Building on the strategic minds in your organization

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The Strategy Inside Everything

In each episode, we discuss events in pop-culture, business, fiction, sports - even politics to uncover the strategy behind the action.
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Frank Speiser Knows Why Media is Broken

Frank Speiser Co-Founder of SocialFlow joins the podcast today to talk media. Working with brands and with publishers he’s seen the cross incentives different groups have for creating and publicizing content online. He’s got a plan to fix it.

This is a real treat to get insider knowledge in plain English. Enjoy.

Transcript:

[00:00:26] Adam Pierno: All right, welcome back to another episode of The Strategy Inside Everything. We are taking a hard left turn. Today, I have a guest that I've known for-- Jesus, Frank, 21 years?

[00:00:40] Frank Speiser: It's 24 years but who's counting, right?

[00:00:43] Adam: Go back all the way back to Boston University or my second alum Terrier. How long were you there?

[00:00:52] Frank: Two years. I took the alleviated route.

[00:00:57] Adam: [laughs] Me, it took me seven years to get my undergrad degree. No worries there, but got it done. That is a joke, mom, I finished in four, but Frank Speiser is here today and he is the founder of SocialFlow. is at your official title, Frank?

[00:01:11] Frank: Correct, co-founder.

[00:01:13] Adam: Co-founder of SocialFlow. When I knew that you started it, SocialFlow was one thing but it's transmogrified into something much different. Before we get into it, can you give people a little bit of background on where you started your career and what got you started at SocialFlow?

[00:01:31] Frank: Sure, I can go all the way back to when we first met you, I was on the football team at Boston University. I got up there and I got sick so I had to get a medical deferment. I spent a lot of time in the computer lab meeting some people that we both know, and got really into website development, realized didn't really like the football team that much. Really liked web development and so that kind of just caught on, that was just right place, right time. It was a period of change where a lot of big things were happening and you could tell you were in the moment when they were.

I remember looking at a picture of something and somebody clicked on the picture, and then it would go to an explanation with text about the picture.

[00:02:23] Adam: [laughs]

[00:02:28] Frank: I know to people right now it sounds ridiculously simple but when you saw that, I knew right there the things had changed. What was going to be very different when I could click on a word and see pictures or click on a picture and see words, the way information was communicated, to me, I was absolutely certain from that very moment. I didn't know that it would become like this where you'd be able to touch a piece of glass in your pocket and some guy come pick you up in his car.

I didn't see that coming.

[00:02:58] Adam: [laughs] If only.

[00:03:00] Frank: But I did notice that things are going to be a little bit different than they had been. We weren't going to be going through card catalogs in the encyclopedia. Fast forward, I dropped out of school. You may have taken a while to finish. I dropped out of five colleges so far and counting, kind of too stubborn to just give it up. In the course of my travels, I've been fortunate enough to work on some pretty interesting projects that had scale. When everybody else was taking options during the dot-com era, I was working on contracts and building a consulting business.

I got to work on the real business problems. I got to build my skill set through a bunch of different things that almost nobody wanted to do because it wasn't glamorous but it was real work deep in systems. Things that required you to go into areas that either the skill set of people were lacking or people couldn't bridge them across. I got to build up my abilities to go cross stack, full stack in what I was doing. Where that lead was-- Eventually, when you're building a consulting company, if you get big and successful enough at the director level or managing director level, what your job becomes is, you fly around the country getting yelled at by people who are politically motivated to yell at you.

[00:04:36] Adam: I'm very familiar with this experience. [laughs]

[00:04:39] Frank: That's the job. You basically have like eight or nine concurrent projects of people that are really powerful and mad.

[00:04:47] Adam: [laughs]

[00:04:48] Frank: After a while, it didn't appeal to me. I was like, "All right, if I'm going to get yelled at I want to at least build something that I can point at and be like, 'Look, we did this. The mistakes are mine.'" I'm not disparaging, I'm sure you have much smarter clients than we did and they treat you much better, but a lot of times you'll put together this project, you put your best people on it, you'll work late into the night. You’ll hand it over to the client and then three weeks later somebody blows it up like Wile E. Coyote and it's your fault.

You have to come back and be like, "All right, let's stitch it back together, let's get it working." That got a little demoralizing after a while. The money was great but it was just one of those things where you didn't own it. I took a job as CTO of Takkle. I was like the third person there at Takkle-- Sorry, it was HEAVY. I went to HEAVY which was a fairly large video site and then it started to decline a little bit. We basically revived it, brought it back. It’s still alive today but at the time it was about the third the size of YouTube.

[00:06:03] Adam: Yes, it's not what it was in its glory days but it is still operating.

[00:06:06] Frank: Right, we were there when it was going through the roof and we put together a really brilliant team. I still keep in touch with a lot of people from there because it was a nexus of artists and graffiti. People and hip-hop folks and basically people who shouldn't probably be in a startup or allowed to basically operate freely.

[00:06:31] Adam: That's why you had a point of view. HEAVY had a particular kind of content that was there which positioned it well against YouTube which was a catch-all for every kind of video.

[00:06:43] Frank: Yes, it was. We could do stuff and they would be like, "Yes, that sounds great. Go for it." You're like, "Really?" They were like, "Yes, we could do it." The tech team sat right next to the design team. It was this free and open exchange of ideas and I was the CTO of that company. I was the highest ranking officer, whatever, on that floor. The CFO and the co-CEOs were on a separate floor. It was just like a madhouse on that floor. It was a fun time. I don't necessarily know if I'd structure a company like that myself, especially where one of the CEOs was a night-time guy and the other CEO is an early morning, get up and jog at 5:30, kind of guy. Made for a little bit of difficulties in matching up what people wanted to have done but--

[00:07:43] Adam: Also, a nice 24 hour work cycle where night boss would come in and say A and then day boss comes in and says B.

[00:07:50] Frank: That's exactly what happened. It was just one of the things where I was like, "Okay." We built HEAVY, I felt like we took it as far as we could go. Like I said, when I left it, it was about a third the size of YouTube, when I left. [unintelligible 00:08:06] is like largest customers. I took a job as CTO of Takkle which was almost like a high school sports social network. It was like a profile.

It was just as Facebook was sort of coming along and back when MySpace was big and you wouldn't want your college coaches to see your MySpace profile because you can't be trying to go to college to represent a major SEC school and then have a bunch of keg stands and you and your friends passed out in the field somewhere. You didn't want your coaches seeing that. What they would do is they would put together their athletic resume and you'd be able to meet other athletes and talk about how to get through school and it would feed them through how to get your grades up and how to get through the SATs. It was a really good product ahead of its time.

[00:09:11] Adam: This is what exposed you to Social and figuring out the opportunity there?

[00:09:15] Frank: Yes. There was a lot of learning from that. The HEAVY thing was mainly how to deal with scaling and video and stuff like that. What we learned at Takkle, which is, I think, maybe a good segue into the way we should look at media and the way Facebook is working. Some of the things that aren't going to work right now that are just sort of coming to light which is-- We did this cohort analysis where we had eight sections of our site, eight major features. We looked at any given month how many users used each of those things. How many people used one thing? How many people used two things? Obviously, everybody that logged in used at least one thing. It was a significant drop off of how many people used two features of the site. By the time we got to four or five, it was almost nobody. The only people who used all eight, were me and the other guy who did the study.

[laughter]

[00:10:19] Frank: Not even the CEO of the company used all eight things in any given month.

[00:10:25] Adam: He was like, "I thought we only had six."

[laughter]

[00:10:28] Frank: It was just one of those things where-- It makes sense, the lesson there is, if you fragment your audience too early, you lose critical mass, and you don't give it a chance to succeed. If you look at a lot of the major products that worked. Facebook was a wall at first. Google was just a box that you type stuff into.

[00:10:53] Adam: Right, one feature.

[00:10:54] Frank: Yahoo, right? Yes, it was just one feature. Even go way back to Nintendo, there wasn't that many different games in the beginning, it shipped with the same game, which I think was a brilliant move. Super Mario Brothers came with the Super Nintendo, and everybody had the same game to talk about. It was like, you built critical mass around a culture, and that became your culture, and then you built in from there.

Now, Google's proven that it's not exactly great at building user experiences. Facebook, they've done a few really good things, and they've missed in some occasions, but to their credit, they're not afraid to roll things back and take them out behind the woodshed and shoot them, they're willing to do that. Can I say that on the podcast? Is that okay?

[00:11:50] Adam: Yes, we talk about woodsheds all the time.

[00:11:52] Frank: All right. I just want to make sure I was in the right company. [laughs] The lesson being, if you break your audience down into tiny pieces, you might think you're giving people what they want, but the mistake would be you're giving the loudest constituents what they want. That's not who uses your products or looks at your media or interacts with your ads the most. The people who--

[00:12:20] Adam: You're talking about optimizing for light users, instead of optimizing for your heaviest users?

[00:12:25] Frank: Right, if you just optimize things for the loudest people, you get the most extreme things that have the tiniest constituents. Everybody does that. Look at the way political reporting is done now. Everything is this crazy sensationalist thing that makes it seem like everybody either belongs to Antifa or is building a wall on the Texas border right now. That's kind of what you think. If you were an alien that landed in the middle of the country, and you picked up the news.

The news would be like, "What's this thing?" "It's the way people distribute their thoughts throughout this civilization." You'd be like, "Wow, these people really hate each other." It's not really the case. You can get up and walk to the store and have reasonable conversations with people who don't think exactly the way you think, and they don't try to kill you. It's not really that bad. Conflict sells and profit margins are so thin right now in the media and advertising space, that we've become addicted to conflict and friction.

[00:13:44] Adam: Yes, 100% agree. That's changing the way we're taking in media which is changing everything online. Fewer people are clicking things in the middle, they're clicking the most clickbaity crap they see.

[00:13:59] Frank: It's not like you can fault people for it because--

[00:14:05] Adam: I do it too. I say they but I mean we.

[00:14:08] Frank: It's just one of those things where it's in human nature. It's like, would you like to read this article about somebody doing something really normal and what you would do? Or would you like to read about this person doing something absolutely bat-shit crazy? You're like, "Hey, let me look at that. What's going on there?"

[00:14:28] Adam: Breaking Bad wouldn't be a very interesting show If he doesn't get cancer and start cooking meth. It would just be about a science teacher. It would suck.

[00:14:35] Frank: Yes, [laughs] that's exactly right.

[00:14:38] Adam: He's head of the class if he doesn't get sick.

[00:14:40] Frank: Right, I'm glad you didn't use Dexter as an example. Thanks.

[00:14:44] Adam: No, [inaudible 00:14:44]

[00:14:45] Frank: [laughs] Yes, that's exactly right. People like sensationalism for a little bit, but they fatigue of it too. A perfect example would be, if all of your news, if I just kept saying like, "Hey, check out this swimsuit issue picture of--" I have no idea who's a swimsuit model, nowadays. I'm a married father who just works all the time. I don't even look at stuff like that.

[laughter]

[00:15:20] Frank: Say, I kept sending you pictures of this swimsuit model and I was like, "Check this out." You'd click on it, and probably so would I the first time, but If that was all the news you saw, eventually, even though you're probably-- the demographic and the type of person who might really want to look at that thing once. That type of content might appeal to you, eventually, you're going to be like, "What's going on with the stock market, and what's going on with jobs, and how's the real estate in my area, and what are the schools like?" You start to realize people are a pretty diverse set of ideas and requirements.

[00:16:03] Adam: Yes, and they're always changing.

[00:16:05] Frank: Yes. They're very fluid. They're contextual. They move according to groups and sets. People, they don't want just one thing. That's kind of where we're locked into this model right now, where people are getting fatigued of this one thing, flat, dimensional way of looking at them. It's definitely making, in some ways, media and the advertising that goes on top of the media worse.

[00:16:39] Adam: That's why the BuzzFeeds of the world are better positioned because they have-- They're not rooted in a point of view. They can serve up 100 different things, a quiz, a tasty video, this thing, that thing and whatever. They can cover more ground of my dynamic changing interests, or questions, or requirements, versus my local news station that's locked into the borders here, or things that are relevant to my area, and they're boxed out. From a media standpoint, they lose out.

[00:17:14] Frank: I don't know if I mentioned this before we started rolling up. We service, at SocialFlow, maybe 200 of the world's top media companies. I get to see a really good cross-section of who does things right and who's missing the mark. There's definitely a stratification, there's very, very smart customers who do things the right way. They do what you just talked about where they will-- And they have the resources to invest in the content creation at first, but then what they will also do is they'll look at the data.

Instead of going with confirmation bias and just being like, "This is what people want." The story they think people want, they will actually use the data to go out and find out like, "We're getting good feedback here." Did you read the book Moneyball or see the movie?

[00:18:08] Adam: Yes, I read the book.

[00:18:10] Frank: In the beginning, in the book especially. They talk about these old guys sitting around a locker room, talking about what a ballplayer looks like. Statistics never comes up, they just talk about, "He's got the look." That's kind of how news in some cases is still run, or TV is still run, like programming, they're like, "This is what we think the audience wants."

[00:18:37] Adam: Right, where they focus group, the anchor people, but they don't think about the actual content or the reporting.

[00:18:42] Frank: Yes. They basically stack the focus group with what they think a focus group should look like which is the exact opposite of what a focus group should be. You should be surprised by the people in the focus group at least some of the time, otherwise you're not doing it right. You got to listen to the data, but you got to give the data a chance to be ethical and go about it the right way. Otherwise, you just get this self-perpetuating confirmation cycle which is what the folks who are losing market share are doing.

There are media companies that are doing great and there are ad agencies that are doing great stuff, but what they're doing is they're actually informing their-- They're using data to inform their stories. Because the content and the ads, they're all some type of story, maybe with a different context. The ones that work, they have a narrative. It's not just like out of place, juxtaposed, just a [unintelligible 00:19:54], the brand exposure in there and the story builds on some sort of understanding of the audience to give them what they want.

[00:20:07] Adam: You have a sample size that you're looking at that's more neutral because of all your clients. You can look at that as a global dataset?

[00:20:16] Frank: Yes. We have people from what would be considered the right all the way to the left, and in-between. We have financial publications, cooking publications. People love cooking, by the way, the most popular video that we've ever shown, I can't say the customer's name because we have very strict confidentiality requirements. The most popular video that we've ever published was seen by 136 million people and it was a video about how to make a sweet potato cake.

[laughter]

[00:20:59] Frank: I'm not kidding. It's like a Super Bowl sized audience about making a pie.

[00:21:05] Adam: All right. You nailed it. That’s where I want to go right now, I don't think I've watched that. My question is, if you had 136 million people tune in for an episode of NCIS. They would sell those ads for three million bucks for 30 second. I'm betting that a customer that served that video was not able to pull in that kind of money in exchange for the eyeballs that they got. In fact, they probably had to pay to get it in front of some of those customers.

[00:21:38] Frank: Okay. They didn't have to pay. It was completely organic distribution which was the amazing piece of it. Now, we've crossed- we have 15 videos that I know have been seen by at least 50 million people which were completely organic. The content creator made zero dollars out of those. Not only did they make zero dollars in revenue but they also paid to create the content. They lost money to show it to hundreds of millions of people.

[00:22:10] Adam: Plus serving fees. That's insane.

[00:22:15] Frank: When you think about it, like that right there, do you need a better example of how the media model is broken? The content creators who spend the time creating the content make no money in some cases. In cases when they do make money, they have to degrade the user experience so much with intrusive ads and the volume of ads that it becomes a less enjoyable experience for the user.

[00:22:49] Adam: Go to [redacted], just go to any page on [redacted] and watch, there's two autoplay videos, a pop-up--

[00:22:54] Frank: You said [redacted], I didn’t say [redacted], I just want to put that out there, I didn’t say--

[00:22:57] Adam: Sorry. We can edit that out, I don't want to upset-- If it's a customer of yours, they're not a customer of mine.

[laughter]

[00:23:06] Frank: All right, [unintelligible 00:23:06]

[00:23:07] Adam: I’ll edit that out.

[00:23:08] Frank: Thanks, man.

[laughter]

[00:23:11] Adam: Talk to me more about how it's broken. I think we understand how it's broken. If you're a publisher and most of the listeners to this show, Frank, are strategy people that are trying to figure out ways to connect brands and customers through a culture. They're trying to figure out what's relevant, what moves them, what gets them excited and then draw a connection to a brand. If you're a publisher and you're publishing a video that gets viewed 136 million times and you get no money from it, what's happening?

[00:23:49] Frank: A really easy way to do that would be-- if you're like Williams-Sonoma or Pyrex or somebody like that, you'd want to see that thing start to win attention and then pay for additional distribution with a little bit of branding. Then when there was any click-throughs on that, you'd want it to land on a page where you got a page takeover and you had some sort of continuity and context around what you were doing. That's one easy way to win. Let me back up a little bit. The thing that's broken is strategy people are trying too hard to guess what people want.

Instead of using the hard data of what people actually want, they're trying to manufacture their own home [unintelligible 00:24:44]. When, In fact, if you just look at the data-- I'm going to plug one of our own products. The best ad buy in the world right now is this thing that we sell called AttentionStream.

We talked about it before, it took us four years to get people to start to buy this product because it was just a foreign concept.

[00:25:09] Adam: Was it ahead of its time? Is that why?

[00:25:13] Frank: It was. Everything that SocialFlow has done has been ahead of its time and we might as well have been 10 years late because it's just as painful-- It's probably worse to be early than it is to be late, to be honest with you. Because then, at least, I don't have to convince people it's a good idea.

[00:25:29] Adam: Right. Keep selling it.

[00:25:30] Frank: Basically, what AttentionStream is, is when something starts to outperform its expected boundary of how good it's supposed to do on the organic side. It looks like you're going to get more referral traffic from something or it's a video that should become sponsorable, but isn't right now. You get a little bit of a warning and then there's an automated process that takes an ad, puts it within the terms of service within Facebook or Twitter. The under 20%. Then when you click through, it traffics the ads that go with that type of content when you land on the page, if it's a text or a story or a link post.

That whole thing may cost you between $4 and $8 to buy that traffic but then you can sell that traffic at a premium because you know the audience, you know what they're there for, you know the context. You can sell it like a premium unit. Your rate cards, $30 to $50 CPMs in a lot of cases. Instead of you trying to create an ad experience that garners 15 million users. People are still talking about that stupid Old Spice commercial with the guy riding a horse or the Oreo Dunk in the Dark campaign when the lights went out at the Super Bowl. That was six, seven years ago and people are still talking about that, about brand narrative and story.

Instead of trying to build your brand around an occasional Grand Slam, what you should try to do is you should look at repeatable, consistent access to audiences that are contextually inclined towards what you're doing. Then just be good at differentiating the content that you associate with that. When you sponsor the additional distribution, improve the experience. When you land there, use the momentum that's behind it. Instead of fishing for 10 million users, you already have them. Now, what you do is, you just got to be a little bit better than the inclination to jump back into the social feed and keep them there for a little bit.

That's a better game statistically and mathematically to win in terms of brand awareness, product placement, conversion. It's easier to win that than it is to create an experience from scratch that gets you the 10 million and then you do something with it. People are just misusing that. It only became after media margins got crushed down so low that we-- Our smarter clients were like, "We have to do something." Then they started doing this and realizing, "Look, our margin on this are like 25%-30%," or more in some cases. We're selling-- it's like the '80s for us again.

It's back when they owned the newsstands and the TV stations and they're making the money like it was when they owned the distribution. I'm looking at my timeline here on the podcast, I've been just yammering on and on, but hopefully--

[00:28:57] Adam: No, this is what it is.

[00:29:09] Frank: When the media companies own the distribution, they got the bulk of the revenue but they forgot at some point right when they went to websites, they forgot, "Oh, we're not in the media, we’re not in the content and distribution business anymore, we’re in the content business." Then as things started moving towards Facebook and Twitter, they got out of the distribution business altogether and you became a content company or you died.

[00:29:35] Adam: The door was closed behind them.

[00:29:37] Frank: You're not going to recreate where the audience goes. It's only happened a few times, Netflix did it, Facebook did it. It's hard. Look at Snap, they're not having a particular amount of success and they got off to a big start, it's just really hard to garner--

[00:30:04] Adam: That pace is impossible to keep up and especially-- Snap is a different animal than a publishing entity where Snap is relying on a population like Vine. "We need people to come, support this platform, create a ton of shit, keep pumping it out and we will have your back and make it a happy place for you to be and figure out how to kick you some coins." A publishing company, going back to BuzzFeed, they're actually employing people to start generating these videos and articles, listicals and quizzes.

I wonder when you say replicate singles instead of swinging for Grand Slams, you're talking about creating a triangle between the subject matter of the site or the publisher, the interest of the customer and then a point of view of the brand that ties those three things together.

[00:31:05] Frank: Right. I would say BuzzFeed is a decent example, but it's not high quality. The listicals, like 10 reasons Why your High School Class is Never Going to Amount to Anything, or whatever. Or 10 Reasons Why your Dog Thinks you're an Idiot. I might read one of them every month but probably not.

[00:31:35] Adam: A better example might be The Ringer right now that's doing cross culture, music, sports, movies, TV, like higher quality content but still able to pump it out.

[00:31:46] Frank: VICE does a great job of stuff like that.

[00:31:51] Adam: Yes, of course. Great example.

[00:31:52] Frank: Or like we talked about, there's the Spotlight team at the Globe. There are series of content that has an audience and that they have it. It's just you have to pay to get that content and you have to pay for quality content with a piece that's kind of broken. We don't have a system where the better content gets paid more. It's what people click on more often gets more banner ads which then funds more content like that. If we can take a detour for a second, actually, I was talking to a friend of mine at a major search engine located in Mountain View, California. I don't want to say which one.

[laughter]

[00:32:48] Frank: I was talking to a friend of mine and he was like, “I love the Brave Browser.” The Basic Attention Token Brave Browser, and he was like, "Because it's a great user experience." He's very politically active and I've known him for a good portion of my life, he's a great dude. I said, “Look, Brave might be a decent user experience but it blocks ads and it relies on user contribution.”

[00:33:16] Adam: Yes, exactly.

[00:33:18] Frank: Really, if you just extrapolate that and, say, everybody comes to like it, what you eventually do is you pay the media companies to make sure the things you think are worth reading never show up because they have to pay. They have to pay to make them and then they have to pay to serve them. Then nobody pays to look at them. The better the content is, the less people will pay for it because the people that are using these ad blockers and things like that, that's not the solution. If you want stories about stuff you hate, use an ad blocker because the more that they can monetize you, you'll start to notice if you use and ad blocker, media gets the worse for you. because it's like, "Oh, I can't serve ads to this person, I'm not getting paid, I'm not monetizing them at the rate that it would make sense to make more of this content. Therefore let me make this other content and that audience will at least pay to look at it."

[00:34:25] Adam: That's a great analogy. The ad blocker-- not an analogy but that's a great point. Going back to what you were saying earlier, the rewards go to the ad that is most clicked. We know from third party research into ad fraud that a lot of stuff isn't [sic] even make it through the DSPs and into consumer vision. They're just invisible ads or they just never even show up. Is it really the best ads or is it just the ones that make it to the surface and somehow get credited for being clicked?

[00:35:04] Frank: Yes, it's the ones that get in front of people. First, you know what you have to do, you have to win the auction. You have to bid enough to get shown. Then, some of them will get clicked, but not really. A lot of ads get clicked by mistake, to be honest with you, in some cases.

[00:35:29] Adam: What the stats say is, "You're more likely to get struck by lightning than to intentionally click a banner."

[00:35:34] Frank: That's right. I can see when my dad or my mom got their phone and they go to an article that you sent to them and something pops up and they're sitting there trying to-- It looks like they're trying to defuse a bomb of MacGyver, when they're trying to figure out whether they cut the red wire or the blue wire.

[00:35:53] Adam: "Is it the X that's on top or is that the Close button down on the bottom?"

[00:35:57] Frank: Yes. I think the majority of the population is like, "How do I get rid of this ad?" That, obviously, is not a great user experience. If we don't fix the user experience, we're never going to fix media. You're just going to get more media that appeals to the lowest common denominator who accidentally clicks on stuff. The way you do that is you just make the reason to click on it so sensational that the top of the funnel's so big, you still can make some money because you bring so many people in through the top of the funnel. The news and the contents, that's getting shorter, less responsible, less fact checked, and it's not a good trajectory.

[00:36:54] Adam: It all starts looking like local TV news.

[00:36:57] Frank: That starts looking like [unintelligible 00:36:59] prizewinning journalism compared to what you're going to get. I don't know, one of my favorite movies-- I got a chance to work out with him for a little bit while he was living in the same town as me, Terry Crews starring this movie called Idiocracy.

[00:37:18] Adam: Sure, Mike Judge, yes.

[00:37:20] Frank: In one of the biggest shows called Ow! My Balls. It was just about people getting hit in the balls. That was the whole show.

[00:37:32] Adam: That show, by the way, that's America's Funniest Home Videos that it's been on for 25 years.

[laughter]

[00:37:39] Frank: That show stays on the air because of that stuff, like dogs knocking babies over, it's like that wins every time. If we don't fix it, that's just going to be where we're headed. The good news is--

[00:38:00] Adam: Define, "Fix it," Frank.

[00:38:01] Frank: Okay. First, what you have to do is you have to decouple the frequency with which people access news and the value that's attributed to news or content. It requires audience segmentation. You have to realize you probably are worth more-- there are markets that you're listed on your sessions or whatever. It's creepy to go after a single person. I'm not advocating this, but you're definitely worth more than some guy who cracks a Budweiser over his head and yells a bunch of racist stuff before he throws the beer can out into the lake. That's probably a pretty safe bet that an advertiser would much rather reach you than they would that other dude.

[00:39:01] Adam: Depends on what they're selling, but I get it.

[00:39:05] Frank: First, you need audience segmentation. Then what you need is, you want to make sure you contextualize the content. The thing that you're trying to associate with what they're doing makes a little more sense. It's not just the volume of ads that you get out there. It's how much of a fit you are and how much of an appetite the person has for that stuff. We have algorithms now that are pretty sophisticated, we're just not using them for that because people don't get paid to buy ads that way. It's crazy. I'm sure you've come up with this where people want to spend their ad budget as easily as possible and then go home. If they can get like 0.2% increase on click-through, then they think they're geniuses. Everyone high fives, that needs to be fixed. What you need to look at is the entire funnel and the reason why that's broken is because Facebook, which is the top of the funnel-- Nobody ever goes to Google for the most-- Actually that's not true. Google is back as the number one referrer of news traffic. Facebook has ratcheted back its referral traffic and they just came out--

[00:40:33] Adam: [unintelligible 00:40:33] getting pulled in front of Congress, yes.

[00:40:34] Frank: Well, yes. Not just that. I don't know exactly what their plans are but they just came out with an article last week where they said, "We're not going to be focusing on referral traffic for you, media companies," which seems a little odd to me but it's their prerogative and they can do what they want. We work on behalf of the media companies. So, for us, we don't want that for our media companies. We're working hard to get them more traffic. What you want is you want ads that fit. People don't go around searching for ads. They are inclined towards certain behaviors and you should try to match the ads towards the behaviors which they empirically model out to do.

BMW buyers don't go around talking about how they're going to buy BMWs-- or maybe they do.

[00:41:34] Adam: [laughs] BMW drivers-- [crosstalk]

[00:41:35] Frank: They probably talk a lot about buying BMWs, and by the way, I have a BMW so I'm an asshole.

[laughter]

[00:41:46] Frank: But I don't go around talking about, "I'm going to buy a new car." For me, it was a surprise. I didn't tell anybody. I didn't even tell my wife which was a mistake.

[laughter]

[crosstalk]

[00:42:02] Frank: I think BMW drivers should talk about buying nicer couches, first of all. Anyway,-

[00:42:08] Adam: That's their only-- [crosstalk]

[00:42:14] Frank: -that's what you should do. Basically, they talk about this thing which I call, or we call, around here an Attention Signature. They talk about politics in a certain distribution and golf and sailing and private school and vacations. They talk about these things in a much different manner than somebody who watches NASCAR and buys Budweiser and likes to go bowling. Not saying one is better than the other. One makes one set of people happy, another makes another set of people happy, but the same ads shouldn't go to the same people, even if they were both 34 to 45. NASCAR's audience isn't poor. Believe it or not.

[00:43:02] Adam: No. They have a great audience.

[00:43:06] Frank: That's why they have all that sponsorship. They're smart. It's a smart organization.

[00:43:14] Adam: They've built this coveted audience of the former NFL customer, that age group and income level.

[00:43:21] Frank: Yes. It's not a simple sport. There's a lot to it and they've taken that and they've built this business around it, but it is different than the BMW, sailing, golf, yacht. It's a different type of advertisement. Maybe demographically they look the same age, they don't live too far apart, they earn maybe roughly the same amount of money as a household in some cases, but the same ads aren't going to work against the same people. What you have is the language around the content they're consuming as the primary alpha signal of what's going to work in that conversion [unintelligible 00:44:08]. No one's paying attention to that except for the really smart folks. If you align that, then you can start to fix these problems because you don't waste impressions. You don't get in front of people who don't interact with what you're doing. Sorry to cut you off.

[00:44:25] Frank:  No. I've had you on for about an hour. I want to let you get back to your-- I know you have a big day there at SocialFlow. I want to set you loose. I have a feeling, Frank, we're going to need to set up a sequel because [laughs] I have a list of questions here that I've been writing down as we've been talking about alpha signals and targeting and how can we learn all that stuff. I think we're going to get that on the record, on the books here, but this was awesome. Thank you so much for coming. Tell people how they can find you.

[00:44:54] Frank: You can just go to www.socialflow.com, Twitter @socialflow, Facebook SocialFlow. We have a blog that we come out and-- specifically for media companies and ad strategy folks that they can go and see what's happening. We post research there all the time.

[00:45:15] Adam: Is that socialflow.com/blog or what is it?

[00:45:20] Frank: Yes, socialflow.com/blog and it's right there. [unintelligible 00:45:25]

[00:45:28] Adam: I'll include the link in the show notes, for sure. This has been really interesting. I really appreciate you making time. I know all the stuff you guys have going on there is pretty crazy right now.

[00:45:37] Frank: Yes, I appreciate it and I look forward to following up. Thanks. It's great to talk to you.

[00:45:43] Adam: Yes. You too. Thanks a lot.

[00:45:45] Frank: Bye.

[00:46:12] [END OF AUDIO]

Adam Pierno