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Kristina Prokop:
Hi, everyone. Welcome to the Eyeota Audience Sessions. I'm very pleased to have here with me today Rick Erwin, CEO of Adstra. Rick, welcome!
Rick Erwin:
Thank you. I'm so glad to be here.
Kristina Prokop:
Yeah, great to have you. So that everyone knows, Adstra is a partner of ours and we've been working together over the last years to activate different data assets that they have. And they've recently gone through re-branding and have a lot of new products on the market. So, we wanted to take the opportunity to invite them and to invite Rick and talk a little bit more about what's going on behind the scenes at Adstra. So Rick, maybe just to start off, can you tell us the background of Adstra, what type of data you guys operate with, and a little bit more about the re-brand from ALC to Adstra?
Rick Erwin:
Sure. So, two years ago we brought a team of ten data industry veterans together and we bought ALC, which was the precursor company to Adstra. We did it with a plan to greatly expand what ALC was doing for its clients. ALC is a well-established first-party data monetization company, particularly in direct marketing circles, that's well-known in that part of the industry. My team of veterans is well-known in enterprise data and identity for marketing. So, the rebranding was, really, about making a splash to say “we're Adstra - we're something new and different, and here's what we do”. And, at the same time, reassuring the 500 or so ALC clients that we have this new name, Adstra, because we're now able to do things for you that we weren't formerly able to do, but we're still the same company that you've relied on for 40 years. So that's really what the Adstra rebranding was all about and it was, I guess, fortuitous to do it in this environment because it allowed us to cover a lot of ground with a lot of clients and partners and help them understand what the rebrand was all about. But if you'd like me to, I can tell you what that expanded sort of thesis of Adstra was all about and what we're bringing to the market. I'm happy to elaborate on that.
Kristina Prokop:
Would love to. And you know what, I think it is also very interesting because a lot of the companies were coming from a traditional offline environment, a lot of the people using the digital assets today, they don't necessarily understand the power of the elements behind those offline datasets, although you've expanded on it greatly today in what you're doing with Adstra. But I think it is interesting for everyone to understand what was that core asset, which is still a part of your data assets today, right? It's just that you've expanded well beyond what that original core asset is.
Rick Erwin:
Yeah and maybe I should just step back and say, look, we start with two fundamental premises. One is that as every form of advertising media has become people-based, every consumer brand and their partners need to have their own identity spine. It's just a critical asset now at the enterprise level. Ten years ago, it wasn't important for every consumer brand to have an identity spine, today it is. Most of them don't. So that's premise number one, but premise number two is: people-based data, surprisingly, is still used in the vast minority of all advertising impressions. And so we do two things: we built a US platform that translates any form of consumer identity into any other form and we license that data that comes from our platform to help brands and their partners either create or strengthen their identity spine. We do that with persistence in a privacy-compliant way.
Rick Erwin:
It's portable and it's people-based. We call that our core piece, but secondly - yes, we created a new core piece - secondly, we make it easier and more economic to use people-based data in every possible insight, targeting, and measurement application that you can. And in doing those things, we intend to disrupt what is really a very stodgy data industry. You mentioned a term that I love, but I'd also like to sort of retire that notion that we used to all say freely “there's offline data and online data”. The way I view it, there's just real-world data. There's only real-world data that can be used to understand us as consumers better and better target advertising to us. And what we're doing is bringing as many forms of that real-world data together, connected to a very accurate persistent identity spine, and making it economic to use in any application.
Kristina Prokop:
Yeah. Which I like because one of the things that frustrate me sometimes about our industry is that we do have a tendency to categorize and silo off different disciplines and different types of data. Whereas I think the approach is very smart and looking at it much more holistically and moving up to that position. Just out of curiosity - I don't know how much you can share with us in this format, but when you say more economical, what does that actually mean? I mean, I know what “economical” means, but in practice, what does that look like to your end customers?
Rick Erwin:
It's a great question. Going back about - I’m going to date myself - but probably eight years ago, I remember being at Cannes and having a really intense conversation with a leader from our industry. We were talking about this issue of how data should be priced in digital, and this is what I mean by economic, is that our industry, the data industry, has not done a good job matching the price of people data with the value in use. And it turns out that it doesn't make sense to charge $5 for a 1000-consumer name audience to optimize 15 cent per-thousand media online. It just doesn't work, but, and I'm using an absurd example, but it's really not that absurd if you look at transaction prices in the market, sometimes you'll hear a data company say “Why? I still don't understand why I put my data in this particular platform and it wasn't being used”.
Rick Erwin:
And then a lot of times, if you just asked the diagnostic question about what's the average price of a media impression in that platform and what is your data price, then you can get to the answer pretty quickly. What we've done is created ways, lots of different ways, more than we could possibly cover here, but we could do it in another call or in another venue, lots of different ways to break down the economic barriers. One of which, the most obvious of which, is just what an audience costs on a per-thousand basis.
Kristina Prokop:
Okay, nice. Thanks. So if we look outside - obviously data is very prominent in programmatic strategies - are there ways that you help brands outside of programmatic?
Rick Erwin:
Yes. In fact, I mentioned there's always the three main buckets of use cases around marketing data and identity: it's insight, and insight is really about just - I like to always paint the picture because people can imagine what this is like - the VP of marketing is summoned into the CMOs office and the CMO wants to know “What is this core customer group of ours like?” and all the VP of marketing knows, unless they go and get additional data, all they might know is where the person lives if they ship them something and they know what the transaction value was. So, there's no CMO in the world who's happy with the answer being “They live at one 123 Main street and they spent $50 with us”. All the other information is what the CMO wants to know.
Rick Erwin:
Are these families? Are they young families? Are they older families? Do they have lots of kids? Do they not have lots of kids? Do they live in urban areas or rural areas? What else do they do with their free time? That's insight and that's how we help brands understand their customers better. The brand knows what the person is spending with them, but they don't know all those other things. Targeting is what we do together: it's just providing audiences that are responsive and predictive of response for use in all media. Programmatic is one, but of course, we have enterprise brand relationships where the brand simply wants to activate against prospects that look like their best customers outside of programmatic and we can help them do that as well. And then measurement, which of course means so many different things to so many different people.
Rick Erwin:
But measurement is about trying to figure out whether the people that you marketed to responded and did what you hoped that they would and what we help people with there is tying together the channels of response that they may not have been capturing before. We don't perform a measurement service for them, there are many others that do that well, but we use our identity platform to help them identify responses that are the customers that they marketed to, that they may not have been attributing a restock or response to before. So that's part of what our identity spine can help people to do. So we think of ourselves as enablers of better measurement. So, those are just some broad categories of what we do for folks outside of the programmatic space.
Kristina Prokop:
Great. And so, obviously, the burning question over in our ecosystem right now is this future, this evolution of the way that we transact in, looking at IDs that we share, the eventual deprecation of third party cookies - how is Adstra adapting in that environment? Or at least preparing for that environment? Because obviously, there was a lot of preparation going on, but we're not quite at the point yet where we're nationally transacting actively on those, on anything outside of that yet.
Rick Erwin:
Yeah. It's funny because when we began the journey with Adstra and creating this disruptive company, we really weren't planning on the deprecation of third-party cookies. But the platform that we built is perfect for that. I'm being careful not to take credit for us being so prescient to have seen that coming. We really just wanted to create a platform that could translate any form of identity to any other, but as it turns out, that's exactly what brands and their partners need from us in a world where we might see a deprecation of third party cookies because every form of identity is represented in that platform with the ability to junction between them seamlessly. And so there is no one form of identity, which if deprecated would harm us. We certainly would like to see all forms of identity being free and open and marketing.
Rick Erwin:
That would be the best thing, I think for everyone including consumers. But if that was not to happen, our platform positions us well to simply translate to the other forms of identity that are represented in our platform. And, of course, as you see happening, there's a great deal of emphasis on first-party cookies. And our match partner network is dominated by first-party cookie identity, which is federated. So, we're feeling like our platform is very well situated to allow us to continue to help brands and their partners, even in whatever the future may bring.
Kristina Prokop:
I'll ask you about that one later. It's interesting. So, I've been in the industry for about 22 years. You've been in the industry for quite a long time. Looking at the size of this shift, is this really comparable to anything that you've seen along the course of your career? Or is this a shift that is larger than the ones that we've seen in the past?
Rick Erwin:
Such a great question because I think we act like that in our industry. We act in the present as though what we're experiencing is the worst thing we've ever seen. I actually don't feel like it is. I feel like the one thing that's constant in our industry is that there's a seismic shift. And when I say our industry, I guess I'm casting a broad net, all of marketing and advertising and all of its forms, there's always something seismic. I mean, it was 1996, if I'm not mistaken, the telecommunications act, the cable act. And that was what gave birth - a lot of people forget this - but that was what gave birth in the US to this notion of notice and choice. Notice and choice were invented at that time as a way to get the industry to a place where there was more privacy protection and yet a free and unfettered marketing and advertising business. And at the time, talk about seismic, that was, level the field, maybe all marketing and advertising would stop. You know, it was just a massive thing. So, no, I don't think - I prefer to think of these things as you put two hands on the steering wheel and you keep riding because there's always going to be something like this.
Kristina Prokop:
If you watch where you're going, instead of...
Rick Erwin:
Yeah, you’re not texting. Well, that's part of the two hands on the wheel. You can't text if you've got two hands on the wheel, but if we do that as industry leaders, we'll all be fine. It doesn't mean that we won't go through turbulence and hit some potholes on the way, we certainly will, but we'll get through.
Kristina Prokop:
Yeah, it is. If I had to say one of my other frustrations sometimes with our industry, but I guess it really applies to any, a bit of sensationalism that happens from the media. And I think also, I see a lot of people who are relatively young in the industry or early in their careers, where it feels like this is something that could make our industry implode. But in reality, if you've lived through a couple of these large transitions before and you see, actually, what comes out of the other end is most of the time a much better way of working than we did before. And I think, if you look at all these knee-jerk reactions, GDPR is going to be the end of online advertising, all these things that will end us forever. I see it very similarly. I think there's actually a lot of opportunity out of what's happening and I think it's a good transition. It's something that I think we all need and it was inevitable in some way, shape, or form.
Rick Erwin:
I agree. We're working on a thought leadership piece now which equates some of this phenomenon to that scene in Austin, I think it's Austin Powers, with the steamroller very slowly advancing on Austin Powers and the shot gets cut and the steam roller just gets like a foot closer, but it just keeps going for it feels like 10 minutes on screen. I think a lot of these big issues are like the slow-moving steamroller, where it's such a big issue because we're talking about it for two years, we're spending two years on one topic, but in those two years, it's not like the steam roller has moved that far. It's just that we've all been in this sort of a hopped-up panic mode. And I think that's why I say the two hands on the steering wheel, because maybe 20 years from now it will be a person who is now a 24-year-old media buyer who's living through this, but who in 20 years will be 44 and looking back and saying “Oh, I remember in the year of the pandemic”. And I think that's what it will be like, they'll probably be talking in a holographic projection interview set up on zoom, but it'll be reflecting on more or less the same kinds of issues that we deal with.
Kristina Prokop:
Yeah. Speaking of the year of the pandemic, it's obviously been a pretty roller coaster year, one I think with a lot of takeaways for all of us. Is there anything in particular that you personally or Adstra has taken away from the year that was just almost put to bed?
Rick Erwin:
So much! We could probably do a whole segment on that. One of the things, for me personally and as a business leader, is the power of distributed labor. And I think everyone's got at least a casual appreciation, even before this, that we can do a lot more remotely than we used to be able to do, but I'm not talking about that casual awareness. I'm talking about a really big awakening to the power of distributed labor and I only claim to be at the very front end of this, but I think that we have a chance now to learn how to get work done differently, not just do work remotely and do it the same way we would have in the office, but do it remotely, but do work differently. And one of the things I'm most excited about is, I just think, it has a massive upside for diversity and inclusion because we can perform work at an A grade anywhere with any type of talent.
Rick Erwin:
Whereas I think particularly in our industry, particularly in Silicon Valley, I think, while there's a lot of companies in Silicon Valley who have a tremendous devotion to diversity and inclusion, when you walk through the engineering department, not so much diversity, really. Right? And I think that this gives us a real opportunity to change that, by not making being at a place the reason why only this type of person is here. So I think that's a huge upside and just gives all kinds of room for getting work done together differently going forward. But also I've been surprised at how resilient the advertising industry has been. It's been challenging and certainly, you can see agencies have taken some real hits and had to recover from them. But, here we are in the worst global pandemic in a hundred years and people are buying things and people are responding to advertising and advertising is still, thankfully, allowing a lot of content that otherwise would cost consumers more than they could afford.
Rick Erwin:
It's allowing it to be free. And all of that has been much, much more resilient than I thought it would be. In fact, we saw a dip, if we just use our digital media audience revenue as a bellwether, we saw that take a really significant dip in the 20% to 25% range from I would say late April probably through mid-June. And now it's almost completely recovered with the exception of just one or two spots where it's continued to be down a little bit, but I think that's amazing resiliency. And then, just on the topic of resiliency, I think the resiliency of people in our industry has been pretty amazing. We all know that being remote and unable to be together at industry conferences and events and even just meetings have changed the way we work together. And it's really created for a lot of people a feeling of some isolation and we're all going to have to learn to get past that as we reopen up hopefully next year. But I think it has also highlighted the resiliency that people have, the fundamental ability people have to pick themselves up and do their job and provide value to clients and move the needle and I think that's all very encouraging.
Kristina Prokop:
Yeah, same here. You know, I've been really impressed with the way everyone has pulled through and, thank goodness, I feel very lucky that our industry has turned out the way it has. So yeah, totally agree with you on those fronts. So maybe just to close it up for today, if you’re taking your crystal ball out, looking into next year, are there any big predictions that you have for 2021?
Rick Erwin:
Yeah. I don't know how big they are, but I do see certain things unfolding. One, we talked about that slow-moving steamroller. We should all expect there to be even more gnashing of teeth and, dare I say, clutching of pearls than we even see right now over the next year because that's what our industry does. So as we moved toward the start date of GDPR, I remember that Ad Week, that last Ad Week before GDPR went into effect, was the peak of the panic around GDPR and so we'll expect to see that; but, more importantly, I think we'll see a delay to the ID deprecation that we're talking about. I think we'll see a bit of a postponement to that.
Rick Erwin:
I don't think anybody should plan their business around that postponement, but I see enough in the tea leaves that I think that it would be prudent for Google and Apple to take a breath and maybe not make that the hill that they want to die on. And I don't think that the DOJ will become instantaneously ignorant to this issue or friendly to them in a changing US presidential administration. So I think I would expect a little bit of a delay to that ID deprecation. And the other thing that I'll make a prediction of, that's maybe a little bit bolder, it's not going to happen as a silver bullet in 2021, but I think one thing that's happening in the industry is there's an awakening to the value of PII among people who are native to digital media. So, an example of that is in the wake of cookie deprecation, one of the first things you saw people kind of rally around was hashed email - well, hashed email is a form of PII.
Rick Erwin:
And I think that's a very good thing because hashed email is very safe from a privacy standpoint. It's not perfect and nothing is and ever will be in any standard, in any industry for anything, but it's very safe generally. And I think this is getting into maybe a little bit of my personal philosophy, but I think one of the biggest problems we have with the digital sphere is anonymity. There's no other healthy part of our society, really, where anonymity rules the roost. And, increasingly, I think we could solve a lot of our challenges if we just focused on safely knowing who's doing what. And so I think we could be seeing an ascendancy of the safe use of PII in various forms of digital media and I'd like to see that continue and I think it would be great not only for our industry but more broadly for the global public square of how we use the internet to talk to each other around the world.
Kristina Prokop:
Wow, yeah. So, we can sit here one year from today, looking over predictions and see where we landed. But I think they all make a lot of sense. And I also agree in, the speed with which that change is going to happen was, I think, massively overstated and, again, that kind of knee-jerk panic reaction... yeah, I think it'll be a year of a lot of preparation. Again, I totally agree. We can't slow down in terms of preparing for those changes, but I think the reality is that, until we stop actually transacting on our traditional identifiers, it's going to be a little bit of time. But Rick, thank you. Thanks so much for joining today. It has been a pleasure, as always.
Rick Erwin:
Thanks, Kristina. Great to see you and talk with you and be safe.
Kristina Prokop:
Thank you. And just a quick kind of practical question: if anybody's looking to use Adstra data or activate data, where should they go?
Rick Erwin:
Well, they should just send me a note to rick.erwin@adstradata.com.
Kristina Prokop:
All right. Well, thanks, Rick. Stay safe and we'll be talking to you soon.
