Why is mobile mediation broken? Jim Payne: Here is whats next!

Speaker 1 We essentially sat down and decided with CloudX this spring, early the spring, was that look, now you have AI agents and workflows that actually can make those tools not only usable for the publisher, but like a joy to use and can provide pricing advice for you and price floor optimization.

Speaker 1 We can, you know, model out exactly how you should run an auction and what data to put into it.

Speaker 1 Matej, Felix, Shaku, bringing the insight. We're rocking those vibes till the early daylight.
But T-U-A, master, eyes on the prize. Tracking data through the cyberspace skies.

Speaker 1 Felix stacks colours like a wizard in disguise. Jackups crafting realms lift us to the highs.
Two and a half gamers talking smack. Slow, hockey, sick, got your back.

Speaker 1 Ads are beautiful, they like the way. Click it fast, don't delay.
Uh-huh.

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Speaker 1 Hello, everyone, and welcome, actually, to a very special episode of the Two and a Half Gamers podcast.

Speaker 1 Today, we're joined by two, I guess, history legends to talk about ad monetization, which is my favorite topic. So before we're getting started, I'm Felix Brauberg.
And I'm here combining.

Speaker 1 We are your hosts. And today, like I said, we're joined by two industry legends, Jim Payne and Dan Sack.
We're here to talk to us about ad monetization and CloudX.

Speaker 1 But yeah, welcome to the show, guys. Thank you, Felix.
Thank you, Jacob. Appreciate you having us on.

Speaker 2 Yeah, thank you, guys.

Speaker 1 So maybe starting with you, Jim.

Speaker 1 I guess some people have called you the godfather of mobile mediation. Mainly by me, I guess.
But like,

Speaker 1 I don't know. Like, do you just want to maybe give an introduction of yourself and outline some of the things you've done in mobile? Appreciate that.

Speaker 1 I can't take total credit for that because mediation existed before I got involved with Mopub.

Speaker 1 Maybe, you know, godfather of programmatic and mobile advertising.

Speaker 1 But I've been around the industry for a very long time. I mean, I started my career as a product manager at Google before

Speaker 1 going to AdMob actually because I wanted to get involved in the mobile revolution, which was happening at the time. You know, the iPhone just launched and the App Store was out.

Speaker 1 And so I had learned everything I, well, a lot about advertising through my experience at Google working on double-click and some products for Map, local-based ads, and realized that, you know, the mobile advertising ecosystem probably needed a little bit of that.

Speaker 1 So I actually joined AdMob just before they got acquired. And then

Speaker 1 during the acquisition process,

Speaker 1 me and another guy who worked at AdMob Nafis, Jamal,

Speaker 1 we spun out and basically created Mopub in 2010. And so

Speaker 1 since that time, you know, we've really been trying to move the industry forward. So, you know, it's a 15-year process of that.

Speaker 1 And I guess that makes me a godfather just because I'm older than everybody else in the industry. So I'll take credit for that.
But we did we did Mopub and then we did Dan and I did Max.

Speaker 1 Dan obviously joined Mopub. That's how I know him.

Speaker 1 And now we're back for this next iteration, which

Speaker 1 is really informed by what's possible with AI and the democratization of intelligence overall. And so

Speaker 1 we felt like

Speaker 1 we couldn't resist the opportunity to marry this new set of technologies and a tailwind with a business that we know and love so well. Yeah.
Pretty cool intro.

Speaker 1 And Dan, yourself as well, you're no rookie either, right? So please introduce yourself.

Speaker 2 You know, I used to be the young guy, but I joined.

Speaker 1 Yeah.

Speaker 2 So I guess we all, all of us, I've basically spent my entire career in this space. So I joined Mopub in 2011.
I was an entry-level publisher BD guy.

Speaker 1 And back

Speaker 2 then, there were two BD folks, and one of us was handed non-gaming, and the other was handed gaming. So I was handed gaming, fortunately.

Speaker 2 And that was a huge deal in my career and set me up well for the 15 years since.

Speaker 2 So I spent about six years at Mopub and then Twitter working on the Mopub business, working with publishers, and then left to work on Max with Jim, where he trusted me to be the CEO for a short period of time until our friends at Applevin called.

Speaker 2 I then joined Applevin and worked over there for four years, which was a great experience for me.

Speaker 2 And after a bit of a break, you know, getting back into it now with Jim, as he said, we're really supply side people through and through.

Speaker 2 So I'm happy to be back on the supply side, only on the supply side.

Speaker 1 And

Speaker 2 pretty excited about the timing of this business, the product that we're bringing to market, the support we've had so far from the market, on the buy side, on the publisher side.

Speaker 2 Yeah, that's a bit about me.

Speaker 1 Sweet. All right, let's actually get started with some good stuff.
So just want to start off super simple, right?

Speaker 1 So seeing as you guys have built a large portion of the supply side industry and all of mobile, just wanted to ask a super simple question. In your opinion, right?

Speaker 1 How does the mobile ads industry work and where is the value created?

Speaker 1 That's a great question. I mean, the thing about mobile advertising is that it's meaningfully different than desktop in a few ways.
One way is,

Speaker 1 and this is something actually we saw early on at Mopub, is the SDK piece.

Speaker 1 So a lot of the innovation in mobile advertising, and Felix, I know you touch on this pretty much every week in your newsletter, is what's happening at the actual device level in terms of innovating on the ad unit, innovating on the frequency of ads that you show, innovating around what that presentation looks like.

Speaker 1 There's so much that happens at that last mile, which is SDK bits that are shipped through the app store and integrated directly as software into a publisher offering.

Speaker 1 That is meaningfully different than desktop because desktop really is just tags. You leave the tags there and then they

Speaker 1 essentially show the same ad unit for the most part. There's some innovation and native ads and things like that, but those really don't scale.

Speaker 1 So that's a big piece of where the value creation, in my opinion, lies.

Speaker 1 And that's one of the reasons why, you know, we're excited to get back into it is because ultimately, you know, people, when they're actually deciding how to monetize their app, there's heuristics and there's things that you can try and do, but you don't really have a lot of flexibility and you don't, um, you don't have the ability to actually apply intelligence to some of the things that you're doing in terms of when to show an ad, who to show an ad to, how to segment your audience and decide, you know, how frequently should you show an interstitial, let's say.

Speaker 1 That's, you know, there's some best practices and there's things that people experiment with and try. But ultimately, I think there's a lot of

Speaker 1 there's a lot of room there for improvement. So that's one aspect of it.
Two, I think obviously, you know, the mechanism of mobile advertising in the context of privacy.

Speaker 1 means that there's less identity signals, means that there's things you can't do in terms of actually providing targeted advertising in the same way that desktop does.

Speaker 1 And so there's been a lot of innovation around trying to create discovery type advertising. It's more like Facebook or Instagram rather than like a search ad.

Speaker 1 And that innovation is obviously something that Apple Oven's been doing tremendously well. But you know, others are getting into the game and there's plenty to be done.

Speaker 1 And there's a lot of data that's on the sidelines sort of structurally because publishers are sitting on a treasure trove of information, but they can't really use it.

Speaker 1 So I think those are the two areas of value creation and mobile advertising. For me, maybe I missed something, Dan.

Speaker 2 So on the publisher side and building tools for the publisher side, I think it generally boils down to impacting LTV. And there's a million different ways to do that.

Speaker 2 And then on the demand side, I think it's really around generating ROI for advertisers. So there's a lot of companies doing a lot of great work on both sides to create value.

Speaker 2 We could probably spend 30 minutes talking about how the market works. But yeah, I think Jim captured it well.

Speaker 1 And that's how I think about it. Cool.
So next question. What is a mediation platform and how does that fit into the industry?

Speaker 1 It's going to get more advanced after, I promise, but just wanted to cover the basics.

Speaker 1 Well, you know, mediation is kind of a term of art that I think has evolved over time, right?

Speaker 1 When we started doing this at AdMob, mediation was basically a waterfall sequence of ad networks that would essentially try to get 100%. It still is on AdMob.
You can still...

Speaker 1 I was setting up waterfalls today on AdMob, so not that much has changed. So I told my boss I made a Playable Ad with Playable Maker.

Speaker 3 And he said to me, what language did you code it in? And I said I don't know. With Playable Maker all you do is drag, drop, click and it does it all for you.

Speaker 3 So again he said what language did you want to make it in? And I went I don't know. English? At the end of the day as long as Playable Maker does it all for you why do you care? It's just like magic.

Speaker 1 That's good.

Speaker 1 But you know, we actually don't use the word mediation platform for what we're working on in CloudX and there's a reason for that and that's because ultimately we look at ourselves as publisher tools more broadly speaking.

Speaker 1 But it's more akin to like a supply-side platform like an SSP, like you would find in traditional desktop ad tech, coupled with a marketplace model.

Speaker 1 And you know, we're not running an ad network, that's not the idea.

Speaker 1 The idea is not to offer like arbitrage, but instead to create a platform upon which transactions that want to happen can happen more easily and with less friction.

Speaker 1 And those transactions that want to happen, what does that mean? Well, that means basically,

Speaker 1 you know, there's some pool of demand and there's some pool of supply. How do we actually connect those two together?

Speaker 1 A supply-side platformer like this exchange platform is really ultimately the way to do that. Mediation was a hack to get there and remains to some degree that way.

Speaker 1 And today, right now, yes, there's unified bidding and there's

Speaker 1 a single auction to some degree. It's not 100% of what happens.
And it's also not necessarily always in the publisher's best interest to have. a single auction where everybody can show up.

Speaker 1 That's one way to optimize, but you're not necessarily optimizing second-order outcomes that way. Does that make sense? Yeah, it does quite a lot.
But I'm not sure if Jakob, you follow that.

Speaker 1 So Jakob is a game designer, but yeah. I used to do mediation back at Treplat, if you remember the old waterfall.

Speaker 1 Yeah, I know some of it, but yeah, let's get more advanced, I guess.

Speaker 1 But Stan, there's right now, I guess CloudX is not a mediation platform per se, but right now there's three main leaders in the industry, right? There's LevelPlay, AdMob, and Max.

Speaker 1 Max is kind of the clear leader. That's kind of the largest on the mediation side.
You've worked with all of them. You built some of them.
What's the kind of the difference between these places?

Speaker 1 And what kind of do you see as the gap of the market that these platforms are not fulfilling at the moment? What's the

Speaker 2 three?

Speaker 1 And in aggregates,

Speaker 1 yeah.

Speaker 2 And Jim, Jim worked extremely briefly on a second one. I guess the main difference is

Speaker 2 these are platforms that

Speaker 1 are

Speaker 2 basically offered in connection with an ad network. So you get the tools, and you get the ad network, and the company that's operating the platform has an ad network.
That's one model.

Speaker 2 We're taking a different approach. So our approach

Speaker 2 is only to build tools for the publisher without any other

Speaker 2 business line internally

Speaker 2 that we're thinking about. So it simplifies life for us a lot.
We just build what the publisher needs, nothing else. And this goes back to to a philosophy we actually had at Mopub way back when.

Speaker 2 So rule number one at Mopub was always put the publisher first. It was always do what's in the publisher's best interest.
And it's a very simple way of building a product.

Speaker 2 So we can apply that approach here. So we're really just building supply-side infrastructure for the publisher and intelligence.

Speaker 1 I mean, there's a lot of publishers that don't feel, I guess right now they're being put first by any of the main mediation platforms.

Speaker 1 What kind of tools are you guys looking at to kind of go along with with to actually put publishers first? That's quite interesting. Yeah, well, I think

Speaker 1 Dan's put his finger on something important. And that actually comes from a Google philosophy that we had when I was working there, which is focus on the user and everything else follows from that.

Speaker 1 And we look at the user as ultimately the folks who are creating the content, games and, you know, utilities and things like that, putting a blood, sweat, and tears into that.

Speaker 1 shipping the software, maintaining it, keeping user population happy. Those are hard things to do.
To get anything that resonates with a user is quite a challenge, right?

Speaker 1 So we want to respect that, give them tools that allow them to monetize in the way that makes sense for them and the content that they create and the audience that they have.

Speaker 1 And I think, you know, that was something that we believed at Mopub, and it's, we'd like to bring that back to some degree. Now, what does that mean from a product perspective?

Speaker 1 It really means here's the tools and we're going to also build some AI agents and workflow optimizations and things like that to help you actually use these tools effectively.

Speaker 1 One of the challenges, and I think the reason that this company is possible now, this platform is possible now, versus even a year ago, is that what we found when we were doing Max, you can put a lot of complex stuff out there, but people tend not to know how to use it well, or it's too hard to use, or the workflows are too complicated, or they're error prone.

Speaker 1 And you end up making things worse the more you do rather than just going to a simple auction where everything can flow through.

Speaker 1 That was certainly the conclusion we reached at some point during the Max product effort, because it started with a lot of different things you could do, like different levers you can pull and price floors you can do and create an auction this way or that way, line items, provider those.

Speaker 1 But they weren't really used properly.

Speaker 1 So, what we essentially sat down and decided with CloudX the spring, early the spring, was that, look, now you have AI agents and workflows that actually can make those tools not only usable for the publisher, but like a joy to use and can provide pricing advice for you and price floor optimization.

Speaker 1 We can model out exactly how you should run an auction and what data to put into it, things like that. All of that is possible with basically the intelligence layer.

Speaker 1 And it's on top of a sophisticated platform.

Speaker 1 So we think the two together actually create this 10x experience for the publisher whereby we're giving them an incredibly powerful tool, but also making it super easy to use and not make mistakes while you're doing that.

Speaker 1 Because if you put mistakes into a production game that's a a piece of software it's very very hard to fix later so that's ultimately the design philosophy and we're very much designing for the publisher and the publisher team and the supply side teams which we know you know it in in many companies especially gaming studios not a lot of resources go to that side of things a lot of resources go to ua but very very little resources go to the supply side so let's do automation so we can actually make these products really work to generate as much revenue as possible, but also preserve the experience for the user.

Speaker 1 I mean, I wish I had some automation when I was optimizing my admob stuff today. It takes forever, right?

Speaker 1 But if I can do like a concrete example, so let's say, for example, let's say I'm a publisher like Alphit7, right? You might have a team of five to six people, right?

Speaker 1 What kind of benefits is it that you kind of see that so CloudX would sit on top of a mediation layer and then, or you'd replace it, or how does the product actually work? Hello, everybody.

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Speaker 1 Work. Yeah, that's so initially it's a we're you were carving out some inventory.
So how do you actually do that carve out? That's in itself a question of optimization. But once you, let's say, once a

Speaker 1 piece of ad inventory lands at the CloudX platform, what do we actually do? What does it mean to

Speaker 1 service this? Well, basically, what a publisher can do is set up a set of auctions that happen with participants that they define.

Speaker 1 you might want to say, and you know, we've got three launch partners that basically we announce the company with. That's Meta, LiftOff, and Magnite.

Speaker 1 And so let's imagine publisher X, they want to do a first-look deal with Meta to say, for my best users, the people who've been with me for the longest, where I actually, you know, know something about them and I know they're high-value users.

Speaker 1 We want to give Meta a first look at that at a certain price point. That's the kind of the core initial use case that many people are getting excited about.

Speaker 1 But then you can start to do more things like that, right? With more participants on the buy side, more data, better pricing.

Speaker 1 And essentially, you know, you can't, there's ad quality aspects of that type of decisioning too. So, okay, well, I can create all that stuff.
That sounds very complicated, though, right?

Speaker 1 Like many line items, it's error-prone. How do I know if it's even working?

Speaker 1 So the way that we solve that problem is we decided as part of the design philosophy of this thing that essentially you should be able to describe all your monetization logic essentially as code.

Speaker 1 And so we have a blog post on our site about this. It's the monetization as code.

Speaker 1 And it's essentially like, hey, how do I look at this as a piece of infrastructure where I can actually ship it the same way I would ship my Kubernetes configuration as an example?

Speaker 1 I'm going to create line items. I'm going to try different price floors.
I'm going to have all these different versions of that.

Speaker 1 And when someone pushes a new piece of monetization logic, there's a diff. It shows, hey, Jim, change this price floor from this to that.
It's not just me writing it.

Speaker 1 Now I can write it with Claude code helping me.

Speaker 1 So cloud code can go and create a thousand line items with very, very specific pricing for each region that I might be interested in, segmenting my traffic to creating all these different keyword value pairs, which would be impossible to do in a traditional UI where you're clicking everything and very, very easy to get wrong, and impossible to know what actually happened on the other side because there's not really reporting that's that granular or even even works that quickly.

Speaker 1 Cloud can actually do it and then actually pull the logs and say, here's what happened. And I'm going to, you know, make an improvement to it tomorrow.

Speaker 1 And that kind of agentic workflow, coupled with fast iteration cycles and full observability on the platform, we think is going to open up a whole new just canvas for publishers to basically say, take control of their modernization and do so much more than they've ever really been able to do that, or was practical to do, frankly.

Speaker 1 Yeah, so I guess going back to the example I used, right? So if I'm out Fit 7, we've got Thanksgiving coming up next week with Black Friday, right?

Speaker 1 So instead of logging on and setting bid floors that are higher or basically setting some lower, what can I say, like

Speaker 1 yeah, lower bid floors or higher bid floors, I'd just be able to write that as a prompt and go enjoy my turkey and everything is kind of just sorted for me. Yeah, how clever is it going to get?

Speaker 1 Well, you know, I think there's

Speaker 1 like what you can do, practically speaking, that's the automation of heuristics. And then there's what you can do that's intelligent pricing and modeling and predictive capabilities.

Speaker 1 The second piece is based on, you know, actually doing this work. a bunch of times and seeing what works and seeing what doesn't work and learning from those experiments that you run.

Speaker 1 But the first piece of heuristic automation, I think absolutely, that's out of the box. And we've got a blog post on that too.

Speaker 1 Basically, you can go in and type, Claude, give me 20% higher price floors for the next five days on all my different apps and make sure it all works.

Speaker 1 And it'll go create 120 LIDAMs that automatically have that targeting, expiration date, all that kind of stuff. And then give you a report at the end.

Speaker 1 Would you also be in a position where you could say like, hey, optimize for Arcto or optimize for retention?

Speaker 1 And basically do whatever you want to block Mintigirl ads because they always pop up and cause churn. I don't have anything to say about that.
But yeah, the second piece.

Speaker 1 The optimization, auto-optimization piece is absolutely a key facet of what we're doing, too, because, but ultimately, you know, we need the platform to start working, right? So

Speaker 1 our design philosophy of the product is its full observability of programmatic and what's actually happening in the auction.

Speaker 1 In fact, you know, our third leg of the stool here is this trusted execution environment secure auction piece where we've actually published the source code of the auction on GitHub.

Speaker 1 It's an elastic licensed thing.

Speaker 1 You can see what's there and then we run it on secure enclaves and Amazon and folks like Meta go in there and they actually check to see it to make sure the auction's done properly and that and we can verify that only the winning bids emerge from this auction and we're doing it in a certain way.

Speaker 1 And that's an example of the philosophy that we have, which is basically the publisher should be able to see what's happening in their auction as if you owned the exchange yourself. So very cool.

Speaker 1 I think you need to explain just how big a deal that is, because I think there's a lot of people that don't understand that everything on mobile is pretty run on closed auctions, and it's basically black boxes, and it's infuriating for publishers.

Speaker 1 Maybe you can just go into explaining why that's a bad thing. Yeah, it's well, it's, you know, without getting too into, you know, speculative territory.

Speaker 1 The thing that we do hear consistently from buyers, actually, as well, is that no one really knows what's happening and a lot of the stuff and and strange outcomes happen that you wouldn't necessarily expect some you know a lot of these things have great explanations too i'm sure i mean i can say it like right so on admob mediation google is always the largest network on level play unity is always the largest network on max appleven is always the largest network yeah so in a in a perfect in a perfect economy

Speaker 1 that probably wouldn't happen right so i'm not saying that there's untoward things happening i'm not necessarily saying that but what i what I do think is important to note is that running a fair auction is kind of the cornerstone of the whole idea of what we're trying to do here.

Speaker 1 And that's, like I said, if you imagine you, the publisher, had your own exchange where everyone's connected to it, bidding on your inventory. You would know that you're running a fair auction.

Speaker 1 You'd believe that, and you'd represent that to your buyers because that's part and parcel of doing that.

Speaker 1 But you'd also know what's happening in terms of who's bidding and what are they bidding on and how do I price my inventory and how do I create carve-out deals and make sure that my best buyers who retain my users the best are get a first look if I want to do that from a business perspective.

Speaker 1 There's nothing wrong with that. I don't see anything, any issue there.
But, you know, that's just not the way that the tools have evolved in the space so far.

Speaker 1 And some of that has to do with the complexity of it. Some of it has to do with just the maturity of the market.
But I think the third piece is trust.

Speaker 1 And so we feel like both buyers and sellers trust us, trust our background, but they don't have to take our word for it because we've actually put the code there and it's verifiable too dan uh norm normal mediation platforms they are usually given away for free can you just explain how actually mediation platforms earn their companies money and basically maybe dovedale that into how cloud x will charge for usage sure so if you go through a few models starting with mopub for example we gave away network mediation tools for free and then we had an ad exchange where we charged uh

Speaker 2 you know a transparent margin and it was was uh

Speaker 2 a service we were providing to all the DSPs that wanted to access supply and a service we were providing to all the publishers who are getting access to 100 plus DSPs and we were collecting payment from everybody.

Speaker 2 So that was a MOPA model. The platforms we just talked about,

Speaker 2 you mentioned that if a publisher is running on like a level play, for example, the

Speaker 2 Unity or IronSource network revenue share is higher than it would be if the publisher was on a different platform.

Speaker 1 So

Speaker 2 generally the reason reason why SSPs or mediation platforms that are owned by a network can be effectively given away for free or made free and sometimes even made free with sizable integration bonuses is because the network that owns that platform basically recoups whatever they paid in a deal and a lot more by having you on their platform where they're generally likely to clear more of your inventory than they would if you were elsewhere.

Speaker 2 So, basically, the infrastructure goes out

Speaker 2 into your app and then their network's well positioned and it's a great outcome for their then they'll make a lot of money through their network more than they would had you been on another platform.

Speaker 2 So that's that's a very simple model. For us, we don't have a network.
We're focused entirely on the publisher and the infrastructure.

Speaker 2 So our starting business model is transparent fee to the buy side, which I think is industry standard at this point. Over time, there may be opportunities for us to unlock additional revenue streams.

Speaker 2 We'll see, you can imagine intelligent features that you could turn turn on and there's a dramatic increase in publisher LTV and that's measurable and

Speaker 2 that's like a premium feature kind of thing. But

Speaker 2 we're not remotely there yet. Today it's just the buy-side fee for us.

Speaker 2 And that works great. We have a lean team.
You can do a lot today with a small team, cover a lot of ground. And these platforms can get really big, really fast.
So we can build

Speaker 2 a pretty substantial business with just that buy-side fee. But I think in time, there'll be premium features that we can offer as well.

Speaker 1 Yeah. Felix, maybe I can do like one of the stupid questions as a game design and product person here.

Speaker 1 Why would I integrate in your platform if there's like a hefty bonus coming from these mediation and networks ones and like look at your ones?

Speaker 1 Just like again, TLDR for people who don't understand that.

Speaker 2 The you wanna go, Jim?

Speaker 1 No, yeah, Jim.

Speaker 2 Yeah, uh so I I've I've been out in the market now with this business for I want to say four or five months and generally the deals publishers are getting from other platforms are not exclusives.

Speaker 2 Yeah, it's generally like a revenue kickback or something like that. So it doesn't have to be one or the other.

Speaker 2 And so we're generally not putting publishers in a position where they have to ditch Google or Macs and whatever deal came with Google or Macs for level play.

Speaker 1 So the understanding is that by not ditching it, you are getting more long-term upside for you later down the line and not just short-term kind of bonus of the integration. Do I get it right?

Speaker 1 Oh, hello.

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Speaker 1 The more critical mass of supply you have, the better off

Speaker 1 you are if that supply

Speaker 1 can be more or less accessed by as many buyers as possible.

Speaker 1 And let's not also forget the fact that many publishers are buying a lot of traffic as well, or they want to move people around their own studios.

Speaker 1 So, this is not, you know, these are, these are kind of activities that we want to be able to enable for folks.

Speaker 1 And our model is, like Dan said, highly leveraged, transaction-based platform orientation. What does that mean?

Speaker 1 Well, that means we just want to facilitate transactions among participants in the marketplace and then take a very fair rake on top of that.

Speaker 1 Now, if we're just connecting the pipes, that's a lower fee. If we're helping people price things, there's some intelligence there, you know, we're helping you build models based on that.

Speaker 1 You know, maybe that's a slightly higher fee.

Speaker 1 If we are, you know, two parties don't have a relationship and we're taking some amount of credit risk, payment processing, all that kind of stuff, there's, you know, there's other fee opportunities for us there.

Speaker 1 But the idea is: look, we want our fee to be reasonable, limited, so that we can create as many transactions on this platform as possible and not load the system with too much of a rake.

Speaker 1 That's our goal. And it's important to us not to be sitting there actually the folks taking the arbitrage.
And I think that's a, you know, it's a fine thing.

Speaker 1 It's a risk-taking activity and it's a fine thing for people to do. And certainly there's people who make a tremendous amount of money doing that.
That's not really our goal, though.

Speaker 1 Our goal is ultimately the platform because we think that serves publishers the best.

Speaker 1 So you were talking a bit about earlier as well, like about mediation, how it looks very different on mobile and desktop.

Speaker 1 Like which in your kind of view is better or what's the main difference and yeah what do you think mobile could benefit that's on desktop i mean if you look at it like there really hasn't been a lot of value hasn't accrued to the supply side in the desktop world that being said it's hard to really draw that many conclusions because google has the most powerful franchise in desktop runs everything end-to-end has a tremendous amount of assets there and especially double-click they're kind of impossible to challenge in a lot of ways.

Speaker 1 And they've built a lot of moats.

Speaker 1 And they, I think, crucially, too, like, I know that Google has gone through some litigation on this, but for the most part, the pricing of Google AdX and other products is pretty fair, I think.

Speaker 1 And they don't box the publisher in in a lot of ways. I mean, they, yes, they want to be part of every auction.
They want to be part of everything the publisher does, but it's not, they don't have to.

Speaker 1 So I think that's that created like a lot less of a space for this SSP to add a lot of value in desktop. And then I think a very important piece of this is that tags can just be switched out at will.

Speaker 1 So I can wake up tomorrow and switch from SSP A to SSPB on my website or run a test between these guys. And, you know, this one standardized ad unit on the web.

Speaker 1 It's a very different situation and integration. And so, you know, mobile just hasn't really evolved that way.
I think that the supply side has created a lot of value.

Speaker 1 And people want to do these integrations as few times as possible, but then have the integrations do a lot for them ultimately. Cool.
And what about pre-bit and post-bit?

Speaker 1 I guess that's the real missing piece, right? That is on desktop but doesn't exist in mobile. Yeah, pre-bit is like rewriting the stack of your web page based on the results of an auction.

Speaker 1 You know, it's again, it's a bit of a hack, right, in a way. And so

Speaker 1 that's why, you know, these two worlds basically don't really meet. You know,

Speaker 1 I guess you could argue that that a lot of the things that we've done have looked towards desktop, which I think is a bit more of a higher cock rate in terms of tracking things.

Speaker 1 And said, and, you know, like with header bidding, we said, oh, you know, this is a good idea. Like we want publishers

Speaker 1 in mobile, to rewrite their stack based on the results of an auction and who the user identity is. That was back in the days of the IDFA, and that was what Max is based on.

Speaker 1 And so

Speaker 1 I think for me, we look to what is happening in terms of the intelligence revolution and pricing, things like that. And we say it's time for that to come to mobile advertising.
Yeah, I agree.

Speaker 1 Very much so. There's a lot of mediation platforms that try to ban that, actually.
Yeah. That brings me to another point, right?

Speaker 1 Like, probably you're entering one of the most gate-kept industries that I can think of, right? For example, I looked it up right before the show.

Speaker 1 Google has given out its bidder to nine platform or eight platforms in the last 10 years.

Speaker 1 Can you talk about how this industry is kind of gate-kept and how you actually get access to the different inventory from the different bidders that's the secret sauce that i can't explain to you now um

Speaker 1 look i mean i would be lying to you if uh if i said that it is easy because it's not it's not easy i think the the thing that we've noticed is that when we started to think about really doing this over the summertime you know we started talking to some people and folks on the publisher side consistently said we would love to have you guys come back you know and because we really want to do x you know we want to run an auction with just Meta at 10 bucks or stuff like that.

Speaker 1 You know, there's like tactical things that they wanted to see us do.

Speaker 1 And I think by virtue of that latent demand or, you know, desire to move things forward, plus this notion of like, hey, I can actually give you a 10x better product meant that a supply side offering from us deserves some attention.

Speaker 1 from folks on the buy side who would be traditionally the gatekeepers.

Speaker 1 So yeah, I would be lying to you if I said that it wasn't, I think, something that would be very, very tricky for anybody who's not me and Dan to do.

Speaker 1 And so, you know, we kind of are using that, I guess, reputational capital to try and bust open the industry

Speaker 1 in another way for another iteration to allow this new set of technologies to be applied to an old problem that,

Speaker 1 you know, people still want to

Speaker 1 improve on.

Speaker 2 Yeah,

Speaker 2 it's a team effort. You know, you build it kind of quarter by quarter, you know, tranche of partners by tranche of partners.
The publishers have a huge role in it.

Speaker 2 You know, when we did Max, we actually had a group of publishers invested in the business. So we were able to approach the buy side arm in arm.

Speaker 2 I think if you can put your finger on something that will make life better for an enormous amount of players in the market, I mean, there's the reality, which is, you know, part of why we jumped back in, is that

Speaker 2 a lot of companies are not happy.

Speaker 1 oh yeah if very true

Speaker 1 no it's not

Speaker 2 it's it's not it's not meant to be it's not meant to be provocative at all it's just meant to be you know like a factual you know that that's like a signal so if everyone was happy then we wouldn't be needed here at all we wouldn't be wasting our time no one would take our calls it's basically the opposite end of the end of the spectrum we were more or less drawn back into the market by unhappy important market constituents collectively all these constituents can get a lot done.

Speaker 2 On your own, you can only get so far. So, we can drop in and be an organizing force for

Speaker 2 the publisher community, the buy-side community. So, it takes time, but it's a team effort.

Speaker 1 Yeah. So,

Speaker 1 it's early days. Sorry, go ahead.
Let me just

Speaker 1 Felix.

Speaker 1 I would also say that people, when we explained what we wanted to do with this transaction-oriented platform, marketplace approach, fair pricing, intelligence, and automation, like a true 10x better product.

Speaker 1 People on the buy side that we launched with and other folks who are right behind them got really excited about that.

Speaker 1 So there was, there's a level of excitement of, hey, this is a new product vector that we want to actually support. And that started to break that gatekeeping aspect of it.

Speaker 1 And then we offered the secure auction piece too, to say, we're going to do all these features, but we're not going to let anybody play any games with it because we've got this unique secure option too.

Speaker 1 So you can trust that it's legitimate while we're opening up all these new capabilities.

Speaker 1 And, you know, I just want to give credit to our early buy-side partners for taking a leap with us because they saw the vision and got really excited about it. Cool.
So it's early days, right?

Speaker 1 So like you said before,

Speaker 1 you have Magnite, Facebook, and also a liftoff currently on its partners, right?

Speaker 1 So if I'm a publisher listening to this, how, like, what type of publisher can get the most value and how do they get value currently in the product in its current iteration?

Speaker 2 There's a, I mean, there's, there are other buy-side partners integrated as well or integrating. We just didn't go through the hoop jumping to get their marketing approval to use their names.

Speaker 1 Okay, okay. I don't want to, I don't want to.
That's Al. Right.
Networks et al.

Speaker 2 There's a very active pipeline of buyers integrating basically everyone you would expect.

Speaker 1 So

Speaker 2 we're pretty slammed with those at the moment.

Speaker 2 But to your question, publisher, so I think the the the part of the publisher market that's that's most underserved is the segment that I would describe as more,

Speaker 2 I don't want to diss people that maybe aren't in this segment, but the quality-focused publisher market, publishers that want to retain.

Speaker 2 The structure of the market today makes retention extremely difficult. It's basically unmanageable is what we're told.

Speaker 1 So

Speaker 1 if

Speaker 2 you want to live in an LTV optimized world and you want to retain, then how you manage your inventory

Speaker 2 would probably be different than if that's not your business model and you don't expect to hold on to users very long.

Speaker 2 So we're finding resonance with the publishers that are looking to retain users for a long time.

Speaker 1 And realistically, many publishers have, you know, there's

Speaker 1 cohorts, right? So there's some cohorts that you're going to want to treat differently than others. I think you pointed out in your newsletter just today.

Speaker 1 With Candy Crush, what they do, you know, they're some people you're going to look at differently. And how do you be smart about that?

Speaker 1 Well, right now, that intelligence is really pretty hard to implement for a publisher.

Speaker 1 I mean, with Candy Crush, they've got plenty of resources and they think about this deeply and they have the ability to iterate and test and do all these things.

Speaker 1 For most publishers we talk to, even if they wanted to do it, it would be an initiative that they have to then start to go do. And then, how are you really going to know if you're doing it that well?

Speaker 1 It's just not the highest priority. But I think as a platform feature,

Speaker 1 it's a really powerful thing

Speaker 1 for us. You're going after kind of the core, the 70%

Speaker 1 ad revenue gaming people and kind of the apps space, I guess, or where retention really matters.

Speaker 2 We talk to everybody, and

Speaker 2 in in uh generally with everyone we talk to, there's there are some users for whom they want an alternative path.

Speaker 2 And and what I was what I was going to say is, we we saw an incredible shift in the market. I guess Facebook maybe was really who brought it to market.
But for me,

Speaker 2 I saw Axon One launch and it moved advertisers to a AI-enabled user-level decisioning world. And it was like, wow, like just hard to even imagine that

Speaker 2 there was a more manular way of doing things prior to that. I think there's a similar unlock that we can achieve for the pub side.
So

Speaker 2 AI-enabled, intelligent, user-level supply-side decision-making and monetization. So if you think about it like that, you know,

Speaker 2 the way a publisher wants to treat, you know, a certain type of users.

Speaker 2 i mean this like jim said you were talking about this in your article today about candy crush so so we're coming to market and for starters we provide publishers uh optionality an alternative path that they can tap into when they want to for some apps for some users

Speaker 1 whatever they want cool i mean i'm super excited i can't wait to try the product anything else you want to anything else you want to get in as last words before we kind of wrap uh well yeah

Speaker 1 i appreciate you uh giving us the opportunity to talk about the product You know, for me personally, and I don't want to speak for Dan, but I think he feels the same way.

Speaker 1 It's just really great to be back

Speaker 1 in the ecosystem and uh to have gotten such a warm welcome.

Speaker 1 Uh, last week when we launched the product, the initiative, a lot of people uh were very excited to see us back, and that that just feels good.

Speaker 1 But obviously, we want a tremendous amount of value here too. And so, you know, for me, this is uh I guess this is my third company here in this space.

Speaker 1 I, the amount that you can do now with these new tools is just so compelling. And so for me, it's this call to innovation of

Speaker 1 what are we able to do with these tools and how can we apply them to a problem that we know so well and really bust open the opportunity again. It's really been fun.

Speaker 1 And so we're just thrilled to be back. And like I said, thank you for the opportunity to talk about the product.
Yeah. Great to have you.
Thanks for so much for coming on.

Speaker 1 So this has been another fantastic episode of the Two and a Half Gamers Podcast. We're thrilled to have you.
Don't forget to like and subscribe. We'll be back next week with another game review.

Speaker 1 Thank you so much. Bye-bye.

Speaker 1 Everybody. Ciao.

Speaker 1 See ya.