Programmatic 3.0: A Conversation with Industry Disruptor, Matt Wassserlauf
Matt Wasserlauf, one of the original disruptors of the TV business, revolutionized advertising by enticing television advertisers to invest their marketing dollars online. He founded and later sold Broadband Enterprises (BBE), the industry’s first online video company, and co-founded the mobile video platform Torrential. Matt’s newest venture, Blockboard, where he is CEO and Co-Founder, is a performance CTV ad platform that utilizes blockchain technology to ensure total transparency, verification, and trust.
The Continuum recently spoke to Matt about the technology behind digital advertising, how brands can make sure they’re reaching real people, and Programmatic 3.0.
You’ve had a long and successful career working at the intersection of technology and advertising. Can you explain that to us?
I’ve been working in digital advertising for over twenty years. In 2004, I started the first online video network called BBE, which was short for Broadband Enterprise. We aggregated the existing video sites—then it was all on the web—and provided those for scale-out buying for the largest marketers in the world. Our biggest client at the time was Procter & Gamble.
In driving and distributing all of that great video advertising, it was clear that the industry needed better measuring tools. P&G asked us to help them create one, and so we built Vindico, which was the first video ad serving system. We were measuring and tracking all that video spend for P&G and then for the other major marketers who were moving their TV ad dollars online.
We ran that through BBE for about eight years, and then we sold all of BBE to Specific Media. They had a great banner advertising platform, and BBE was the perfect complement to that.
I left and started a mobile video platform called Torrential, which was, in essence, BBE for these new operating systems called Android and iOS.
Oh wow, we live on our phones now; it’s hard to remember when those were new. What has it been like being in emerging technology for so many years?
I find it really energizing. As every new chapter opens up, new opportunities emerge. I get fired up for solving the new problems that come with working with new operating systems or under new conditions. You know, when we started with mobile, we were operating in a cookie-less world, which gave us a lot of experience driving video advertising without the help of cookies. Obviously, this will help us when the cookie-less web finally arrives.
So, you worked with the web, then mobile, and now you’re tackling streaming with your new company, Blockboard. Can you tell us about that?
Blockboard is a performance CTV ad platform that utilizes blockchain technology to ensure transparency and verification. The goal is to bring Web 3.0 principles to the digital video ad business.
We are on a mission to ensure that 100% of our client’s ad dollars go to working media, eliminating fraud and waste and ensuring that the right people see the right message in the right place.
To do this, we rebuilt the entire ad video ecosystem on blockchain. We wanted to do two things. First, we wanted to be able to verify all ad calls across video, which we did through the use of a smart contract on blockchain. We've now had five years of experience building this platform and running it with some of the largest marketers in the world who are seeing results they've never seen before in the industry.
The other thing we wanted to accomplish with this new platform was to create a platform that is completely transparent. By being built on the blockchain, we are in a public ledger which shines a light on how all of this stuff is working.
“We are on a mission to ensure that 100% of our client’s ad dollars go to working media, eliminating fraud and waste and ensuring that the right people see the right message in the right place.”
Why is transparency so important?
I get very fired up about this because it is so important. I initially really started to understand this when I was at BBE. I saw a lot of wasted ad dollars. We had a front-row seat because Vindico was tracking the activity. I remember, for example, early on, Reckitt Benckiser made a $40 million ad buy. We didn’t buy the video because we knew the price was unreasonably low, but our system was tracking all of the impressions, and we could see that many of them were not legitimate. The platforms would run Lysol ads four at a time at the bottom of a page so they could count more impressions per person. They would count impressions from porn sites where it was running. My team would pull a URL that was generating impressions and find it was a completely fake site.
I don’t have hard numbers, but I would guess that 80-90% of that ad buy was wasted on false impressions. In some way, what Reckitt Benckiser did by establishing such a low CPM (cost per 1,000 impressions) floor was open the business up to a myriad of ways to run bots and fake impressions. And now we have all of these automated programmatic platforms that are scaling these fake methods.
That’s why we built Blockboard the way we did; our proprietary technology eliminates fraud and waste, allowing brands to identify and engage with real, highly relevant, and receptive audiences.
Last week, we did a session at Advertising Week called “The Key to the Future of Programmatic Marketing” with our client Michael Scalera of PIMM brands and Bill Duggan of the ANA. Bill shared the findings of a study he spearheaded, The ANA Programmatic Media Supply Chain
Transparency Study, which concluded that the $88B open web programmatic media ecosystem is riddled with as much as $20B in waste.
$20B a year in waste! It’s hard to digest that, and many companies don’t seem to want to. One thing is crystal clear – it is time for Programmatic 3.0. The future of programmatic marketing is a system that reaches real humans at reasonable prices for better results. And how will brands know this? Because, above all, it will be completely transparent.
Most people have only heard of blockchain as part of the crypto markets, which have come under scrutiny recently with the fall of FTX and the arrest of Sam Bankman-Fried. Has that been difficult for you?
Crypto has gotten negative coverage, it’s true. But actually, it has some excellent properties that make it a terrific platform for a number of industries, including ours. We built in blockchain because the smart contract mechanism, which is endemic to blockchain, allows you to verify all video ad calls to make sure real people are seeing the ads. This optimizes ad dollars, leading to measurable consumer behavior, higher conversion rates, and greater ROI.
There’s no question that CTV’s popularity has grown exponentially, especially during the pandemic when we were all home binge-watching Netflix. How can advertisers succeed in this new streaming-focused world?
Test and learn. As you said, it’s growing exponentially with everyone signing up for streaming services. Major marketers are curious, and when they agree to test it, they're seeing success. So that’s how everyone should be thinking: get something up to test and move from there.
The big next step for those marketers that are starting to really grow their spend is to amend their creative. You can’t just use TV creative or a TV spot for this new channel because the streaming audience is made up of completely different viewers with different sensibilities. They have an ever-growing skepticism for linear TV, and they don't want to be taught the way that traditional television ads teach about a product. They want dialogue.
Like with any new audience, the only way to know you’re reaching them effectively is to test and learn.
“One thing is crystal clear – it is time for Programmatic 3.0. The future of programmatic marketing is a system that reaches real humans at reasonable prices for better results. And how will brands know this? Because, above all, it will be completely transparent.”
We talked earlier about a world before cookies; now, we’re approaching a post-cookie world. Blockboard had never relied on cookies. What lessons do you have for marketers?
Right, we don’t have cookies. Instead, we're pulling the identifiers from CTV companies like Peacock and Paramount, and we're understanding those identifiers and then retargeting an interested customer by sending them to a brand’s website or Amazon channel. Unfortunately, most of the technology out there isn't there yet. We're doing it in our limited way with our advertisers, but the vast majority of technology and infrastructure that's meant to drive video advertising isn’t ready to do this yet. It will be.
You really can’t have an interview without talking about AI these days. Would you like to share your thoughts on AI with us?
I'm cautiously optimistic about AI, and my optimism is the same as everyone else’s. AI will give us the capability to do stuff faster and on a bigger scale. That said, there’s a lot of work we still have to do before we can truly unleash AI on the ad market. If we unleashed AI today across the existing programmatic platforms, you would essentially turn the $20B of ad waste we already see into trillions of dollars of waste. It doesn’t make sense to do it until we have better measurement tools in place.
We’ve started to do that in private markets today, and I believe that more and more advertisers are going to look for ways to reset their advertising spend so that it is delivering their ROI. But some of the reset might come by way of antitrust suits and government intervention that makes Google break off their DV 360 programmatic platform from their YouTube publisher.
What’s next for Blockboard?
We are really focusing on two strategies. The first is our performance business. In the same way, you'd see a direct response commercial on TV, we've become the means to this on CTV and the way to prove that the impressions are all humans. We have some great advertisers and we’re helping them reach real people and getting real sales. We’re going to build and scale that market.
We’re also working on a Software as a Service system (SaaS) which is in beta right now. This lets our clients and their agencies manage their own campaigns. We have three agencies using it right now, and they’re loving it. As we move forward, we will continue to harness the power of sight, sound, and motion to tell and sell.
October 24, 2023
