Is Agentic Direct the Future?

Welcome to AdTech Therapy, the podcast where the ad tech industry and the people who work in it finally get a seat on the couch. Where are your hosts? I'm Janna Marron and I'm joined by Scott Messer. Hello! Each episode explores one theme and works it through by taking real questions from our patient portal. We dig in on how we work, how we think, and what gets in our way. No jargon, no vendor spin, just honest conversations, and a little tough love for an industry where the work is hard. AdTech Therapy, the session, starts now. Hello, Janna. Hi, Scott. We're both back in our respective homes. It is nice to be in these chairs, which sometimes look like couches, I will say. How have things been? It's been a long week on the road. And a architecture, programmatic IO, advertising week, and then you hit a pre-bid summit a couple days ago. That was fantastic. Shout out to all our friends who came to our cocktail party, cocktails with consultants during a programmatic IO. That was a great time. And I've just been catching up on all the notes that I have, like jammed into my phone and into my head and trying to get a bunch of my thoughts out on paper and also do all the work that we have. So listeners, you need to know that Scott will send me a Slack or a text message or sometimes both. And we'll say to me, "I've figured it out." And like, just, you know, I know what's going to happen or remind me to tell you about this thing. And then we'll disappear for like a week and not explain it to me. And so Scott, you went to advertising week. You came back totally inspired about the future of agentic advertising and the possibility that some control would finally come back to the publishers. But you've been so busy that you haven't been able to explain it to me. So you're all going to get a front row seat to a Jenna and Scott ad tech therapy session where he explains something and I ask a bunch of questions before we get to your questions. Scott, tell us the vision. I will tell you the vision, Jenna, and I'm separating out on my head and I've got some things to talk about. Right? I want to convince you. I want to show you the things. I'm going to get a caveat here though of like, I see the vision and I see how this plays out. But I don't know if it's actually going to happen. And like, there's a bunch of things that need to come true if we want this, I'll dare call it like a utopia that we might be able to find. Scott, we call that manifestation. For those of us that believe in the universe, all about the manifestation. We manifested ad tech therapy. So this will be the beginning of the manifestation for bringing control back to publishers. Oh, God. I love it. Oprah, if you're out there, we're big fans. She's got to be a listener. Okay. So, agentic advertising. I want to let's first start by separating out like agentic direct and agentic programmatic. I'm not really talking about agentic programmatic here. Just to speak on that for a second, I think agentic programmatic is interesting, but you're really just building a better programmatic pipe. And you're doing some automated campaign setup reporting optimizations. That's interesting. But like, I don't think you can squeeze the programmatic pipe a lot better than you're already doing. And it doesn't make a compelling reason for advertisers to materially shift their behaviors inside of agentic direct, which is the booking of campaigns through an agentic marketplace, some MCP layers of uploading your brief, translating it into what a publisher has, negotiating back and forth, and then booking the campaign into the publisher's ad server as in pushing in line items. That's agentic trading. That's what I'm here to talk about. And that's what I see is like the future. So why is it promising because it restores publisher power in pricing and negotiations? I think there's an inventory squeeze coming where quality supply is not infinite. Okay. Well, we've been saying quality supply is not infinite for a long time. And I see what you're saying, 100%, because a lot of this stuff is halfway automated already. Right? I mean, somebody can bulk upload line items today. But programmatic guarantee also goes through, I wouldn't say it goes through the SSP, but essentially it does. And for any of the SSP platforms that are building this, they're going through the SSP to get into the ad server or you're building an agentic direct marketplace that connects directly in when I look at who's going to build an agentic marketplace. I think there's like four major categories of people who have a right to build them. One is the OMS. This is a great place. They have some very clear natural advantages because of their packaging and pre-existing ad server connection, as well as like the finance and approval workflows that are in there. The second is the SSP themselves. They already have highly transactional relationships with publishers, natural fit for somebody who wants to clear more inventory. The third would be ad servers, Google, very particularly. We talked about buyer direct, that is exactly what this is. I think they lack some deficiencies in packaging and probably, you know, what is the negotiation lever look like, but that's for everybody. And then the fourth category is independent ad tech vendors. This would be like a PUDX who's doing a great job trading some campaigns and making the thing work. And then the last one is data vendors like, well, where do they come from? It's like, that's a great idea. Because they have a data spine. And when you want to bring the good parts of programmatic over into the direct world, it's data and identity and addressability. Why are they not available today in the direct world? Today, they're nearby in the direct world. You have data in game, you have live ramp, you have permutative, optible, like whatever it may be. They're really like single direction tools. I'm going to get a forecast on an audience and I'm going to tell you we're going to target them. Might be sports enthusiasts. The agency might say, Hey, I want you to use this third party data segment for me or you might get even luckier and I say, I want you to use this CRM file for me. I want you to target my known users on ramp IDs. We can do that today, but it's really difficult to say the least, to say the least. You got to move a lot of data around and it doesn't scale for the publisher and it really doesn't scale for the buyers. They might come up with it one time and ask you, but nine out of 10 times that if you ask an agency or a buyer, if they want your data and they want to use it in certain ways, their answer is, I'd love to, but I can't. It doesn't scale. Yeah, when we should really talk about the scalable thing because I've really been thinking a lot about that and publishers and with the squeeze on quality supply, I think that there is probably an opportunity for both marketplaces for publishers to be really strong because of the data. Yeah. So the data is an important part of it. I don't think you're going to get buyers off of wanting to use audience data for targeting, audience data for measurement, so it needs to be a part of it. So that's where I look at OMS's ad servers and SSPs and say like, data may not be your strength, if it's still bulky to attach impressions and move data and optimize campaigns based on data, you may have struggle with adoption and scale. So that's that's one part, but it doesn't mean that a genetic direct has a problem. It means just means that certain solutions are better for you than others. I said like, we want to take the best parts from programmatic, right? What are those? Presibility, choosing your own impressions, spending as much as little as you want, buying in an unreserved fashion. And I've said many times before that I think there's going to be a huge hurdle to take buyers that are used to auction buying and moving them into reservations is going to be a big leap. And I listened to Paul Frampton, Collar of the CEO of Goodway Group talk a lot about this of like what it takes to move buyers and behaviors because if you can't change the buyer behavior, you're obviously not going to get a new adoption of tools. So how do you change behavior? What do you do with a seller? You incentivize them. Oh, I was missing the point. That's okay. So you need to incentivize buyers to change their behaviors and possibly make things cheaper Scott. I know. Well, actually we might and then make it more expensive again. If you're talking about programmatic, you can't really make it a lot cheaper. There's already very few humans involved. It's already like highly agentic and you look at the platforms in Google and meta. And so you're talking about some squeezes of optimizations. And when you look at the 51 cents that's missing in the ad tech tax, it's made up of fraud. Some unknown slice that is really funny of where that goes and verification services. I asked double verify targeting contextual data. And then there's two big categories that are left over that make up 30% SSPs and DSPs. So you can make this cheaper if you don't go through them, which is precisely what agentic direct is kind of proposing. So when you ask like why is an SSP building an agentic marketplace, well, chances are they're going to put that transaction fee back. And so you can remove those fees if you find a marketplace that doesn't want to charge them. Optable shout out to them. I've done a lot of work for them. So take this with a grain of salt if you will But they announced free gentick for their marketplace to launch which means the transaction of Impressions is free uploading your briefs are free Translating that into a campaign is free. It's free to use that. They want you to be a data customer because they're a data business And it makes sense So if you're an agency and you're looking at this you say well, I can't really get that much better on programmatic And I can't change the way that I build clients Which is currently based on size of media spend because you got to have hands-on keyboard and It's based on other services. So how do you get to a world where you can build them on Performance or on outcomes you move to a gender direct because you don't need hands-on keyboard anymore You can do a very large reservation based by without as many humans Currently, if you wanted to scale direct it would take a lot of humans and that's a big problem for agencies I bet one of their number one costs is like humans typing in campaigns. I'm sure it is But are you sitting here saying that like we're gonna have fewer people? I mean publishers can't possibly They're so lean as it is. Well good news for publishers. I think you actually get to use the people you have and it's not Fewer people. We're not compressing that side. This is a structural shift for the agency side Where you can get the benefits of programmatic data enabled media Reservations with preferred pricing and preferred access to inventory and you can reduce your headcount costs So that it operates like a programmatic manner But you also get to remove potentially the SSP and DSP transaction fees You might be stuck with a little bit of fraud and certainly verification services But getting 30% back into working media is a big number and that's the incentive for agencies To move into this model and say I want to move my money into a gentick direct because of those things I just listed Okay, now tell me why it's going to be the year of the publisher Well, I may not be 2026 year of the publisher, but this is beneficial for publishers because it swings back the media Decisioning power dynamic towards the pub if you have unique inventory If you have elite inventory and I think CTV is going to lead this shift and if you're spotify and if you are all these other platforms that are Kind of hard to buy and they've wound up having to build their own programmatic tools so a DSP could buy them You're going to be pretty excited about Moving into a reservation world because you can get rid of those taxes. You can build relationships with the buyers again Your sellers are going to be busy selling not building media plans Selling what selling to the buyer to tell the agent to go buy my media. Yeah, here's what's in my inventory Here's my tent pole. Here's my stuff. Here's how you get value add Here's how you unlock certain things. Here's how you get into my elite show programs. Here's how I share Data with you these things are important because I think in like five years I'll just pick a number. The agents will be able to have done this. They will have learned from us And they will know all the rules that we want to put in there But not yet. I mean like one of the craziest jobs inside of a publisher, Jenna. I think is the pricing manager on a sales team that is the biggest brain and they have to know everything in every single moving part and They have to know every buyer and every relationship and every Trick in the book of how to move a budget around and shift the ECPM Those are usually very expensive very senior people and they're very smart I don't think you can easily upload their brain into an agent But an agent can do that work eventually in the meanwhile It's your sellers. They are communicating that they're gonna negotiate hand-to-hand after the inventory is selected and the media plan is carved out You know, Scott it reminds me of 2015 when we started selling PMPs for real tell me about that Jenna I mean the opening exchange everybody was running the opening exchange and Nobody really liked it and at that point. We're still moving things around in the bad stack and I be at the top of your waterfall and then all of a sudden came this notion of a deal and It was incumbent upon us publishers to Figure out what made us special and go out and communicate that and This feels like the ability to do that again, but in a more advanced way, right? There were four different ways that you could buy the inventory and the reasons why right you could buy by section You could buy audiences you could have a sponsorship whatever it may be right and now with agenteic It's the same thing with the added layer of choice. Yeah It comes a more powerful story for a seller to go out and say this and also like not everybody's gonna be able to do it Right, and you've got a you're not going to make all Inventory available this way. It's not like the open exchange where somebody can go out and buy it just yet You have to be invited that's correct and that's part of the supply squeeze that's coming and I think this is gonna be led by CTV and sort of semi-walled gardens opening their platform and That's gonna be the leader of it and I think the web will be a fast follow, but the web won't move an agency You know, we're 7% of an average brand spend like you got to go up into the big dogs The the next thing I want to talk about inside of this is merchandising and actually doing that packaging and what it looks like inside the agenteic direct world Right now like you upload an RFP and they're like we want sports and the other agent answers back we have sports How many impressions how many things and they're kind of these like packages that are human created? But there's the the open proposal spec coming from the iab tech lab adcp is working on this like the agents will get better at Negotiating sizes shapes creatives and then you'll also be able to layer in Geo-targeting Audience segments all the things that sort of get selected and negotiated through a campaign So as a publisher, it's not oh my god. How do I create 10 million packages? It's actually like we're gonna start with these like rudimentary hand-run packages and then eventually the agents will get flexible enough To negotiate on them, which is why I talk about that pricing manager being so important and this is gonna be called merchandising of inventory. Yeah, shout out to Amanda Martin who said it exactly at the same time with me during lunch So she's she's a co on that word. Thank you Amanda. I appreciate it But that's merchandising and like you're gonna have to prep your packages for Agentech trading and reservation-based buying it doesn't mean that you have to go to zero and you can still protect your inventory Which is the important part here because Jenna you said like this is all about like going back to PMPs and all these things But like we remember what happened in 20 you said that was 2015. We remember happened in 2016 The question that is my life's work to answer which is why shouldn't I just buy you in the open auction? Was invented and this is like actually here's why you don't want to buy us in the open auction because my inventory is exclusive I make it available here a bunch of it gets bought out before it ever hits the market and that's a problem There is a lot of inventory right now that gets sold before it ever hits the market and that's like IP controlled Stuff I think minute media just put out a report this morning talking about like they have the largest sports IP holder for Their type of video and the majority of it is sold before it ever hits the auction, but you just can't get this stuff Yeah, I mean they call it the upfront for a reason buy it up press Do you believe that Agentech direct is like a a one would be a benefit for publishers? I also I mean I would think so I think anytime I mean you can put the control back in the hands of the people buying and the people selling even through Eventually and agent that is programmed by the buy and the sell it brings them closer together Right, I have been having this conversation with people for years that the most important conversation You could be having with a buyer isn't with their engineer or data analysts. It's from your sales person with their buyer Right, that is the most important relationship and we think the pipes can fix it and they can't Right, we still have to tell people why we're special and there are plenty of special publishers out there It's about telling the story and you need your agent to be able to tell that story for you too. Hey, man That's it. So that's my vision for Agentech direct I think we got a lot to do I think some of our questions today from the patient portal We're gonna answer a few questions that may be still lingering out there. So maybe Janet will head into the patient portal Let's do it. All right our first question is from nervous in Nevada When do I know if it's the right time to move into agentech trading so I have the worst answer and that is When somebody shows up wanting to do it with money I can't tell you the number of things that I have set up in hopes of money that I never saw a penny for and wasted Probably a lot of people's time and so Anytime, you know, you're moving into something new be sure the demand is there or You know that you have a timeline for said demand because you don't want to be like me who set up something Took probably six months to do it and it sat there for a year and nothing ever happened Yeah, shiny object syndrome as we like to call it I'm in line with that and you know the first qualification of this is you need to do it when it's right for you and your business Right if you're struggling Right now and you don't have enough people and things like probably not yet. If you've got time and resources and ambitions, you should absolutely be moving into this and start testing the things and find it. Because it's very important that we have people advocating for the publisher side of this. This isn't a given, like this could fall off the rails. It could also be that we're going to get a Gentick direct, but it runs through platforms that you don't like in ways that keep the ad tag tax in place. Because publishers didn't demand a seat at the table of how the table gets set. So I'm going to push a little bit harder on pubs of like you got to lean into this thing, at least from an idea and design standpoint of what do you want to happen in a Gentick trading. How do you want it set up? Which are the platforms that we're going to choose and make educated decisions about that? And what mistakes do you want to avoid the second time around? Yep, a great question is like, what lessons do we learn from programmatic and how do we avoid them? Because this is that same moment. And there's like, how do you not get rug pulled? How do you not get disintermediated? How do we keep the relationship between the buyer and the seller? It takes our advocacy, keeping the chips on our side, don't let the middleman in like all those things. Okay, but a clear answer of when's the right time. Jean, I like your words that you have like have a timeline on the demand, have a line of sight on your plan. And Janet, this will sound familiar to you. Remember when we used to say clean room already? Get your data organized, get your partner sort of lined up, find some low cost implementations. Where if a agency or buyer says to you, I want to do a clean room, you can have it up over the weekend and not six weeks to six months of paperwork and planning. So be a Gentick direct ready. Start thinking about these things like it's coming, the money's going to come over the wall in 2027, but it's coming to like the elite level of supply first. And then it's going to start making its way down into pubs. So practically what I think that means is figure out what needs to be done in order to participate in a Gentick trading, figure out how long it will take you to do that inside your organization. So right, if you're going to be a Gentick ready, you need to figure out all the pieces that need to be in place so that you are and start moving in that direction, but have a timeline where you think, if I do it by here, they'll be money by then, right, based on the vendors you're speaking with so that you're not building something for the sake of building it. Right. Or leave certain parts of it unfinished until, you know, these things move so fast. Don't build anything in concrete and Sharpie pen right now and use your vendors and give them product feedback like help them test. They need pubs. They need to see how hard these things are. Test them. And I encourage them to go back to that framework that I talked about of who could build an Gentick marketplace. Think about their natural advantages and their natural disadvantages and why they're better or worse for you. And are they the long term solution? I'll try to put out some diagrams of it to help everybody along as a visual. So now I've said it in public and I have to do it. So there we go. All right. Next question, but remind me before we finish to ask you what you think about the hundreds of agents, concept, we'll do that at the end. Let's get to our next question, bewildered in Buffalo asks, I have a raft of vendors lobbying ideas and platforms to me for agentic marketplaces, but I'm not sure what to pick. How do I choose and why? So just after we told everyone to get a little bit deeper into the deep end and now somebody's in the deep end saying, I'm drowning or I don't know where to swim. They might know how to swim, but they don't know where to swim. Good question. First always be judicious with your resources. We know we can't do everything and I can't have you falling down and drowning in the water. Sorry to use morbid references here, but like you can't sink in the middle of this, right? So figure out how much you can do. And then look at the vendors and you know, who has money? Who's vision do you believe in? What does it get you strategically? Like are you taking a short term money grab? Fine. Is this a long term platform that you want to build on? Is this an existing partner that's bringing you and offering? Are you swapping out of technology somewhere later? There's a bunch of strategic questions to ask yourself and I'd navigate those to do it. But you're right to be overwhelmed. The marketing jargon is high, the promises are high, the clarity is low. Because it's a classic new tech thunderstorm. Yeah, it's very amorphous. And we all have to remember that like sometimes you have to fake it till you make it. And the promise of these tools can sometimes be enough. But what you need to do is figure out what's real and what isn't. And that comes from being curious and like really saying like, well, how does it work that way and think about all of the times where somebody said, oh, it does this thing. And then you went digging and it turns out, you know, the code doesn't actually do that thing. Don't be afraid to say, I don't understand what those, what that jargon means, explain it to me in a term that I can understand. How my favorite thing to do lately is to say, can you stop using all those technical terms and explain it to me of what happens on my website or in my app or on in my CTV environment? Because that way, I can think through like, okay, in my mind, it works. These pieces touch these pieces, touch another piece, add runs. And then I can work that through in the same brain. So everybody should find a way to ask the question and get the answers. But don't sit there and just say, aha, sure, I get it. Yeah. Lean in and push all the buttons. I know what you're pushing. All right. Next question. Last one for today and then going to a soccer game and you're going to a baseball game. Really sporty of us considering, you know, we're not a lot of talk about sports anymore. Dangling in Detroit asks, it feels like it's been bad news for pubs and their staff for years now. Is agentic trading more bad news for us? Why should I be excited about it? Well, first of all, if you've ever wondered if people in the patient portal get to name themselves and use their own acronyms or pseudonyms here, yes, they do. So thank you very much dangling in Detroit for getting Janet to say that on air and now me. Appreciate that. But if you feel like you're dangling, we're here to give you some answers and another rung of the ladder to reach for. I think now you're going to know that my answer is no, this isn't bad news for pubs. And that this is good news. I see it as a benefit. It has the potential to restore power through the media decision power dynamic, which gives publishers pricing power and control over their inventory. That's good news. And why should you be excited about it? Because it can do these things. It might be a shift, right? It might really help and it might bring back some of the CPMs. It might restore confidence in brand buying of the open web. That's a really big point. Like I think Jenny said it earlier, like the worst thing that happens here is like they just pick up their ball and leave, like if it sucks to buy it in the open web, brands are just going to leave. It's already a small part and they don't use it for certain things. So it's not that hard to just pick up and be like, Hey, Google, here's some more money. Hey, CTV, here's some more money. Hey, open AI in your LLMs, here's some more money. We need to make the open web a great place to transact that includes measurement, targeting, data, like all the stuff that the platforms and the walled gardens offer. And I think a gentec direct gets us closer to that, but it has to be the right kind. One thing that was really interesting that I heard over the last two weeks, the first is that like the open web is getting smaller, the premium open web. And so if we understand supply and demand, it does as we shrink the pool of quality supply or basically make the buying only on quality supply, squeeze it, right? CPMs will go up and, right, there'll be more as Scott likes to say, pockets of inventory for liquidity. There you go, right, and liquidated three different channels. If you could even put 20% of your ad stack back through agentic direct or you're currently at 5% or 0%, it has an enormous effect on CPMs because you're constricting the auction, right? Well, you may care about CPMs in the future if you can sell all of it. I mean, well, if you think about it, right, if it's direct, it's complete. If you still have programmatic running, that's also pushing your yield out, right? Right. It all works together. Right. Yeah, and it's a tremendous boon for the rest of your open auction stuff and your programmatic stuff. They may even come as part of the supply squeeze. I think you're going to see curators and intermediaries come and lock up publisher inventory to sort of pre-biot on a programmatic basis because they need access to it. Very possibly. Like, this is getting back to the waterfall. Wow. Let's old as new again, which gets me to the point for pubs, yeah, which gets me to the thing I wanted to mention. So during the pre-bid summit, there was a session on the agentic buying and basically that, like, potentially, it's the new, let's say, self-serve for publishers. And you could have hundreds, hundreds of seller agents, hundreds of buyer agents selling, you know, $500 campaigns, $1,000 campaigns as well. Right, which doesn't make sense for your sales team to go after or whatever those numbers are, right? And so that I think is potentially very interesting as well to again have different pockets of liquidity. It will bring a bunch of buyers to you. I think it'll move a bunch of open auction buyers into the reservation world because they're not getting the same inventory that they want, but they can use all the benefits of programmatic and say like, I will buy your inventory for you from a dollar, but you're going to slot them in and you're going to space them where they are. Now they can guarantee some of their stuff. And it's still optimizable, you know, like it's going to be a weird world when the agents are optimizing direct campaigns, like on the fly, if you allow them to be. And you bring up a really interesting point about the one to many relationship here in an agentic direct world or really any agentic world. But there's a clearing house in the middle and there's a contract between the parties. The question is, is it going to be like direct where every campaign has an IO and you have to sign tees and sees with every single buyer and buying platform? Of which then that means you're going to have 400 of them for maybe $5 or maybe $500,000. Or you or it's like programmatic and, you know, you sign the tees and sees programmatically and you don't need a hundred IO's for right. So you're going to sign the tees and sees with your agentic marketplace and the buyer will sign them. And there's kind of this middle agreement of what's doable and not doable. Maybe you'll get an amendment coming around the side. Hopefully we're done with those market places are doing the payment clearing. That's a good question, right? Let me let me tackle that in a second, but it's a good to know that your agentic marketplace should be the one responsible for setting up these buyers as buyers and legitimizing them. Steelward calling the authorized buyers, if you will, so that that's an interesting place and think about that role for them, which makes SSPs really good places for an agentic marketplace because they already do that your ad server, maybe not so much your OMS, maybe not so much. These are, you know, things that we're going to have to consider. Now, what was your question again, Jenna? You think I remember I'm old Scott. Run back the tape. Oh, clearing houses. Who's clearing the payment? Great question. I've spoken to some biceye people and some agency folks. I asked them both about rev shares and payments and how they pay for these things and then about clearing and the answer was kind of we don't know. So one, I don't think agencies are getting charged a lot of money for these right now. They want the test budgets. They want the money in. It's not about making generating revenue from it. It will come. And then there's a variety of models all the way from free agentic to percentage of media spend to CPM on transactions. Those can all come up, but it is interesting who's going to clear the money, right? Somebody could be an intermediary in the middle, like the SSPs have historically done, which is really just a big bank and floating the money for pubs or could just go directly to the publisher. And then you have to pay us from that publisher has their own seller agent. Who's building the seller agent. If they license the seller agent, they have to pay a licensing fee. Like, right, I'm starting to understand where all the ad tech taxes going to go in agentic. Right. And yeah, that's an interesting place for companies like revving that's out there and or X that are in the sort of factoring receivables for publishers and creating a little bit of a float and liquidity for them. If you get rid of the SSB in the transaction, who's going to play bank? And will you take 60 90 day terms or do you want like faster payment on it? So I think there's a new opportunity for players in that space to figure out how some of that funding works in different ways. Those great. Any last thoughts before we head to our respective sporting events for the day? No, but I had a good time being on the couch today. Jan, that was great. Thank you for helping me clear my head. You know, I'm so happy you were here. And I love it when we do this when we do it personally. So I'm glad that our listeners got to hear us do it live on the pod. And with that, that's all we have time for today, friends. Don't be shy. If you're wondering about something in your ad stack, your data strategy, or literally anything else in this crazy industry, get yourself to add tech therapy.com and drop us a line in the patient portal. This is a safe space. Wear your ad tech therapist, Jenna and Scott. We'll see you next week. And remember, Agentec Direct is the future, but the future is in your hands.