67. Ramsey McGrory - DoubleClick to Mediaocean via Right Media

Speaker A: So you're bombing the same ad unit, and the ad unit is effectively sort of competing with itself. And so, uh, I think, uh, at this point, I think Brian looked at it and said, we just built this wrong.

Speaker B: Early to bed, early to rise. Eat right and advertise. Early to bed, early to rise. And one more thing. Get your name out there. Get your name out there.

Speaker C: Hi, I'm Marty Kine and this is Paleo Ad Tech. This week we are very happy to welcome Ramsey McCrory to the program. Ramsey is currently the CDO that is Chief Development Officer at MediaOcean. He started his career in the US army, later found himself at the mighty DoubleClick in 1999 at the peak of the dot com boom as an ad sales exec and product manager. He later joined the equally iconic Right Media 2004 as a VP of Platform and ad sales and stayed on after Yahoo acquired the company for a lot of money around 2008. Then later, Ramsey was CEO at AddThis, which was acquired by Oracle, and president at Scout Media before joining his old friend and former Paleo ad tech guest, bill wise at MediaOcean. So did you feel the army was good training for Double Click?

Speaker A: Uh, very different cultures.

Speaker C: I've never asked anyone that question before.

Speaker A: Right. Oh, my gosh. Uh, no, no, I don't think. Look, I, I fell into Double Click. I. When I finished college, uh, when I finished, um, grad, uh, school, I moved to New York, working for Citibank in banking, working on Deri credit and debt derivatives. That was early credit, um, derivatives. It was the mechanics of everything. Pricing analysis and market analysis and credit risk and all of these things. So super complex, um, transactions. But after two years, I didn't like it. And the hiring manager at Citibank, uh, had moved over to DoubleClick. And I called her up and said, I'm really not enjoying this. And she's like, well, I, I, uh, joined this great company called DoubleClick. And the Internet's growing, so you should come here. The parties are fantastic. Um, and after 10 interviews, I was hired as, uh, an inside sales guy, banging the phones for calling on finance and insurance companies, selling display advertising and AltaVista, if you remember that.

Speaker C: The AltaVista, that was a legendary deal they had. So had you heard of DoubleClick when she said, I'm working for this company called DoubleClick? No.

Speaker A: No.

Speaker C: Okay.

Speaker A: No.

Speaker C: But you were in New York, right?

Speaker A: I was, I was. And careers, um, can be, um, designed. And then a lot of it is luck. This was Something that I, I did not intend to go into advertising or the technology piece, but it ended up being, it ended up having all of the attributes of things that I'm attracted to, which is chaotic and crazy. I like chaotic, fast moving things. It ended up being very data driven and technology driven. It's a very diverse community. You get the super engineering quant types, you get the creative types and everything in between. So in so many ways it just fit the kind of work that I wanted to do day in and day out.

Speaker C: But your role at that Citigroup was not a sales role, right? Was this a new role for you at DoubleClick?

Speaker A: Yeah, yeah. Uh, uh, yeah, it was, it was

Speaker C: my first kind of a career change. I might, one might say, yeah, pick

Speaker A: up the phone and sell people on it. So that, that meant Learning all about DoubleClick, learning about the ad technology, how to make it do the things I wanted it to do around targeting and optimization. Because the finance insurance people are always trying to get a new credit card application, get a, uh, quote for insurance. So I had to figure out early how to make direct response, uh, work in Internet advertising.

Speaker C: So you said you had 10 interviews. Why, why was that? Seems successive.

Speaker A: Yeah, I don't know, it was a cultural thing. You just ended up meeting so many people. Um, and I don't even remember. I don't think there was any rigor around two interviews. You know, it wasn't like this person is, is assessing this and this person is assessing this. I'm not even sure who I, who I interviewed.

Speaker C: Kevin o'. Connor?

Speaker A: No, no, no, no. By that time, no, I, I mean I knew Ko. Um, once you get in, everybody knew Kevin o'. Connor. Kevin Ryan, Dwight was there, you know, Wenda, uh, Barry Saltzman. Early, early, you know, OG of DoubleClick. And still.

Speaker C: So this, the year you joined, was that 1999, is that right?

Speaker A: Yeah, that's right.

Speaker C: Okay, so DoubleClick was a public company at the time.

Speaker A: It was. My options were struck at $136 for anyone that remembers the, the Google transaction, I think was sub$10. So.

Speaker C: So are you saying, Ramsey, you didn't make a lot of money on that?

Speaker A: 0 money.

Speaker C: Hopefully you didn't end up with a tax bill. I heard about that.

Speaker A: No, I did. Yeah. Yeah, there were some people that, that had, um, exercised options and owed that and then the value went down. Boy. No, that was not me.

Speaker C: Not, not a happy moment. I know. No, see, you did not interview with Ko. So where were the offices at this time? Were they On Madison Avenue or had they moved to 34th street or click, Click City. Yeah.

Speaker A: Yeah, we just moved into 33rd and 10th.

Speaker C: Right.

Speaker A: Which was the new place. The new place that had the basketball court.

Speaker C: Yeah.

Speaker B: Ah.

Speaker A: Uh, and this was top floor cash. It was 13 and 14, and then we took over 11. And so it was. I mean, that. That office was, Was, uh, was brand new.

Speaker C: Was it open plan? I mean, you all.

Speaker A: It was okay. Yep. Inside sales on the top floor, banging the phones.

Speaker C: Yeah. Did you have your own desk or was it open seating?

Speaker A: Just open seating. But remember, I had been at City at that point. It was City, Solomon. So the trading floors had, you know, 400 people.

Speaker C: Oh, yeah.

Speaker A: Uh, picking up phones and yelling. And you were used to it, so I was used to that, yeah.

Speaker C: Do people have pets in the office?

Speaker A: I don't remember. They must have brought. They must have brought dogs in. The occasional pet, the occasional hamster. Uh, it was late, late nights, uh, young people. Halloween was a huge, uh, event. Um, Kevin Ryan, I think that was one of his favorite. And then obviously Willy Wonka party and sales events. So, um, a crazy, crazy time.

Speaker C: Did you ever play basketball on the court?

Speaker A: No, I'm five foot, not a player. And then I play tennis.

Speaker C: So you're banging the phone. So what, what were you saying? I mean, who were you calling on? And what was your. What was your pitch at that time?

Speaker A: This was, uh, this was the finance vertical, so calling on insurance companies. There was. I literally was talking to a farmer in Colorado who ended up. He had been doing like, rent, like, direct response type work for an insurance company. And they asked him to start, um, doing. Figuring out the Internet. And we just, we, you know, we, we bonded. I, I grew up mostly in Montana. Um, and. And we just sort of figured it out together. And, and that meant across all the media that we were buying how could we use the ad server and get creative to drive messaging? And now that's so commonplace and there's so much sophistication. But this was like, you know, traffic and ad target it, try to frequency cap it, watch the performance. And early on, uh, you know, we had a direct response group that was led by Bill Wise and Mike Walrath. And this was m. It was this sonar.

Speaker C: Yeah.

Speaker A: No, it wasn't. It was not sonar. It was a separate group.

Speaker C: Okay.

Speaker A: Um, eventually they were, um, combined. But the, uh, uh, the group was like Dwight Fairback, Lori Jacobs, Aaron Letcher, who's over Deep Intent, and me. And this was just like large accounts and driving direct response oriented buys. So you know I would get a spreadsheet on a daily basis that said here are the publishers, here's the impressions, here's the cost here, the number of conversions and we would just, I would just be going in and making trafficking changes in uh, in DoubleClick at the, the time, um, trying to grind those creatives into performant um, campaigns and it really did honestly it set the table for Right Media. The concept of Right Media came out of um, doubleclicks unwillingness to invest in an ad server and a media business that was focused on meeting direct response um, goals. And so a lot of the early thinking of Right Media came from the work that we had done at DoubleClick working with the largest performance oriented advertisers.

Speaker C: Do you remember when you met Bill Wise?

Speaker A: Bill was running Sonar, he was in the finance group and they developed sonar as a second offering. There was, there was the DoubleClick network that was focused on premium, premium brands and premium publishers. And then uh, there was another level of advertisers that might be head of market or torso and then publishers that could be thousands of publishers who had set up um, websites and wanted to serve ads there. So the BD team is out there signing up publishers left and right and the ad team was out trying to find marketers that weren't the top hundred advertisers. And so Bill was leading that group. Mike Walruth was one of the, you know the um, the first salespeople in that group. Eventually that group was slammed together the brand group. And you know Bill and Mike uh, ran that uh, and then they sold that, that division off. In 2002 DoubleClick decided to sell the media division off. I think the bankers told them they should get out of the media business because it was less valuable. What they didn't understand is when you, when you do that you sort of lose touch with the uh, the market. So you know from 2003 to uh, you just don't understand what people are doing with it. So from 2003 until DoubleClick sold in 2006 I would argue that we sold in July of 7. So I think it was late 06

Speaker C: to Google, click to Google.

Speaker A: And then at that time it was Microsoft buying a quantive um, they bought Jeff Green's first company adcn.

Speaker C: Adcn, yeah, yeah.

Speaker A: Which is probably the closest competitor in terms of strategy to write media way back when um, and then Yahoo came in and closed the transaction July of I think 07 uh with Yahoo.

Speaker C: So the DoubleClick era. Uh, you were there 1999, you're there 2000. The Market.com crash. Uh, some of us remember it. Uh, you were there during that period. What happened at DoubleClick and what happened to you personally?

Speaker A: Well, the brand market, I think, just dropped like a stone. The performance market stayed steady. Um, so if you're. I mean, how many times have these direct response advertisers said, if you're meeting my goals, they've got unlimited budget.

Speaker C: Yeah.

Speaker A: So that performance part of the market kept coming along. And, you know, whether it was, you know, financing credit cards or insurance or, you know, uh, the lead gen product that Jonah Goodhart and his brother Noah created, that they've talked about colonize, those kind of performance oriented advertisers, uh, were just soldiered through the downturn.

Speaker C: So you were focused on that at doubleclick though, Right? So your business was okay. Okay. But the company itself suffered, clearly.

Speaker A: It did, yeah.

Speaker C: Ah, so what was, what was going on around you?

Speaker A: Well, the. Oh, my gosh, you probably heard about this. I think we DoubleClick went through seven or eight cuts where the HR people were in the office on the 13th floor and you people were waiting for their phone to ring and to be. It's good morale. Yeah, it's totally. Do not remember any of this until you brought this up. Uh, you get that call and it's like a 13th floor conference room, could you please come see us? And there were literally seven cuts that we, we went through. So, you know, at the end of that, it was a materially smaller group of people. I've sort of lost track on, um, exactly when that started to happen. I, I think it was after that that DoubleClick decided that they wanted to spin out that. That media business and. And they did, and they sold it and merged with a company called L90 that became Max Worldwide, which became part of Excite. I won. Which became part of the Jeeves. It was. And then. I see. Yeah. A long. A long list.

Speaker C: So you eventually left DoubleClick and ended up at Right Media. And Right Media, as you said, was founded by some DoubleClick alumni, Mike Walrath being one of them. And Mike was the founder?

Speaker A: Yes, yeah, Mike was founder.

Speaker C: Mike.

Speaker A: Mike. Mike was the founder. Um, okay. Jonah and Noah were invested. Yeah, yeah. It started in, In Poindexter's office. So Joe Zawadzki's then known as X plus one. It was, uh, previously called Poindexter. And we were doing the. Well, Mike and Aaron Letcher and Matt Phillips from that DoubleClick group were doing all the buying for AOL and a dating advertiser. I think it was Match. Um, and the intent was to take what I think both Mike and Bill had proposed to DoubleClick, which is invest in a new kind of ad server, and to build that out. So it was really this digital agency execution arm for a period of. And that started in Q3 of. Yeah, yeah, Q3 of 03. Um, and then I joined six months later, February. And my goal was to build out more advertisers. So the initial ad server called Manage was, was um, launched and we were doing, we were doing the buying for aol and I think it was Match and using the, you know, any of the fees that we got from that to fund the uh, development. And then I called up all of the direct response advertisers that I had worked with previously. And I think I signed four iOS the first day in the office and we were off and running and took it from just this digital agency to, okay, now we have this ad network, we're buying inventory and managing it for 1, 2, 5, 20 advertisers. And um, and that was the origin of the company at that time. Brian o' Kelly was doing some consulting with Josie and uh, then he joined as VP of engineering working for Matt Phillips. And that lasted, uh, a couple months. And this is. And Matt would tell you the smartest decision he, he ever made was to hire Brian. And Brian quickly became the CTO and uh, the architect of what was, um, dynamic pricing. And then probably eight or nine months later, the exchange. And then we were off and running from there.

Speaker C: Yeah, a lot of innovation at Right Media. Certainly a legendary moment. Uh, were you in the Poindexter offices in the themselves in the infamous closet

Speaker A: that it was founded in the back office? No, no, I missed.

Speaker C: Okay, good.

Speaker A: I spent some, I spent some time in there. I was on 5th Ave. Right around 23rd.

Speaker C: Was it a closet, by the way?

Speaker A: It was a back office. It was a back office. I. Eight by ten, no windows.

Speaker C: Yeah, okay. Yeah, yeah, because I was working at uh, an agency at the time on 25th and Park. So we uh, and we use Poindexter worked with them. So I, I recall that that was

Speaker A: where the first area, first Shake Shack was there.

Speaker C: It was cd. Yeah. Madison Square Park. Yeah, no doubt. So what was Right Media's pitch to you? I mean, why. How did they get you to join? Because they're just a startup.

Speaker A: I mean I, I had worked for Mike and, and it. This was like, we're Going to do great things and you would be the head of sales. So come over and let's go. I mean everything that came as most innovation is it's never one decision, it's a series of things that happen, um, that put you in a position by force of will and by luck. And there were a bunch of things that were just happening that gave us an opportunity. Remember social NETWORKS?

Speaker C: Yeah.

Speaker A: Especially MySpace was just a uh, juggernaut and there was so much inventory available out there that, that, that publishers including MySpace were very open to new ways of working with partners to drive monetization and very few people could handle the scale. And, and, and Brian is a very good architect and an engineer. And you know, we started taking some inventory and managing campaigns. Uh, and then uh, the original ad server called Manage ended up being very good at optimizing to performance. But it was optimization by suppression. And what I mean by that is you pick a price point $2.50 and then you optimize inventory. And that's usually by managing geos and frequency and websites and you're pulling them out. But when you optimize those campaigns you end up affecting your scale. And so we were looking at this and figured out that it was really good at what it was doing, but what it was doing was suppressing or decreasing the amount of spend that was actually happening. Mhm. And so we started fiddling, Mike started this and we all started fiddling with creating quarter increments in the ad server for campaigns. We have eight segments starting at 50 cents, going all the way up to $3 and whatever. And that worked for a time. But if you know anything about the way ad servers work, if you do that, what you're essentially doing is octupling at eight different placements, you're octupling frequency so you're bombing the same ad unit and the ad unit is effectively sort of competing with itself. And so I think uh, at this point I think Brian looked at it and said we just built this wrong. And what he meant by it was all the ad servers were optimizing inventory against a set price because that's how ad inventory was negotiated. I want you to pay this, I want to pay this. Here's the commitment, here's what's guaranteed, here's what's not guaranteed. Here are the goals and constraints, yada yada. So dynamic pricing came from a series of discussions and innovations around flipping the model from um, optimizing inventory against price to now optimize price against inventory. And when you make that fundamental change it means that every advertiser is willing to look at every single impression. And so what that does for the publisher is on high frequency inventory. You're monetizing it and you have every advertiser looking at it. So you're maximizing the yield on it. So that was the pitch to the publisher. The pitch to the advertiser was, you know, you used to get 1x in terms of delivery on your campaign. Well, we changed the pricing and it turns out, uh, the effective CPM on this is, is lower overall. And we just quintupled your scale because we opened up a bunch of inventory that didn't work at $3 but worked really well at buck 75. So that fundamental change of changing the way you manage price against inventory, which is now known as dcpm, came from those innovations to try to grind the ad server to do what we wanted it to do.

Speaker C: Now to your knowledge, uh, was Right Media the first to do this sort of price optimization or um, dcpm?

Speaker A: Uh, I think it was, I don't know of anybody else who did that. So that Price marketplace is not new. It's search. It's a fundamental of search, but um, for display inventory, nobody else was doing it. And after we did that, we then went out and um, other ad networks started asking if they could license our technology. In a couple of months we licensed that same technology, now called Yield Manager. After Brian rebuilt it, we licensed it to three or four ad networks, including our own ad network, the right media, um, network. And what we realized within a month or so was we had all trafficked demand and supply tags into each other. So the ad server, once again, you just look at what people are doing and figure out. Then we changed it from this ad server to it's now an Exchange. And now you have a seat and you can connect to people. You don't have to, you don't have to send tags to each other. That uh, concept of a network, the Exchange, is built into the fundamental software. And so that move from dynamic pricing to okay, now we're going to license it to other people to okay, well they're actually interacting in a way that we think we can build into the platform. And that became the right media exchange.

Speaker C: So there were no tags in the Exchange.

Speaker A: The only ad tags, the only tags were the ad tags that were serving the actual creative. So you created a page, there was a tag. Yeah, you created uh, um, a sort of an entity, a seat on the Exchange. And we had our little pant people, the publisher Advertiser Network technology And we would use that to explain this exchange concept and dynamic pricing. And you know, when we. I don't remember the exact date of launching the exchange. I want to say early 05. And from that point on it was, you know, it was a, uh, you know, it took off. It took off. It really took off. Yeah.

Speaker C: So you had a, ah, seat. So were there seats for publishers and seats for advertisers? There were different kinds of seats. Yeah.

Speaker A: There were buyers and sellers. Okay, buyers and sellers. And then you had people who are buyers and sellers. That was the network. Um, if you were intermediating you had a slightly different seat. And then there were, you know, there would be technology providers, early technology providers like uh, Poindext, which then became X plus one and then Invite Media and the whole dsp, uh, sub, uh, segment, ah, exploded a year. That came later and a half after. Yeah, right.

Speaker C: But this is not exactly real time bidding yet because the decision isn't being made in the moment. Right. On the price.

Speaker A: Yeah, well it was and it wasn't. So it was real time bidding in that. On every ad call an auction was being held. But what it required was all the intelligence had to be synced into the right media exchange. And so the next big flip was, okay, now actually start calling out to the market for a bid. And that allowed for uh, the buyers to have their data and make a decision about what they want to bid rather than forcing them to integrate the data segments and that intelligence into their Right media seat. That took a little while. Yeah, um, or for that to play out. But it flipped where the transaction or how the transaction was happening, such that intelligence sitting outside the exchange could do its thing and be able to respond to a bid request in a certain amount of time.

Speaker C: So you mentioned these pant people. Pant. What is that exactly?

Speaker A: I don't have, uh, uh, I'll have to find an example. But they were little Styrofoam figurines.

Speaker C: Oh, so they were little.

Speaker A: They were little. It was just like the body, like here up and then, and then a uh, head and it uh, was P A N T. Uh, and we would take them into meetings and use them to show what an exchange was. We had to educate people on what it meant to have an exchange. A buyer, a seller, technology providers. You know, I might have five publishers in there and two advertisers and we would just use that to show what does it mean to be in an exchange.

Speaker C: And did it come across pretty, pretty clearly then to the buyer?

Speaker A: I think so. I think the, the, you know, the idea of buying, using an exchange to buy, if you think about the equity market, you know, it's not a new concept. So people got that. I think people struggled with dynamic pricing because they're used to a set price. And usually like ad agencies are estimating ad serving fees based on the price against the media purchased. So the feedback was like, oh, I love this. Let's go to. Why would I do that? I have no idea how much ad serving is going to cost me. And at that point, ad serving was 5, 6, 7. It was way more expensive than it is now. So, uh, it was material. But the trade off was in the exchange. If you're bidding on all of the inventory and you're allowing price to move, you literally can bid on every single impression. Uh, and you may win it, but you'll get more scale. What we did to fix the problem is at first we said, okay, you can set your min and your max. And they would say, well, my min is 0, my maximum is. They would always pick the CPM that they were buying at. And they say, I never want to, I never want to bid more than that. And so to not smart. So what we said was, you just want the aggregate cpm, the aggregate ECPM to be below what. So we just said, okay, you pick that number and if it's $3.50. What we knew was that because MySpace and other high frequency inventory was in the exchange, the effective CPM would be lower. So what it would do is it would allow the bidder to bid $50, $100, whatever for high quality inventory. Because on a, uh, on an ECPM basis, it was going to meet the goal. It was going to be under what the CPM they had set.

Speaker C: And these are second price auctions, right?

Speaker A: Yeah, it was a modified second price. Yeah, we fiddled around with, uh, with that. But it was, it was a second price auction, more or less.

Speaker B: Get your name out there.

Speaker C: So Yahoo, as you mentioned, Yahoo. Did acquire Right Media, uh, notorious deal. So how did that affect Right Media, the company? You stayed for a little bit, right?

Speaker A: I stayed for four years.

Speaker C: Yeah.

Speaker A: So more than more than a little.

Speaker C: More than a little bit.

Speaker A: Um, more than.

Speaker C: Bill, you were a, ah, Yahoo hooligan, as they say.

Speaker A: Yes, Yahoo is a great company. Look, Yahoo bought Right Media for two reasons. One was Yahoo had a tremendous amount of unsold inventory, what they called Class 2 and they had sold it in blocks to four advertisers. And we had tested enough to know that we could drive yield and if you assessed the acquisition based on that alone, the payback was less than three years. They made triple their revenue on, on the inventory and so just on the price which was, I think a net price was 800 million 800 something. The, the payback was there, okay? But at that point if you remember there was lots of CEO shuffles and Yahoo wanted to be a competitor to Google and so this was them, um, in part not just about Class 2 monetization, but also wanting to compete with Google because Google had bought DoubleClick and DoubleClick had launched their exchange. But the reality, the way it played out was um, Yahoo really wasn't that interested in the exchange strategy. Didn't want to invest in things like quality control, didn't want to, didn't want to deal with PR issues that came with early, uh, Exchange. Didn't really care about driving yield for other publishers. They cared about Yahoo. And from an organization standpoint, this exchange business sat under the Yahoo network management. Uh, so over time it was fairly clear that Yahoo wasn't going to support the broader exchange strategy. And Brian left at the transaction and waited a year or so and launched AppNexus. And AppNexus filled a void that Yahoo was no longer supporting. Right. Media to fill, which is a free flowing, dynamic, programmatic, uh, marketplace.

Speaker C: Yeah, well, I mean he's quite open about the fact that he launched AppNexus uh, as a, um, direct competitor Yahoo.

Speaker A: Yeah, he wasn't at the time. He's like he is now. Yeah, yeah. But it was a cloud service.

Speaker C: It didn't even start as an antech company. I believe it was a web hosting company or something.

Speaker A: Yeah, I know it's a two cloud service and something like that. But it was just putting, it was uh, Brian putting the component pieces in place to relaunch it.

Speaker B: Get your name out there.

Speaker C: So what are you doing today at MediaOcean? What are you guys up to? What's your role?

Speaker A: Uh, I am eight years into Media Ocean. The first four years was um, a CRO. So everything external for the company, it was really about building out a sales function that went beyond the uh, original Media Ocean holding company clients who had been clients and have been clients for

Speaker C: just the big agencies.

Speaker A: Yeah, forever it's been the holding company agencies. Uh, and at the time Media Ocean was essentially the linear DSP and the finance systems for the agencies. We both invested in digital and invested in diversifying. And now sort of fast Forward the first four years of CRO. The last four had been focused on M, M and A, we've done about 10 total. The most recent and largest was Flash Talking which is primary ad serving, video ad serving, BCO and then 4C8 social and, but then ML and AI and video compression and a bunch of uh, pieces. So you know, fast forward now. Agencies continue to be a really important part of what we do. But uh, brands direct our uh, an even larger category for us. And we've done hundreds of supplier technology data integrations. And while linear is still, you know, we're still processing 60 billion um, in linear. Digital is a juggernaut and you know, collectively over 100 million globally that we're processing and continues to grow double digits. And we're large enough that what happens in the market is typically what happens with us, which is ctv, social, video, online video growing, other categories like linear decelerating. But slowly over time. Um, I love where we are. I still think there's a ton of innovation that's got to happen over media Ocean, which is our ad infrastructure, finance contract system, Flash Talking, which is our ad tech. And then we have a budding verification business that competes credibly with IAS and dv. I'll uh, leave you with one thought which is as much as things change, a lot of this stays the same. You know, the questions that we were trying to answer 20 years ago are ah, still the questions we're trying to answer now.

Speaker B: Thank you.

Speaker A: Big advertisers want to know where did I spend my money, what message did I deliver, what proof of performance do I have and what did I get from. And it now there's so much more complexity and fragmentation. It's harder to get to the answer. But it's still the same fundamental questions we're trying to answer.

Speaker C: Ra.