Stop Blocking the News: Brand Safety, Performance, and the Case for Journalism

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This episode of Signal & Noise features industry veteran and well-known personality Lou Paskalis in a wide-ranging conversation on the state of advertising, brand safety, and the future of news media. The discussion explores why marketers have historically avoided advertising in news, the misguided reliance on keyword and domain blocking, and new research showing ads next to quality journalism don’t harm brand perception.

Paskalis also dives into how AI, programmatic buying, and publisher data strategies are reshaping the economics of journalism—and why supporting trustworthy reporting is both a civic duty and a smart business move

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Brett (00:00)

Hey everybody, welcome back to Signal & Noise. We've got a very special guest today, Lou Paskalis for our listeners that are in the Ad Tech and MarTech space. He's about as well known a person in the industry ⁓ as you can imagine. So welcome to the podcast, Lou. That being said about how well known you are in the industry and how you've been on the speaking circuit for a number of years.

I've seen you going all the way back to my Nielsen days, but we certainly sort of got to know each other a little bit at Neustar TransUnion. ⁓ I'd love to hear, know, Lou Paskalis, introduce yourself in your own words to our audience for those that don't know your background and who you are in the ad tech, martech industry.

Louis Paskalis (00:44)

Well, I appreciate the opportunity and well-known could mean infamous. Hopefully, I can dispel that in the next couple seconds here. Yeah, so I started in the advertising business in the late 1980s at a small family-owned company called Ernest and Julio Gallo. Gallo was a big advertiser in a small category. I learned the ropes from Ernest himself, who was very value-conscious.

Brett (00:48)

Hahaha!

Louis Paskalis (01:11)

I used to like to say, if you got something that was worth a dollar for two cents, he'd ask why you couldn't have gotten it for a penny. And so it was really about, in those days, understanding the marketplace dynamics And so ⁓ I transitioned from that to briefly having my own company in the product integration space, sold that successfully, joined American Express.

Ultimately ran ⁓ media there, content marketing, launched a mobile marketing practice. I think that's where we met. ⁓ And then was recruited from there by Bank of America in 2013 and went over to Bank of America to run global media and was given a couple of other areas, including marketing data enablement and marketing data use governance.

And that really set me up for the era that we're in now, ⁓ where I think, you know, it was almost like getting my second MBA, as I like to say, ⁓ in data compliance. And the bank was very risk averse. And so really challenged us to, you know, make a good business case for the use of data. And I love the standard that we had there, which was just because we have permission to do something doesn't mean we should. And it created a very high governance bar.

And I think where we're at now as an industry, particularly in the era of agentic AI and the ability to really mine data at a granular level, we're gonna need to understand the permission provenance. So I do a lot of speaking on that. And today I have my own company, AJL advisory. I have two dozen paying clients, ⁓ most on the tech side, trying to understand how to talk to marketers, some on the marketing side, really trying to figure out how to connect what the marketing discipline is to the CEO and CFO growth agenda where I have had some experience in my career and really, really enjoying it. It's fulfilling, it's rewarding, it keeps me busy.

Brett (03:05)

That's awesome.

Rio (03:05)

All right, well, thanks for that background, I mean, we're really excited to have you on the pod today. This is kind of a continuation of a topic we've been digging into with different guests about really what's going on with the news media, right? And it's kind of, it's a great topic and it's very timely because in many ways, I look at it as almost like a paradox. In some ways, the news has never really mattered more, right? We've got tons of like...

bombarded with information, lot of it disinformation, a lot of it AI slop now, right? And people need accurate information in order to make informed decisions on what they're doing, who they're voting for, et cetera. But at the same time, the news media is under tremendous strain, right?

Some, including me, believe it potentially jeopardizes the future of the industry itself. You look at some numbers since 2005, US has lost more than 3000 local newspapers, shrinking from 7500 to roughly 4500. Brett, we ⁓ talked about this last episode about how the industry is really, look, the revenue it takes in has been halved since from 2000 to 2020, which is really kind of shocking, right? And these recent closures and the numbers really point to the future communities really don't have a primary source of local reporting, right? And you look at like why is a lot of this happening? I think a lot of brands when they make decisions, CMOs when they make decisions about where to advertise, many of them just avoid news out of fear, right? ⁓ Which ⁓ I think a lot of that's misguided, but that's one thing we're gonna talk about today. Lou, love the future news study that you collaborated with Stagwell on,

I love that that found that there's no negative impact on key brand metrics when ads run next to quality news, right, which I think is not surprising, even on really, really tough topics, right? ⁓ In a lot of ways... ⁓the way the industry's handled this over time, whether it's over broad, you know, keyword blocking lists ⁓ or different tactics, just avoiding news altogether. This has demonetized a lot of legit news content, despite the fact that this study and others have shown that there really maybe is no negative impact. And this money really could have gone to fund better reporting and better quality journalism, right? And then you look at what's going on with AI right now with, you know, referral traffic really falling off a cliff. This is going to be another ⁓know, death by a thousand cuts, right, this would be another cut impact in the industry, right, and publisher monetization has already fallen, which is really, which is bad, right, so in the next hour or so we're really looking forward to talking to you about this, looking at brand safety, risk versus over caution, talk about how brands and CMOs and marketers maybe should be investing in quality news and investing in good journalism, right? And when we look at where to put their ad dollars, we talk about how AI is shaping this, how the business model of journalism is changing a little bit with the goal of giving some practical steps to marketers that they can look at immediately this month, this quarter to help support trustworthy reporting and good journalism overall. So with that said, let's get into it. And Lou, I started out with the future of new study with Stagwell, which again, I've worked with Stagwell for a long time. I think they're fantastic organization. ⁓ As I mentioned, I found there's no adverse impact on purchase intent or favorability when ads ran next to negative, but high quality news. Love you could maybe talk a little bit about this, about the study, about the findings, and about why they're important.

Louis Paskalis (06:24)

Yeah, sure. I agree with you. I think what Mark Penn in particular and his leadership team have done at Stagwell is incredibly impressive. When they did the initial study, know, a lot of times when you see these studies, you look at the end and it equals 1,244 adults. They studied 50,000 US adults, right? This is meaningful. This is material. They leveraged Harris Poll, which is one of their you know, internal agencies. And I found so much in the initial study, which is now over a year old, but still very compelling. And then we did a similar version in the UK with 20,000 US adults, which is similarly large. If you look at the relative populations of the two. And, you know, the things that stand out to me, number one, you correctly said there is virtually no impact in purchase intent when ads run adjacent to provocative ... content I think that's part of the evolution that we've gone through. ⁓ I think in the last decade, we've become less, sensitized to, okay, there's going to be unsettling news every day and there's going to be ads next to it. And I'm not going to blame the advertisers for being adjacent to the ads. When this initially started on the marketer side, we were trying to avoid ISIS beheadings in UGC. ⁓ And yeah, it was really black and white. You need to be away from that. But it's actually grown. If you get the reference to Seymour and the little shop of harm or horrors, the Venus flytrap that gets bigger and bigger and ultimately eats its owner. And now everything can be construed as a potential adjacency issue. And that gets problematic. And where there was a tipping point in the culture. And the tipping point was the George Floyd incident.

Rio (07:56)

Yeah, who wants to be near that? Yeah, no kidding.

Louis Paskalis (08:26)

in Minneapolis and the ensuing Black Lives Matter movement. And what happened there was a bit extraordinary inside of the enterprise. Corporate communications, which enjoys a very privileged relationship with the CEO, said, perhaps we should get out of news for a little while because it's very provocative right now. And that has metastasized into something permanent now.

In many cases, think you've got marketers that are doing that for reasons they don't fully understand anymore You've got CEOs who if you ask them, are you advertising a news? They absolutely when in fact they have policy whether or not. you have to be, yeah, literally have, so you have three kinds of problems today with the demonetization of news. You have people who are avoiding the category altogether.

Rio (09:12)

So is this the official policy of these brands, Lou?

Louis Paskalis (09:25)

One very good friend of mine who is a very accomplished CMO said on stage at an event that I was at, why would I advertise in news when I can reach the same audience elsewhere without the risk? This is a friend of mine, a highly respected leader. And I went tearing into the green room to say, wait, how can you say that? Because number one, you can't reach

Rio (09:53)

Yeah, I would argue you can't hit the same audience, right? mean...

Louis Paskalis (09:55)

You can't hit

Brett (09:55)

Yeah,

Louis Paskalis (09:55)

the same audience. And in that same stagma, one of the things that's buried in there that as a long time media buyer, I can tell you was like a gold nugget. 11 % of people surveyed, self-identified as news junkies. In the study definition, a news junkie is someone who is only consuming news when they're consuming media of any form. That's unduplicated reach. Unduplicated reach drives the outcome of every campaign.

Brett (09:55)

yeah.

Louis Paskalis (10:25)

And so news delivers that they also deliver a very affluent and influential audience. They deliver an audience that has, you know, the highest likelihood to have multiple graduate degrees in a household, to take vacations abroad, all the other things that say that they have the means to purchase things. Right. So you can't leave that on the table, but unfortunately the marketer hasn't been able to make that case. So that's the news blocking. Then you get the domain level.

And domain is, you know, we don't advertise it in New York Times because it's too provocative. And I think that is risky too. And I'll come back around to that in a minute. They block specific publications and they end up blocking a lot of them. know, the problem with both keyword blocking and domain blocking is it's like a roach motel. If you remember the ads for that, the keywords check in, but they don't check out. And so

Rio (11:02)

So will they block specific publications?

Louis Paskalis (11:17)

One of my favorite things to do with clients is ask them, when's the last time you audited your keyword blocking list? And the answer, yeah, yeah, the answer is never. We've never audited our keyword blocking list. And so you have things like Hillary Clinton in there. Well, she's now a grandmom living in Scarsdale, New York. ⁓ Maybe it's time to take her out of the penalty box. But domain level blocking is accretive over time. And you just end up blocking more more and more publications. ⁓

Rio (11:22)

Let's just grow, over time, right?

Brett (11:32)

Yeah.

Louis Paskalis (11:45)

But the one that's really insidious, and I think the one ⁓ which was limited by the technology that we had available to us six or seven years ago, but is no longer limited to that technology, is keyword blocking. Because keyword blocking ignores context. And as we all know, context is everything, particularly in news. And so a lot of the traditional ad verification companies really have a keyword blocking core with their clients.

I'm also working with a company called Mobian, which is Jonah Goodhart's third venture, maybe fourth. And wasn't that great? Yeah, I listened to that a week and a half ago. Yeah, it was great. And the gist of it is what he's doing is he's looking at individual article or page level context and understanding it not just from a suitability standpoint. And we'll get into a different screen safety and suitability.

Rio (12:20)

Yeah, I heard listening to him on Marketecture podcast recently. That was good. Yeah.

Louis Paskalis (12:42)

but also from a what he calls persona's perspective to try to understand who am I talking to based on their interest in this content. And the technology has evolved and he's leveraging AI and leveraging more sophisticated models, not just in news, entertainment, lifestyle, sports, whatever it is. So I can actually reach those audiences that are very passionate about that because to your earlier point, interest in news is growing. We are in a tumultuous period of time.

People want to understand the impact of tariffs under day-to-day kitchen table issues. You know, should I be stocking up on stuff that comes from abroad because it may go up significantly? Should I accelerate my car purchase because these tariffs are really going to change the dynamic? And so you're seeing green shoots in a number of areas, particularly young people, returning to journalistically driven news sources. These are very valuable. If you think about how hard we've worked as an industry to reach young people.

Well, they're actually self-selecting in the news. So we need to challenge domain blocking. We need to challenge capital blocking. We need to challenge domain blocking and we need to challenge keyword blocking. And there are tools out there to do that today. And that unlocks real value for marketers.

Rio (13:57)

So sounds like you're saying there's been a gradual changing of perspective, let's say, where people are acknowledging, like it was over some of these massive keyword block lists, these domain level blocks of legit publishers. that was overzealous. There's an acknowledgement that's happening. But it sounds like the practices haven't caught up with that. Is that fair to say?

Louis Paskalis (14:19)

No, I think two things are changing. One, the demand for news, which had been declining, is now starting to pop up. We saw that before the last general election, ⁓ where again, young people were ⁓ moving away from social media as their primary source of news and moving to things, was traditional news sources or podcasts. A lot of people refer to the last election as the podcast election. And there are studies that say more people, more voters, got their news from podcasts more than any other source. So that's okay, because you know, podcasts are easily rated. And there are a lot of journalists who now have their own podcast as either a side hustle or they've evolved to that. ⁓ So demand is increasing. On the marketer side, it's it's hand to hand combat, I don't want to diminish the challenge that you have marketers sort of looked at the brand safety issue as set and forget. And as you know, that doesn't work, the culture changes, what's acceptable today might not have been acceptable two or three years ago. ⁓ We're constantly seeing the context of time, in how consumers consume facts, right? And so you really need to make it a more dynamic practice. I was very fortunate at Bank of America that my boss really believed in the importance of setting up a brand safety and suitability practice. And so we were able to take a very senior leader on my team, staff her with two other internal resources, build an agency team around her and set some of what I think today, 10 years on are still some of the best standards out there. And it was, I think we used more Harvey balls than any other effort I've ever been involved with because we had to really get into the nuance of it. You have to work it to get it right. And on one hand, you're protecting your branch, you're protecting shareholding.

Brett (16:03)

Hahaha

Louis Paskalis (16:16)

On the other hand, you still want to deliver the growth, the audiences that will drive the growth that news can bring you when you've got it rated correctly. And so now we're in an era where that can be done, but we still have to challenge because if you look at the marketers to-do list, understand what agentic AI means to my go-to-market, staff that accordingly, rethink my entire marketing stack, rethink my tech stack, explain the new ROI, move to a customer long-term value framework and I got to fix brand safety and suitability? That's going to be at the bottom of her list. And so you really got to get in there and talk about, hey, this is going to make your media value, return on investment much better. And that's where we've had success.

Brett (16:59)

Which ties back to that, yeah, it ties back to that unduplicated reach story, right? As long as you prove the value, I've seen you give these presentations, you did it at of my own events at Brave New Worlds, right? The quality of context, right? The quality of audience, the household income, all of that defends what's gonna really drive impact for an advertiser. How do you actually get them over that hump though? Because I think they're gonna come back to that notion of.

Louis Paskalis (17:21)

Yeah, and it... Yeah.

Brett (17:26)

Yeah, what about the bias? about the article, you know, reliability stuff, right?

Rio (17:30)

Yes, it sounds like it's at the marketer level, like CMO level, this needs to ultimately change the most because the technology's changed, right?

Louis Paskalis (17:34)

It is, it is, yeah. Yeah, I think there's two ways in. think the first thing you have to do is to drive reappraisal based on value. And that is, you know, we've been very fortunate at Ad Fontes Media, where I also serve as Chief Strategy Officer, where we rate the news on bias and reliability. We've got case studies that very definitely show the value of returning to news.

We were able to work with companies like the Trade Desk and some of their biggest advertisers. And we now have case studies, one from a financial services company where we created a pre-bid segment for them based on their risk appetite for bias and reliability. And everything has some bias. There's virtually no publication out there that isn't a little biased. And a certain amount of bias is okay.

It's when you get into the extremes that you want to avoid for obvious reasons. And reliability is just another less polarizing way to say truthfulness. And so we look at reliability in a number of dimensions. And we were able to create this pre-bid segment for this financial services company. And they saw 70 % decline the cost of customer acquisition. 70%. And on top of that, their CPM actually went down because news is being sold at a discount today.

That won't always be the case, I believe. I believe we'll start to be able to get back to premium pricing for news because it delivers a premium audience. Right now, the marketplace dynamics are such is that you can actually ⁓ really take advantage of the audience they deliver at a lower price than other alternatives like sports, for example, has gone through the roof. Yeah, yeah.

Rio (19:08)

Better audiences at lower cost, that is just crazy. And by the way, I love the study you put out with Ad Fontes know, that Vanessa, you know, she's just down the road from me is funny. I've been meaning to go to that, when her wife has a Brazilian restaurant, right, if I'm not mistaken.

Louis Paskalis (19:22)

It's phenomenal. highly recommend it. If you love Brazilian cuisine and they have a lot of fun. I'm on their mailing list now. So I get a lot of invites to a lot of fun events every weekend. So Little Brazil it's called.

Rio (19:25)

Effort.

Brett (19:33)

yeah, so with that case study, were you able to scale that out? Did they double down on that integration with?

Louis Paskalis (19:40)

yeah, so they've now embraced news and they've returned to it. We've done another one with a movie studio where we had similar results. ⁓ And it's so easy to do now because we built these pre-bid segments in virtually all of the DSPs. ⁓ We partner with Trade Desk in launching something called News Navigator, which truly makes it so easy for the marketer to experiment with news. ⁓and they've got a group of publishers. And so what they're doing is they're just with News Navigator. You're adding news inventory to other inventory and you're bidding. And marketers are seeing tremendous, tremendous results. And as a result, we're on track to bring in a million dollars of incremental revenue to news publishers in 2025, just from News Navigator alone because their CEO and founder, Jeff Green, is really committed to the open web and particularly news. And so he invested in technology that others have not been able to prioritize. Again, everything comes down to prioritization. And he saw it as almost a civic mission to ensure that the fourth estate ⁓ is vibrant and able to deal with the reality that we're in today. And look, they're on their back foot on a number of fronts. There is a war on truth. And that call is coming from inside the house.

Brett (20:59)

Yeah, it's an existential thr-yeah.

Louis Paskalis (21:03)

there's a war on truth, that call is coming from inside the house. And then you've got the agentic stuff that you mentioned where it's very hard to discern what is real quality journalism. then what is, this happens to me, I have the YouTube premium product and I'm a military history nut and I'm constantly watching stuff and I was watching something the other day that had like four or five facts wrong in the first two minutes in the comments and I said, this is terrible. ⁓ I don't know what you're doing. ⁓ But it's very clear that it was driven by AI. And if you think about journalists in maybe a bit of a grandiose way, they are the knights of truth. They are on the front line trying to uncover what the truth is, in some cases a great peril to themselves, to ensure that people are informed. And it's not just the electorate at election time.

Although that's incredibly important and it's the reason the framers of the constitution called journalism out in the bill of rights, the only profession in the constitution or the bill of rights called out by name because of its important role to ensure that the electorate is informed and that elected officials are held accountable. But it's just, it's the everyday, as I mentioned earlier, the kitchen table issues where people just need to know, what do I do now? ⁓Think about, you know, should I send my kid to Harvard if I live in a foreign country, given all the turmoil right now about, you know, students coming to United States on visas to study? Maybe I shouldn't do that. And that's changing. Yeah, many of them are not. And I think that's toward detriment, but that's beyond the scope of this conversation. At the end of the day, news has become more important than ever. And it's a better conduit for marketers to grow the return on their investment.

Rio (22:35)

Yeah, many of them are not. Yeah. That's interesting. I we can pivot a little bit here and talk about, I you've talked a lot about programmatic, so maybe a programmatic reality check, we can call it. I read that you had called it the worst thing and the only salvation for news media. I find this interesting. We've talked a lot about it on this podcast about how for publishers.

Open exchange CPMs have been very low, many of them under a dollar. When you look at the take rate and all the tech tax, it's less than 50 cents on the dollar, ends up in publishers' pockets. think because of that, we've seen a big push for direct sale deals and other things to change things a little bit. love to hear what you think about this, what can be done to change it, what did you mean by that quote exactly, et cetera.

Louis Paskalis (23:34)

Yeah, so the actual quote that I've been saying for about almost a decade now is that programmatic is the worst thing that ever happened to advertising and it's the only salvation for marketing. And what I mean by that is it's the first and only instance that I'm aware of where marketers get real time signal about where they can put place thier ad And so it allows us to understand context and allows us to understand much more⁓ on an, on an almost deterministic level and in real time where my ads are running, I said to the leadership at Twitter about a decade ago, at some point, your data will become more valuable than your ad inventory. And that launched an entire workstream, ⁓ with their data team. Cause the leadership got behind it and we were a little bit ahead of the time, but it was all about real time signal. you remember Twitter and it's heyday was all about breaking news anywhere in the world.

The Arab spring doesn't happen without Twitter. Right. And so if I can understand that immediate context, I know something about the person, what their interests are. If you knew what I followed, you'd know that I'm a formula one fanatic. And the only time I go on X now, the only time is for whenever there's a formula one race that I'm watching live because there's an entire community of friends that I've never met, that are all sitting there snarking about why did Ferrari just changed to medium tire, know, like the crazy stuff. That real time signal really tells you my passion, my interest, my ability to be receptive to a message, your ability to tailor that message using dynamic content optimization so that it breaks through the clutter. So it's about the signal and the ad inventory is secondary, but unfortunately, like everything else in this industry, the buyers and their agencies

Brett (25:04)

Yeah

Louis Paskalis (25:31)

used it as a mechanism to hammer price down and commoditize things. Is an impression in a high-creating news publication worth the same as an impression in a ⁓ cooking show that's running on YouTube? I would argue it's not. ⁓ I would argue on a number of factors, including latency. mean, if it's a real-time news thing, you know a lot more about me than if I'm watching some video on demand about how to make ⁓ Chateau-Briand.

Um, so I think if we look at the era of AI to finally get there, and I found this great quote a couple of weeks ago, I'm not going to remember the quote. And I said it to the former Twitter leadership via text, all the guys that were involved in approving, you know, this experiment that we were doing with them. Uh, we were just a little too early guys. And it was a very clear argument that look with AI.

Rio (26:00)

Yeah.

Louis Paskalis (26:28)

third party data signal is going to become vital to marketers. You hear a lot about first party data and everybody is weaponizing their first party data. But at the end of the day, most of the first party data that I have is very, similar to the first party data that my biggest competitor has. And so I look at first party data in an analogy of the kitchen as salt and pepper. Very important on the kitchen table, helps flavor the food, et cetera.

Brett (26:35)

Yep.

Louis Paskalis (26:58)

but the kitchen, they have a whole spice rack full of rosemary and thyme and turmeric and basil and sage. That's third party data. That third party data tells me what people are interested in, ⁓ what they're doing right now, gives me signal to append my creative so that it's hyper resonant. The great Rob Norman is fond of, ⁓ he said this to me, wow, a decade ago. He said, I fear that ⁓the end of the force, we're reaching the end of the force fueling economy. The idea that you you would trade attention to a commercial for access to content. And again, this was a decade ago. And, and, and, know, if you play that out, you therefore must engineer relevance into every interaction. How can I make this ad more relevant in this situation? So the person stops what they're doing and engages with my ad. And we now have the ability to do that. Programmatic signal interpreted by AI and served by dynamic creative in real time allows me to win the moment. Every impression is an opportunity to make a good impression.

Rio (28:05)

I think if you combine contextual signal with that too, it becomes pretty interesting. Maybe that's something that X can do, I mean, I've always thought their advertising products were just so unimpressive, right? I mean, I've never bought anything that I've seen there, but I compare that to Facebook, I'm not embarrassed to say, I actually have bought a lot of stuff because of Facebook ads, right? That have been super highly targeted and apparently they have plenty of intent signal, right? Because they were able to serve me up things I ended up being interested in and you know, and I think X has always been more, I mean, look at the ads there, they're more upper funnel, right, awareness. So maybe they can do that. Maybe pulling in third party signals can do it. I don't know, but they haven't cracked the code yet, that's for sure.

Louis Paskalis (28:39)

Yep. I don't think X is going to be focused on ads in the future. I think we're very clear signal at the departure of Linda Yaccarino and the fact that X got folded into XAI. I think X to Elon represents a feeding mechanism to grok so that he'll understand behaviors. He'll be able to use it as a training model. ⁓ I just, you I think he raised $16 billion for

Brett (29:07)

Yeah.

Louis Paskalis (29:12)

X AI. and I think that at its, ⁓ at its height, ⁓ under Elon X ads was returning about two and a half billion dollars. So I think he's willing to walk away from ads and just focus on it as signals of intent or interest for my AI product. And I don't think it's a good proxy for where the industry is going, but I think everywhere else. Yeah. People are going to start to realize.

Rio (29:13)

XAI,

Louis Paskalis (29:40)

marketers, excuse me, publishers are going to start to realize I have this wealth of signal that I can actually leverage, which in most cases has some uniqueness to it. And the more that publishers start to think about what can I do with this unique signal, whether it's geographic, whether it's contextual, ⁓ whether it's intent or interest, all of those things are going to require some craftsmanship. But in order to combat this era where we're moving from search to solutions or answers where people aren't visiting the page and referral traffic is going to go to zero. As Nick Thompson said at the Atlantic a couple of months ago, he pulled his team together and said, it's going to go to zero. Well, it was zero before Google. ⁓ And so now you're going to have to build demand and demand is going to have to come from the consumer with great content, great editorial. And we all have subscriptions, probably too many of them, of things that we read because the content is great.

But then great intrepidity, great entrepreneurialism in terms of what we do with the signal that we get and how we break through to marketers. And I think it's going to radically decommoditize the industry. It might be a challenge for currency, but I don't think it's going to be a challenge for marketers who really want to be more relevant and engineer relevance into every one of their ⁓ impressions.

Rio (31:03)

Looking at signal, looking at relevance, mean, ⁓ I think one challenge for publishers has been, okay, we have signal, we have great audiences, we have great, we have all these assets, but how do we actually package this up to get brands, get CMOs, to get marketers, to get agencies who are doing the buying interested in this? And think a lot of it comes down to direct sales. What do you think publishers need to do in order to be better at direct sold campaigns? We see they're getting higher prices, better CPMs.

Brett (31:03)

Yeah, it w-

Rio (31:32)

They're keeping more of every dollar. What do think they need to do to get better at this?

Louis Paskalis (31:39)

I think they need to hone their narrative. I think that a lot of publishers tend to have a one size fits all. It's almost like a media kit from 25 years ago. And they spend a lot of time talking about their editorial content as they should. And the unique proposition in that regard and the number of Pulitzer prizes they might have or whatnot. But I think they need to actually, for every calorie they put into that side of the narrative put another calorie into data and insights, right? You know, there's a few people out there in the industry, I think of Edwin Wong, who recently left Fox to go over to Uber ads, who have spent their entire career doing that is mining this rich cornucopia. And you know, if you talk to a typical CRO, they're gonna say, gee, is that really worth the round trip? But I think there's a modern group of CROs that are recognizing that our value, our differentiated value, is a combination of the great customer, consumer, or reader experience that we create and the great insight that we have about them, which is more actionable. It's not like a com score insight. There's nothing wrong with com score, but I don't necessarily need to know that our readers are three times more wealthy than the average reader of book. That sounds like an old radio ranker report. If you ever bought radio, every single radio salesperson comes to your office with a ranker report that says,

We're number one in the 2 a.m. to 4 a.m. day part in this market. And they kind of lose credibility. No, it's like, what are you doing with data science? How are you helping me connect to my audience? What is your strategy working with the infosomes of the world or the live ramps of the world to really connect your signal in a deterministic but highly safe way to my signal so that we can deliver better experiences?

How can I measure differently on your platform? Right? So it's becoming much more adept at the science of digital marketing. And I mean digital. You said earlier that we've lost a lot of newspapers in this country, particularly locally. we have, ⁓ I'm more concerned about news platforms. And most of those local news platforms started out as newspapers, but today their value to the community is more digital than print. And I think we have to accept that.⁓ you know, I, I still get, ⁓ the New York times delivered to my door cause I'm old school and I like to thumb through it, but I read a lot of other publications online now. ⁓ and at some point I'm sure. Print will go away, but local news won't. And so like, that's wonderful. If you think about the importance of data signal, you get a lot more data signals, a publisher in a digital environment than you do in print. Right. ⁓ so I think it's weaponizing the data in a full-throated way, hiring more data scientists to do that, doing more data partnerships, and maybe not just talking to the buyers.

My biggest and most important partner at Bank of America was the chief analytics officer. And she and I worked together to really understand at a very granular level, okay, what are we delivering? How can we take advantage of this signal? Is it valid , are permissions there? Do we have the right governance model in place? And are we creating experiences that really break through? And in those days, we really didn't have dynamic creative optimization. It was more of a manual process where

Brett (34:53)

Yep.

Louis Paskalis (35:16)

We were looking for, the end of the day, more bespoke ads that could be more tightly targeted. That was four years ago. The sophistication of what we can do now is so much better than that. But publishers need to pivot because what they've been selling isn't working. And what they could be selling would be a renaissance of revenue.

Brett (35:38)

Yeah, well, and so to me, that is the crux of how you ensure fair compensation, fair value, willingness to pay, right? Because as you enrich your data at the publisher level, it's more valuable, right? Because you're able to more hyper-personalize, content-optimize, hyper-target ⁓ audiences, right? Which gives the publisher leverage to say, this is worth more than you may think it is. And it moves them out of the, yeah, move them out of the commodity zone.

Louis Paskalis (35:56)

I appreciate it.

Rio (36:00)

and being able to prove it out, right? ⁓ Becoming really good at measurement.

Brett (36:04)

So you wrote a really good article, this might be a good pivot to, which I love when you talk about preserving the vitality of the open web, you referenced it in your question before last, right, as we moved from an era of search to one of answers, you wrote a really good sub stack article called Beyond IP Protection, the Risk of Losing Context in the AI era, and it was, yeah, so I was like, ⁓ Lou's got a sub stack, let me check this out. So part of it was tied to fair compensation, and you're,

Louis Paskalis (36:24)

Hank, you were one of 10 people who read it. Thank you.

Brett (36:34)

Let me see if I can summarize the thesis here is that you talked about Cloudflare, which we referenced a couple of minutes ago. And you basically said, I think we're going to solve this through a combination of technology, potentially industry regulation. Those things in combination will help us solve sort some of the brand safety issues to ensure that publishers, well, brand safety, but also LLM issues, right, of not being fairly compensated as a publisher for your content that's being scraped by the LLMs. ⁓ But you kind of said that that's a, like in Maslow's terms, that's a need that you need to fulfill, but there's a bigger problem at stake here. And this is when you really laid out this idea of losing context and nuance, right? When AI becomes your content source, or a lot of consumers' content source, right? They're just doing these black and white summaries that take out sort of the empathy, the reason why we're, you know. Can you dive into that? Because I thought that was pretty fascinating.

Louis Paskalis (37:35)

Yeah, yeah, and warning to your viewers, this is going to get a little wonky, so forgive me. ⁓ Well, ⁓ so the piece I wrote, which I was very passionate about, was in response to this Cloudflare announcement.

Brett (37:39)

Hahaha!

Rio (37:40)

think our viewers like it, Lou.

Louis Paskalis (37:53)

that prevents the audience from scraping content from publishers of any kind and then incorporating it into their answer environment. And I started to think about that. I'm like, okay, this is a necessary first step. It is stopping the theft of content, theft of content. But in and of itself, it's insufficient. Once you stop the theft, then you've got to have the monetization. And let's be honest, I think increasingly people are going to turn, in my case, Perplexity is my new Google. I very, very rarely use Google. I use Perplexity for everything. Yeah, it's just, I get a fulsome answer. And they are decent about putting footnotes back to the sources. But that doesn't include monetization.

Brett (38:36)

Yeah, I'm with you on that.

Louis Paskalis (38:47)

And so I think people are just going, I think it's, you know, it's the easy button forget the answer where I don't have to go to a bunch of links to really form my own opinion. And while that's unfortunate when you talk about referral traffic and journalism, I also think it's the new reality we need to deal with, and so publishers need to get fair value for their work. And I think that's going to be really hard because fair value for the work has to recognize the sort of lifetime value of that content, inside of the Perplexity engine right there Perplexity is going to use that information over and over and over and over again so how do you decay that over time you know ⁓ New York times always on

Rio (39:29)

And you're going to need new content too, right? They're going to need the updated fresh and if we publish their fresh validated fact check content, right? I mean, it's gold.

Louis Paskalis (39:33)

So so so.

Brett (39:38)

But it calls for like a pay scale that is dynamic and adjusts over time.

Louis Paskalis (39:42)

Right. Right. There was a lot of great press about the New York Times striking a deal with Amazon for $20 million. So Amazon could leverage New York Times content. And, know, the New York Times, Meredith Kopit Levien their CEO, who I've known forever, always on their front foot in this space. I'm not sure that's the right number. I dont know anybody that is, you know, knowledgeable about the right number is. But over time, I've got to believe that that information might be worth more than $20 million, which is a drop in the drop in the bucket. And so we've got to get to fair monetization, which I think is going to take some experimentation. The music industry went through this about 80 years ago with a rights management and the Foley editor gets this and it gets that. Yeah. Yeah. Yeah. Yeah. And it's messy. And I think we have to get there because if the LLMs don't have original content to scrape,

Rio (40:27)

And again, 25 years ago, right, with Napster and figuring out how to, and they have recovered, right, in all fairness, right?

Brett (40:29)

Yeah, and Napster. Yep.

Louis Paskalis (40:40)

then they run out of fuel, right? So they need to make sure that the ecosystem is healthy. And at the same time, the ecosystem needs to defend the content, negotiate for the content. But what I was really trying to get at my piece, and Brett, you for really, thank you for reading it and getting there, is that in all of that, what I've found is that the answers that you get in any, know, chat GPT, I use them all. I have subscription to every one, Claude, ⁓ Perplexity. they tend to boil it down to sort of the dragnet answer. Just the facts, man, just the facts. In any event, they strip away the context, the nuance, the backstory. And I see that as a loss on several levels. First and foremost, that backstory really helps me to understand a lot of the dynamics that we're seeing, right? Like it avoids this...

Brett (41:14)

Yep.

Louis Paskalis (41:32)

sort of where we seem to go in our culture, which is an ad hominem attack. Well, I don't agree with this person. Why not? Well, I don't like that person. Well, do you understand why they're taking that position? No, I don't. I just don't like that. Regardless of the facts, it's a fact-free conversation. And that leads to lead to the ultimate problem that I think we're facing in our culture, which is polarization. If I can't create ⁓ at least a bit of understanding about why I got to this conclusion,

Brett (41:45)

Regardless of the facts, right?

Louis Paskalis (42:02)

then it's unlikely that you're going to have any empathy for me. And, you know, in an ideal world, I might say, gee, Brett, I disagree with you greatly on this topic, but I really respect your reasoning on how you got there. And that empathy creates a greater perspective. And it makes it harder for me to say, I don't like Brett. Yeah. Because at least now I have respect for him. And so what I'm trying and I'm struggling with the articulation of this, as you can tell,

I'm trying to make the case for original content. And again, not just journalism, but journalism is a great example here because journalists, Semaphore does this really well. ⁓ They'll give you the counter argument. They'll give you expert opinion. And it's all, it's all labeled in very clear ways so that you can really consume the content and say, all right, I understand what's going on. I understand the backstory. I understand the counter argument and I'm more well informed.

And a well-informed electorate is what the Bill of Rights asks for in the Constitution of the United States. And so I'm hoping that the oligarchs who all have their own ⁓ LLMs, their own AI solutions, will recognize the importance of this. Jeff Bezos owns the Washington Post. I genuinely want to believe Oligarchs for Good is ⁓ something that

Brett (43:01)

Yep.

Louis Paskalis (43:25)

could be a thing, certainly, Laurene Powell Jobs and what she's done with the Atlantic. You have to say, wow, she's been great. I think Mark Benioff has been great for Time. I think up until ⁓ this administration, Bezos was really an ardent supporter of The Post. I think he's had to adapt a little bit to survive the current climate. But at the end of the day, we need to find a balance between just the answer and the important context.

Brett (43:52)

Yeah. So when you said well informed, it seems to me that most of the social media, the digital platforms that we're involved with on a day to day basis, it's less about well informed and more about well engaged. Right. The algorithmic logic is all about keeping you in tune and feeding you more information that's like the information that you just ingested and engaged with. And people like you ingested and engaged with. So they're taking all that signal and they're saying we're going to just drive hyper engagement. You see it with teenagers, right? They just go down these sort of paths where it's like, what are you looking at on TikTok? Well, it's rigged to encourage engagement versus.

Louis Paskalis (44:22)

Yeah, and yeah. I call the strategy engage and enrage. Okay. And it's, and it's the most provocative, the stuff that makes you angry, that gets you more engaged. If you think about social media, ⁓ you know, the comments are always, you're an idiot, you know, whatever. ⁓ it's not, gee, I totally agree. Yeah. Especially on X. Yeah. ⁓ actually I, wanted to, one of the pro bono clients that I'm working with is a new social platform called Spread. And I highly recommend it. Spread does not allow you to comment.

Rio (44:48)

Especially on X.

Louis Paskalis (45:02)

It only allows you to share content. And at first I was very much against that because, you know, as a marketer, I use LinkedIn to market my own brand by taking articles I think are interesting, writing two or three sentences on top of them and sharing them with my followers. So it's part of my marketing strategy. Spread doesn't let me do that. But I really love going to Spread now because the people I follow on the platform and they've done a wonderful job of recruiting journalists to the platform.

And the journalists like Ann Applebaum are constantly posting their own content. And so it's a curated environment. It's like what Twitter used to be in its heyday, a curated environment of content I want to consume. ⁓

Brett (45:41)

Yeah, you're not falling into the doom scrolling loop, I guess.

Louis Paskalis (45:44)

Exactly. It's actually more uplifting. And so I think the business challenge for the social platforms is how do I get out of the business of enraging my people in order to keep them engaged? And, know, they become less important to news. Most of the major platforms have moved away from news in any kind of ⁓ meaningful way. And, you know, they give very, when they do have news on the platform, the rev share is terrible. It's terrible.

Brett (46:13)

Interesting.

Rio (46:13)

the rev share with publishers, yeah, it's terrible. mean, like, yeah, they're siphoning billions of dollars a

Louis Paskalis (46:15)

Yeah. Apple News gives 70 cents out of Apple News gives 70 cents out of every dollar back to the publisher. No other social, no social platform comes close to that. Because they believe in the importance of news. So I think we've got a lot of work to do in this space. I think that there's going to be experimentation, turmoil, more heartbreak.

I think it's gonna be Darwinian, but at the end of the day, completely forgotten the question. I think it could be both.

Brett (46:39)

Darwinian not or not Orwellian that

Rio (46:44)

I guess I had a question and or comment, right? I mean, I think it's interesting about I mean, think telling publishers you should be striking deals with the with the AI companies that are creating new LLMs because they need your content you should they should be paying you and you look at the amounts of deals 20 million 30 million maybe it seems like a lot for the times but you know for Amazon it's nothing right but I think part of the problem too is when you look at the AI companies like value capture right like they're making people are using them but I'm paying 20 bucks a month right so they're really not profitable yet so I think they should be hammering out deals I think it should be I think that will be part of the publisher business model in the future I believe that but I think that's only going to be one piece of the publisher business model. If they hang their hat and, that revenue stream from licensing content is going to save us, I don't think it's going to be enough. Right? Big picture.

Louis Paskalis (47:31)

I don't disagree. I don't disagree. ⁓ I do think on the one hand, ⁓ there's no future where these AI platforms are not going to have advertising revenue as part of their growth agenda. You know, it's the same thing that we saw in the streaming services early on. we'll never take ads. Yeah, guess what? Never comes quickly. yeah, exactly.

Brett (47:54)

It's the Eric Suford quote, right? Everything becomes an ad network.

Louis Paskalis (47:58)

Everything is an ad network.

Brett (47:59)

So how do you prevent it from ⁓ making some of the kind of stumbling on the same stumbling blocks as we experienced in other, like in programmatic media as a result, right? As they move towards advertising, CTV, same thing. How do you make CTV advertise in a way that's not as annoying and disruptive and interruptive as linear television?

Louis Paskalis (48:18)

I think you got to start with confidence that right now is fleeting. In CTV, you've got a premium audience, you've got a favorable ad to edit ratio in comparison to all other media right now. And you should be able to command a price premium because of the data exhaust, because of the fact that you've got logged in viewers. And with the right privacy policies in place you can leverage that insight and create a much more relevant ad for that environment. But you've got to recognize as an advertiser that if we turn this into another race to the bottom where, you know, I'm going to go with anybody whose CPM is two cents lower than yours. And, know, by the way, I, I've worked for five CMOs in my career and always in an investment role in media.

I was never asked anything about CPM. What they want to know is, did you deliver your business goals, customers, new growth, whatever it might be, brand favorability, and did you stay in budget? And then they ask you where you want your bonus at You know, it's not about CPM. CPM is a very bad and horribly gained ⁓ KPI. ⁓ If you ever spend any time with Adam Heimlich, CEO and founder of Chalice, you know, it's a ridiculous, ridiculous KPI and everybody's gaming it. ⁓ And we need, we need to re-

Brett (49:44)

Yeah. it can often, yeah.

Rio (49:46)

Yeah, never short of opinions. That's for sure.

Brett (49:48)

Well, and see, in a low CPM rate can also be a red flag. It could be like ⁓ a, that, if I'm paying this low CPM for CTV, it's not appearing on the television glass. It might be appearing on mobile. It might be fraudulent, you know, ad impressions.

Louis Paskalis (49:54)

It's Kimmy. It might not be appearing at all. I think below, you know,

Rio (50:03)

But

Louis Paskalis (50:05)

out of the ability.

Rio (50:05)

even looking at CPMs...

Louis Paskalis (50:06)

Yeah. I mean, there's a lot of packing peanuts in there if it's a low CPM and you shouldn't be buying packing peanuts, right? So.

Rio (50:11)

But I think this gets at like who's doing the buying. And I think this has been one of the challenges. So, okay, the brands, have been historically very concerned about it. So I do think that I've seen, I've noticed some changes at CMO level. Okay, maybe we should be advertising, but then you've got the technology that's maybe impeded a little bit. But I think the role of the agencies are also important here because they're the ones doing most of the buying, right? So like translating what the brand wants, what they're okay with.

what type of content they're fine having their ad show alongside, translating that into the actual blocking and tackling of the buys itself, which are a lot of times done by agencies. I mean, it's like, do you have an intermediary in there representing the brand doing this? Do you think that slowed down this kind of, I think, transition back to being comfortable with advertising new sites?

Louis Paskalis (51:00)

Look, as someone who spent their entire career relying on agencies, I am a big fan of agencies. I would not be sitting here talking to two of you without them. I'd probably be valet parking your car out front. Having said that, there have been some big disintermediation moments between the agency and the brand marketer. The first one comes from the era of procurement. So when I was at American Express, ⁓I had a great mind share team. And one day the head of the mind share team calls me and said, Hey, your head of procurement was just in here. And he told us to ignore everything you said and simply try to get a 10 % more inventory for 5 % less cost. And, know, Brett, as you know, in my youth, I was a hothead and I went storming up to the CMO's office. Like I need to see now, you know, and fortunately

Rio (51:40)

Okay.

Louis Paskalis (51:58)

our CMO who is very charismatic, called the programmatic guys, boss's boss's boss, and clarified my role versus programmatic's role. But it is a parable. 99 % of times, it doesn't happen. So you've got an agency whose bonus, which is a material part of their compensation in most models now, is highly tied to efficient acquisition of media. And the procurement person is the one who is blessing that number.

Brett (52:23)

Yep, reach.

Louis Paskalis (52:28)

And if you as a CMO have not wrangled procurement and agreed that low cost CPM is not the metric, but how about reducing the cost of customer acquisition? That could be a metric, right? And that one is not really gameable. We got this many new customers for media, and we spent this much on media. Therefore, one divided by the other equals cost per customer.

Rio (52:45)

Yes. ⁓

Louis Paskalis (52:53)

So we need to get off these really bad proxies that tend to commoditize and not recognize value. I think the second disintermediation that's happened has been, and I'm going to tell a short story here. ⁓ A few years ago, David Sable invited me to go up to his office and visit him when he was moving out of three ⁓ Columbus Circle, the WPP offices there. And so we were talking and it was late in the day. And so I asked him, said, what's the biggest change you've seen in your very storied career about marketing as a discipline. He said, I'll tell you what, when I started in this business, the agencies were being asked in by the CEO and being asked questions like, what new products should we launch? What kind of people should we be hiring? Where should we put our next store? Really, questions that go well beyond how we think about agencies in 2025.

Rio (53:46)

fundamental questions.

Louis Paskalis (53:50)

And then he said, you know, today we're lucky if we see the CMO a couple of three times a year. And what's happened is agencies have been sort of squeezed out of the C-suite and seem to be the proxies for the CMO. The CMO who's having a difficult time articulating the return on investment of marketing. And many marketers see marketing as a cost center as a result and not the investment center that it is.

And they've been replaced by consultancies, McKenzie, Accenture, Bain, BCG, all of which are whispering in the ears of rest of the C-suite that, I'm not sure your marketing is effective. I'm not sure your marketing agencies really understand where the puck is going. And so they've lost influence in the C-suite, which is terrible because consultancies

do many things well and they have an invaluable role in helping facilitate change, but they don't build capability. So my agency is my go-to-market capability and I need to partner with them. I need to let them make a fair profit. They need to be transparent with me about where that profit is coming from. I don't like principle-based media, but it's becoming increasingly the norm. That's another conversation. But at the end of the day, ⁓ we've got to recognize as marketers,

Rio (54:52)

No tech well, yeah.

Brett (55:12)

Mm-hmm.

Louis Paskalis (55:17)

that the agency needs a clear brief and not a conflict with programmatic. And they need to be our partner in innovation and that innovation is messy and oftentimes money gets wasted in the pursuit of learning. That's okay. And we need to tell them that's okay. As long as we're building for the future and we're not slavishly committed to a past, is rapidly disappearing.

Rio (55:42)

Yeah, it's interesting. I mean, don't think agencies are really part of the problem, but I think they're part of the solution, right? I think that you really, need to be on board with this in order to accelerate this kind of, we're comfortable advertising on new sites again. We want to change the way we're looking at brand safety, brand suitability. That's interesting too. mean, the role of procurement, I've seen some like crazy, like I saw one RFP a few years ago where procurement said we don't expect any marginal media. We expect you're gonna find it somehow I mean like that's your race to the bottom and I saw another where a big company was trying to outsource all their ad buying Offshore because they thought it would be lower cost. I mean like just makes no sense to me. So ⁓

Louis Paskalis (56:18)

Yeah. Yeah, and then you have some clients that are going for 180-day payment terms. There's no other industry in the world that goes to 180-day payment terms. And it's just...

Rio (56:27)

Yeah, well, Google and Meta don't take 180-day payment terms. tell you that, right? They're net 30.

Louis Paskalis (56:32)

No. And so the agency has to front, front, front the client who has plenty of money in most cases. So look, I generalizations are generally bad. And I think in some cases, agencies are part of the problem. think in all cases, they should be part of the solution, but we need to get closer. We as marketers need to get closer to our agency and not just the top of the house. What I found is when you're talking to, ⁓ Arthur Sadoun Sidun at, ⁓ at Publicis when you're talking to Brian Lesser,⁓ at WPP media, there is tremendous alignment. Yes, we're philosophically aligned. It's the mid level that often doesn't get the brief. They're still down there trying to buy based on price and not understanding where the puck is going. And so I, I, one of the things I've learned in my consultancy is to a diagnose, are we talking to the what people or the how people, the what people are typically the senior ones who have a vision for the future, what we're going to do in that future and really want to drive differentiation and change. The how people generally are transactors. They're mid-level, their KPIs are very much about value and really measurable, tangible things. And they don't care about the ESG agenda. They don't care about diversity. They care about performance. And if something is two cents cheaper than the other thing, then we're gonna put 100 % of the budget on that. And that, we need to make sure the brief goes through the agency to the people with their hands on keyboards.

Brett (58:00)

Which sounds like a leadership challenge, right?

Louis Paskalis (58:03)

I think it is. I think it is. You know, I was very fortunate when I was at Bank of America, we ⁓ built our own team within ⁓ Publicis called Group Connect, which is still thriving today. And everybody was part of the same P&L strategic planning, buying, digital measurement, the Epsilon team, you name it. We were all one team. And that allowed me to go in and meet with them on a more regular and comprehensive basis.

It allowed the leaders of that team to ensure everybody was on the same page. And I think that model, which I believe is pioneered by Phil Caudel for Ford many, many years ago ⁓ when he was a CEO of a mind share. ⁓ I think that model works better for large, large brands, the top hundred. I think as you get into smaller agencies, it's less of a concern because, everybody is ⁓ more connected to the top of the house.

But I think you really have to diagnose as a client. Is my message getting through to all levels of the agency? Do they feel empowered? Are we on the same mission? And is procurement giving them the room to learn, to experiment, and to potentially fail in order to succeed ultimately?

Rio (59:18)

Predictions for the future, Lou. Love to hear like what do you, like next 35 years. I mean, maybe that's too far and things are changing so quickly. Where do you see things going? Do you see improving? Do you see it getting worse? What you think?

Louis Paskalis (59:30)

I think it's going to ⁓ be Darwinian, as we said earlier, for all sides of the ecosystem. think savvy marketers will recognize the magnitude of change and move away from certain 20th century ideas like a campaign. I think we are now in an era of always on marketing. I think we are so connected to the culture and consumers are so bombarded with information and advertising that we need to almost start like my content team did at Bank of America when I was there with a daily standup meeting. What's going on in the culture today and how can we take advantage of that? Or how do we avoid getting caught up in that? And then we need to leverage ⁓ new pathways to market.

Dynamic creative, creative that comes from a common framework, but has a custom delivery so that it really breaks through in environments. And I think we need to recognize, and there was a great piece, last week about this. it was DigiDai. They were covering the CEO Summit, and it was a competitive of quotes. And one of the quotes that really resonated is that, you know, we've removed from four or five ads in a campaign over 400.

And I think that's a step in the right direction. But I think if we ultimately realize the full potential of programmatic media connected to AI driven creative optimization, that 400 might become 5,000 variants of the same app in order to take advantage of situational context. Absolutely. Absolutely. This is why I think AI is a force for good when harnessed correctly. When we stopped talking about it, it like, it's going to take my job, which is such a tedious conversation. No, it's going to empower you to do your job much better.

Rio (1:01:05)

which wouldn't have been impossible pre-AI.

Louis Paskalis (1:01:23)

AI is not going to take your job. It's the person who knows how to use AI better than you that will. So think it's cheating.

Rio (1:01:27)

It's interesting what Dynamics created because that was always such a problem, right? Like when we'd advise clients you should be doing this, like, and then they said, well, we can't, can't, like producing the content, getting it approved, getting it, queuing it up and like just too hard. in industries with required yeah.

Brett (1:01:37)

Yeah, the versions and variations are way too difficult. Yep.

Louis Paskalis (1:01:40)

and you hit, hit an emotional nerve with me because, know, I spent three and a half decades defending the immediate investments in every way. I liken it to a proctology exam on the telephone pole. ⁓ it's not comfortable. Okay. And, and, know, but, but the creative was always the exogenous variable. Well, we built this campaign.

Rio (1:01:54)

Does not sound fun.

Brett (1:01:55)

Yeah.

Louis Paskalis (1:02:02)

to reach high net worth customers, but the creative wasn't ready, so we ran a credit card ad instead. Nobody cares. Well, it didn't work well. Well, yeah, because we built the campaign for a completely different audience. Yeah, but the media investment didn't seem to work. Like I'm sick and tired of creative getting a hall pass. And I think finally, the tooling is there and because consumers thumb so fast now, ⁓that unless you're making hyper relevant ads, you have no opportunity to stop them in their tracks and engage them. So I think this will be a Renaissance for creative, but I do think the interesting dynamic, and this goes back to the era of Mad Men, I think it's going to be the media signal, the data exhaust, the ability to weaponize my first party data along with that third party media signal that's going to inform that creative variation. So you're still going to have an ECD.

And ECD is going to say, you know, I think that this year, these are the major themes that will really break through, but then you're going to contextualize it in a very, in a very, ⁓ discrete way, how to win in this impression in CTV on this show on Tuesday of next week, that kind of level of detail. So I think that's going to be a big change. I think the skillset and the org structure inside of both the marketer and the agency is going to change radically.

You're going to need a lot more math. I think you're going to bring analytics and media together. I think you have to. think the def— I think so too.

Rio (1:03:34)

And creative, I think, has to go back into media, too. I think breaking them apart. Not everyone did it, but I think that has to happen.

Louis Paskalis (1:03:40)

I think so too. so I think, and I think that the overriding dynamic is going to be real time signal. You know, I love the name of this podcast, Signal & Noise, because we're going to need to make sure that the signal we're getting from third party media is quality. You know, the ANAs work with supply path optimization, ⁓ still shows that one and two programmatic impressions are not measurable, not accountable, not viewable, or ⁓ made for advertising sites. That's not useful signal.

So we're going to have to prioritize high quality signal that actually allows me to understand situational context in order to make ⁓ my AI smarter than my competitors. So I think that dynamic will change as a result of changing out a lot of the roles on the client side. And I think this has already happened, but I think it's worth saying.

My entire career, the TV 30 or 60 I think we're gonna stop doing all planning based on the new TV creative. And I think we're gonna start doing audience based planning.

And I do think my last comment, my last thing that's going to change is the way that we do segmentation. In the past, segmentation was an annual, a biannual exercise. It was binary so that if you're a multi-homeowner, you can't also be a world traveler when in fact we know that that's false. But all product development, all audience targeting, all campaign measurement was based on that very false, very stale segmentation. And I think today we can do what is effectively real-time dynamic segmentation at scale signal allows me to understand that there are 50,000 people in the market today for this product, not the 6 million that a propensity score would tell me could buy the product, but 50,000. And one of my clients, ⁓ one of my interesting clients, Gum Gum is working on exactly that with something called the mindset graph, which is really understanding what your interest is right now. What is your intent? And can I tailor my message to match that?

And so I think we're gonna really look at that as almost like a daily segmentation schema as opposed to a biannual segmentation schema.

Brett (1:05:53)

Yeah.

Rio (1:05:55)

looking at segmentation going from like annual and also looking MMM going from this annual process into something more real time on the planning side.

Brett (1:05:55)

we think about...I thinking back to the Brave New Worlds that you spoke at and Michael Cassand was on ⁓ the stage. I think it might have been after you. And he said something that I'd love to get an idea when you think about hyper relevance and targeting and limiting your audience down to those specific intenders. What about the brand awareness you're trying to drive? The halo effect, the serendipitous. He talked about serendipity and how we can't lose that in advertising, which kind of ties back to your madman conversation, right? I didn't know I needed a Rolex. I wasn't an intender. I wasn't in market. I may not even be of the right household income, but how do you ensure that you don't eliminate that sort of halo effect of brand awareness building with all of this sort of data-driven hyper-relevance, hyper-targeting, hyper-segmentation?

Louis Paskalis (1:06:49)

I think it's a critical question and I'm glad you went there as a lifelong brand marketer. ⁓ I've always felt that there is no difference between ⁓ the upper funnel brand activity and the lower funnel outcomes. People see it as like two different disciplines. In many cases, it's split inside of marketing organizations and the left hand doesn't know what to. Yes, yes.

Brett (1:07:10)

We tried to prove that to Bank of America for years, for like a decade. We just kept showing the data, right? How top affects mid, affects low. And if you eliminate this and focus on your direct mail and put 70 % of your budget into direct response marketing, you're gonna have lower ROI, you know, higher CAC. Right.

Louis Paskalis (1:07:16)

Yeah. Yeah.

Rio (1:07:27)

Short term, might be fine, but it falls off a cliff, yeah.

Louis Paskalis (1:07:29)

Yeah, yeah, I call it demand stocking. You're basically stocking the pond with more demand, right? So I think that what you raise kind of gets into an area that's very hot right now, which is sponsorship, particularly sports sponsorship, particularly women's sports. So I think that's the kind of environment, an example of how you maintain your brand messaging. Activating those sponsorships which are becoming increasingly important tent poles inside of a marketing. Because a lot of the other things have gone away from a real time standpoint. lot of the other, you know, prime time isn't what it used to be. We've saw like a two and a half percent decline in total spend in the upfronts this year. And, know, I think that that trend is likely to continue cable. It was more like a 10 % decline, if I'm correct. I think it's still going to be around activating my sponsorship.

And then looking at my ESG portfolio, which is still important to the marketer, it might not be something they talk about as much in the current ⁓ administration. Certainly, DE &I seems to be under assault. But at the end of the day, the things that we as an enterprise stand for, that we're passionate about, ⁓ Bank of America was very committed to green bonds. so ⁓ they raised a, I think it was a $3 billion fund for green bonds, green bonds you lose money on. They're not as profitable, but it helps companies. I remember the very first, or one of the very first initiatives was helping Baltimore become a smart city by helping them elect, you know, change the electrical grid. So it was more reliable, do other things to make the internet speeds faster and create a, you know, an incubator for next gen companies. And it worked magically and you know, Baltimore needed the shot in the arm. Well, those kinds of things, those stories should be told. Some of that I think is best done in content marketing where context also matters. I think increasingly you're going to see more content like stories run in spaces previously occupied by ads. The big difference being good content rarely has a click to apply or click to buy link in it. It tells a story. And if it's done well, it competes for attention. And I know of examples of that, but a lot of times content gets co-opted into long form advertising and that's not going to win.

So marketers still need to get the brand out there, or they still need to position the brand heroically. ⁓ They need to do that for four different constituencies, not just customers, but also employees and shareholders and board members. Board members can be the toughest judges, and board members are some of the toughest when it comes to brand safety and suitability. They're the ones that text a screenshot to the CEO at 5.30 in the morning saying, why is your ad running on Breitbart? ⁓

Rio (1:10:16)

or I got the wrong advertisement, why is this running? Yeah, that's the famous one.

Louis Paskalis (1:10:20)

Exactly, exactly. And so, you know, I think you really need to make sure that you're building the brand so it's inoculated from a lot of those potential concerns and that people say, I know what that brand stands for and that brand represents the same things or values the same things I do.

Rio (1:10:37)

But we were running one campaign for the multi-dwell unit division of a telecard member they were really clear, like when these conferences take place, you want you to be marketing within this geofence, which was a hotel, where all the execs were going to be. It's so funny. That is in a very important constituency. Yeah.

Louis Paskalis (1:10:53)

Wow. Wow.

How are you doing with frequency capping on that? ⁓ Wow. That's a lot of concentration.

Rio (1:11:02)

Yeah, well they wanted to make sure that they knew their money was being well spent. It was funny,

Brett (1:11:07)

I think ⁓ that's a good way to end and thank you, Lou, for ⁓ joining us on Signal & Noise. This was phenomenal conversation. Appreciate the time as always. We went well over, but I'm sure our listener base is going to be thrilled to hear the detail because I think we went pretty deep in a couple of different areas. ⁓

Louis Paskalis (1:11:26)

We did, and I really appreciate the forum where two of you have so much experience with this, so it's easy to have that conversation. I really appreciate the opportunity, and I hope your listeners do as well.

Rio (1:11:38)

Lou, thanks again.