do, words in particular that we use. So it's like OK, that's interesting that it does like sort of learn. Ok, here's an ad exchanger style, but it can't really give you a sharp article. It's just going to be generalities about CTV that it's just kind of like picked up somewhere else.
Speaker 1:Yeah, yeah, totally. I mean I trained a model on my, on some of my writing and I don't know. It's kind of useless though, like it didn't have knowledge or opinions and it could sort of ate the style, but that was it. There's nothing really in there. But I mean you mentioned that some CPG are picking up this technology and running with this and I mean I think there was an example Colgate Palm of was at the brand Like they're getting into trying to like create listings out of this. Could you help us understand how, like what use case of shaping up there, how it's getting used so far?
Speaker 2:I think what they have in mind is sort of like dynamic product listing page type stuff, like really just starting with copy and I imagine from there they'll go on to the artwork. But yeah, I mean it makes sense that if you know something about me, maybe you sort of shape the product description page a little bit. You know, if you know, okay, I suspect that this person is like more interested in like the budget side of things, like more. Or, you know, this person is like we know they're interested in like the sustainability angle of this or something like maybe you want to like, yeah, that sort of makes clear cut sense. It does sort of seem like a lot to just sort of say like oh, you mean, this is like sort of just doing like dynamic A B testing of like copy on your product page. It kind of reminds you of like CDPs, like, oh, like another, like new interesting technology that like burst onto the scene, sort of like, oh, you're just like triggering an email ad, like it's not. You know it's sort of like like it's not that interesting when you get into it, like is this really something like amazing innovation? But I do think, yeah, like it probably is, saves them a fair bit of like time and money when you don't need a person to, you know, to do the intelligence or change the product pages or do the testing.
Speaker 2:But yeah, I mean, but they're just going to like test this, I think especially for a Colgate like they're very conservative, like they're very worried about feeding any information into it or anything like that.
Speaker 2:You know, I think like like it's sort of is like the marketing team is leading that, but like legal and IT is just like right on their shoulders, like even more so than usual, like it's like okay, like we are watching everything like a hawk. So so yeah, like from the big code, that's how it's going to start, and I think it is mostly just like it's saving individuals time, like that's mostly what it is. It's like a person who's like, instead of this, take me 15 minutes, it's going to take me one minute, so so we'll see if it's able to like sort of step up from from there. But but yeah, I mean, I do think it is like it's enough that a lot of like point solution type vendors probably in trouble, like a lot of you know, ab testing, a lot of just sort of like basic point solution type stuff. I imagine it could eat up into that.
Speaker 1:Yeah, yeah, I imagine so as well. I mean, it's not that different, Like I can't remember which vendors working on that, but Google is working on solutions like this. Do you know they're working now like yeah, okay, I don't think they're building out like landing pages or some or something like that, but they're working on basically different ways where your feed can be your product feed can be fully automated. Also, where, like, your ad copy can not only be just generated through AI, but also then on the fly, it can be dynamically adapted to a search query and stuff like that.
Speaker 2:And yeah, there are sort of like a couple different like. There's the sort of, you know, like an individual using a service to create copy or like stock art or something like that save themselves some time where normally they would sort of code something. And then there's this kind of like parallel track of like these products like Performance Max, you know, advantage Shopping, like that's the other new, you know kind of like side along to that trend. Are these products that you know I kind of like a just a sort of personal thing of mine is like AI like a term just not being used correctly, like really we're talking about machine learning. This is just one of those things where it's like, okay, like I'm just probably going to lose on this one, and like AI is just going to like we're just going to use AI to just as a term to describe these. Hopefully it just gets straightened out at some point.
Speaker 2:But yeah, these sort of AI led products like, if anything, that's where it's, you know, actually being productized the most, like these little, you know, these Colgate having a little test of this sort of chat GPT licensed copy tool is like nothing compared to what they're feeding into Performance Max, like what they're just sort of let you know, handing over to Google or probably Facebook or, you know, amazon, all these products like that's where all these things, all these platforms are headed. So I think, even before any of these other like AI services pan out, all these companies will be like totally in on these AI or sort of machine learning based ad buying products. They're taking that off their plate.
Speaker 1:Yeah, yeah, that's a good question about that. I, you know, I can't honestly remember precisely where that border is between AI and ML and which which is which one we should be calling which. But yeah, I mean, it's clear that there's been a leap in the maturity and I think it snuck up on a lot of people. But at the same time as you start to get familiar with that, in the shock where it's off, you see a little bit differently. I just I don't know, like you were mentioning what's going to happen to some vendors in different spaces, like AB testing or whatever, but I also don't know what's going to happen to the vendors that are.
Speaker 1:Just it's like your technology is just an API call to this completely commoditized infrastructure actually, because, like anyone can basically make a API call to chat, gpt, like in in. In principle it's both slapping the UI on it. I guess there's things you could do to enrich it with some exclusive data sources or something like that, but like to get kind of better with it. In principle, I feel like if the technology is advanced enough, you could just ask it to write API calls for you and ask it to build a front end for you. You could just ask it to build the product for you, and I just I'm wondering how this whole category will get valued in the future, because it almost seems like it would eat itself if the technology really advances that far.
Speaker 2:Yeah, I mean AWS, I think will probably be like the furthest along. There already is even and I think I pretty recently wrote up AWS like coming up with like sort of off the shelf like identity resolution. Like there's a whole, like you know, point solution, a lot of investment there, and these are identity resolution companies, cdps, and then you know Amazon has just been like okay, here's like one of the services you offer, like bang, like I just said, this is just a total commodity now. So and they'll just keep climbing up that ladder of services. Like you know, if you operate an identity graph, they're just gonna make that. You know their own. If you do a data clean room, like independent data clean room, they're gonna say, all right, that's just a commodity now. And yeah, I think they are. As it gets more sophisticated, they're just gonna work their way up.
Speaker 2:Like I think that's one of the things about like Aida, amazon, like going back to you know them in, like the affiliate days, like now that's done, like I remember, like people in the affiliate days, like like we're just we're gonna keep trying to like make it work, make it work until Amazon, just until this disappears, like they eat their way up the chain, and that's what happened. Everybody knew it was gonna come and they were sort of like riding this wave as long as it goes. So we'll see, like you know, is the move just to like get fall by snowflake, or if you can make that work on your own. But yeah, like they need independent versions of this to work too, like in the way that, like you know, youtube like needs TikTok because, like they just need to be able to point and be like look, it's not just us, like there's actually like there's company in an antitrust way, like they need to be great competition here. So, yeah, with all these announcements, there'll be like a few like independent partners.
Speaker 2:That's what. That's what I wonder. Like okay, is this like great or terrible for like a live grant? Not sure.
Speaker 1:Yeah, yeah, I know totally, I can, I know totally what you mean. If you ever like, visit Google's special page that they have about competition I'm sure you've seen it before where they are like oh, it's so hard, it's harder now than ever before and this is benefiting the costs and all this stuff. The unit costs. It's getting cheaper to advertise, yes, but I mean, yeah, you mentioned AWS, google Cloud. They're also on this with, like, their Vertex AI and they've got, like for the retail use case, they've got recommendation engine based on this AI. They've got they've got retail search so that your onsite search can be better. And you know, again, they'll also just keep developing lots and lots of capabilities that are right now actually other product categories. Like there are onsite search providers and they could I don't know, they could get smoked maybe by Google's cloud offering and then it just drives.
Speaker 2:It's an interesting how it like breaks down, because I was trying to like get into that and this was sort of years ago, I think. Then, like I was talking to Google retail cloud people because I was trying to find out, like trying to figure out, like where do these search budgets land? Like they're not, it's not falling to Google advertising, it's falling into like the cloud. It's in a weird way and they have a really like weird system like the revenue I mean even by like Google black box standards, where it sort of is like calculator that takes into account like, okay, the data you use like your Google cloud, like your Google advertising, and it just kind of like comes up with a monthly bill and so, yeah, it's hard to like un, like disentangle where these different like revenue. Okay, well, where search budget is falling now, yeah, and the cloud, it's all gonna go to the cloud, like that sort of seems to be where that's headed to. I think it was probably like five or six years ago. I was like oh, I kind of think I'm gonna be socketed to my editor at the time and like I feel like I'm gonna end up being like a cloud beat. Like we were having like a sort of general conversation about where oh, like James, you know, annual review, like where's your beat going, that sort of thing. Like I think it like maybe in a few years I'm gonna be like a cloud advertising reporter, like that sort of seems where it's going.
Speaker 2:This was before, like Snowflake had like a media and advertising business and yeah, it does. You know, this was like at Google putting ads data hub. Like they were kind of isolating the ad server and the cloud business. It does make more sense, but I do think it's also gonna be like such an antitrust nightmare for these companies. Like there are a few like big Google brands like you know, bluechip clients who for years now have just been building their identity set in Google, like in Google cloud, cause they're like they were at data hub, like pilot partners. They're all in, they're probably huge like YouTube and search advertisers. So they're like really tied on.
Speaker 2:But at some point maybe you're gonna wanna take your data like oh, like you know, we're switching AWS, like we're switching like Azure made us like a deal we can't say no to, and they're gonna try and take their data out of Google and it's gonna be nothing. It's good, they're gonna get the raw data that they put in five years ago. No enrichment like nothing. It's gonna be nothing addressable. They're gonna pull it out and be like whoa, what the fuck? And it's like yeah, actually, like you thought you were building your data, like that was actually like a Google thing. You were building like that.
Speaker 2:That really wasn't. It kind of felt like your first party data, but like it wasn't exactly cause Google had juiced it with its own data and that means they're not gonna get anything back. Yeah, so there are these very like interesting issues that I kind of foresee. You know, like any kind of bundling of like advertising with Google Cloud business, like that's just gonna send up red flags I think that has happened and sort of to a degree. But yeah, like it's just gonna be a very complicating factor as you get in with like retailers, especially where it's like how can you disentangle like the data costs, the data sales, from like advertising budgets? So yeah, like that's where I think is gonna be like a very interesting and messy space.
Speaker 1:Yeah, I mean, that's a really interesting take. And I'm wondering cause I've often scratched my head about why Google didn't step more aggressively into, like, the retail media space and like, how is Criteo eating Google's lunch on retail media? Well, like, how did this happen? But I wonder, if they just had a certain level of like, of caution, they were like, I don't know, we're just gonna, they're just gonna bust us up If we go, if we take this next step or something like like also, when you think about like that they do then power a retail cloud function like retail search on site search. You know, maybe it's a way that they can still like if an advertiser or if a retailer is like using that on site search and then they're building in their own kind of paid search functionality into there, like at least some of that is running through Google cloud, and they get like a piece of the pie somehow. I don't know.
Speaker 2:Yeah, I mean I think on the just like data consumption, they're gonna just keep, that's just gonna keep ripping in the background. But yeah, like it is. I mean, I think it was also like Google's shopping and retail strategy has just like, not, you know, they dip a toe, get a bit by a piranha, come back out like they've really tried. So many tried to be like a marketplace themselves. No, try to be like. You know they had like smart shopping. They were trying to sign like Walmart, best Buy and then like those big retailers kind of pulled out like Google's shopping page is often very like aside from Amazon and like Tmoo. And then there's just like weird random sellers, even often in their like press releases, like it'd be like okay, like who's like contributing a quote or something. It's just like some like weird merchant you've never heard of who just sells like custom hacks or something like that. It was like that's pretty weird. And yeah, they just really in a way, haven't had the appetite to get into just fulfillment, payment processing, all that stuff. It's like, okay, that's like the third rail, like that's where the power lives, like that's how it works, but like nobody wants to mess around and I think that's almost like Amazon's advantage every step of the way, I think, has been like Amazon has just like had the appetite to make these tough bets in fulfillment, in warehousing, delivery, media, like that's. You know, walmart is just so like nervous about like, oh, like Walmart should have bought Roku, should have bought Pinterest, like you know, just didn't really like think of themselves as a media player, whereas Amazon was just like, okay, we're gonna like, we're gonna take this step, and they kind of. Yeah, though, like Amazon has a lot of like bravery almost in just like making those bets, google, like I don't know, like we've kind of kicked around the idea of like you know, if the AI gets smart enough, maybe Google should just try and be like a shopping assistant or something like that. I think there's a lot of like browser extension and like email, kind of company honey and other services that are just that, would like try and be that like that's what they would love to be, I think, and it would make perfect sense for Google. But, yeah, like you know, they really have not seized the opportunity that seems like it's before them in retail media, like it does like retail. Like you know, there's an example of like damn, like they managed to just like live through retargeting, just dying and this retail media stuff kicking up just in time for them to be like, oh wow, we're actually perfectly positioned, we're great, some, that you spot too by an agency kind of like knocks off the company. That's like right in their rear view mirror, like hounding them and all. It's like oh, like okay, like they're holding company now.
Speaker 2:So all these other old companies are gonna come to like that kind of it all worked out nicely for for Katao, they're an interesting one. Like I've sort of thought of them as like this Schrodinger's Cat kind of company for a while, like they had all those short sellers. Like they were weathering this sort of fraud claim that an investment house was putting forward because they were shorting the company. And it was this question of like okay, are they like a profitable, sustainable business Cause? For a while, their market cap was like below the cash on hand. Like everyone just thought they were going to zero. It's like okay, this company is gonna emerge much stronger than they seem, or they're just dead. So yeah, like I think that this came out well for them.
Speaker 1:Yeah, we opened the box and the cat was still on it.
Speaker 2:Yeah, we were talking to like Megan Clark and who's she's the CEO there now, but she was kind of taking over, I mean, at this terrible time, like it was. She was going from Nielsen's watch business. At the time it was like, oh my God, like just going from the frying pan into the fire, like the least, like what would you not wanna do? And like the entire like world of online advertising. It's like, oh yeah, I would like, yeah, Nielsen's watch business and pretty up. So yeah, it was like, but you know, hats off to her, took the, took the tough job, like Amazon. It's like all right, I'll take this bite.
Speaker 1:Yeah, I mean good, good point. You mean their Google has kind of done these like half mentors and yeah, and they've never really gotten into those operational nitty gritty kind of areas. Yeah, they just never committed.
Speaker 2:They're like, okay, we'll see what it's like doing, you know, customer service and being a marketplace, and it's like, no, no appetite for that.
Speaker 1:This is all, like every everything that you've mentioned just hinges on last mile in one way or another, and they've never been a last mile company, and that you know, and that's that's a big topic, like people always saying, like, is Google trying to kill off agencies or blah, blah, blah. But the agency do awful lot of last mile work for Google and until they can, yeah, it's, it's tricky for them, but I mean, I think it's more like a human really like has a very strong role.
Speaker 2:Like, yeah, fulfillment, like, yeah, it's not a drone, it's not a machine doing it like you anywhere where there is like a human, that's a problem for Google. That's just like where Google Google kind of sees that and, I think, gets out of it and I think, like agency, like they don't want to get into services, like they don't want to be in services at all, like they used to have like measurement services I covered a Dometry which they bought, you know, and they were big in like, yeah, attribution services and they were like no, like we're just done Like all this, like human hand holding, like if it isn't, if it's not a machine that we can like program, this isn't something we could do via an API port. We don't want to do it and I think that that sort of is the opportunity for all these, you know, services on top of Google.
Speaker 1:Yeah, yeah, I mean I think they would love to be to just become really much more of a basically like a SaaS, like low touch SaaS kind of offering and and you know where there's basically a CSM like kind of function out there, and you know CSM.
Speaker 2:One too. Yeah, very easy, cause it's like, yeah, like, oh, yeah, we're getting rid of a lot of people. So that's what investors have wanted to see for the past like 18 months.
Speaker 1:Yeah and that and, but that's ultimately, you know, as a CSM, you drive featured option, you, you ensure retention and and that's not exactly like the relationship with agency is just, I think not, agencies are not Google's CSM's and that's that's where this friction kind of comes from. But yeah, oh, one thing I just want to mention earlier because you mentioned, like you were mentioning Pinterest, and I mean it just must hurt, Cause, like Bill ready, I think he was trying, you know, like his title was commerce and payments and and, of course, with his background, of course payments is in there. But you know, I think the buy on Google program, where they're really trying to switch to this, yeah, you know, kind of becoming our own marketplace, and I think that was largely his initiative and there could have been somebody really sweet there in terms of, like you know, getting Google pay prominently placed, whatever the case might be. But then just, yeah, seeing Bill ready move on to Pinterest and then Pinterest and Amazon getting cozy, it's his. I miss connections, miss connections.
Speaker 2:Yeah, yeah, pinterest is sort of like, it's sort of an interesting one because there's like a lot of shopping intent. I'm not sure what their sort of user levels and engagement are at this point I haven't really like checked in, but that was an interesting one, like Pinterest, clearly. Like Pinterest is the sort of retail media opportunity I think for itself. When their Amazon partnership was very interesting because it's like I mean it's third party visibility, like they're you know they're allowing Amazon advertisers to reconcile like a Pinterest ID to an open web ID if they're using Amazon. And I think we've I've seen that with the retailers. Like I've been surprised, shocked even like I would. I would have thought all these retailers would be going and like a Pinterest following, like the walled garden model, like fully, you know, fortressifying. And yeah, like we're seeing Pinterest say, like with other platforms that are, you know, not like the trade desk say, but like a, you know, a first party data operator that has an ad business that you can just sort of like plug into a privacy safe way, yeah, like we're going to allow it, like in Macy's, like I sort of was shocked to discover. Like Macy's, albertson's, walgreens I would have thought that the you know, like those are like conservative legal teams, like it wasn't. I wouldn't, like the marketing would be the hold up, but like I was amazed that it's like oh, wow, like yeah, they're going to allow the trade desk to reconcile, like a Macy's ID against an open web ID, and I just didn't think that they were ever going to do that. So so yeah, I didn't.
Speaker 2:You know, maybe that is like, maybe things will open up. I think that that would be like a really cool unlock for I mean certainly for like programmatic companies, but maybe for the, for these retailers, cause it's not, like you know, macy's just isn't going to, even if Macy's is huge, like you're not. How are you going to get like insurance companies Like there's? You know there's lots of interesting things, like Macy's has a wedding registry, there's all sorts of, you know, home lenders would love to use that or something like that, but you know they need something else. But they have, you know they have Ralph Lauren contacts, not ad industry. So I think that there is clearly this like huge opportunity there. But yeah, I don't know Like how, how, how much do we get in? And does that just keep opening up more? I'm not sure. It would be interesting to see, and it does sort of seem like Amazon is the the partner of choice as opposed to Google there. I think probably because Amazon just has the payment info.
Speaker 1:Yeah, I'm just keeping an eye on the clock, james, and I mean, before I, before I have to let you go, I'm wondering if there's, I don't know, is there anything that you're that you're kind of watching, that we haven't talked about anything that's underhyped, overhyped, that you want to make sure we cover?
Speaker 2:Well, I do think, on the, especially on the sort of topic of like human service and you know these AI products, there definitely is, and you know Google and Facebook having gotten rid of a lot of people recently a lot of like human services. I do think that with this big just like just whooshing adoption of Advantage Shopping, performancemax, there is this problem of like okay, we're letting these systems go, but we've got rid of, like the customer service and support. Like I think we saw that when the Facebook glitch happened and you know advertisers who spend tens of millions of dollars a year, agency buyers who spend hundreds of millions of dollars a year, just like can't find a person to get back to them. Like obviously, the you know the customer service chatbot solution instead is not solving anything. It's just giving you like a generic like, oh, we'll look into that. It's just like days of this. You know, I think it's the same problem.
Speaker 2:Like Facebook, google, like they got rid of in many ways, like the people who know how the platform works and know how to service these accounts, and so when there's this problem happens like okay, like you've leaned into PerformanceMax and Advantage Shopping for the optimization and performance and like you're seeing that. But you know, there is this flip side of the coin too, which is you're losing the human services even around that Like okay, when something goes wrong, you don't have a person at like Google or Facebook or Amazon, and it's opened up. Like Facebook. We've seen in Amazon too, like these like fraud and sort of corrupt schemes where, since there isn't human services, like these consultants and agency middlemen, like there's an actual, there's a huge value in just being like hey, I'm the one who has like a person inside who can get this ticket seen too.
Speaker 2:Like that's what it comes down to. Like these advertisers just can't get like a ticket seen too. And if you can get a person at Facebook to just look at this ticket and be like, oh yeah, account approved, yeah, we shouldn't have like suspended this campaign, it's a one minute fix, and like people were paying 10,000 bucks a pop for something like that. And yeah, like these are just sort of things that open up because, yeah, like that's what I think of. It is the flip side of the coin of like these PerformanceMax, oh, these like benefits, like okay, you're taking this other stuff too, and just to be very like cognizant of the whole picture of what like adoption of these sort of machine learning led products is.
Speaker 1:Yeah, I mean I think there's an analog to the offline retail world where, you know, people are starting to get pretty frustrated with the customer experience in stores for a longer time now. But you know it's only self-checkout and it's so hard to, you know, get a hand reaching something on a high shelf or if you have a question about how, like which product to buy or whatever the case might be. So I think we're just seeing like a deep population of commerce, you know, like online and offline. So I totally hear you on that. Well, thanks for I don't know thanks for sharing your opinions and experiences and ideas here. Just wondering if there's any thoughts you have or where we can find you online.
Speaker 2:Yeah, I mean you could find me on Twitter always, obviously read ad exchanger and I guess if we're doing prologs, we do have programmatic IO coming up later this month look into it or in a month in New York. So you know I'll be there if you are and definitely if you have something interesting, like most of the interesting, like really cool stories, and you know the background that I need comes from, like people you know. I just, oh, I make golf clothes, I make custom. You know I'm a small personal like Shopify and Facebook merchant, you know. So I'm just sort of give the shout out to your DTC company mid-level marketer Like you have the interesting information and perspectives and if there's something you see that I should know about, I mean hit me up on email, james, at AdExchanger, or Twitter or Signal if you're not comfortable sending it on Twitter, which I hear more often now.
Speaker 1:Yeah, I believe that. Yeah, well, dms are open and yeah, I mean, I've chatted with you before, james too, and I'll always really great to speak with you and I love your stuff, by the way, always has a humorous edge to it, I'd say, which I really appreciate. I also, by the way, shout out to the illustration on AdExchanger. They're just so awesome.
Speaker 2:Oh yeah, Neil did those for a long time. He hung up his hat like a month and a half ago. We've got a guy named Kevo, but yeah, that's always been. That started with John, the publisher, founder of AdExchanger. He had a cartoonist before he had. Zach Rogers was his first editorial hire, like 10 plus years ago, way back when, and it was that same guy, Nate forever. He was great to work with.
Speaker 2:I think it was like a cool little thing about AdExchanger, Like it's something that all these like I see, like DigiDate, AdEach, AdWe, they all did like brand redesigns and site redesigns and they all clearly were like looking at the exact same bit of market research, Like I don't know if they were all using the same vendor, but like everything's the same, Like the font's the same, the graphics, they're using the same kind of stock and it's been a cool little thing of like AdExchanger, of like oh, I need a little bit of like illustration for this story, shoot something in Nate. And it almost has this like camping nostalgic feel. I think, like AdExchangers really like unchanged style. So, yeah, no good shot out to Nate.
Speaker 1:Yeah, yeah, it feels like newspaper in a positive way and yeah, I think the whole. I think AdExchanger is a great looking feel in the writing too, so definitely.
Speaker 2:Yeah, right on check this out.
Speaker 1:Yeah, definitely check out AdExchanger, and thanks again, james, for joining us.
Speaker 2:Right on. Appreciate it, love the show.
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