This episode is brought to you by Sojourn, the number one platform for travel and hospitality advertising. Travel data is unique. Someone searches for a flight, a hotel, and then a rental car. Those aren't three separate signals, that's a trip taking shape. With Sojourn, travel marketers get visibility into the entirety of the travel journey. To target real travelers when they're in market, from impressions to insight to impact, Sojourn is the only travel data platform that closes the loop. Visit sojourn.com for more. That's s-o-j-o-u-r-n.com for more.
All right, welcome to the architecture podcast. This is Harry Po. Second week in a row, we have our guest co-host Paul Kenkton, and Eric will be back next week. Paul, how do you feel? Are you getting into it? Are you loosening up after your second week?
I'm getting into it, and it's a good thing that Erica is coming back because I have big news. I have big news. Yes, I do. I am moving to San Francisco and joining Corgi as a growth marketer. Now, I may not fit the profile.
Really? You generally they seem to be looking for... you don't look like a Corgi kind of person.
No, no, I have not. I have not been posting a lot of selfies on X, formerly known as Twitter, either, but I do have this teensy-weensy little marketing background. And I'll be joining Corgi, so you know, you'll see less of me. I don't really know what Corgi does. I think I don't think that's important, though.
I don't think that's important. They have the Corgi cafes, right? That's important. Yes.
They have an army, I would call them, of young female influencers who work there.
There's an expression that's going around called Corgi Girls.
I see. I've not heard that. I don't know what you're talking about. That doesn't exist. And I'll be joining Corgi as a community manager and a growth marketer starting immediately. And I'm moving to SF. I guess that's a requirement if you're going to...
You're not allowed to call it SF, but otherwise you're doing great. Yeah, you might have just had your offer rescinded. Did you have one of those AI interviewers for this job?
No, I had the CEO slide into my DMs, as one does, and asked me if I'd be interested in a confidential role, whatever that means.
Did you note that the Corgi founders are Forbes 30 Under 30, so they're certainly headed to jail?
I did. I've retained a lawyer. It's called a Forbes 30 Under 30 exposure lawyer. But here's the kicker. When I went to buy insurance against that, the only one who sells it is Corgi.
Yeah, that's smart. Yeah. So, Corgi can offer the 30 Under 30 liability insurance. So, if you're on 30 Under 30, you get the Corgi insurance, and then if you end up going to jail, your family's taken care of.
You know, for those who are not as brain-rotted as us on Twitter right now, they have no idea what we're talking about. I think we should probably tell people who are not as extremely online what the heck this is.
Sure. Okay. So there's a Y Combinator company called Corgi, and we're giving them free press right now, which is their entire goal.
Absolutely. And what's special about them?
So what's special about them? I posted about this on LinkedIn. We talked about this last week with Jack Reigns. They seem to have stumbled upon like as if a marketing strategy were built on X as a platform. Like they just piped into it with an API somehow, I guess in GCP now, wherein like once a week their founder gets in a beef with a prominent VC for no particular reason, and then everyone takes sides, and then like Martinelli chimes in and Elizabeth Holmes. And again with the 40, 30 Under 30, I don't know, read into that what you will, but like it's all out there. They have been hiring, like you said, an army of community managers/growth marketers that I'm just going to say all kind of seem similar.
We're not sexist if we point out sexism of another company.
I don't know. I don't think we could be cancelled. I'm just going to say it. They're hiring young, attractive female, overwhelmingly Asian women who are marketing managers who don't, who are mostly being hired for their social platform, I guess. And it's an expression. I didn't make it up. They in San Francisco, they are called Corgi Girls. It's a thing. It's a little bit of a disparagement, but it's a thing.
Which is brilliant. I'm going to be the one who's going to say that whatever they're doing is definitely working. And the notion of finding people who have tens of thousands of followers and getting them to announce that they've joined Corgi. Now, listen, I'm just some schmuck in Jersey who definitely does not have tens of thousands of followers yet, now that I'm on this show. We'll see what happens. But, you know, it's like this is the new reality. You can be a hater and you can say, 'Oh, look at what they're doing.' But like you sell insurance, it's so boring. Like my issues with the company have more to do with the fact that I know InsurTech and that it is like the sort of like pot of gold at the end of the rainbow that is the worst. Insure is the worst.
So many founders chase it, and it's like, guys, there's a reason why, you know, these companies are a hundred years old. Like it's not because you haven't used a cool UI with it yet, like or AI. Like you don't think MetLife is using AI to find a way to reject claims? Like they're on top of this, you know. I guess I would strategically point out that like if you think about the Geico Gecko or Flo from Progressive, right? The strategic incentive of their marketing department is 100% name recognition. That's the only thing that matters because you can't convince someone to get insurance. They just need it. Like you buy a car, you need insurance. And in that moment, what you want is for the consumer to have your name on top of their brain stack ordered. And so this is a different form of the Geico Gecko. This is basically the online Gen Z version of it.
So it's brilliant. I'm going to go on record saying it's brilliant. I'm not saying I think the company's going to succeed necessarily, but like if what they're trying to do is get acquired by a really boring company for their marketing skills, I think they're going to do well. I think the cafes are brilliant. They probably break even. So I don't know. I think that plus Jack Reigns, I think there's something to be learned about.
We got a little trend, two points in the line. Okay, so moving off of that, I want to address some criticism in my newsletter that went out this week, or really a question. So, I wrote a newsletter this week about how, you know, the OpenAI traffic is reducing revenue because page views are going down. Actually, it was last week, I think. And an interesting question that I had in my mind when I wrote it, but also people brought up, is whether we think price increases will offset volume declines. And the case study for this is linear television, where the multi-decade decline in viewership has largely been made up for in pricing increases, and the companies involved in broadcast TV for a long time were making quite a bit of money because the pricing kept increasing. And I personally think that's not going to happen on the web because the web doesn't have must-view content. There's no Super Bowl. There's no audience that is only web. But wondering, Paul, if you have a point of view on that little debate.
I just think nobody should criticize you, Ari, that whatever you say in your newsletter, it's probably got his gravy train. He wants to be the number two co-host over here. Come on. No, I think that sounds like Copium, man. It's like, oh, hey, don't worry that we're dying. We're just going to get more expensive because we're scarce. Yeah. Okay.
All right. There is some evidence that prices are firming up, but I don't know if it's going to keep pace. All right. So, we're about a month away, or a little less than a month away, from Architecture Chicago. So, the full agenda is live on the site. So, if you go to architecturelive or specifically chicago.architecturelive.com, you'll see the full agenda. We have some great speakers, including Laya Brilson from The Onion, who's going to be talking about how The Onion is surviving in this modern world. Love The Onion. We've got Willie Jackson from Starcom, Julia Federer from United Airlines. I'll be doing a live podcast. We haven't announced the guest yet. So, that should be exciting, and you'll hear it on this podcast that Friday of that week. So, really good stuff. It's a one-day Chicago. You could go in and out same day or overnight from New York if you're there. If you're in Chicago, it's an absolute must-attend. And if you're a qualified brand or agency, you can get comped. So, there's a lot of good reasons to do that. All right.
I did not get comped, by the way. I have a paid-for pass. I need to buy my travel, but I will be there.
I'm glad you were half of ID5, by the way. We got to make our money somehow. So Paul not comped. So, hope to see you there. All right, with that said, our guest this week, I sat down myself, so Paul's not in the call, with Richard Greenfield, who is the co-founder of LightShed Partners. Richard is one of the most astute analysts on the media landscape, and he and I have a great conversation about the recent news about Meta settling with the states, but also AppLovin. And famously, he's a Trade Desk hater. He loves posting about why The Trade Desk is a bad stock to own. So, I get him to open up about that, and he really relishes that conversation. So, Rich and I will get started in a moment, and then we'll come back, Paul and I, to talk about the news of the week. So, talk to you soon.
All right, we're ready to go. I don't know if we're going to cut this. So, welcome Rich Greenfield, the co-founder of LightShed Partners. Third time on the pod, and this time we were having technical difficulties that turned out to be a loose plug. So, who said podcasting is a high-tech business? Thanks for being here, Rich.
What a crazy week, Ari. Pretty astounding how much is... It's late August. We're supposed to be on vacation. We're supposed to be on vacation, supposed to be quiet, and instead there's so much to talk about. I'm sure we could fill your entire show if we wanted to.
I'm sure we could. So, we want to dip out of the ad tech advertising world and into the big media world. What is going on in media writ large? These people don't take vacation. They're working in August. M&A activities. But the big news as we're recording this on Wednesday, the 26th, is that our old friends at Meta, they got themselves out of this whole problem. They settled for 17.1 billion dollars with 47 states and the District of Columbia against the ongoing avalanche of litigation around harms to teens and children. What's your hot take on this? I mean, look, at the end of the day, you know, I know this sounds crazy, but in the scheme of Meta, 17 billion dollars is, I don't want to say a drop in the bucket, but it certainly is reasonably insignificant when you look at this type of capital they're spending to build out AI data centers and sort of, you know, in Mark's goal of winning an AI, the cost of that is multiple times larger every single year than this settlement. And so again, this is painful for Meta. You know, I think at the end of the day though, investors are happy to have this largely behind them. And I say largely because there are still a few states that are still continuing on with this lawsuit. It'll be interesting to see how that plays out. But I'm actually far more interested in the repercussions more broadly because my gut is, and the way you see Meta pretty aggressively marketing this today, this is not about just Meta. This is about trying to get buy-in from the rest of their peer groups. So the TikToks and the YouTubes of the world. And I wonder how easy that's going to be, you know, given that there is very different use cases for each of these, you know, companies. Like I think you can look at sort of the educational side of YouTube and go, that may be more difficult to block, you know, not just for parents but for schools. And it is a more complicated discussion, I think, when you think about sort of the use cases of each of these applications. But look, from an advertiser's standpoint, and I know there's tons of advertisers that listen to your show, you know, this is obviously, you know, this is going to be challenging, right? And because I... it'll reduce media exposure, right? Because part of it, it's not just dollars, we covered it, right? Yeah. There's some behavioral changes, right? So, you know, less time now. Look, can parents override the changes? Sure, they absolutely can. And how easy it is going to be to override those parental controls, obviously, we'll see. I think, you know, I'd love to know what the actual usage of screen time is, which is opt-in on iPhones. You know, obviously, this is default locked down. And so, you know, the two hours per day, potentially an hour a day. If other applications like YouTube and TikTok sign on, it drops to an hour a day for each of these apps. Combined with the nighttime shutdown from 12 to 6 or 12 to 7, those are obviously pretty dramatic reductions in time spent. Now, again, it's not opt-in. So, everyone's being opted in, and you have to forcibly get yourself out of those restrictions. What percentage will opt out? But I think to your point, Ari, the main thing is overall impressions. So, advertising impressions are going to go down. I mean, I think there's no way around that, that this is going to have a negative impact on overall impressions.
Yeah. And so what we're talking about here is the deal is 17.1 billion, but it's a ratchet deal where it's actually just 12 billion until and unless their agreements with their direct competitors and similarly with the behavioral. So this is a genius little bit of prisoner's dilemma gaming here.
Absolutely. And I think, you know, what Meta is trying to do, my guess is, create a framework where the states are heavily incentivized to go after other actors in the space.
Yes. This is a balance the state budget agreement more than anything else. Right.
Yeah. And so, but the impact on advertisers, I mean, look, we talk about it all the time, right? This is one of the most challenging demographics to reach. And the reason you advertise on YouTube, the reason you advertise on Instagram, you know, I'm not sure there's a lot of people advertising to the 15-year-olds on Facebook, but certainly if you think about Instagram, TikTok, and YouTube, you know, a huge reason that you put this as an important piece of your media budget is reaching younger people that you can't reach on linear TV. I mean, you and I, Ari, when we were 15 years old, we were watching linear television. We were, right? Like there was no doubt you could reach us on linear TV, you could reach us on terrestrial radio, like there were many ways of reaching the two of us. Heck, you probably could reach us putting ads in movie theaters back in the day, right? Like there were lots of ways to reach consumers. It's gotten harder and harder, and these social platforms have become sort of the lifeblood of reaching a younger generation, and this is going to make it more challenging. Not impossible, but certainly more challenging.
Knowing Meta, they'll still end up on top. Like probably prices will go up because of scarcity, and you'll have different ways of gaming the system. Like there's a lot of moving parts here.
Well, and you also have to remember the other thing that's important to think about is, again, if it applies to everyone equally, everyone gets penalized, and so, you know, the end result is there'll be less inventory, but pricing will go up a lot. But then I also think, you know, remember different companies will be affected to different extents. Like there's no doubt that TikTok, while it certainly has expanded its demos substantially, there's no doubt that there is a greater percentage of younger users on TikTok than there is on, you know, the broad, when you think about Meta, which is Facebook and Instagram, there's definitely a different mix. And the same thing with YouTube, these are much broader. I mean, in fact, what people forget about YouTube is, you know, over 50% of view time is actually on the big screen television in the living room.
It's crazy. So this is interesting. A lot of open questions, like will this be followed by the direct competitors? It's a state deal. I don't think that preempts civil deals. So the civil suits continue, and there'll be a lot of them. And then what will the actual revenue impact be? Don't know. I would say it's almost impossible to figure that. And how do other companies that are not technically social media but have some form of feed, what happens to them? Like, you know, like Netflix.
Or I was thinking like Snapchat. Snapchat's not a, you know, it's not really a social media app. It's, you know, primarily a messaging app, but there certainly is content on it. How will that work? Meanwhile, Apple continues to just laugh its way to the bank for not being in this business and they've avoided having to do any, you know, age verification and things like that. And they've just continued to keep their hands clean of this whole issue.
Look, this has become a bigger issue when you think about what's happened with Roblox over the last 12 months. I mean, this isn't, you know, this is not isolated to Meta. Like I think, you know, the bigger takeaway I think for your listeners is just it's very clear that the regulatory side of this, I mean, we had social media crackdown as one of our top 20 predictions for 2026, and the reason was sort of seeing what was happening overseas. You know, it started in Australia with sort of a crackdown for under 16s. You saw it starting to play out overseas in parts of the EU. And even certain states started to really get more aggressive over the course, you know, Maine and other states started to get much more aggressive over the last 12 months, and it sort of felt like there was an inevitable wave. I mean, you're even seeing this in schools, right? Like I look at my kid's school, and for the first time, they're putting them in those Yondr pouches from bell to bell in the high school. Like there's just a broader and a broader crackdown on device usage. This goes way beyond just simply social media. When you think about device usage, Roblox, etc., this is really just recognizing that we didn't set as a country a lot of rules around usage of technology, and now we're trying to play catch-up or fix some of the prior mistakes.
Well, there are layers of regulation, right? There's state, obviously, is what we're talking about now. There's federal, where nothing seems to ever happen. And then there's the application layer. There's the Apples and Googles of the world. And these are all interacting because one thing you didn't mention is pornography, which is now age-gated in many jurisdictions around the world and in certain states. And age-gated, sometimes just illegal, sometimes illegal, right? And so you have all these things turning into a world where the anonymous browsing of the web becomes more difficult, and or not just the web, the app usage and things like that. I do look forward to seeing how teenagers very quickly figure out how to get around these restrictions. And my guess is there'll be an entire cottage industry of ways of subverting the system.
Yeah, there was a whole, there were a lot of stories on the Roblox workarounds where people had pictures of themselves with like mustaches drawn on and things like that. But really what it's about is getting the next generation capable of working in data centers because that's where they're all going to end up. Look, the single most interesting piece of this is just that it's not opt-in.
Most of what we've seen in the past has been opt-in. This is basically an opt-out. And so that's a huge change from a behavioral standpoint. Starting this means, you know, most people who are lazy, like this just goes into effect. And I'm sure you're going to see a chorus of kids upset. And it'll be interesting to see how parents, you know, collectively, and I mean that truly, like how does this play out?
Yeah. So you mentioned your predictions articles. You wrote 2026 predictions. I think it's 20 of them, which makes you a great podcast guest because I can just cherry-pick the ones I want to talk about or the ones you got wrong, right? We still have four months left in the year, just to be clear. You're doing pretty well. I'll just, a couple jumped out at me. AppLovin buys Roku. That was your take, and you know, not a bad take.
I mean, look, I will say the good take on that was we did believe Roku was finally going to get sold for many years. We chose the wrong buyer.
A very viable buyer. That makes sense. It scans. So I guess double take. First take is what's your take on AppLovin as it is right now? And secondly, we'll talk about Roku.
Look, I think AppLovin has, you know, it's amazing to see the technology they've built, you know, sort of a black box, but if you think about Axon 2.0 and the ability for them to target ads in the gaming space to game players, leveraging, you know, the learnings they got because remember they used to own games and they got rid of that business after they had trained their systems on it. But they are an amazing, they have an amazing technology layer that can target the right ad to the right person who is playing games. I think from the standpoint of, you know, the big open question and the reason why the stock has been so volatile is, okay, what's next? Like they are amazing at video game or, you know, gaming broadly and targeting ads into that ecosystem. Actually, they, you know, it's a category that Meta sort of left for dead. Now Meta seems to be at least inching their way towards having more interest. But I'll say the big open opportunity is, okay, well, you know, what other form of ads can you serve? And they've tried to get into e-commerce, they have entered e-commerce. Is it moving slower than they would like? Absolutely. Are they, you know, we question, like, do they need to make an acquisition of someone like a Pinterest or like, is there someone in the retail, you know, ecosystem where they will learn the way they learned from the data side when they owned the gaming business, or can the model basically self-correct and learn simply from serving the ads to their users? And that's an open question. And I think, you know, look, I think they've been pretty open, you know, they obviously, you know, had a slower than expected growth last quarter, the stock got killed, but look, I do think, you know, Adam deserves a lot of credit for owning up to the challenges, being very transparent that this is not easy and that it's going to take time. Not all investors have the patience. But look, I compare it to someone like Jeff Green at The Trade Desk who, you know, is blaming everyone but himself for their challenges. Like Adam is owning their challenges, and I think he really is committed to figuring this out. Like I thought it was really interesting. He showed up at Cannes this year, and like they're not really a big Cannes player, but he wasn't there to like go to the parties and to do like all the... he was there to help him figure out the e-com world. Like he's really trying to figure out this world of advertising. And look, it's not, I don't think it's an easy or straight path, but I think it's really interesting. Where we made a mistake is like they clearly have aspirations in CTV, and there's tremendous... their AI and machine learning clearly has potential to be used for more than just mobile devices. And we really thought that like they had, you know, they had acquired Wurl, which is in the FAST CTV space. They certainly have longer-term interest in being bigger in CTV. I don't think they're there yet. I thought Roku was a really interesting way for them to sort of get big in CTV and then leverage their technology, you know, effectively to sort of create their own targeting layer. You know, Roku is now using a lot of different third-party DSPs. You know, could AppLovin sort of become that supplier of ads? And obviously, e-com is a huge category for CTV, and so that was where that logic came from. It was also at the time, and things are very different now, but its stock was 2x where it is right now. And so when you're flush with a high stock price, big valuation, using your currency to be aggressive makes sense.
Yeah, my point of view on this is I think it's a really good call, App. But the reason is because I think AppLovin's ultimately going to be supply-constrained because the reason their special sauce are these unskippable full-screen ads, and consumers can only see so many of those, and so they're not demand-constrained necessarily in the long term, whereas something like Roku buying a platform gives them the ability to shape what the ads look like and do full-screen and things like that. What do you think about the Roku-Fox deal? Anything strike you as a rationale for that?
I think it's fascinating because if you think about Fox, they didn't really have a, you know, Fox One had launched, and it was really just their way of, hey, if you want to replicate everything Fox gives to an MVPD like Charter or YouTube TV, and you don't want to subscribe to one of those big bundles, you can just get the full suite of Fox content from us directly. So like Fox One was not a big bet. It's not a, you know, it's a very bare-bones, very simple, purpose-driven app. So they didn't really have like a big robust digital future. I mean, because that app was essentially tied to their linear TV businesses. They didn't really have a future digital strategy. Yet they have great relationships with sports and news, the two things, you know, coming full circle back to what your podcast is known for, the advertising world. Like those are the two categories that advertisers care most about. And so you have these great relationships with advertisers and with brands that want to be in sports and news, but you don't really have a digital play. Lachlan is 54 years old. Lachlan Murdoch, to be clear, is 54 years old. He probably is going to be doing this for the next 30-plus years like his father. And so what's the play like? What is the long-term? I don't, you know, I don't think you and I are watching linear TV in 20 years. And so I think this gives a future for Fox and one where when you control 40-plus percent of CTV screens in the US, and we'll see whether they can execute better overseas, but certainly in the US, which is where Fox's strength is, you now have a true digital gateway where not only are they the platform that everybody else, the toll booth that everyone else has to go through. You know, you think, Ari, like you think about Comcast and Charter and DirecTV as like the historic gatekeepers, like for the TV world. Roku is a modern-day gatekeeper for the streaming world. And look, is Walmart with their Vizio acquisition? And remember, a year before, we did make another mistake where we thought Walmart would buy Roku, and they ended up buying Vizio. So again, we've been circling the hoop on sort of this what happens in this space. It's hard to hit that three-pointer where you get the deal and both parties.
But the point is, while there's certainly growing competition facing Roku over the next several years, there is no doubt that they are the dominant CTV platform in the US. And now Fox, and if you think about it, I think now it's sort of like what can you dream? Yes, they own Tubi. So you can obviously make Tubi a lot more visible, but you also can do really interesting things like if you look at like the sports zone and, you know, think about news and information, how can Fox use their assets and really amplify them inside the streaming world and also create unique experiences, you know, for sports and news content. Sure. I don't think, you know, you have to balance how much you lean on the button for your content versus others. But, you know, Ari, like the Roku Channel, they leaned pretty hard on the Roku Channel button, you know, historically, and that seemed to work out pretty well for Roku. So can Fox lean on Tubi a little bit or push the lever on Tubi a bit more or push the lever a little bit more on, you know, their news channels or their, you know, whatever FAST channels or whatever they create. I think it's really interesting. It's a huge price. There's no doubt about it. But, you know, if you think about companies that are trying to really do something truly innovative, you know, take the highest-profile transaction right now in the industry, Paramount buying Warner Brothers, a studio and cable networks, buying a studio and cable networks. Like, there's nothing earth-shattering about that transaction. It's literally, hey, let's put these two assets together. Hopefully, we can cut a lot of cost, and if it all works out, hopefully we're more competitive to Netflix over time.
right? And that YouTube doesn't crush the whole industry over time. This is really like a, you know, taking a sharp left turn and doing something that no traditional media company was willing to do. I mean, I could have made an argument why every single player should have bought Roku over the years. Everyone just kept passing as the valuation went up and up and up. And I think it's really interesting that Fox is the one that finally did it. And I think it's the success of Tubi and their belief in CTV advertising that really drove this acquisition.
Yeah, they're very committed to the ad model in streaming, not as much of the premium subscription model, and so there is a fit there. It is a little surprising to me that Roku is just such a unique asset, especially after Vizio got taken off the market. There's no other OEMs you could really buy, I don't think, that are worth a position in the ad market. And there's really no other comp to Roku either, right? There is not. I mean, Vizio was this, you know, a much smaller player in the field that Walmart now is trying. You know, look, Walmart just bought Vibe. Like, there's no doubt that Walmart has much bigger ambitions now and has their eyes fixed on Roku. You know, Google TV has been... I've always been surprised that Google TV, given how good I think the Google TV UI/UX is, I've been surprised that they haven't pushed it more aggressively in this country.
Right. Right. I mean, I think you have to, if you're not making the physical TV, you have to pay, you have to give away a lot of revenue, and, you know, that requires a certain level of aggressiveness. But they do it in Android. So it's kind of, you know, a question about why they wouldn't do it in TV. There's also an imbalance where they make so much more money on YouTube TV and YouTube than they do on ads on any other platform on CTV. They don't have a balanced network model. So, you know, unless you get people watching YouTube, it's questionable.
Well, but the one thing I'll push back on is both Fire TV and Google TV, I think, are making a very big push into AI and audio-driven AI. And so, you know, you're now looking at Google televisions, whether they're made by Sony or TCL or whoever, they're now including near-field mics and they're actually, you know, being literally built in. And so you're literally going to be able to talk to your TV, you know, with an AI interface, meaning Gemini in this case, or, you know, you can use Amazon's as well. But the idea being that whether it's Alexa or, you know, the Google Assistant or Gemini, you're literally going to be able to control these devices and do things and make requests. And like, I, you know, I think if you think out of the box, it's not just about making the content that you see. It's like, hey, I want to watch... the simple request would be, I want to watch CBS or I want to watch the Market Maker podcast. Sure. And it can do that and it will do that. But what if you ask your TV, 'Hey, I'm thinking of going to California. Could you create a piece of content that would plan out for me what my trip looks like?' And through AI, it actually assembles all of the different YouTube videos relevant for your trip and creates an original piece of content that you can then watch. Like, that's where this sort of gets really interesting. And so competitively, I think it'll be interesting. And again, I don't have an answer on this yet, but will AI be a differentiator on which TV platform? Because right now, I'd say most TVs are chosen based on price.
Yeah, I think these are all really interesting points, and the price is lowered by the subsidy from the advertising, which was The Trade Desk's approach when they tried to build an operating system out of nowhere. But other folks who actually... Yeah. We keep wanting to get... Okay, fine. Let's get to The Trade Desk. So I don't want to use this word too aggressively, but you're a little bit of a hater on The Trade Desk. Like, it's a pretty common theme in your Twitter account about how effed this company is, or your perception of it is. Are you a hater?
It's frustrating to me because I feel like if you and I were running the company... No, I'm going to be completely honest. What drives me crazy is I feel like if you and I were running this company, I think there's a very... I could literally go through several fixes that I think would transform this company overnight. You know, they could have bought PayPal. They could have bought, back in the day, they could have bought Roku. Like, they could buy Yahoo right now. You know, like, there's so many companies that have first-party data that would have allowed The Trade Desk to really have... This whole idea of like, we're going to be, you know, this neutral third party, we don't want any data, we're just a transaction layer. I think the reality is that what makes for better targeting, and you're seeing it with Amazon every day, and you're seeing it with Yahoo's DSP, I hear this. I literally hear this from brands.
It just works better. Like, it does. The targeting is better. The ROI is better. And so the reality is, I feel like Jeff's insistence, Jeff Green, the founder, his insistence on not moving into first-party data has been a fundamental mistake. And he is completely unwilling to change that view. It is so sort of fundamental to his belief of running the company. And look, he controls the company. It's his company. And so it's not so much I'm a hater of The Trade Desk, I'm a hater of their strategy, which I think is flawed.
Yeah. I wrote a piece about this called 'It's the Data, Stupid,' which made this point a couple months ago. Also, owning your own data is a higher-margin business, higher-opportunity business, and more defensible. All of these things. But another point that you've made multiple times is the moat shrinking with competition. So part of The Trade Desk's glory days was that they were wiping up the competition. There used to be, you know, 20 viable DSPs, and suddenly there were 15, and then there were 10, and a lot of that share went to them. And, you know, there are fewer, there's less market share to be stolen from others. The market isn't growing as much, and you have a little company by the name of Amazon with their own DSP. How important do you think that is in the story?
You know, and look, you can say Amazon is best suited for endemic brands that sell on Amazon. Sure, it is. But you know what? Amazon also has one of the largest auto parts businesses in the country, right? So Amazon knows what car Ari is driving. And so, you know, when you're looking at car ads that show up on Disney Plus or on Hulu or Peacock, who's better to deliver that ad? Is it them or The Trade Desk? Right? Like, I just think there is so much data they know about you and your family. I think it's the same reason why Yahoo... I mean, I hear more and more positive feedback from streamers on the value of the Yahoo DSP because they have sports fans and they have people using Yahoo Finance and people using Yahoo News. And, you know, like, it is sort of incredible the... not actually, it's not that incredible. It's a pretty simple model of if you truly understand your consumer, you can serve a better, more targeted ad, and that's the whole game. And so I think what was special about The Trade Desk is that they had this massive access to supply. I think the reality now is like the supply is increasingly the commodity, and now it's the question of who has the best data and the best agentic workflows to get the right ad to the right person at the right time. And that just doesn't feel, cost-wise or ROI-wise, it doesn't feel like The Trade Desk measures up anymore. And so that's the problem.
Yeah. To use an imperfect analogy, it feels a little bit like they're the Mac versus PC back in the '90s, where you could argue it's a better product all day long. But that's not the number one decision factor for the customers. So...
It's a great analogy, actually.
Let's talk about their arch-rivals, Amazon's. So Walmart continually is putting up 35, 40% growth in their advertising business. They acquire Vibe for a reported 1.4 billion.
I almost fell over and thought it was a mistake when I was in Cannes and I heard the number.
I was looking at my... I got an email because I was an investor and I was on the...
Yeah. So I got the email while I was walking down the Croisette and I almost like walked into traffic. I was like, what the hell is happening here? So can you uplevel it? Like, is Walmart the next Amazon in advertising, or are they more in the endemic game? I mean, I feel like what Walmart is essentially doing is, you know, I mean, first of all, they've moved away. They were exclusive, sort of, with The Trade Desk. Now they're non-exclusive with The Trade Desk. You buy Vibe, and Vibe is not exactly a replacement today for using The Trade Desk, but does it... I mean, you know it better as an investor than even I do, but as a mobile DSP, does it have the makings if you put the right capital and investment?
Yeah. Could it transform itself into something far more than a mobile DSP?
And so I think it's really interesting. It feels like Walmart is sort of trying to pick off pieces and then build. Like, you know, it didn't buy, again, it didn't buy Roku. It bought Vizio, right? So it bought the second player, not the top player. Like, that's where I made the mistake. In this case, they didn't go out and, you know, buy The Trade Desk. They went out and bought Vibe for a fraction of the valuation. Well, but I think there's a theme that, you know, we all should recognize that Walmart is trying to find pieces of the adtech ecosystem. They want to build this business and scale it the way Amazon clearly has. And so I think they absolutely have much bigger ambitions. Why wouldn't they want to leverage all of their user data? Like, the one thing they're really missing that Amazon has that Walmart doesn't is a video strategy. And it'll be interesting now that they own Vizio, own Vibe, do we see them in some way get into the FAST channel business in a bigger way? Like, is there something next? And again, I have no idea, but it feels like there's like a next play to this as we think out into '27 and beyond.
Yeah, they don't have a FAST... or they do. I think they used to have small... there are, on Vizio, there are FAST channels. There absolutely is. Yeah. What I'm saying is it's not like they have this wide suite of like things that maybe relate to Walmart shopping. Like, there's nothing like that, and like, or there isn't a Prime Video for Walmart.
