Terry Kawaja

Serve Somebody.

You may be a business man or some high-degree thief
They may call you doctor or they may call you chief

Well, it may be the devil or it may be the Lord
But you’re gonna have to serve somebody – Bob Dylan

There was enough of a groundswell over last week’s post – Living in the Light – that I think it’s worth going a level deeper on the concept.  While last week I focused on the shape and demands on us as companies and individuals in current age of reckoning on privacy, fairness and data security, this week i want to get specific.

As I write this I’m at Terry Kawaja’s LUMA Digital Media Summit listening to an interview with author Andrew Keen (How to Fix the Future, The Internet is Not the Answer) on the very reckoning – social, political and commercial – that I called out last week.  One line from Keen is ringing in my ears right now:

Computers can’t have goals. Algorithms can never have agency.

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Over the past two decades we’ve allowed the capacity of technology to define its morality and mission.  Because it can, therefore it may, therefore it must.  We’ve used this libertarian formula to encourage ad tech for the sake of ad tech, data for the sake of data.  What has been largely missing from the discussion is human agency:  people following purpose; individuals setting goals; all of us making values-based decisions about what we should do, why, and for whom.

You gotta serve somebody.  Perhaps the most important leadership question in any organization is simply Who do we serve?  Or maybe that only sounds like a simple question.   I think at this point the vague platitudes of Google (Don’t be Evil) and Facebook (Bring the World Closer Together) have not been particularly helpful or instructive.  Instead, they (and we) should decisively make a call about who the ultimate customer is.  If there’s a jump-ball or a conflict of agendas, who do we side with?

Is it the consumer?  If so, we make very different decisions about privacy and value that we have over the past 20 years.  Is it the marketer?  If so, then we treat their money like it is our own and become advocates for creating ever more value for their investments with us.  Is it the shareholders?  The Venture Capitalists?  The Bankers?  Well, OK, but if you are making your decisions for them, then you are by default saying it’s not really about the marketer or the consumer at all.

Human agency is a tricky business.  It takes thought, consideration and values.  It takes discipline.  But agency is a quality that can only devolve to us humans.  We are the only ones who can choose.  And it’s the choices we make as leaders – not the power of the technology – that will create the world we’ll leave to our children.

Life Beyond Swim Lanes.

Life Beyond Swim LanesTwo years ago in this space I posted some thoughts on how the media and advertising world was getting curiouser and curiouser (“Crossdressing,” July 2014); how publishers were running creative studios, agencies were taking positions in media and marketers are becoming content producers. Thing have only gotten curiouser still.

I thought about this in light of the recent Publicis Groupe reorganization.   It seems that PG is doing what big agency groups do when bad things happen (like losing major business from Wal-Mart, P&G and Coca-Cola); they’re shuffling the org, merging a few divisions and creating some new agency and service brand names while retiring others. But while some of this may be window dressing, there is a profound identity crisis afoot that challenges us all to rethink our roles in the marketing mix.

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Not too long ago, one could look at Terry Kawaja’s LUMAscape chart and say “that company is a DSP…that one is an ad server…and the one over there is a trading desk.” But that all seems quaintly anachronistic now. Big agencies are spinning out their own ad tech companies – Xaxis, for example – that look a lot like next generation ad networks. Companies that once positioned themselves as disinterested ad exchanges are now offering a range of tools and services to work the system. Other firms – the artists formerly known as SSPs (sell-side platforms) – now offer convenient services to the buy side as well. Fluidity is the name of the game now. But the danger is that a company that can be anything to anyone can easily end up standing for nothing at all. So how then to understand your place in the world and create a leadership vision in such a muddled, asymmetrical landscape? I believe it comes down to a handful of questions:

Where is the market underserved? What do we believe marketers and media companies deserve that they are currently not getting?

What non-obvious problems is our company uniquely qualified to serve?   What opportunities are we in a good position to help the customer explore?

Where are the gaps? Where do the handoffs and connections too often fail in current processes?

Once you and your team have really explored these questions (there are no quick answers), it’s best to assume no identity at all and instead work backward from the potential opportunity. That’s right: stop explaining how you’re no longer a DSP or that you only used to be a trading desk….nobody cares. Self-classification is the quickest path to marginalization.

The most successful companies in our world have always rejected labels, crossed borders and connected disparate ideas and markets. For others, it may just be that your box on the LUMAscape has turned into a prison cell.

Six Questions for Terry Kawaja

Six Questions for Terry KawajaLUMAscape architect and dynamic investment banker Terry Kawaja is joining us at The Seller Forum on March 12th to talk about the consolidating video marketing world. To prep for his talk at the Forum, six questions:

 Is the Video LUMAscape starting to significantly consolidate? Some examples please.

We’ve seen 29 transactions across the Video LUMAscape just in the last 18 months starting with Aol/Adap.tv. These transactions range from content plays (e.g. Disney / Maker, Amazon / Twitch and AT&T / Fullscreen) to monetization platforms (e.g. Comcast / FreeWheel, Facebook / LiveRail and Yahoo / BrightRoll). These deals are reflective of the continued growth in digital video but also the coming convergent TV sector.

 Do all those YouTube videos help Google run the table and own web and mobile video or is there hope for others?

Video does not quite have the same network/scale advantages of search so it should proliferate to all publishers. YouTube ‘s strong position (nearly 40% of all video views in 2013) has new competitors (Facebook, Amazon, Vessel) and we will likely see the viewership splinter over time.

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 What’s surprised you most in the video picture of the last 12 months?

The pace of Facebook’s growth has been staggering and surprising: in October 2014, Facebook actually saw more video views that YouTube. YouTube is more akin to a portal (and people don’t navigate to portals) whereas Facebook’s video discovery is in the feed and shared socially. This will be interesting to watch.

I’ve heard that those crazy young people are streaming their favorite shows over the web now. Are we going to show them commercials like we do on the web or like we do on regular old TV?

The TV ad experience and inherent value proposition is based on interruption. Viewers put up with (or ignore) ads in return for their desired content. I believe that this value proposition has to change in a mobile context and that may threaten the mobile video pre roll or interstitial. Ad creative has to be better (a good thing) and the value proposition may need to change to facilitation, not interruption.

 Deal that looked big but wasn’t? And under the radar deal that’s really significant?

So far the $45 billion Comcast / TWC deal looks threatened. I mused that Comcast could have used the same $45 billion to instead buy a basket of tech unicorn startups that included Uber, Dropbox, Snapchat and Box. One year later, the TWC deal has gone nowhere and the basket is now worth over double! I think the Telstra / Ooyala deal, while under the radar, is interesting because it represents a new entrant buyer (in this case, a monopoly foreign telco) that has set its growth sights on digital video and has more deals to come.

When you did your cameo on Mad Men was Jon Hamm nice to you?

Unlike the character he plays, it turns out Jon Hamm is a super nice guy. He treated the cast and crew very well.

There are just 15 open seats left for The Seller Forum on March 12th in New York.  If you lead a national media sales team, you won’t want to miss key insights on video, viewability, talent, first half outlook and more.  Request your invitation today.


When the Music Stops.

When the Music StopsRecent industry rumblings describe widespread confusion about the many ad technology players crowding the landscape today.  More ominously, we’re hearing about the bloodbath-to-come when consolidation strikes the ad-tech sector.  Perhaps the only thing surprising or disturbing about either of these stories is that they would surprise or disturb anyone at this point.

Digiday’s recent multiple-choice, ad-tech quiz challenged industry know-it-alls to guess which tech vendors made which claims about themselves.  I’m pretty sure even the companies’ own marketing teams couldn’t have passed the test, since the slogans all played out like some bizarre Haiku competition in which all poets had to use the same half-dozen words:  “….platform…leading…real time…programmatic…transparent….”  There quickly followed Jack Marshall’s warning that the ad tech shakeout is coming, conveniently titled “The Ad Tech Shakeout is Coming.”  According to Jack, once-plentiful VC money is drying up and many of the big suitors – Google, Yahoo, Facebook, Microsoft, Amazon – have already chosen their ad tech prom dates.  Now where have I heard this before?  Oh, yeah!  From LUMA Partners CEO Terry Kawaja:  the entire reason he created the now-ubiquitous LUMAscape chart was to illustrate how wildly-crowded, incrementally-absurd and ridiculously over-capitalized the ad tech M&A market was.  And now it seems the music might be stopping soon and there aren’t so many seats left to grab.

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So what’s an ad tech company to do?  Well, first, nobody’s asking me for my advice; I’ve never spent a day managing a startup company.  But I do talk to a lot of people in this world and I’m a pretty good listener.  So for whatever they’re worth, here are a few suggestions for ad tech players looking to survive the impending chill:

  1. Figure out who you serve.  Fast.  Hedging your bets by trying to simultaneously serve every possible customer who could ever buy anything from you is no longer viable.  What used to be “versatile” is now just “unfocused.”
  2. Fewer logos, more activation.  Every ad tech player has a PowerPoint slide jammed with “partner” logos, but it’s debatable how much partnership is really going on.  Just because you dropped a tag or pixel in their stack doesn’t make them your partner.  Get focused on relationship yield and how you’re going to truly activate (and monetize) your best customers.  Then stop talking about all the others.   Nobody believes you anyway.
  3. Focus on the experience.  You might think it’s all about technical superiority.  And you’d be wrong.  Most of your potential “partners” are probably just trying to keep up with the technical jargon and nuance.  What they remember – and what they pay for – is a superior business experience.  Get stuff done.  Keep promises.  Anticipate.  Advise.
  4. Start with the customer and the problem.  Throw out all those “who we are” slides leftover from your VC pitch deck.  On slide one, tell the customer what you know about them. On slide two, identify a problem you think they might have.  You may think you have to first introduce your company and give them context but, again, you’d be wrong.
  5. Run it like you plan to stick around for a while.  You just might have to.

Slicing the Bean.

There’s an old black and white cartoon from the 1930s that has two hobos settling in for a meal together.  After they set out plates and tie napkins around their skinny necks, they attack the main course:  a single bean, which they carefully slice in half and eat rather contentedly.

I’m reminded of this image when I see the online ad landscape slide created and popularized by investment banker Terry Kawaja of GCA Savvian.   Terry graphically and articulately lays out the dozens of sectors and hundreds of companies that make up the service and data chain between the marketer’s online ad investment and the dollars gathered by sites.  A central premise in his argument is that this process middleware (my term) is severely overcapitalized, and that the players there are all in competition to further dissect the relatively paltry online display space of today.  Like the two cartoon hobos, they’re not finding more food, simply making a big show of slicing the bean ever more finely.

I think that in our rush toward creating ever more process intelligence (data) and efficiency (targeting) we’ve gotten a little lost.  Investors,  marketers, agencies and media companies have stopped asking a very fundamental question of each new entrant into the already-overcrowded middle:  “How is what you do going to create new online wealth?”

It’s as though we all took the wrong lesson away from the record success of Google and the inevitable success of Facebook.  Each of them created something of value that was fundamentally different and new, something that spiked usage of the medium (Facebook driving massive, always-on usage)  or that brought significantly more dollars online (Google’s self-serve buying model aggregates zillions of dollars of mom and pop spending ).

The industry doesn’t need one more data source that’s going to refine targeting by a quarter of a point.  Nor do we need another technology or platform to shave a nickel off the CPM.  We do need great companies and products that are going to create new hours and new dollars in the space. There’s a time to sow and a time to reap.  The time for slicing up the bean is over.