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The DIE (Demand Is Everything) Doctrine; 3PC Are Nearly Dead; Come Meet Us In Cannes
The DIE (Demand Is Everything) Doctrine
It is a matter of fact to say that publishers (specifically news publishers) are the “poor relation” in the digital marketing and media ecosystem.
It is a tough grind. From the collapse of a once-lucrative traditional ad business to the capture of ad revenue by the lower-funnel kings (Meta and Google), publishers are, to say it simply, struggling.
It is probably logical to assume that publishers are not going to be the best source of SaaS revenue for shiny ad tech vendors promising incremental gains in exchange for a monthly fee.
Publishers, specifically CFOs, want a fat cheque at the end of the quarter. There is a reason Teads is doing 100s of millions in revenue. It’s also why Outbrain and Taboola remain on publisher pages. They all bring the coin.
This doctrine applies to all ad tech businesses with a supply element. You need the demand to get access to supply. You only have to look at the fight between SSPs and DSPs for both demand and supply in the online video and CTV market.
SSPs, making a tilt at TTD and DV360, have signed trading deals with large holding groups. It is in their economic interests now to get access to supply.
That could take the form of guaranteed pricing for AG (Automated Guarantee) or, in the case of Programmatic Guaranteed, fixed CPMs for a “first look” at impressions.
It is for this reason that supply-focused SaaS are doomed to failure and will struggle to scale. Managed service is a requisite. You will die on that subscale hill without it.
The DIE doctrine applies to everything in ad tech.
If you are reading this and are thinking, “...shite, I need a managed service, but can’t actually afford expensive traders”, then this is a fortunate serendipitous moment in your long week.
FPC is investing in a business that has built world-class trading and workflow capabilities, executing across multiple programmatic platforms (DSPs, YouTube et al) and walled gardens. Think of it as your ad trading back end.
Managed service has a perception problem: nobody wants to be seen doing it, but you can’t grow revenue without it.
So why not untangle the trading mechanics from your media/tech offering, and use a “ghost trading” (using the ghost kitchen analogy here) solution.
If you are interested in learning more, reach out to us: email@example.com.
Google Pulling The Trigger
Google announced this week that it is not going to push the date on 3rd party cookie deprecation. It is going ahead as planned.
Insider’s Larry O’Reilly reported on the story this week - highlighting that despite Google’s assurance about the 3PC replacement, the industry remains unimpressed about the proposal:
“Google has noted in its own progress reports that website owners using these technologies could experience delays in loading up user information. This could hinder publishers' ability to effectively run ad auctions, which take place in the milliseconds it takes for a web page to load, and could harm their revenue, Rosewell said.
The nonprofit organization Prebid — whose members include the adtech firms The Trade Desk and Microsoft's Xandr, and publishers such as Insider and News Corp — penned a letter to Google earlier this month, a copy of which Insider obtained.
The letter raises concerns that one Privacy Sandbox proposal, called "Protected Audience API," reduces the amount of control publishers have over how their ad inventory is monetized — and that it could harm competition in the digital ad sector because it favors Google's own adtech.”
The cliff is coming quickly. The “chrome hack” where buyers over-index on the browser to make campaigns work will be a flawed tactic when Google kills the cookie.
What we have here is a fundamental problem around innovation. We are trapped by our inertia.
The pivot-to-contextual is happening in fits and spurts. Ad tech is addicted to the ID. SDA (seller defined audiences) is dying a slow death, as the IAB Tech lab attempts to weld on an ID to the framework (why, oh why?).
Events will overtake all this thumb-twiddling. The Google solution will not work at scale. IDs will not work at scale. It is why we are invested in startups building for a privacy-first environment.
In summary: if you are not ready for this next shift in ad tech, you’ve got 12 months to sort your act out. Partner (and invest) in the companies that will shape the future of this industry.
2024 will be fun.
Come Meet FPC In Cannes
FPC is bringing the entire team (the three of us) to Cannes.
We are hosting drinks on Tuesday. But it’s so oversubscribed, we had to put a waiting list live (currently, 250 and counting).
We will be doing a bunch of meetings in Cannes across the week. We are keen to meet any of the following:
Prospective LPs: those interested in investing in our fund.
Corp Dev: those interested in buying our portfolio companies.
PEs: those looking to help scale our portfolio.
Generalist VC funds: those looking at co-investment and follow-on investment opportunities
If you fit any of the following criteria, do get in touch to organise meetings. We will be in town from Sunday (June 18) to Thursday (June 22).
Send your details to the following address: firstname.lastname@example.org.
Have a great weekend, readers.