2023 AdTech Predictions with Simpli.fi CEO, Frost Prioleau

The current business environment has caused many companies to evaluate their ad budgets more closely. Now, it’s more important than ever before for advertisers to drive performance and ensure every ad dollar counts. As we kick off 2023 and advertisers strategize for Q1 and beyond, Frost Prioleau, CEO, and co-founder of Simpli.fi, shares his thoughts on what to expect.
 


 

Transcript

 

David McBee
Hello, and welcome to the Simpl.fi webinar series. I’m David McBee, Simpl.fi’s director of training and education. Thanks for joining us each month for industry news, interviews, product rollouts and training on all things related to targeted advertising and connected TV. The Simpl.fi webinar series is available on demand with new episodes posted on the second Monday of each month at simpl.fi/webinars along with all of our previously recorded episodes. It’s January of 2023. Happy New Year. This month, we will be talking with Simpl.fi’s founder and CEO, Frost Prioleau, about his AdTech predictions for this year. Frost, welcome to 2023. Thanks for joining me.

Frost Prioleau
Thanks, David. Glad to be here.

David McBee
So for the past few years, you and I have chatted each January. We kind of have this annual tradition now where you talk about your predictions for the year. And by the way, I looked back and quite a few of yours came to pass. So good for you. Of course, you and I [inaudible 00:01:13]-

Frost Prioleau
I don’t know. I’m scared of keeping score on these because predicting AdTech is a little bit of a treacherous game, but I’m glad to at least hit on some.

David McBee
It’s like being the weatherman. You just got to be right more than you’re wrong, I think. That’s the trick.

Frost Prioleau
Or a broken clock.

David McBee
Yeah. It’s right twice a day, right?

Frost Prioleau
Yeah.

David McBee
All right. So you and I have discussed some of these already this year. I’m excited for you to share your thoughts with our viewers. Do you mind if we jump right in?

Frost Prioleau
Let’s do it.

David McBee
All right. So I understand your first prediction has to do with this current economic environment that we find ourselves facing and how businesses are looking to drive performance while making every single dollar count. And I think you have some ideas on how they’re going to do that for 2023. Will you share those?

Frost Prioleau
Sure. I mean, we’ve sort of seen a long-term trend as advertising has become more and more measurable that advertisers then want to measure it more and measure it really to how it’s impacting their bottom lines. And we saw back during the pandemic days in 2020, we saw, hey, budgets got cut way back and so the dollars that remained were really focused on performance-type advertising. We saw that loosen up a little bit, and now we’re getting into another arguably tight economic time. And advertisers, again, are swinging back towards the type of advertising that is very clearly driving performance and that is driving measurable, incremental performance, is what they’re looking for.

David McBee
You and I talked the other day about the advertisers that are buying the big billboards in the stadiums and things like that. Do you feel like when economic times are a little tougher that takes a hit and performance really takes the limelight?

Frost Prioleau
Yeah. So if you look on the spectrum between general branding and performance-type advertising, yes, I think these less accountable branding advertising takes a hit and you see advertisers, really the CMOs are being asked by CFOs and CEOs just like, “Hey. How can you tell me that this advertising is really working for me, whether that’s driving people to my website, driving people to my store, driving conversions? What’s the return on ad spend?” And so that type of advertising tends to hold up better in a tough economic time than high level branding, which may not have a direct demonstrable return back to the bottom line.

David McBee
I’m going to age myself with this story, I know I am, but 20 years ago when I was selling Yellow Pages, it was so much easier to convince advertisers to run an ad in the Yellow Pages because we could put a call tracking number there and prove their ROI as opposed to what television and radio had to deal with. So I feel like that’s… We’re living that version of that in 2023. Would you agree?

Frost Prioleau
Yeah. Absolutely. I think addressful advertising where you can precisely target your audience and then precisely measure the return on that, it’s absolutely a trend that I think we’ll see is people come in ’23, allocate their budgets, those parts of the budgets will stand up better than the parts that are very high level branding.

David McBee
All right. So let’s shift gears a little. Let’s talk about CTV. There’s a lot going on with all the different CTV providers and inventory. What do you see happening on that front?

Frost Prioleau
So it’s been the year of CTV. It’s been growing fantastically for the past few years. The last big catalyst we saw was, again, during the pandemic when all of a sudden people are stuck inside and they started watching a lot more streaming TV. And that really caught the attention of many advertisers like, “Hey. They’re family. They’re doing nothing but sitting around watching streaming TV. We need to advertise there.” And so that’s been growing. It’s grown well this year. And then of course the big news that happened is something I think I had a prediction a few years ago that Netflix would offer advertising at some point, wasn’t at all clear that they would, but finally they said, “Hey. We need to supplement our go to market with an advertising supported tier,” as has Disney+.

And so this is a thing where number one, it’s important that new inventory is coming into the platform, coming into the CTV world. We’ve seen that happening already. But this is high profile, quote, unquote, premium inventory that really is getting the attention of more linear TV buyers. So in the past, you could argue there were some group of linear TV buyers were like, “Hey. This is just a niche. You don’t have Netflix. You don’t have Disney+. You don’t have a lot of this premium inventory.” I think with Netflix, Disney+ and others bringing on more streaming inventory, that makes it much, much harder for linear TV buyers to continue to or to ignore streaming. And so I think we’ll see more experimental but more testing budgets come in from linear buyers who were not using CTV as part of their mix, and that’ll just improve the whole ecosystem. As we’ve seen, this is a two-sided marketplace. More inventory attracts more advertisers. More advertisers attract more inventory. And so if you take a step forward on one side or the other, it helps the entire industry.

David McBee
Okay. So what about the world of CTV for local advertisers? What does that look like? Will it be easier for them to be in this same space with the big guys?

Frost Prioleau
Well, yeah, it’s super interesting area. If you look at what programmatic does is it really levels the playing field between national advertisers and local advertisers. And if you look at the business that Google and Facebook have built out, they’ve got millions, I think I forget the exact number, but literally a million local advertisers or smaller advertisers on their platforms. In the past, linear TV has not worked well for a lot of smaller advertisers for a couple reasons. One, creative has been expensive to produce. And there are many solutions now that we’re seeing where small advertisers can get high quality creative produced for a couple thousand dollars.

And secondly, the targeting was quite blunt instrument. So a small advertiser, call it a yoga studio in the west side of Fort Worth, Texas where I live, really doesn’t want to advertise across an entire cable zone because that advertiser might know that, hey, their target market is just a couple zip codes. And so the ability for local advertisers to target at a smaller geo area than a cable zone, just to a couple zip codes, and even beyond that to just target the people within those zip codes or the households within those zip codes that fit their particular need. And I’ve used in the past a luxury car dealer, probably fine advertisers throughout the whole cable zone, but they can go and select just the households that have household incomes in the range where their target market is. Or a local retail store that says, “Hey. I just want to advertise to households with kids that were within a couple zip codes.”

And so that kind of availability is there now for small local advertisers who can run campaigns and spend a couple thousand dollars a month very effectively using CTV. And so I think this whole trend around the democratization of CTV is a super interesting one and one that could really expand the market for TV advertising in general.

David McBee
I know you’re right because the more I watch CTV, the more I start to see some of these small local advertisers that are right in my backyard, and I just feel like it’s a better experience for me as a viewer as well. So [inaudible 00:09:05].

Frost Prioleau
Well, and the thing that I say, “Hey. Simpl.fi is not a company that would typically be advertising on TV, but with the targeting aspect, not geotargeting, but the targeting aspect available on CTV, it makes sense for us to run CTV ads.” And so if you’ve been to our website, might see that we’re retargeting you with a CTV ad, which we couldn’t do and it wouldn’t make any sense to do for us to do a linear TV ad for Simpl.fi.

David McBee
All right. So what kind of an impact will these local CTV differentiators that you’ve just mentioned? How will those differentiators impact the big national brands that have local locations all over the country?

Frost Prioleau
Yeah. So one of the things we’re seeing is advertisers large and small take advantage of the precision, and it could be the geo precision or the audience targeting precision of course, of CTV and programmatic in general. And so what we’re seeing is as automation comes into play, it used to be if you’re, say, a grocery chain with 400 outlets, it would not make sense for you to run 400 different campaigns or even 4,000 different campaigns if you were running 10 different tactics at each outlet. And so what we’re seeing now is that those sort of companies which used to run DMA-wide or statewide or regionwide campaigns can now run campaigns just around their 400 stores with unique creative around each store, with unique budgets around each store, you might want to spend more on some stores than others, and with unique measurement and individual measurement around each store. So we can see that the store on the south side of Albuquerque’s advertising is working better than the store on the east side of Dallas.

And so the ability to localize and get the benefits of localization for companies that in the past who have been running national campaigns is something that we see more and more of. We expect that trend to continue. And really it’s a combination of two things, one, the precision of targeting and measurement that you see in programmatic, and then just the automation to enable that to happen without taking a huge amount of time on the media teams that have to execute those types of campaigns.

David McBee
I think that’s great and those larger advertisers that have all those multiple locations, they can just… It’s going to make it feel so much more local in each city. I think that’s awesome. Can we talk briefly about what some of the larger retailers are doing with their data and their media networks?

Frost Prioleau
Well, yeah. I mean, the buzz… Clearly, there’s a ton of buzz about retail media networks and really where almost all retailers are looking to what Amazon has done. And they’ve said, “Hey. Amazon has fantastic data around their users,” but the retail business in general is a fairly low margin business. So it’s a great way to boost margins and generate more revenue and margin from a retail business to build an advertising business on top of that that leverages the data that those retailers have. And primarily this is focused on the CPG brands that are advertising or that are being sold through that retailer. And so that is something that is certainly growing, Amazon leading, Walmart, Kroger, Target. You see many, many brands in many verticals building advertising businesses around that and essentially using their data to sell more advertising space on their own websites, on their owned and operated websites, but also using that data to execute campaigns for their advertisers across the rest of the internet. And so targeting their own shoppers when they’re visiting other sites or watching CTV or what have you.

What’s interesting about that, and it’s sort of similar, many of these advertisers have fairly limited… They have a limited set of data, which is super valuable. And one of the problems in the industry right now is that they take that data and they try to match it using a typical onboarding service to target on third party data, and they have fairly low match rates, in the 40 or 50% range. So half of their data just becomes unusable for targeting outside, off of their own website. And so that’s something we’ve been working hard on. We have with our addressable solution ability to match a 90% range. We’ve seen a ton of uptake on that. In the political world, that has a lot of user data as well. And we see some uptake happening on that with the retailers as well, who are very much focused on, “How do we maximize the value of our data?” And one of the key ways to do that is by maximizing the match rates to target those users when they’re traversing around the internet or watching streaming TV or what have you.

David McBee
Okay. While I have you, I want to ask you about artificial intelligence. Everyone is talking about ChatGPT and all the things that people are doing with it. I actually used it yesterday to write a poem to my wife because she’s sick, because [inaudible 00:14:36].

Frost Prioleau
Did you tell her that it wasn’t you?

David McBee
Not at first, but I did come clean. So how do you see that impacting the agencies and advertisers that we work with?

Frost Prioleau
Right. So programmatic advertising has long used machine learning. So there’s a ton of… We run what? 100,000, 140,000 campaigns a month. We use a ton of machine learning to optimize those campaigns to make sure we’re bidding the right amount on the right ads and to drive the right performance that our customers want. But AI is something different than that. It’s really automating sort of use cases that humans might do. And in particular, ChatGPT has a lot of applications I think in advertising. On one hand, it has the ability to extract contextual themes from websites where ads are being targeted or mobile apps with respect to sentiment. So it sort of democratizes some of the contextual capabilities, but it also… If you look at customizing creatives, there’s an opportunity, in whether ChatGPT or other engines that are more specific, to write a host of creatives, to personalize those creatives based on the audience that’s being targeted.

So we just talked about localization for these retailers. And so if you have 400 stores, wow, how do you write… What 400 creatives do you need? Well, AI can help write creative around each store based on inputs that you have. Similarly, landing pages. A lot of people looking to drive SEO, SEM, and you just sort of expands this concept of mass personalization where if you know that… I mean, you could essentially write a landing page for every keyword that you’re targeting with a Google search ad. You probably don’t get that specific, but you could certainly see a bunch more specific landing pages to really focus on the needs of and the interests of people who come to your site for a particular reason. So there’s just a whole host of reasons or a whole host of ways.

There’s a general theme in programmatic advertising in particular around automation. A lot of that automation that we’re focused on, of course, is in workflow, automated optimization, how do you run campaigns across multi-channels at once and automatically make sure the budgets are being spent across those channels in the most productive way, but there’s… So there’s another leg to the automation stool and automating creative and some contextualization and classification as well. And so another sort of tool in the toolbox of a automated advertising platform.

David McBee
Sounds like it’s going to be interesting, doesn’t it?

Frost Prioleau
It’ll be interesting and there are lots of predictions being made about it, but it certainly has direct impact in the advertising space.

David McBee
Well, Frost, thank you very much for being my guest today and for sharing your predictions for 2023. I’ll see you next January and we’ll check and see how you did. Okay?

Frost Prioleau
You bet. Well, I’m sure we’ll see you far before then, David. So take care.

David McBee
All right. Thank you. And thank you all for joining us for the Simpl.fi webinar series. For more information on how Simpl.fi can help you achieve your goals in 2023, please reach out to your account manager or send an email to hi@simpl.fi. And visit simpli.fi/webinars for past episodes of the Simpl.fi webinar series. And make a note in your calendar to check out brand new episodes every second Monday of the month. I’m David McBee. Be awesome. And we’ll see you next time.

Connect With Us

Please complete this form to receive more information.

Learn More.

×

Request a Demo

Complete the form to request a demo of the Simpli.fi platform and see a sample report.

* Required