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Episode 5
Harnessing Changing Consumer Habits to Reshape the Future
About This Episode
We discuss the impact of COVID-19 on the advertising world where some businesses have stopped advertising completely, and others have increased it.
John Shaughnessy | Regional Vice President, Data Marketplace, LiveRamp
Christian St. Louis |Director of Vertical Strategy, StackAdapt
Transcript
Episode Introduction (00:00:00)
So this combination of COVID plus an expected economic slowdown, I think, begs two questions. One, which new habits will remain, and to which older ones will vanish. And our friends at the Lassus data provider within our marketplace shared a really interesting stat that over 50% of respondents to a recent study, expect to adopt new shopping behaviors as part of their routine in the future. To have a 50% chance to influence somebody to do something different than what has been their autopilot way of doing it up to now is pretty exciting. And so we hope that folks will think about which habits they can take advantage of which habits may be dying a little bit and where they want to jump off the ship before Coast out.
How Agencies Thrive Introduction (00:01:00)
Curious to know what industry leading marketers are looking to achieve and the ever evolving digital landscape that how agencies Thrive podcast by StackAdapt is dedicated to helping the new breed a forward thinking savvy, lean and mean marketers when in the rapidly evolving digital landscape time to thrive.
Vitaly (00:01:28)
Thank you for joining us today. My name is Vitaly, and I’m the host of this podcast. In this episode, we’ll take a deeper dive into the topic of data orchestration, and how changes in media consumption impacts verticals like travel, consumer goods, or retail. What really stood out to me in this discussion is really the topic of the automotive industry. Specifically how to find that new balance when people are hesitant to purchase big ticket items. Yet social dynamics push people to own private vehicles because they’re hesitant to use public transit. Christian and John discuss different data strategies to reach market consumers. And importantly, the idea of suppression and how to not target people who just drove the car off the lot. Without further ado, here’s the episode with John Shaughnessy from LiveRamp..
Christian (00:02:12)
Alright, welcome to the podcast everyone. Today I’ll be talking to John Shaughnessy from from LiveRamp where we’ll be talking about data orchestration, the current advertising climate and specific verticals where data orchestration works really well. So thanks so much for hopping on. And joining me today, John.
John (00:02:31)
Christian, very excited to be here.
Christian (00:02:34)
Awesome. So before introductions, just wanted to talk quickly about the definition of data orchestration, because I know it’s not necessarily an intuitive phrase, but it’s a combination of data identity and machine learning. It’s a cohesive strategy that really allows DMPS like live ramp and DSPS like StackAdapt to be successful together by creating like very personalized audiences that are created within the DMP, and then passed over to, to the DSP to execute on all types of digital media. So I’ll quickly introduce myself. So I’m on the solutions team at StackAdapt. I partner with the sales team and the technical team teams to empower marketers, basically helping them build unique advertising solutions and drive the growth of the business. So that’s kind of a fancy way of saying it, but it’s really consider the solutions role to be kind of a translating role between the revenue side of the business and the technical and product side of the business. And so John is the head of data strategy programmatic at live ramp, where he manages the commercial strategy to grow programmatic data buying from the LiveRamp data store marketplace. And he helps live rams partners adopt and scale third party data strategies. And before LiveRamp, John was a management consultant and founded an advertising agency. So with that being said, John, if you can maybe talk a little bit more about how you got into advertising and and how you ended up with live ramp?
John (00:04:07)
Happy to Yes, so the transition into advertising was a fortuitous one, when I was a management consultant at Booz Allen Hamilton. We helped some media companies, including Viacom on strategy and tactics to help win in their prospective space, and just really became enamored with the industry. So when a college friend tapped me a couple years later to be a co founder for a boutique ad agency. I hopped at the chance as a way to get to learn more and really bring some of the data background I had from my consulting days to this industry, and there was a lot of fun in terms of live ramp before moving to the Bay Area recently I was working in a V. C, in New York City. And this seed stage fund focused on marketplaces. And the LiveRamp data store marketplace was a really fascinating business model for me, that has been growing quickly and helping to balance supply and demand. So data providers, and then on the demand side brands, agencies and platforms, and I thought that would be a fun way to kind of continue my career on the backs of some of the really interesting things that live ramp is doing around identity addressability, et cetera.
Christian (00:05:36)
Cool, thanks. That’s super interesting. So I’m curious, how did you find being a co founder of a boutique agency? How did that go?
John (00:05:44)
There were good days and bad days. But we had a lot of fun grinding it out. You know, the thing that I think I take away from it most is the responsibility and the ability to wear many hats. That means focusing on, you know, strategy for the agency, elements of marketing, where can you find your niche business development in terms of signing new partners and helping them grow and be successful? And then a data analytics function? Which is how can we find insights to make those who work with us better than they were yesterday? And there’s a lot of management and leadership elements as well, as you’re looking to hire first employees, figure out who will run certain parts of the business, and hope that you’re doing more good than holding people back, as you know, a first time executive?
Christian (00:06:41)
Yeah, that’s super interesting. Again, I come from a similar background in terms of analytics, and data analysis. Originally, I was into data science and transitioning into advertising just seems to make sense, especially in terms of digital just because of the plethora of data that that’s out there. And it’s available. Super interesting to dig into. awesome to hear. So with that being said, so a lot of people might see who may not be too familiar with LiveRamp might see it as a DMP, where you can, you know, onboard first party data and have that push to different platforms and have a vast third party data store to or marketplace to pick from. But obviously, there’s a lot more to it than that. So could you explain kind of like what live ramp does today?
John (00:07:29)
You bet. So think of live ramp as providing the data connectivity platform, leveraged by brands and their partners to deliver innovative products and exceptional experiences. And I would say in times like these, we could all use some more exceptional experiences. And so live ramp is powered by four core capabilities, data accessibility, identity, connectivity, and data stewardship. And so live ramp exists to make it easy to connect the world’s data people and applications.
Christian (00:08:00)
Awesome. Thanks. Very nice, structured response. So where exactly would you fit into that equation and what area you focused on LiveRamp today.
John (00:08:11)
So I work in our data store, which is a marketplace that combines data sellers, so about 150 data providers, spanning all kinds of data types, verticals, and media, and data buyers, who could be brands, agencies, platforms, publishers, and in some cases, data providers as well. And so we are not quite DMP we think of ourselves more as a marketplace, because we’re not cookie based DMPS actually, our clients, and what we’re doing is focusing on taking the identity work that is core to live rams product suite, and matching it with ethically sourced data, so that people can get the most out of their first party, third party or a combination of those two.
Christian (00:09:01)
That’s great. Yeah, I mean, a lot of people may not know that. So that’s, that’s super, super insightful. You know, the definition of a DMP gets thrown around, and it’s good to understand where live rent fits in that equation.
John (00:09:14)
That’s right. And then we work with partners, like StackAdapt, who are DSPs, who can help those data buyers activate across a variety of platforms and reach the target audiences in the places that they’re most influential.
Christian (00:09:32)
Yeah, absolutely. And I think that’s kind of like what the definition of data orchestration is, is coming from, you know, maybe first collecting the offline data or working with the original data provider and then working with LiveRamp to kind of address all of that onboarded model that whatever whatever it may be, and us kind of like the identity portion to make sure that audiences addressable as possible, and then how that executed through a DSP to through media.
John (00:09:59)
That’s right. Yeah, it’s a it’s a big effort. But fortunately, we’ve got good partners like, like StackAdapt to help make it easier for folks to find what they need the audience’s they need and then be able to reach them.
Christian (00:10:14)
Yeah, absolutely. So that being said, what are the main focuses for for 2024? Live ramp in particular?
John (00:10:24)
Yeah. So I’ll come back to some of the broad live ramp things because I’m sure we’ll want to talk a little bit about Google’s cookie deprecation and what it means for the advertising industry going forward. But in our world of the data marketplace, we’re really focusing on three things. The first is reprioritizing business outcomes, which I hope to come back to in just a sec. The second is balancing supply and demand across the marketplace. And within various verticals, some of which are high fliers right now, some of which are struggling a little bit. And then third is to help our partners with back end investment they can be doing, not only to help them in these tough times, but to prepare themselves to be better coming out the other side.
Christian (00:11:10)
Cool. Yeah, I mean, that it’s interesting that that you bring up, you know, working with both sides, because until recently with, with Google Chrome’s announcement, which I think we’ll get into a little bit later and in more depth, but working with DSPs, and both SSPs is fairly interesting, I think. And so could you just describe a little bit how you kind of fit in terms of working with DSPs, which we we’ve already talked about a little bit, but also working with the exchange SSP side of the business?
John (00:11:39)
Yeah, for sure. So we want to be kind of that catalyst that makes those connections, right. So one thing we can talk about here in a little bit is a big initiative for LiveRamp this year, which is called authenticated Traffic Solutions, where we’re trying to help publishers be able to get a replacement for cookies in the bloodstream. And so that is one unique focus that we have, where we’re trying to create this situation where there is a better value exchange. And by that, I mean, if we can help publishers have better content. And then we can incent consumers of that content to show trust by authenticating, then we can come up with a much better way to allow for the ecosystem to work seamlessly, even as cookies take a step back. And that’s something that’s really important to us, and something that we are throwing a lot of investment and colleagues at.
Christian (00:12:51)
Yeah, definitely. I think that’s a super interesting side of the business that it’s kind of on everyone’s minds in 2020. And we’ll Yeah, we’ll get we’ll get into that in a little bit. But I think that’s a great transition to the second, the second section of what we’re going to talk about. So this section is really meant to focus on what is happening in the industry today, in the advertising industry. And the first thing, of course, it’s always on everyone’s mind, including likely both of ours is, you know, with the human tragedy of COVID 19 ongoing, and its effect on the economy. There’s impacts that are far reaching, you know, both personal and, and business wise. And so I just wanted to touch on the topic on how LiveRamp sees media consumption trends changing and how, how LiveRamp sees the effect, I guess, on the entire advertising industry in general, from the perspective of, I guess, the data side, but, you know, working with both SSPs and DSPS really seeing the entire tech industry.
John (00:13:54)
Yeah, absolutely. I think you bring up a great point. First and foremost, we hope that all the listeners of today’s podcast are safe, healthy and sane. It easy to I think get caught up in the disruption to an industry or to the broader economy. But we do need to realize and harken back to in these times that this is impacting people. Right. And so I think a lot of what we will try to share today is trends and insights that reflect what we are seeing, but also what the impact is for individuals and verticals and the economy at large. Because I think one of the big takeaways is we need to still be able to reach people, the right people in the right places with the right messaging. And getting those things right may require a little bit of a change in our approach. Given the sensitivity of this time, and so many things being brand new. So, maybe to start with some of the media trends, we got some great insights from our industry friends at IAB, they pulled about 400. media planners, media buyers and brand leads. About 75% of those respondents were VP or above, and three quarters said that buyside Coronavirus will have a greater impact on us ad spend then the financial crisis when ad spend dropped 13%. And as a result, we’ve already seen that 24% of marketers have paused all ad spend for the rest of q1 and q2. And then another 46% are adjusting their advertising spend through June. And so far, we’ve seen digital ad spend down about a third and traditional ad spend down about 40%. Now those Christian that are still advertising are adjusting their in market tactics, and are actually increasing and in many, many cases doubling down on audience targeting, OTT and CTV device targeting and programmatic buying. So our friends at comScore shared some insight that they’ve seen 29% year over year growth in OTT households for CTV, and 43% for streaming boxes, most of which benefits the Big Four, but Netflix, YouTube, Amazon Prime and Hulu. And then additionally, we have seen that social use is just absolutely exploding. Alliant one of our data partners, reports that daily social media activity is up 70%. And to put some context around that there was a smartly i o study in November of 2019, where 52% of retail marketers said that they plan to spend more on social advertising in 2020, then in 2019, and 50% of them were planning to spend at least half of their annual marketing budget on social media advertising this year. So a 70% increase in usage probably means that there is still some supply that is available to be purchased and to reach people who are spending more time at home on their devices and looking for distractions in this time.
Christian (00:17:30)
Yeah, absolutely. It’s interesting to hear your perspective on that. And we actually ran a webinar last week, addressing similar similar topics, kind of giving insights and trends really as much data as possible to tap advertisers and marketers to you know, help understand how that affects their business. And one thing we we definitely noticed is, you know, as people are staying home, like you mentioned, there’s just an increase in supply naturally with with seven year like you said, 70% of people being on social media, and people watching more CTV and OTT content as their you know, sheltering in place. So it’s it’s interesting that you know, there’s there’s been articles and research done on you know, the creation of a buyer’s market as some marketers reduce reduce their spending or you know, switch media types and the supply is ever increasing. So, that being said, you know, the, the numbers are their supplies is up, demand is a little bit down. Of course, that changes for every channel, but, so, what are your thoughts on advertising during a pandemic? You know, in a buyers market, like like there is, would that involve, you know, expanding strategy and tactics or, you know, would there be kind of like the most important being pressed on the on the messaging part on having very empathetic messaging and really understanding the human aspect.
John (00:18:57)
I think you’re right on all of them. If I had to pick one, shout it from a mountain top piece of advice, it would simply be don’t stop advertising. Dating back a century Christian studies find that those who keep spending come out ahead. In the 1920s, Harvard Business Review revealed that those who continue to advertise during the recession of 1921 to 23, saw a sales growth of 20%, while those who reduced their spend fell to 7% decline. In the 80s. McGraw Hill research found that b2b companies who maintained or increased their budgets grew 275% More during the recession, and for up to the next three years. So, in every recession, one of the first things companies do is pull back on advertising. But as I’m sure that you’ve seen in some of the stats, you’ve researched and shared with your friends in the industry. Pulling back prevents advertisers from taking advantage of at least for benefits Number one, the noise level drops when competitors cut back spend to the cost of advertising drops yielding better deals. Three, advertisers are projecting stability in a difficult time, and probably most importantly, for Share of Voice leads to share of market, which leads to increased profits.
John (00:20:23)
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Christian (00:21:02)
Yeah, that those are those are great points. And they all you know, there’s, I think it really depends on the on the industry as well, in terms of, you know, if it’s what type of advertising to do, but it sounds like most of the statistics lend to saying that, it’s not a good idea to stop. Hell, right. But for example, like if you put yourself in the shoes of a travel and tourism advertiser, where they’re not able to necessarily run campaigns, where conversions, at least the in the natural sense of the word, word conversions being, you know, people signing up, or people booking hotels online, or, or visiting different tourism sites, or booking cruises and things like that, you know, it doesn’t make sense right now for for any of that to happen, as you know, traveling is being put on pause. And so with that respect, I feel like there’s kind of two approaches. The first one being the return on adspend approach, which may not make sense for, for example, for a travel and tourism advertiser. But then the second one is the is the brand health approach, and having a very empathetic message that still keeps that brand in the minds of consumers and helps potentially gain trust and confidence with them. So So what are your thoughts on the different types of advertising? Obviously, industry dependent right now?
John (00:22:23)
Sure. So I wanted to follow up on your point about maintaining that share of voice but reconsidering a different style of messaging for these times, because I think it’s spot on. The IAB also gave some insights here, saying that 63% of marketers have already changed their in market messages. 42% are increasing mission based marketing. And so a couple good examples that you may have seen or could easily google it. The first is Walmart’s retail heroes. The CEO crafted a video thanking 1 million frontline employees for dedication to its customers. And then no doubt many of us have seen Miller lights virtual tap virtual tip jar, I should say, campaign that donated $1 million to a bartender relief fund. And the ads encourage patrons viewers to do the same. And then the IAB also found that 41% are increasing caused related marketing. So an example here is dubs courage is beautiful. It highlights mask wearing health care workers. And then they donated 200,000 masks to New Jersey hospitals. McDonald’s in Brazil, redrew the two sides of their iconic brand M to signal social distancing. So there are some brands. And I would argue this is across all categories to your point where you can continue to make a connection with your current customers. Maybe acquisition is not the best use of marketing dollars. But there have been some really strong opinions from consumers that appreciate brands that are going out of their way to deliver relevant and timely information. In fact, 87% said that is top of mind for them. So even if the approach is not to go gung ho to try to anywhere from stop the bleeding to gain market share, there is this human connection we’ve talked about before, especially with current customers, to be able to let them know that a brand is trustworthy. A brand is looking out for them and will be there for them once we inevitably move out of this time.
Christian (00:24:37)
Yeah, absolutely. I think that’s, that speaks to really the type, the type of brand that that’s running the advertising is that it really may not make sense to run certain acquisition based campaigns. But then on the flip side, if you think about CPG, for example, and potentially smaller CPG brands that may have been on the backs of the shelves or A little harder to reach for consumers. Those are potentially, you know, open now as people are shopping online and are, are less concerned potentially about the brand, but just about, you know, receiving the product that may that may help the consumer. So I think it’s really the decision of the consumer at the end of the day, which will then help inform the brand on how they can move forward.
John (00:25:21)
Well said, and I think actually to build on that a little bit. One thing that I think is important, regardless of whether you go down one of those two paths, or perhaps a third is awareness by advertisers, that they can harness changing consumption habits, we’re at this inflection point, which very rarely off very rarely happens to be able to change behaviors in a significant way, as if to totally reshape them. So let me tell you what I mean. 2009 study in the European Journal of Social Psychology, prove that forming a new habit takes about 66 days. That study debunked a 1960s, one that claimed it’s closer to 21 days. And I think as we are talking here today, on April 15, or quarantine could certainly last 66 days. And so this combination of COVID plus an expected economic slowdown, I think, begs two questions. One, which new habits will remain, and to which older ones will vanish. And our friends at the Lassus data provider within our marketplace, shared a really interesting stat, that over 50% of respondents to a recent study, expect to adopt new shopping behaviors as part of their routine in the future, to have a 50% chance to influence somebody to do something different than what has been their autopilot way of doing it up to now is pretty exciting. And so we hope that folks will think about which habits they can take advantage of which habits maybe dying a little bit and where they want to jump off the ship before Coast out.
Christian (00:27:13)
Yeah, very well put. I mean, I appreciate all the statistics that you’re throwing out there. It’s very, very informative. Yeah. So that. That being said, I mean, yeah, there’s, there’s changes that were, that you mentioned, that are really potentially long run, habit changes for consumers, for everyone. And one that comes to mind kind of going off off topic a little bit here. But one that comes to mind is with with linear TV and live sports consumption, you know, the with the live sports hiatus for any sports fans out there, it’s obviously not an easy time not being able to watch your favorite teams play and, and it’s really a hole in the TV landscape in terms of content, but also in terms of, of ad spend, is there’s you know, billions of dollars that would have been spent on March Madness, will the combination of March Madness, the NHL, NBA Playoffs, international soccer, etc. And the question is, will that be will that be a big influence in terms of cord cutting, and people who may unsubscribe in the meantime, while they’re not able to watch their live sports and become comfortable with an Ott, CTV can subscription and will not put pressure on the bigger networks to potentially focus more of their time and effort on on providing that content that live sports content on on smart TVs? And envious subscription. So, you know, that could be one of the lasting effects as well.
John (00:28:38)
I agree, I was brought to tears as you were describing all those sports leagues that have been postponed or, or perhaps canceled for the rest of the season. And one of the biggest trends that we have seen data buyers in our marketplace, reaching out to our audience Solutions team, which is our resident experts on data providers and data segments is exactly for what you’re describing. How can I reach sports fans, now that I don’t have the stalwarts to go to and so it has kind of reinforced the importance of audience targeting and being able to find these folks where they are and where they are now might not just be, you know, home versus at a bar, but it’s also on what mediums they’re now devouring, you know, content and obviously, all the trends that I’ve seen, it sounds like you have to just point to OTT and CTV can some consumption going through the roof. And you know, in the meantime, IAB was noting that 73% of these media planners, media buyers and brand leads believe If Coronavirus will impact TV up fronts and spend by up to an average of 20%. And you know, as it is right now, these upfront presentations aren’t taking place and a lot of content production is being halted, right, which is even, I think impacting some of the, you know, HBOs, Netflix, etc, that are trying to pump out as much new content during this time as they can.
Christian (00:30:23)
Yeah, absolutely. And then you see, for example, other types of platforms that that are producing more short form content that doesn’t require that production level of production, increasing in popularity as well.
John (00:30:37)
Yeah, you’ve probably seen adverts for this platform called quibi. Qu IBI, which is short for quick bites, they raised by startups standards and incredible amount of money, and are enlisting celebrities largely to do I think content that’s always less than 10 minutes. And while there’s been some mixed reviews, I think from viewers, it hasn’t stopped the amount of money and resources being pushed into it. So I think that’s one example right now of where people are trying to strike while the iron is hot.
Christian (00:31:15)
Yeah, that’s exactly what I was gonna mention. I just to be honest, I didn’t know how to pronounce the name.
John (00:31:21)
So no worries. And you know, it’s interesting, too, I think you were mentioning a little bit about CPG. To me, and I think most of our audience could probably associate with this. There have been a lot of interesting findings that point to some of these habit consumption tipping points. So I don’t know if you fall into some of these buckets. But I know we have at my house. IRI noted that buyers are reversing long term trends towards organic and natural products favoring stronger cleaning products. So they’re basically saying I’m concerned about Coronavirus. The fact that it can live on hard surfaces. I can appreciate things that are good for the earth. But right now I care to protect my health. Right. And so that seems to be bringing us back to a time where maybe more abrasive, maybe more chemically infused products are having a little bit of a renaissance, right.
Christian (00:32:25)
Yeah, I mean, on the flip, this isn’t, doesn’t really have anything to do with advertising. But on the flip side, you see the changes in the environment that are occurring, due to people being at home, as well, which is, you know, super interesting. I remember going really off topic here. But I remember seeing a video from Cancun, in the in the resort town, where there were, there was a video of a Jaguar and of alligators, like roaming in the pools of the of the resorts, just really, really peculiar times.
John (00:32:56)
And in general, it is it’s a little bit of an indictment that when we stay home, you know, you can see the Himalayas in India for the first time that, you know, ozone deterioration is that it’s like 20 year or 50 year low. But yeah, I mean, there, there are some I guess, as hard as it is to say this and beneficiaries in this time. Another thing that I’ve seen that I thought was pretty comical, but absolutely describes me to a tee. IRI also reported that consumers are returning big time to comfort brands. So for instance, Kraft mac and cheese saw a 67% increase in new buyers versus traditional times. And I know that, you know, in my first hoarding run to Trader Joe’s, I bought three or four boxes of mac and cheese after not having had it for years. And that is one thing that I continue to replenish, even as it’s clear that I’ll be able to get my hands on mac and cheese for the foreseeable future. So I don’t know if you’ve had any or or seen any examples of that, where we’re kind of going back to maybe some like nostalgic tendencies.
Christian (00:34:10)
Yeah, for sure. I think that, like when you get into, or at least I think it’s slowed down now as as you see from different like foot traffic reports that are provided by, you know, companies like factual, recently acquired by Foursquare and cubic and these other foot traffic companies, you see that huge spike, I guess, a month or a month or so ago now where people were getting out in large numbers, you know, because it was so uncertain, but I think that’s really fallen off lately. But in that in that original surge, I think, you know, I experienced that as well. And I think people are, we’re just throwing things in their cards that that were more comforting, comforting and they wouldn’t have, you know, really thought of purchasing like a month before.
John (00:34:51)
That’s right. And the last thing that I’ll mention, which actually speaks to the more things change, the more they stay the same. McKinsey did a study where were asked folks about their expected consumption over the next two to four weeks, and alcohol spend was projected to be about 25%, lower. So this kind of suggests that there’s a disconnect sometimes between buyers intention and their action, right. And that’s something that as marketers, we’re always trying to bridge that gap between what folks might say they want to do, and then the voting with their wallets. Anecdotally, it feels like I’ve been invited to more happy hours over the past three weeks than over the prior three years. So I doubt that consumption is going down. But it does point to the fact that some changes might actually not be happening, or happening in the way that we anticipate.
Christian (00:35:46)
Yeah, I mean, and again, like we were talking about before, it’s it’s really different depending on on every industry that you’re looking at, whether it’s alcohol, you know, food and drink, or alcoholic beverages, or whether it’s travel and tourism or b2b, there’s, there’s all these different changes that that are affected by this. And so, transitioning to, to that topic. Are there specific verticals that are standing out, from live rands perspective today, either positive or negative? What? What are the main trends that you’ve you’ve observed in those industries?
John (00:36:20)
Yeah, so I think CPG is experiencing tailwind travel, as you’ve mentioned a couple of times, is struggling. ADARA, one of our data providers reported that travel searches for the week of March 23, were down 80% year over year, and bookings were down 87%, year over year. The good news, I would say, in all of this is that after both 911 in the financial crisis, international travel to the US increased dramatically by about 10% year over year in each case. So there’s something to be looking forward to. And again, probably a reason not to totally shut down advertising budgets and simply sit on the sidelines. But across travel, the impact has been huge tourism economics predicts a $400 billion hit to us travel spending. The World Travel and Tourism Council has warned that COVID could cut 50 million jobs. And that’s doubly impactful because the tormin tourism industry accounts for about 10% of global GDP. And experts in that field are saying once the pandemic is under control, it could still take up to 10 months for the sector to return to normal levels. So I think that there will probably be some deals to incentivize people to travel. But as long as restrictions exist, it’s not even really on the menu of options.
Christian (00:37:50)
Yeah, what? Sorry, go ahead.
John (00:37:55)
I was just gonna say what I think is an interesting third vertical is consumer finance, because this one really goes back to what we were talking about earlier, your really salient point about, we have to remember that we’re all humans being impacted before. It’s a vertical before it’s it’s an industry before it’s an economy. Right. And so it’s kind of no news at this point that there have been historically high jobless claims in the United States, and in many other countries. TransUnion did a report, where they said 61% of Americans are being financially impacted by Coronavirus. And that’s up about eight points from just a month ago. So the impact is coming quickly. And affected consumers report a budget shortfall of about $1,000 and are saying within six weeks are not sure that they’re going to be able to pay their bills or their loans. What is good news, and what I hope has been a result of the consumer finance industry’s efforts to reach out to its clients is that 14% of impacted respondents don’t have a game plan to pay bills, but that was 42% earlier in March. So what we’ve seen is a trend of folks reaching out to lenders, and those lenders often giving payment options about two thirds of the time to defer or otherwise make them more amenable and I think this is a really good example of how we need to focus on yes, we want to sell more things. But we do need to be very cognizant of folks livelihoods and not just the financial stress but the mental stress and how can there be me be more reassurance by brands that things will be alright, and that brands can help be part of that return to normalcy in short order?
Christian (00:39:54)
Yeah, yeah, very well put. And I think that obviously the healthcare industry plays a big role in that But to your point, the consumer facing financial services industry really has an important job to do in in helping consumers as much as possible. And taking kind of a backseat to, you know, potentially selling credit cards or other different things that they may be used to when when the economy is up. But more being in a support role and having their their mantra and their advertising and their messaging, kind of circling or orbiting around that that empathetic point.
John (00:40:34)
Absolutely. That’s going to be key, I think, in times of crisis, financial services organizations, and I was working at JP Morgan, during the financial crisis, take a lot of reputational hits, and some of that is obviously very well deserved. So hopefully, they are being even more sensitive to the need to be empathetic in this time. Because it’s the right thing to do.
Christian (00:41:01)
Yeah, completely agree. Okay, well, so we’ve spent a lot of time on that topic, which makes sense, it’s on everyone’s mind, including both of ours. But speaking of other trending topics, in particular, I guess starting back in January, about the announcement from Chrome, in that they were going to discontinue the support of third party cookies. So I’ll just describe the announcement to give all the listeners context quickly. So back in January, Google announced it will join Safari and Firefox and blocking third party cookies in its Chrome web browser. And their head of engineering said it’ll happen approximately in two years. So roughly the beginning of 2022. So John, over to you. How do you think LiveRamp is approaching Chrome’s announcement of discontinuing third party cookies?
John (00:41:53)
Sure. So this announcement was pretty much in line with our expectations, Christian LiveRamp has been planning for a world without third party cookies for the last several years. The other thing that I’d want to emphasize is we’re prepared for these changes. So lab ramp has launched its open and neutral authenticated Traffic Solutions, or ATS for short, as you might read in the press, or maybe hear your industry friends discussed in launch last year, and it can be leveraged by brands, agencies and publishers today to buy inventory without the need for a third party cookie. And so far, those addressability solutions have been kind of lovingly embraced by the industry, who’s been telling us at least for a couple of years now that they welcome a simple standard and an unbiased solution. I believe we’ve now signed on 39 publishers globally that reach 16 billion daily impressions across 1000 websites. And then on the other side, identity link and enabling buying and measuring on IDL, as we short phrase, our identity Link has also been implemented or is being adopted by 34 DSPS and 15 SSPs. So we talked a little bit earlier about how we work with both sides. And we’re trying to make sure that the concept of bidding on ideal is something that both sides of the ecosystem are fully embracing.
Christian (00:43:23)
Great explanation, and I think it really is an issue that will impact everyone in the ad tech industry. So maybe to help everyone understand a little bit better in the eyes of including myself in the eyes of a publisher. How would identity link and you know this a solution like identity link help publishers, day to day efforts with with the disappearance, assuming the disappearance of the third party cookie happens as Google says.
John (00:43:55)
So I think that live ramp remains a leader in consumer privacy, and really strongly believes that everyone should have control and choice over their data. But that doesn’t have to be at odds with helping publishers succeed. In fact, we kind of feel that this new improved infrastructure can help to create better trust between publisher and consumer, and consequently, consumer and marketer. So the way that we look at it, and there was a great article penned by Travis cleaner, our SVP of adjustability on Digiday. And I think he summed it up best by kind of saying, the whole point is to enable publishers to create experiences that provide value. offer consumers a method to express trust through authentication, and avoid having to rely on unsustainable solutions, like fingerprinting, insecure, universal IDs or hashed emails, which I think a lot of folks have pushed back on in the industry for a variety. Do you have concerns?
Christian (00:45:01)
Yeah, that’s, that’s great. And I think it’s there’s definitely a balance that needs to be struck in terms of finding the middle ground between personalization and privacy. And I think, you know, as, as people continue to work and collaborate on these on these issues that that will be found. And I think identity link is obviously, an awesome solution, which we’re leveraging at StackAdapt, as well.
John (00:45:26)
Thank you for the vote of approval there. Christian, we always appreciate that.
Christian (00:45:31)
Yeah, absolutely. We’re really excited about the launch of, of the product that we’re going to be leveraging identity link for. But you can talk about that another time. So what other alternative solutions do you think could work? You know, whether it comes from Chrome or other other players in the industry? And what is your point of view on that live ramp?
John (00:45:54)
So not to poopoo other alternatives? I think we are just focused on doubling down, being really committed to enabling a open, healthy and competitive ecosystem. It’s at least our point of view that industry shifts like this kind of underscore the importance of our approach. And as we see that Google’s announcement to phase out third party cookies, is an opportunity to further accelerate this ETs that we’ve talked about. And we’re trying to do everything that we can to position that as kind of the gold standard going forward that all parties can benefit from and find value that they desire.
Christian (00:46:41)
Great. Yeah, I mean, that we talked about the the publisher side and the, on how SSPs would work with work with identity link, and identity solutions in general. And I think the the key side that, that we didn’t talk about is the buyer side, which is, you know, we experienced very much at at StackAdapt, being a DSP. And I think that as identity solutions pop up, it really will just enhance the ability for people to Target and bid as, as more essentially a more private, balanced identity form of identity, like identity link, will allow advertisers to target at that level, except with with an advanced state of privacy, and opt in, etc. And I think that, if anything, the, you know, the cookie being the the very old technology that it is, I think it’s really a step forward for could be a step forward for the industry. Again, it’s all it’s all speculation at this point, as we don’t know exactly how things will unfold by 2022. But if you look at if you look at recent technologies, like mobile phones, and smart TVs, connected TVs, set top boxes, etc. None of those involve cookies whatsoever. And the targeting is very, is very one to one and effective. And so I think having these alternative solutions for the internet, and the open web was only natural to come.
John (00:48:15)
Well said.
Christian (00:48:16)
Thank you. So yeah, I think we’ve I think we’ve discussed the the cookie, the disappearance of the third party cookie, as people as people put it, to good point. But we’re always happy to both StackAdapt and LiveRamp. Talk to anyone about about the uncertainty of the cookie. And with that, we can move on to the last section here. We kind of touched on a few of these topics. So we’re going to talk about automotive CPG, and retail, and how things are changing. Right now, for those three industries. We already touched a little bit on CPG. But we also wanted to talk about in general, how LiveRamp can help support those, those different verticals. And what our tried and true solutions from a data perspective that work in those industries. So for the first one that we didn’t really talk much about is is automotive. So again, jumping back to the topic of right here right now, how do you see the automotive industry being affected by by the economic downturn and Coronavirus?
John (00:49:29)
It definitely has been impacted. I think one of the things that trans Union’s reports shared was that folks are deprioritizing big ticket purchases. Vacations are the first things that get pushed back but then it’s auto purchases and home purchases, right. And so you’ve got that kind of financial squeeze. In addition, around most parts of the country. It’s not very easy to go to a dealership right now and I Walk the lot, and we’ll in deal. And so there definitely has been an impact. I don’t have a lot of stats on hand. But I know that has been an industry that is that has seen a hit. I think in terms of strategies Christian that we’ve seen be useful for auto historically, I think the first is just leveraging kind of auto providers who enable targeting based on purchase and ownership data. There are three or four very strong ones that we work with each utilize different data points, so maybe just a quick blurb on each. There’s V 12, who has Vin level ownership database, that’s a leading source for kind of identifying customers who own a certain type of vehicle. And they use service reports. So that also can include secondary owners, those who have bought used, Hulk is a very strong brand, they have one of two sources of DMV sales match data segments are predictive, but based on a deterministic transaction, data asset experience as the other source of DMV sales, match data. And then a new comer to the live ramp data store is urban science. So they control one of the leading new car purchase data assets. And in a little bit of a twist versus V 12, pokin. Experience, they believe the best use case for their data is actually suppression, they can turn off advertising for buyers who convert even faster than the OEMs. Can. So that’s a great way to make sure that continued ad spend does not target somebody who just drove a car off the lot yesterday.
Christian (00:51:47)
Interesting. Yeah, that sounds like some very innovative companies in the in the automotive industry in particular, that I’m not necessarily as familiar with. So thanks for elaborating on those. And I just remembered, actually, I think we had a discussion the other day, where we were talking about the the auto industry, and the fact that public transportation is a little bit, probably taking a downturn, at least we’ve experienced that up here in Toronto, as people are staying home and limiting person to person contact. And so that this is completely speculation, because I don’t have any stats to back it up. But I would feel that the automotive industry has seen potentially seen an uptick as people are staying in their own cars and looking for other methods to get around that are a little more isolated.
John (00:52:31)
I think there we’ve hit this point for a couple of different industries. But we know that there is a lot of advertising spend to buyers of a certain brand reassuring them that they have a safe car, they have a fast car, they have a durable car. And I’m sure that some of the money that might typically go towards acquisition is being recalibrated to building those brand relationships, because those are so important in the run up to the two or three or four times in your lifetime where you make that big purchase.
Christian (00:53:07)
Yeah, absolutely, absolutely. And the big purchase is something that you mentioned that, you know, is likely taking, taking a pause right now, but it’s still very important to be to have that brand health and to partner with consumers in in a feel good way, especially in a time like we’re experiencing right now. So that being said, the last industry, I was going to talk about CPG and ask you a few questions about that. But I think we covered a lot of it naturally in our conversation about 20 minutes ago. So the last the last thing I wanted to talk about was was the retail industry. So with businesses that involve face to face interaction, closing down, how’s LiveRamp worked with retail focused customers during this time?
John (00:53:51)
Yeah, so I think there’s a couple things that we’re focusing on AI. The first I would say is helping to drive customers to EECOM. So combining identity resolution with third party audiences to find retailers customers, and drive them to buy online. The second is supplementing location data that buyers might have historically purchased with purchase data. Retail loves location data, right, who visits your stores and your competitors stores. But transaction data can help fill those current gaps. That said, some of our close location data providers like factual and cubic and place IQ, are producing some really interesting insights and trends right now about where people aren’t going. And so putting that together with other pieces of the puzzle, you can figure out where maybe foot traffic has come to a standstill, eg moles, and where you might be able to recover some of that lost revenue online. And then wanted to mention a new provider and The Data Store precise target. So they have 5 billion SKU level customer transactions provided by retailers to create 400 million consumer taste profiles for over 11,000 brands. And so there are folks who are coming in looking to create kind of retail coops of sorts, modeling audiences, but based on deterministic seeds to help retail brands survive and hopefully flourish on the other side.
Christian (00:55:35)
Yeah, and I think one, I think one point you brought up, that really rings true. With me, as well as that, it’s what where people aren’t going or what people are not consuming. Now that, you know, consumer habits have changed, and media consumption has changed. You know, people aren’t going to live sports games. Which means, you know, if you were to advertise that those live sports games, or, you know, whether it be digital out of home, whether it be billboards, or whether it be simply advertising, you know, on TV, and for live sports, there’s other ways to still capture those audiences. And, you know, potentially find them across social, digital, etc, and still engage with, with your consumers that way. And instead of taking a pause, and just kind of giving up. And, and with that being said, I think it’s also seen, one thing that I was thinking about the other day is in a b2b industry, you know, a lot of sales is driven through in person events, conferences, kind of face to face interactions. And with that being paused as well. The question is, you know, do as an advertiser, do I do I? Do I pause? And do I wait for a time when when I can engage in those events again, and simply forget about that portion of the sales pipeline, or, you know, given, depending on the financial circumstances of the advertiser, do I, you know, find another way to find that audience and potentially engage with them in a digital manner. So I think that that really affects both retail, b2b and any other industry that’s super focused on on face to face interaction. And like, one strategy that came to mind was, if you’re planning on attending five different conferences, and you know, the companies and the people roughly that we’re going to be at those conferences. Well, you know, with technology the way it is today, and through partners like live ramp, you can still activate those audiences and reach them with a digital message. So I think it’s all about really shifting, shifting a mindset.
John (00:57:36)
That resonates with me very much. In fact, we find that a high percentage of our requests to our audience Solutions team, our resident experts on data providers, and segments are for b2b. And I think that’s been even increasing in this time, as folks are trying to find those alternative ways that you mentioned, to reach decision makers, because they don’t want buying cycles to close, you know, right now, people are working in different places, and maybe not able to go to some of those conferences and events that you mentioned, but they’re still working. And so I think that there are lots of ways to be able to get to those decision makers, those check cutters, and still present, you know, the value proposition of, of your particular business.
Christian (00:58:24)
Yeah, yeah. I mean, it’s, there’s definitely a huge shift that everyone’s, you know, everyone’s trying to get accustomed to, and I think as people, we’re very, very persevering. And I think that, you know, as everyone, everyone continues to get used to their, to their circumstances, that in everyone, the human race, in general, to be, to be, to have a bit of a hyperbole is, is gonna persevere and that I think, that I think business and the economy and we’ll all follow suit as well. And that’s, that’s the that’s the second or third time you brought up the the audience solutions desk. So I just wanted to I don’t know if Sam will listen to this, but I wanted to shout out to Sam, who we we work with, at our at these I myself work with, on a daily basis. Shout out to him for being an awesome and awesome counterpart of live ramp.
John (00:59:17)
Oh, he’ll be thrilled to know that you gave him a shout out. Yes, Nick and Sam and Andy and our audience Solutions team can be reached on our data store at live ramp.com aliased and are both very smart people to work with, and some of the most fun people you’ll interact with in the course of a day. So again, at a time like this, where there’s some uncertainty, and I think we’re all taking a little bit of a hit. It’s great to be working with people who really lighten your day and those three certainly do it.
Christian (00:59:52)
Certainly and, and it’s been great chatting with you as well, John and wanted to call out that. I had a really great conversation today and I hope that everyone enjoys listening to our conversation. So I wanted to thank you again for taking the time to chat with me today. It’s much appreciated.
John (01:00:09)
Oh, Christian. My pleasure. This was such a fun chat learned a lot from you guys. And so appreciate your partnership. StackAdapt and LiveRamp have been doing some really fun things. And I know we’re only getting started.
Christian (01:00:20)
Yeah, absolutely. And we’ve got some really exciting things to announce in the near future. So thanks again, John. And thanks to everyone. Thanks, everyone for for listening as well. Stay safe, healthy and sane. Yep, stay stay safe and healthy everyone.
Episode Outro (01:00:36)
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