Interview with Adtaxi VP of analytics Brian Kroll on the latest in Digital Marketing and Advertising Trends and Changes

TRANSCRIPT:

Darius 0:01 Welcome to the retail tech podcast. My name is Darius Vasefi, producer and host and this interview is being recorded on clubhouse and will be published on retail tech podcast.com in a few days.

Today, I am speaking with Brian crawl, VP of a company called ad taxi. And they are an advertising agency. So we're going to be talking about some really important topics including the iOS 14.5. Privacy changes, and then the impact on e commerce. And just in general, what Brian is seeing change since last year, how are you today, Brian? I'm doing great. How are you doing? I'm great. Thank you. Thanks for joining me. So Sure. So let's, let's start by talking about maybe a little bit about your background, how you got to, I guess be here at the Add taxi, and then what add tax he does? And then we'll get into the other conversations.

Brian Kroll 1:16 Awesome. Yeah, well, so my background, I've been in paid media sales for a while I've had many, many, I guess like careers, but for most of my careers have been in paid media sales. Starting out in like print advertising way back in the day. And for for the sake of knowledge here, I'm in my late 40s. So print was pretty big back when I was still still pretty big back in the late 90s. But I moved over to digital side. And for the last 10 years or so I've been with a company called add taxi and taxi Comm. We are a sort of a strategic paid media placement agency, we're all digital, and we work with sort of all the sort of main platforms. So we run paid search ads, paid social ads, through Facebook, Instagram, Snapchat. And then we also do a whole lot of programmatic primarily through the trade desk, which is our DSP of choice. And I'm the VP of strategic accounts. I'm involved in a lot of sort of sales, but also where a lot of hats to do a lot of sort of, like background, tech and product work on our on our at our company as well.

Darius 2:30 Okay, good. Yeah. Yeah, that's, that's a good, good primer. So well, you know, we're gonna get right into it. The question is, you know, the iOS 14 14.5, privacy changes, which has have caused, you know, a lot of problems. And of course, it led to the public fight between apple and Facebook. And so maybe, if we can go through and just give us a background on that, and maybe tell us some of the details of like, what the actual changes were?

Brian Kroll 3:07 Yeah, you bet. So it all kind of started in June of 2020, Apple's worldwide developer conference, they, they announced the release of iOS 14, which is, you know, their operating system for all of their mobile mobile platforms, basically, for you know, anything that you're doing on your phone, tablet, etc, iPads. And one of the biggest changes that they announced was that iOS 14 was going to be all about privacy. And you probably remember seeing some of the commercials that they were putting out where they were investing this in, you know, traditional media, where the guys have a guy on a bus saying, like, I searched Divorce Attorneys 14 times a day, or whatever it will be, and they're just kind of making, trying to make fun of it to get people to pay attention to basically like, what, what, what are being tracked by phone. And then the whole, the whole concept was, you know, for them that it's all about privacy. And what they what they did was they had sort of a couple of different releases. And they ended up pushing things back, because then when they announced everything at the developer conference, the biggest change was going to be what they eventually got released in 14.5, which is something called app tracking and transparency. And essentially, what it does is it gives consumers a choice to basically a through sort of like their sort of app, sort of privacy labels to understand what apps are tracking about all of us when we're on our phones. But it gives people a choice to basically ask the app not to track and it was something that was kind of running in the background and in when they finally released 14.5 5.1 actually, when they made this sort of mandatory, anybody, any app that was on in the Apple Store, was required to sort of launch launch to the sort of like modal prompt that would say you can kind of choose Is what you wanted to say on it as an app developer, but you know, essentially, it was do you want to allow this app to track you? Yes or no? So allow tracking or don't allow tracking and some some apps did, I think a good job of it. Twitter had something you know, talking about, like personalized ads, you know, you want to keep personalized ads, or do you want to see less relevant ads, there's i thought was kind of cool. But basically, that was the gist of it is, you know, you do want to allow all of this major tracking that's going on, or do you not, and if consumers opted out of tracking, it had made ramifications for the data that could be collected and passed back to, you know, either ad platforms or to the the developers themselves. And one of the main things that it was, is was passing that back was when let's say I'm in an app, and I click on an ad, most ad servers are going to have a couple of what's called like post backs. So you would post back with somebody clicked on a link, it would go directly to, you know, obviously on click out and go to the website for whatever the ad that was, that was promoting, you know, pick, pick any example, I click on an ad or go to the website, when you would make that click, it would send an additional array of tons of different kinds of information about the click on that ad. And what Apple's App tracking transparency did was, if somebody opted out of tracking, it limited severely the amount of information that could be passed back from that link, click. And it also limited the amount of time in which that information could be held by the by the browser or the user agent. So on your iPhone is generally Safari, it used to be that it could Safari could hold it for as long as Safari wanted to or as long as it could, sometimes as long as 28 days is sort of like the standard. But it basically said you can't send anything, you have to wait at least 24 hours for for sending it and you have to send it both in seven days, otherwise, it's lost. So what this this change had a massive impact, especially for Facebook, because so many people interact with Facebook through an app, most of the Facebook interaction is through an app on your phone or on your tablet, some people obviously still go into the browser sort of the old fashioned way. But most of the types of app and these changes caused huge disruptions to Facebook in terms of what they could track and what they could not track. And what also you could report out on in terms of, you know, advertising performance metrics, if you were running ads on their platform, so it was a it was sort of like a seismic shift in terms of what could be tracked and what couldn't. And it prompted Facebook to make a ton of changes in their platform to try and deal with it as best they could once they kind of realized, I think the the scope of the meteor that was coming at them.

Darius 7:52 Okay, so to understand the changes a little bit better, one of the things that I read was that the apps could actually track which other apps or websites you went to, on while that app was open. Is that accurate? I don't know. I don't know if I actually read that correctly or not. So maybe you can help with clarifying that for me.

Brian Kroll 8:19 Yeah. So yes, and so not to get like overly technical. But depending on the app, they definitely are tracking where you're going. And so like, let's say that I'm on Facebook, in the old days, anything that I go on Facebook, and I click on an ad, or I click on a story or click on anything, when I'm in the app, it's pulling up that browser user agent. So they basically they know where I'm going, where I'm reading and everything else. But because of the sort of pervasiveness of the facebook pixel, it, it works, I think largely as like, think of it as like a signal that's that can be picked up from just about anywhere, there is another facebook pixel, whether I'm in my own ad account, or somebody else's ad account, whatever it may be, the facebook pixel is sort of ubiquitous. And if they see a signal coming in, from somebody where I'm showing up on on this app, or wherever, then you would know that if I'm on an advertiser's website, Facebook knows that like, hey, or any any website knows I'm from an advertiser. If I go to, you know, Bed Bath and Beyond or something like that. They've got a facebook pixel, their Facebook knows who I am. Because I'm logging into the app, they recognize sort of my profile my browser, and they know where I'm where I'm going anytime. So if they have if they asked the app not to track on that device, it severely limits the sort of data that's passed back because they're not able to sort of say, like, you know, hey, well, this, this, this user ID or this device, Id ended up going to multiple different sites or it could be an idea and that's that's kind of how like broadly like they're able to infer not only like interest or intent But also that's how it works from the standpoint of like, like a remarketing or something. So like, you know, if I, if I'd been on, on on a website and I was the advertiser, same bed bath me on as an advertiser and I wanted to remarket somebody who was looking at something, then you were able to serve ads to those people sort of wherever they go across the open Internet. And that this this change dramatically, I think impacted how how remarketing could happen, whether it was on Facebook or off Facebook or any other anybody else whether it was, you know, for merely dealing with in app advertising. And so it had a kind of a massive, massive impact there.

Darius 10:38 All right. So remarketing is the same as retargeting, right? are you different? Is it okay to say, okay, that's that's how I was using it? Yes. Okay. All right. So, let's see the other question that I had. Was that, is it correct that this ability was already present for users, but it was just hidden so far back? That it was just hard for people to actually see it. And now, with the new change, it's right there. Like when you actually open the app? Is that correct or not?

Brian Kroll 11:16 Yeah, so you, you did have the ability to sort of like opt out to a degree from what you wanted to see from Facebook or from from anywhere. But it was, you know, I don't I'm not trying to just like pick on Facebook here, but they're probably one of the most impacted, I mean, Snapchat was impacted. Lots of other folks have been impacted by this as well. But it's, you know, there, there are ways that you could do this. And I think sort of Apple's main argument for doing this was they wanted to sort of bring everything to the forefront, and give users control over their data. This is, it's kind of an interesting juxtaposition, because I believe that, you know, being in this industry for a long time, the sort of value exchange between consumers, and the content that they're reading, or, you know, like their, what they're doing online, has never really been, has never really been explained very well by the advertising industry, where it's sort of like, you know, hey, you can you can visit the site for free, you don't have to pay anything to go on to cnn.com. Or to, you know, ESPN or whatever, I'm sure most everything not to, but you don't, you don't have to pay anything to go there. And these are supported these, these websites are supported by ads and coming from, you know, like the newspaper publishing side of things. Local journalism, 100%, supported by ads, especially those websites, so like this change, has had sort of like a major impact, because a lot of people don't necessarily want to see ads, but they don't want to give up the content. And so I think part of what this change is doing, which is interesting, is is sort of letting people know that, you know, hey, this is how you're getting this content for free. Are you do you want to see ads, and only you're gonna see ads anyway, do you just want to see relevant ads? Or do you want to see random ads that have absolutely no relevance to whatsoever and are potentially going to damage your, your browser user experience? So that's, that's been that's been that's been really sort of like one of the more interesting, I think, impacts, I guess, of the change,

Darius 13:20 and that relevance is really a subjective thing. I mean, if you can, can you like measure prove to me, as a user, that what you're showing me is more relevant than what it was before?

Brian Kroll 13:37 It's hard, I think that like measuring relevance is generally on interactions. So you know, like, if you were to look at it and say, like, Okay, well, you know, Brian is on this website, and he's clicking on these ads, these types of ads more than than these other ads, you could try and get an idea of roughly like, what what I'm interested in or, you know, not based on like, first party data that like that a publisher might have, but also third party data on the entire data ecosystem is just incredibly vast. And like, it's third party data, and this gets beyond just the whole iOS thing. But more along the lines of what Google's talking about with the deprecation of third party cookies in Chrome completely, you know, sometime next year, two years from now, if they give it a stay of execution to next year, two years from now, but it's, you know, all of that data is used to inform decisions about which ads to show people and it's leveraged in sort of the auction process, where, you know, advertisers will pay more for the what they believe is putting the exact right message in front of the exact right user at the right time using that data. And so the implications of losing some of those signals are that some publishers that rely heavily on that are probably going to lose lose money, they're still going to show ads, but they're just not going to get as much revenue from those ads, and also the advertisers, in theory, may not get as much benefit from those ads, because I would be willing to pay a higher cost per 1000 in terms of like a CPM for my bids, if I was going to get a lower cost per acquisition. So it's something where it's, you know, just having it's, for about two to three years, I would say that, being a digital marketer, we were kind of in the golden era of having whatever data that you wanted, what you want to do with it now, right or wrong, that's kind of the way it was, we're kind of going back to the older sort of methods of how do we measure things now, when you have some signal loss, and you may not be able to measure everything you used to be able to measure, you know, with the incredible granularity you had because of some of this, but it's, it's forced us back into, you know, doing better modeling and better forecasting, outside of just kind of using the platforms. But as the platform has evolved, it's kind of been like a race to the bottom where they've set up smart bidding, or they've set up, you know, auto optimization, jungles using all this data that was almost impossible to beat on your own without having direct access to the bidding system. So it's a it's definitely sort of been like a very huge change in terms of how the industry I think, is adopting to putting the right ads in front of people and measuring the impact and success of that, and then how do we make optimization choices from an advertising agency perspective to get the best possible value for advertisers?

Darius 16:35 Okay, yeah, I mean, I think that, that the current topic of relevance is, is probably a big one. And it's, it could take a while to, to, to discuss. So now, let's talk about, well, something else you just mentioned is I've also heard this phrase, the death of the cookie. What's that all about?

Brian Kroll 17:01 So it's something that like, Apple already did this a while ago, and Safari, but basically Safari, sort of, by default, now blocks, third party cookies, which will be essentially the cookies from the difference between first and third party cookies. If I go to a website, a web, like I say, I go to CNN example, CNN could drop a cookie down to know that like, Okay, I'm logged in, I've got a profile, I've customized my, my experience to know like, where, how I want to see my news, etc. That'd be like a first party cookie, a third party cookie would be something where, let's say I was in market for, you know, refinancing my home or something, and I went to a lending site. And I was playing around to sort of see, like, you know, what rates are out there, that lending site might sell that data to advertisers. And advertisers might say, like, Okay, I'm a, I'm a bank, I want to target people who are in markets refinance their home, and I want to target them sort of wherever they go across the web, that would be more like a third party cookie, if I was on CNN, and now, you know, like, whatever it would be pick, pick any, any bank that does mortgages, they are going to, you know, they would want to try and target me based on that sort of, like third party data, even though unless you had insight, the that would go away, in the sense of, you know, how that how that would work from a cookie perspective where they wouldn't be have necessarily that amount of targeting. But it also really impacts the metrics for, for optimization, because the way that most ad platforms are tracking conversions is there's a plan, there's a, there's an advertising pixel or a cookie, essentially, from the ad platform that is basically hitchhiking along with all those ads. And that pixel would then also get blocked. So essentially, what you have would be instead of like a direct click coming through, so what you would sort of see like Google Analytics or something, essentially, would wipe out to a large degree, Cookie based profiling cookie based, you know, attribution. And that was, that would be a big change. And there's, there's a lot of different sort of competing solutions that are out there to try and replace this. One of which is that the trade desk has been promoting, that a lot of folks have sort of started signing on to Is there a concept of like a unified ID, where they've kind of are developing a technology where it's not a cookie, but it's really something where like, you sign on with some sort of unique identifier that is then hashed and salted so that it's, it's not identifiable to me so like, let's say I had my you know, be crawdad taxi comm email address, and I use that as my identifier. When I signed on to to read content or something like that. They would nobody would be able to tell exactly like who I am other than the fact that it's like my unique identifier, and then that would be that I would sort of replace the cookie and that's kind of how it works. Now with most of the emerging media, like connected TV or streaming or etc, those don't have cookies. By default. It's all based around sort of like a, like a sort of some other type of identifier. Generally, it's like an email address. And so that's sort of like one of the ways that people are talking about replacing. And one of the other ways is Google had presented their own, which was sort of like a federated learning of cohorts, or FLC, for short. And their version was basically like, Hey, we were going to aggregate 1000 people. And we're going to make models and predictions off of the actions of those 1000 people to sort of keep it privacy safe and privacy compliant. But it's really all about just how do we keep things as private as possible. But then also, I think, in like the case of like, the unified ad 2.0, that gets back to the value exchange, where, you know, I'm giving you a little bit of information, that it's, it's not much, but in exchange, I get information, and like free browsing, etc.

Darius 20:52 Okay, yeah. So that's, I guess, was my, one of my foot. Next question was that what are the ad, tech companies or advertising platforms doing to, to, I guess, deal with these changes, and I think you mentioned a couple of them.

Brian Kroll 21:12 In general, those are some of the big ones. And I was gonna say the, the other things that Facebook is kind of doing it was he was they're setting up, or they already have, but like a conversions API, where people who on websites, it's, it's doing roughly the same, same thing, but it's transmitting hashed user data from let's say, I check out on the online site. It's hashes with data sent back to Facebook, so that they can say that, you know, they don't like it's not transmitted that knows that, like, I made the purchase, but it's associated with facebook, facebook profile, so the case that this person had purchased, they're looking to track things that way, too.

Darius 21:47 Okay. And I, I'm assuming that these are just getting like started, and will probably be other changes in the next couple of years.

Brian Kroll 22:01 Yeah, it's, I think that's it. That's, that's definitely very, very true. You know, I think GDPR coming out in Europe. So the general, the protections that Europe rolled out, or the EU rolled out, was sort of like the maybe the start of of all of this. And then in California, where I live, you heard ccpa, which passed a little while ago, there are other legislation just passed in Virginia. I think there, there's probably multiple different legislations that are passed to the basically like about consumers, and how that how you have access to their data. So I think we are going to see more changes as the as the future unfolds. And I think just as an industry, it's just something that we're all going to have to kind of roll with the punches. You know, there's, there's, the interesting thing about the traders solution is they're not trying to own it or control, it actually turned it over to a third party sort of independent governing body. And a lot of a lot of people are starting to sign on to that they have, you know, partnership, like live ramps, sort of thing signed on a little bit, and then some of the large holding companies on Madison Avenue are signed up for it, too. So it's gonna be interesting to kind of see how how things move and evolve. But it's

Darius 23:22 never a dull moment. Definitely a dynamic situation. Yeah, I mean, I can tell you from a user's, you know, perspective, myself, I hate this GDPR notices that come up on every frickin website every time I go there. It's just so annoying. I mean, and I mean, it, this is supposed I hope they're working on coming up with a better way to do that. But it's just like, you know, it's ads work on the side of on the part of the users. So, I don't know anyway, so let's, let's start talking about how companies are dealing with this and how agencies are actually changing some of their tactics and procedures, processes to adjust and adapt to these changes, and how those are impacting like ecommerce companies or retail companies that are acquiring customers online.

Brian Kroll 24:20 Yeah, so there's, there's been a ton of change. And I mean, just kind of focus on the Facebook side, since they've they're one of the sort of behemoths of advertising and for good reason. I mean, their ads have have worked really well for a lot of marketers.

Darius 24:33 Now, just just to clarify by Facebook, you're combining Facebook and Instagram or just right,

Brian Kroll 24:38 yes, sorry. Thank you. Sure. Yeah. So wherever you can buy through the Facebook ads, business manager, which is like their their ads platform, so kind of wherever you can go with that. Yeah, it's had some pretty, pretty interesting ramifications. First off, when you went from let's say, you're a marketing manager and you were reporting up to a certain level of return. On adspend, or return on investment to your to your, you know, executive team or whatever. All of a sudden, Facebook made a sudden change where they eliminated a lot of the metrics used to be able to look back 28 days, if you wanted to see, you know how far back it would be for somebody were to, you know, make a click and convert, which is arguably a long time, but it was that was sort of like the max window that they had both for a click and a view. And suddenly they change that, where it now the maximum you could look back was seven days. And that would be on a click and one day on a view. And if people opted out, then you didn't have the view whatsoever, because of Apple's changes. And as much as I think a lot of marketers would love it, if everything was 100% Click based, and you could see everything going through a click. This is not the way that consumers work on the internet, a lot of times, I may see an ad, and I may think about that ad and I'm like, hey, that actually is cool, I dig that process. But I was in the middle of doing something else, or I saw some news on her right to go cook dinner, who knows whatever it would be, when I go back onto Facebook, or I go on to any other platform, the odds of that ad being there probably slim to none, unless I spend a lot of time looking for it. As a consumer, it's just easier to just say, Okay, I saw that company, I'm just going to Google them. And I'm going to convert by by I've done. So in the sense of, you know, what we think we're like attribution for marketing. Prior to this change, if I did all of this on my Apple device, you'd be able to see that, you know, somebody was first exposed to an ad on Facebook and later converted on Google or something like that. But now it's sort of you there's a sort of a wall in the middle. And so Google organic will get the credit, and you're not going to see any results from your ad if I had opted out from Facebook tracking. So as a marketer, you're thinking, why that doesn't work, or that's not working as well as it used to, even though it actually did. So connecting the dots is sort of a big challenge there. The one of the other big challenges from retail is going to be on the remarketing side of things. And also on the consumer side, too. So I know, you know, putting on my consumer hat and being in this business, if I ever purchased something, and then I still saw ads and somebody was retargeting The thing I just purchased, I would get frustrated think, okay, you're kind of not, you know, should probably get a little bit better at what you're doing. Because you should be suppressing, I already purchased that you're wasting your money sending me an ad showing me an ad or something I just bought. But that is now going to be a lot harder to do, because of the sort of missing data signals where consumers may be seeing things because we don't know that you didn't just already purchase it where it would have been a complete one to one tie off previously. Likewise, it might be something where from like a remarketing standpoint, I'm maybe seeing ads or prospecting ads that are different, that are less relevant than when I was thinking because there's just a loss of signal data there. So there's, I think, a lot of challenges where revenues may not necessarily have dropped off in terms of if you're using Google Analytics to measure your ecommerce revenue or store sales revenue. But the signal loss may not have had an immediate impact in terms of like, you know, 30 days or so. But a lot of people I think have struggled a little bit in now that the signal loss is more apparent, and that more people, it also had to do with adoption rates, not everybody immediately upgrades to the very first or the very latest version of software for for an app. And so when really like 14.6 and 14.7 came out, those had more automatic updates. We started seeing, you know, 5060 70% of our advertisers, traffic was now from iOS traffic was now on that version. And that's when things started to get a little bit more challenging. So as you had more potential for signal loss, you have, it just makes it a little bit harder to make decisions, you're not as fully informed in terms of like what you would do from an advertising marketing perspective. And so it changes things a little bit in terms of what just the overall effect of this, of how the ads can do from targeting. And you know, a little bit more into that let's not yet you're away a little bit from the precision is forced a lot of people to make changes to how they sort of rethink their optimization and how they rethink how they're communicating results and success, up to up to management or how agencies are doing it to their clients. So it's definitely been a bit of a challenge, but it's not something that's insurmountable. There's still

Darius 29:37 it's not going to stop the ad agency or that business. Ad business credit. Yeah. Okay. So, if a so if I'm a ecommerce player, or I have a company, so is there a difference between ecommerce and for example, like software as a service type businesses and how they're impacted or

Brian Kroll 30:00 Yeah, people who are measuring app download campaigns, you know, anybody who wants to try and get like, you know, those types of things definitely impacted ads, if you're, like SAS complex true SAS, where you're like b2b selling something, it's it's any type of like a lead gen campaign. They're all impacted in similar ways just in terms of what can be tracked. But over overall, it's a, it's just been sort of like system wide, and it's not. And it's not just like online e commerce, offline e commerce as well. One of the great things and most amazing things about Facebook, because they know so much about all of the users and they know, you know, more or less, your frickin hopefully, potentially your true first and last name, but pretty good idea if your city forgot your zip code, state etc. If somebody has a CRM, it's a feature that you can use, we can basically upload offline CRM data into the platform, and they can match back offline purchases, to online interactions. And that's something else that has been impacted by this. Because if you have do not track, it applies across the board, not just online, or offline. So not just, you know, what you would see from just the pure ecommerce role as but also people who are optimizing for store visits or for actual offline transactions. That's, that's been impacted as well, too. So it's been it's sort of a sort of watershed change.

Darius 31:30 Okay, that's so that's interesting. So I guess previously, if I'm, if I'm understanding this correctly, I, I as a business website, or, you know, whatever, e commerce retailer, I could upload my customer list to Facebook, and then Facebook would display relevant ads, to those users based on their past purchase history from my database,

Brian Kroll 31:58 is that correct? You could do it, you could do it that way. So it could be you could upload that data and have it be something that you could target those people. So let's say I had a really segmented list of offline purchasers where let's just say hypothetically, like I'm a, I'm an appliance store, or something like that, where 95% of my revenue is happening in store where people prefer to come into the store to actually buy as opposed to buying it online, which is the way a lot of that that business still operates. And, you know, if I, if I had a list of people who, let's say, had purchased washer and dryer from me, you know, three years ago, and you know, I've had an inkling that they might be interested in purchasing a refrigerator or something like that, you could upload a list of that offline data and say, like, hey, these are the people who would purchase washer and dryer will serve refrigerator ads to them or TV ads to them, or whatever that might be. So there was that from a targeting perspective, but it was also from attribution perspective, where if I had served an ad to somebody, and sort of the reverse mechanism, right, so instead of using target people, you kind of go the reverse lookup away and say, all right, these are the people who purchase from me this last week, I upload the data to facebook, facebook then translates the offline data to their online profiles based on what they what they know. And then they come back through all of their ad logs and say, was this person serve any ads from this advertiser? And if so, which ads and which one should get the last credit for attribution, and they assign that and then, after you upload it within 24 hours, not only just the transactions, but also the revenue will show up in your app platform. And that was a huge way to make decisions on, you know, how I was, you know, like, what did I spend, and what was the true value of what I returned, not just for online, so that was also a huge change,

Darius 33:57 is his CAC going to go up customer acquisition cost for, I guess, brands or, you know, companies that are using paid?

Brian Kroll 34:07 You know, possibly, and this is, this is sort of interesting, I was at a trade show couple years ago before and COVID. And because of the way that all of these platforms, not just Facebook, but Facebook and Google and anyone who has a sort of like a smart bidding, they've gotten really good, as I was sort of alluding to earlier at identifying the people who are likely to convert and because it's all in auction system. You know, people can bid what they want for these different, you know, conversions. And so if you had multiple sort of, you know, competing, let's say, in market to buy a refrigerator or something, right, you have multiple appliance stores bidding on that data. what it's gonna do is it's gonna drive up the cost of those impressions of the cost of of those ads. So you we started to see I think, sort of increasing cost per acquisition previously, and I I think it's while it's gone up a little bit now, sort of having a little bit less of that race to the bottom is forcing brands to rethink strategy. And instead of relying so much on just the bottom of the funnel, where you're literally duking it out with everybody else who's just sitting at the bottom of funnel waiting, it's forced a change in strategy, which is, I think, fun to sort of learn about, like, how do we go back to the old school way of engaging people, you know, really, really thinking through the process of what are the types of messages, I want to I want to tell people who I would potentially want to convert, I think a lot of value that can be found for advertisers by moving up the funnel. And while the platforms may not necessarily like it, because you know, the the increased costs in the auction have probably definitely made all of them a lot of money over the past few years, they're still going to go, you know, money, it's just that it's going to change in terms of the number, you know, like their their average, CPM, or yield per user on the platform side is changing. So I think it remains to be seen what the long term play on that would be, if you're just sitting at the bottom of the funnel, yes. But if you have strategies to sort of move up the funnel, and do a great job of sort of engaging people and nurturing them, eventually down to the point of conversion, I think that that's there, there's a big opportunity for brands there.

Darius 36:30 All right. So we can take some questions, if anybody in the audience has any questions or comments, I'd love to hear it, please just raise your hand. So the next question I have is the pandemic, as I guess I call it is AP after pandemic versus BP, which is before pandemic. So if how has shopping, and retail from, you know, your point of view, what the data that you see, how has that changed? You know, I guess that can be as far as how companies are behaving, and then how consumers are behaving.

Brian Kroll 37:18 So we'll start on the maybe sort of consumer side, because that sort of has direct relevance to the company side. Obviously, when everything shut down last March, you know, in certain cases, here in California, we were, I think, one of the first ones where it's like, you know, essential only right, everybody was doing everything they could to find anything that they could get delivered online. e commerce was the rage. Most people have wanted absolutely nothing to do with going out and interacting with another human during, during the start of the pandemic. And I think that that really helped a lot of companies. I think that you know, the people who were set up and ready to deal with that, plus the businesses that were deemed essential businesses, reap the rewards, whether right or wrong, the companies that were not set up to deal with that really got pummeled, and some of them are no longer here, unfortunately. And so you know, if you if you're, if your business have really relied on brick and mortar traffic, and you weren't deemed essential, and you had no mechanism for people to buy online from you, but somebody needed something, and they're gonna buy wherever they can buy. And so I think that in terms of the business perspective, it forced a really rapid transformation for folks who sink or swim to a degree in some advertisers had, I mean, record yours, just absolutely record yours. And it's across verticals that you wouldn't necessarily think of, because, you know, people a lot, a lot of it actually was probably home improvement, those types of things, people are spending a lot more time in their homes. So you know, what I'm not I'm not driving anymore, I have to commute to work. I'm eating in I'm saving, I'm saving money. You know, I'm going to reinvest that in my house. So like that, that flourished a ton. All the delivery type businesses, you know, doordash, etc, that that flourished a ton. I think like, you know, your Airbnb, etc, those guys obviously flourished a ton. So it just kind of changed, you know, how consumers interacted. And, you know, I think if we're, you know, as we're sort of clawing our way out of the pandemic, I don't see a lot of that changing. I think it's sort of, you know, people have gotten used to the fact that, you know, I can get whatever I need delivered in while there is a certain, obviously satisfaction and going into a store and shopping. I think it's definitely changed how, just how consumers are interacting. And you know, if, if, if we were an on demand economy before, we are way Much more independent comedy afterwards. And it's, I think it'll give rise to sort of how people think about their business models. Now, do I have that option for consumers and consumers buying interact with me any which way that they want? Or am I gonna sort of, you know, be limiting access to them by just sort of small?

Darius 40:21 Right, right. That's a good, really good, good overview. Thanks for that. So we have a good friend of mine up on the stage, our visa, le. Le, Hey, how are you? I'm good. terriers? Hi, Brian, I'm doing great. How are you guys doing? Doing well, enjoying the beautiful weather?

Unknown Speaker 40:46 Absolutely, absolutely. First of all, I really, really want to thank you guys, for your time, all the great insight and information, wanted to get your thoughts on sort of a different marketing strategy and possible return on investment, the ROI out of these two strategies, given the constraints, this being put that we've been, guys have been discussing about how you know, the first party cookies third party cookies is is making it harder to track. For some of the startups or recently established businesses that I've worked with, the challenge is the original sort of data that they have either on their existing customers, or you know, that the people somehow they've had interactions is very, very minimal. I really want to know, your thoughts on the differentiation between an outbound approach or an inbound approach? Do you think it would make more sense to have more of an inbound approach create specific content that would be in a sense deliverable to a bigger masses of audience that you know, anybody would basically enjoy looking at and then cultivate the leads through that funnel? What would be the possible ROI of this compared to trying to get whatever information that's currently available to narrow down and have more of an outbound approach and trying to get in front of the face of the person who's most likely to purchase from you? love to know, your thoughts on this? Thank you.

Brian Kroll 42:23 Great question. I'm, I think it depends on the business. This, I think it depends on sort of, like, you know, I guess what kind of numbers we're talking about skill wise, or your overall growth. And then also, like, what sort of resource is that you have for content creation, or to sort of you know, that that whole nurture cycle, I would say, if you had to pick one or the other, depending on your sort of needs, I would I would go for I would probably say more of the the inbound route that you were describing of finding something that's going to resonate with as many people as possible, and then slowly, but surely, segment and nurture down different paths. Just that that that may have the best chance and sort of this, this new way of thinking about things to just to sort of get as much scale as possible apple at the lowest cost. But, you know, there's also no reason you really can't do both. It might be a good way, you know, from what you have to try and supplement things unless, of course, you're sort of resource constrained to try and get as much data as possible so that you can, you know, sort of supplement the to supplement the sort of earlier strategy with the with the more direct strategy, because it depends on the time to convert, right? If you have sales goals, and you know, I need to have a certain amount of people or a model that says I'm a startup, I have to have this many subscribers or users or whatever it would be, by a certain amount of time. You may need to sort of have a hybrid of the two. Because it's, it's it depends on sort of the time to the time to convert. So hopefully that helps, helps answer but I would sort of lean towards the prospect wide and shallow and then started going deeper. Were you were you starting to get traction? Makes a lot of sense. Appreciate Brian. Thank you. You bet.

Darius 44:19 Yeah, that's, that's actually a really good point, Ollie, because so as a business I'm faced with this myself, we haven't really started actually on the paid side too much yet. We're, we're starting on organic right now, but paid is something that I'm, you know, educating myself more and starting to plan. And one of my questions is that I mean, really the balance between the balance between, you know, acquisition, you know, from a paid channel, and then optimization on our own app or our own website. And I think this is a question is that are people actually paying more attention to optimization on their own properties, as opposed to optimizing on acquisition? And just traffic optimization?

Brian Kroll 45:17 Yes. 100%? Because it's not, you know, I think what? I've always sort of broken down online advertising into three sort of core principles, which is answering the questions of Who do you want to reach? What do you want to tell those people? And then what do you want those people to do? And with all of the data, the, the middle part of the equation has potentially been, you know, like, the creative messaging has possibly been overlooked, as has possibly, like, the onsite experience has, has possibly been overlooked, too. So because people were able to just deliver such hyper targeted ads that, you know, hey, I'm literally picking off all the low hanging fruit. And so I think that it's it's forcing, you know, as we go up funnel, we also have to think about, you know, sort of creative messaging strategy and looking at what's resonating, really, with each audience. But then also, what's the landing landing page experience? It used to be that the, you know, that was a big deal where we would, you know, AB test, landing pages, converting pages, it's, I think we're gonna see a lot more of that in terms of, you know, what's the right content that people are landing on, and they're just putting ourselves back more into the, as marketers back more into the consumer experience and trying to see from the outside looking in, as opposed to just being sort of, you know, stuck with him doing whatever I can, for no matter what I do, I just can't get a better return on my ad spend for this ad? Well, it's like, well, let's look at what what we're seeing and looking at the process of where we're landing people. And I think that's definitely gonna come back into vogue.

Darius 46:56 Yeah, and one of my pet peeves that I don't see a lot of ecommerce companies actually, especially smaller ones, pay attention is on enough investment into LTV optimization. I mean, I personally think LTV is the holy grail of the business. Yep. And, you know, you have all these customers, and people don't even have an account where people can log in. And they can upsell them in the account that they just like leave all of that data, for example, on Shopify. And never on Shopify, for example, I know doesn't have really a good, manageable account yet, maybe they'll they're starting to work on it. But like understanding what people do on your site, not just before purchase, but after purchase is a goldmine that I'm hoping that more people actually pay attention to that.

Brian Kroll 47:56 Absolutely. And to add to that, too, when you're thinking about like LTV, repeat purchase activity and everything, a lot of times, I think people will just immediately try and resell somebody, right? Okay, so you made an order, I'm going to wait exactly 30 days until I predict that your order is going to run out. I'm gonna hit you up again to buy more of whatever it is, I'm selling based on what it is that you purchase. And I'm not going to talk to you between now in those 30 days. But I think when you when you think about the concept of LTV and really driving LTV, you're missing out on a huge period of not necessarily trying to put an ad in front of somebody to get them to buy again. But you that's a huge nurture period, where it's your point, they're just like looking to see what people are doing on site. They're trying to get an idea of how can I talk to them to you know, they're especially if they're brand new customers, their first purchase, you're in the you know, the the testing out phase, right? What can you do to reinforce their opinion of your brand. And while they're thinking about possibly making another purchase during that timeframe, that is a goldmine that so few people even a think to explore or be effectively mine.

Darius 49:12 Yeah, I mean, I. So again, it's one of my pet peeves, and I love other people also spreading the word on that because people are just focused too much on acquisition, and then the pre purchase optimization. So So let's see what we're coming up on time. What else of importance in your opinion, did you find I know that you guys did like a recent Was it a survey or report that you published? He's a bad employee here. I don't remember. Exactly. And I may be I may be a bad interviewee and just throwing something in there that that wasn't But so let's, I mean, believe me, I've got like, I'm trying really hard to do the research before I get on the podcast. And I'm, this is like my hobby. So I could definitely be the one at fault here. So, but so let's do this, let's say for example, what is like if I am a, you know, so maybe I'll give you my own case. So we have a company, and we're doing something really new. And what this says is that we, our goal is to let consumers shop from local stores using live video. So we're building really like a discovery and commerce destination, that you can be anywhere in the US to begin. And you can go into our app, and we'll tell you, the stores that are around you, and which ones actually can have people in the store that can actually sell you. So we do a different type of lives shopping, selling, which is one to one on private, not like you know, QVC or what a lot of other companies are doing like Tick Tock or where you have one person doing a show and 1000 people watching. So we do private, higher price items, more considered purchases. And we are just getting started in Southern California. And we're going to expand out next year in the two other parts of the country. What and I'm like literally talking to different companies trying to put together a budget that I need to include in my fundraising process for growth on on the digital acquisition, basically, what are some of the things that I should really pay attention and have in mind, that might move the needle for us quicker, with less cost?

Brian Kroll 52:08 I work first off, that sounds like a really cool business you guys have working on so kudos to you for that. I would say the number one thing that I have found with really innovative breakthrough startups who are doing something that nobody's really doing before, is I would invest really heavily in video in terms of telling your story and explaining to consumers how exactly everything works. Like, you know, if he if what you just described, if you and I tell this gives us advice to like, you know, our strategists and everything too, but it's like, if you can't describe it, and say what you do, and you know, five seconds or less, you really need to invest in video. And I would say that, like, you know, looking at social channels, and you know, YouTube, things like that will be the places that I would, I would probably start in terms of like a paid media perspective. But you know, building up the content on the site to explain sort of like exactly how it works and spelling out the value proposition to people. You know, something that's just brand new, it's, you know, your video is the way to let people know what it is you're doing, and give them a sense of the experience without necessarily having to go through it. So I would say, you know, find a great creative agency who can help you tell your story that can help us sort of like think through that process and, you know, evangelize to consumers, you know, what it's going to be like, you know, what the experience would be like, and then from there, start pushing that out. And something like that could, you know, especially through those platforms, platforms, through YouTube, or through social can kind of take on a life of its own by potentially going viral from, you know, paid paid media ads, it could eventually sort of make their way that way. So that's, that would be my, you know, advice and sort of like a, you know, quick capsulated conversation would be this are really focused on on the video and the experience there. And, you know, just building the cost to the investors and say, like, hey, look, this is what we think we're going to need to produce all this content, once we have all of the different content. And I would build in a phase two for content, because whatever you learn from the first phase, then you can sort of, you know, iterate on that content and go go a little bit deeper next time around and say, Hey, this is, you know, this content work, this resonated, we need to kind of keep following this trend, because this is generating a lot more interest in this other content. And so investment in the content would be would be key. And then from there, start smaller on the ad budgets. But I guess depending on sort of what your goals would be. In just Southern California, you don't have to have a massive ad budget, but you have to have the content that's going to convince the Looks to to pay attention.

Darius 55:04 Okay. Yeah. Ali, I'd love to hear your, your thoughts to

Unknown Speaker 55:10 there. Brian, I love that advice. I love the storytelling concept of it, my thoughts are actually sort of in the same direction was thinking sort of parallel to what Brian said, you might be able to invest a little bit into influencer marketing. Because I think you mentioned you're kind of looking for more of a high end type of a clientele, for luxury items, from personal experience most of that category in terms of their behavior, they're very hard to convince to try something out for the first time, they I think, mostly their emotional reaction to these things is I really need to know that this is tested out, before I jump on board. So creating more of a social proof concept as the anchoring bias of your landing page, whatever other content you're creating, using influencers or having a lot of people that have already used this, in terms of telling that story. I think that could have a good impact of convincing the person to be willing to try your platform and as the path of least resistance for them to sign on and be on board with you. That's what came to my mind. Yeah,

Brian Kroll 56:25 totally, totally agree. I would just say the caveat on that with influencers, make sure that you have local influencers, that people who were or that have enough a local following that are gonna make it, move the needle. But yeah, I totally, totally agree. Like, I think that fits exactly in the line of like, you know, something that's new, nobody wants to be the first person sort of, you know, to try something. So, you know, if you, if you see a popular influencer, do it and they say how much they love it, then yeah, that's a that can do wonders to launch a brand.

Darius 56:54 Awesome. Yeah. I mean, that's what you both just said, content. So content is really the the foundation, right? Because you need that to do anything. And then, you know, I guess the influencers can actually help you create content, right?

Brian Kroll 57:12 Yep. Exactly. If an influencer sort of like records themselves going through the process, or talking about the process, a lot of brands that we've worked with have influencers that, you know, are a large part of their content creation, and it's authentic, for the right influencers. So definitely, definitely helps.

Darius 57:29 So that's, that's a really good point. Because like, you know, again, as far as like, really getting to the next stage for us, that's literally one of the things I'm thinking about right now, is that how do we get like good videos that explain what we do? And I'm not like, I think what we need is like real human videos, because our solution is all about real humans. And we have some really good shopping agents, we also, were all almost like, you can think about it like Postmates, but a lot more personalized. So we have some really good talent that we can actually put in these videos. So I think the they are the and I just actually had a meeting with that. influencer dotco today that I missed, I got pulled into another meeting. So I'm trying to educate so. So this is great. Well, I mean, all this tells me that I need really to ramp up finding a marketing whiz to come and join us. If you know of anybody who's looking or what might be interested, please let me know. Yeah, we do need like a marketing. I don't want to give a title. But almost like even at the co founder level, I'm, that's what I, I think this is like really critical for us. We've got the technology, our platform is ready. Our software is ready. We actually have paying customers, we're starting to work with shopping centers. So you can what we're doing right now is that basically the concept of shopping mall, you can book an appointment with one of our agents at a mall close to you. And we'll walk you through any store that you want, purchase any item you want, and delivered to you. So, so that's what, but I need I need somebody focused on on marketing. So anyway, this is the beginning of my advertising.

Unknown Speaker 59:27 I think you need to get a devil's advocate for your platform. That's for any startups, you really, really need somebody who's super tough on the idea. And if you can convince that one person as to why they should sign up on the platform, I think you can convince the easier users to to be willing to try it out. You really need a devil's advocate at this point, either as a marketing person or you know you if you can play that role yourself, sort of have that sense of empathy toward that person. And that's how your video content everything goes comes up. I think Next up great house. That's good.

Darius 1:00:02 That's a good Yeah, really good point. Yeah, I mean, definitely any startup person can easily be get drunk drinking their own, you know, magic tonic. You always need somebody to ask you tough questions. We. So that's like one of the things that we are doing right now is user research. And this is end user research. So we are actually spending a good amount of like resources on, on signing up users to just go through the experience and tell us, and we're getting like really good feedback. But some of it is also tough feedback, which I love, actually. So that's awesome. Awesome. Well, thank you so much. So Brian, where are you located?

Brian Kroll 1:00:51 I'm up in the San Francisco Bay Area in the East Bay.

Darius 1:00:54 Oh, okay. All right. Cool. I'm in Orange County, and I think Ali is. So Allie Alia has an agency also in San Diego, correct? Yep. Awesome. So we got the West Coast covered. Alright, thanks a lot, Ryan, for coming up. And, you know, giving us all this useful information and alley for great questions. I really appreciate you guys. Thank you so much.

Brian Kroll 1:01:23 Yeah. Thanks so much for having me. I really appreciate it. And it's been a pleasure.

Darius 1:01:26 I thoroughly enjoyed the conversation. Awesome. Well, have a great evening and hopefully we'll hear more good news from everybody. Sounds great, everybody, take care.

Interview with Adtaxi VP of analytics Brian Kroll on the latest in Digital Marketing and Advertising Trends and Changes

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