Month: December 2017

Between making its 10th agency acquisition of the year and winning the Maserati account, Accenture Interactive’s December reflects a 2017 that saw it get closer to senior marketers. Joydeep Bhattacharya, Accenture Interactive’s managing director for the U.K. and Ireland, said it’s only a matter of time before consulting firms oust traditional agencies in advertisers’ minds and revealed how the crumbling digital advertising ecosystem could benefit the consulting firm in 2018.

Our recent conversation has been edited and condensed.

Big brands have said there’s no role for consulting firms in cleaning up the supply chain. Why is there a bigger role for Accenture Interactive in helping marketers spend their money?
Now more than ever, it’s apparent that marketers need to be more focused on growing their businesses. If they don’t own that agenda, then someone else will. As more industries get disrupted and more new players emerge, then those marketers who are able to influence the trajectory of their own company’s growth will be the ones that thrive. It’s only a matter of time, and we want to be the ones that set the pace for that [change].

Was that focus part of the reason why Maserati recently picked Accenture Interactive without a pitch?
Maserati’s CMO [Jacob Nyborg] talks about the importance of horizontality [within businesses], but there aren’t many agencies that can not only join creative, data and technology end to end but also say that they’re ready to be a true partner. By that, I mean really understanding a client’s growth KPIs, which could mean putting our own fees at risk because of that. We have the talent and the culture at Accenture Interactive, but it’s also about how we take complete accountability to get results.

[In 2018], agencies will be asked to dial up their commitment as partners and have a commercial relationship linked directly to growth. Creativity in the traditional sense will be even more important as the arena for winning hearts and minds of consumers becomes even more competitive and crowded.

How have you found winning new business?
The direct channels for our agencies like Karmarama, for example, are continuing to flourish because the agency has a broader story to say. For Accenture Interactive, it [new business] works well when we’re able to pull the client onto the global stage like we did with Maserati. Being part of Accenture gives us access to places where the business is already present at the boardroom. We don’t just see this is as a scale play; we’re going to grow on reputation. We’re going to be selective about the clients we go after. It pays dividends in the long run.

Do potential conflicts of interest between clients or between parts of Accenture Interactive’s business like media and auditing worry you?
We have a clear approach; we don’t want to make acquisitions that could upset those agencies already in our existing family. With Karmarama, for example, once we knew we could work with them and vice versa, the second part was to collectively decide together [as Karmarama, Fjord and Accenture Interactive] who is best suited to win what business, as there are enough clients to go after for us. It’s a simple and easy conversation that takes place between the three CEOs that I have within my family.

Do potential conflicts become more apparent as your programmatic business grows? Would you spin off the auditing side of the business?
We’ll cross that bridge when we reach it. Right now, we’re focused on how we can invigorate creative, data and technology together, and then have a clear role in the programmatic space. Depending on how things go and what clients see value, then we’ll decide how best to operate in the market.

Part of Accenture Interactive’s programmatic push centers on offering a managed service to run clients’ in-house trading desks, which many media agencies can do. How will the business be able to sufficiently grow in 2018?
Now that we have critical mass [on the programmatic side of Accenture Interactive], I’m seeing more interest in it. More clients are coming to us asking us to do discovery pieces of work that helps them to understand where their money is going and what they can be doing to drive better effectiveness. That’s not just down to us. The market and the view of media within it has started to shift with the transparency and brand-safety issues that have made the mainstream news.

Why did Accenture Interactive acquire digital agency Rothco?
Firstly, we look at acquisitions as talent magnets rather than [profits and losses]. We don’t just acquire agencies for financial maximization. The other part of our strategy is to be a leader in each of our markets. In the U.K., we have Karmarama. We want to be a dominant player in Ireland, which is part of my [management] patch, and so we got Rothco to help us do that. They’re an agency that’s very strategy-orientated, which made it a good fit for the rest of the business. Ireland is a big market for us. It’s where our worldwide innovation center is. There are also a lot of international brands that are either headquartered there or have sizable options, so it’s a great place to immerse all the international clients that visit in creativity and innovation.

Image courtesy of Accenture Interactive

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Alcohol brands like Heineken and William Grant & Sons have concerns about using Snapchat as a marketing platform because they don’t think the app’s age-filtering feature is effective. But that’s not a hurdle for Moët.

The luxury champagne company, which is more than 250 years old, is launching a Snapchat game this week called “Moët & Chandon Tower Toss” as part of its holiday campaign “The Greatest Entertainer.” To play the game, two people take turns swiping up to shoot a champagne cork at a four-layer Moët champagne tower on a table. Each player has 10 seconds to toss as many corks as they want, receiving points based on precision and which tier they target. Moët placed paid ads on Snapchat Discover to direct users to play the game.

“We don’t want to just buy people’s attention through media — we want to get their attention naturally in a customized way,” said Christine Ngo Isaac, marketing director and head of U.S. consumer engagement for Moët & Chandon. “Snapchat is an open ecosystem and has done a good job in building a customer experience outside of traditional advertising.”

Agency Attention helped Moët develop the game, which the brand claimed is Snapchat’s first two-player game. While the game was designed for Snapchat, Instagram and Facebook users can also play a web version through special links.

But one big question for alcohol brands marketing on Snapchat is how to ensure they accurately target people of legal drinking age, which is 21 in the U.S. After all, marketers from Heineken and William Grant & Sons have said it was hard to verify the ages of recipients of ads on Snapchat. But Ngo Isaac disagrees.

“The statement that Snapchat has an age-gating problem is not completely true. I think the problem is many alcohol brands just take a piece of content from other platforms and amplify it through Snapchat,” she said. “For this specific game, our paid ads on Discover target people over 25, even older than the legal drinking age.”

In addition to Snapchat’s own ad-targeting capacities, Moët also asks players to enter their birthdates before playing the game. “We use double verification to ensure that we are not presenting alcohol content to minors,” said Tom Buontempo, president of Attention. “Targeting in general has become more sophisticated on Snapchat. It is working with many third-party vendors to make sure that their ads reach the right audience.”

But that’s not saying alcohol brands face no limitations in marketing on Snapchat. Moët and Attention originally designed the game differently: Winners would have a chance to unlock an exclusive geofilter and then share it with their Snapchat friends after completing the game. But Moët ended up dropping the geofilter idea because it was extremely difficult to prevent Snapchat users from sharing the geofilter with people under 21 on the platform, according to Ngo Isaac.

“We thought of all the possible scenarios that could damage the Moët brand,” she said. “We take the age issue very seriously, which is why we don’t have a company account on Snapchat. We are still experimenting with the platform.”

A Snapchat blog post said 44 percent of Snapchat users in the U.S. look to friends and family for recommendations on alcohol purchases, compared to 19 percent of non-Snapchatters. Bud Light, Shock Top, Smirnoff and Jameson have all used Snapchat’s ad products like Snap Ads, holiday filters and lenses, according to the company blog.

“We use the same type of age registration as similar ad platforms. All new Snapchat [users] enter their date of birth when they sign up for the app, and we then age-gate,” said a Snapchat spokesperson. “We also don’t serve alcohol ads to users with improbable ages that fall at the upper end of the age ranges on our platform.”

The spokesperson said around 80 percent of Snapchat users are above 18 but declined to specify how many are over 21. But Ngo Isaac said Moët has found “the next generation of drinkers” on Snapchat, older millennials around 30-34, whom Moët wants to target.

“Snapchat is no longer just a teenager app,” she said. “It is becoming a more general advertising platform.”

Image courtesy of Attention

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For the past year and a half, Theresa Moore, vp of platform partnerships at Pixability, has been trying to buy video ads on Amazon to no avail. A few months ago, Moore — who said trying to build a relationship with the e-commerce giant has been an “interesting journey” — thought she finally had an in.

Amazon’s user-experience team responded to an email she sent, but instead of giving her the direction she needed to buy, it offered her a $100 Amazon card to learn about her experience trying to contact the company. Moore was flabbergasted: “I told them, keep your $100 and give me the contact information of someone at the company who can help me make progress.” She said she didn’t get a contact, but she kept the $100.

Moore is one of many ad buyers trying to work with Amazon but finding it difficult to secure an Amazon rep and then start the process of advertising through Amazon’s suite of ad offerings, including its in-house team Amazon Media Group, self-serve marketing suite Amazon Marketing Services and programmatic solution Amazon Advertising Platform.

“It’s at a level where you can only develop a relationship with Amazon if you know someone,” said one ad buyer at a large agency who asked for anonymity.

Another ad buyer, who wishes to remain anonymous, said their large agency has begun forming a relationship with Amazon after a year of “stalking,” but only because of a major client’s spend.

Digital agency PMG had a similar experience. PMG started reaching out to Amazon about two years ago and didn’t gain traction with the company until a year in, when its client, retailer Cole Haan, expressed interest in spending with Amazon, according to Price Glomski, evp of digital strategy at PMG. That led the agency to acquire eight contacts at Amazon and start building its own internal Amazon practice. In the past year, the agency has spent well into seven figures on the platform, working on campaigns for large clients like Beats By Dre, Glomski said.

But even when ad buyers have an Amazon rep and footing within Amazon, they don’t necessarily get the answers they need quickly.

The makeup of Amazon’s internal client services teams is murky. None of the five ad buyers Digiday spoke with for this story know how Amazon’s client services teams are structured or how many people each has. There is a general understanding that AMG, AMS and AAP all have their own teams, and one ad buyer, who prefers anonymity, believes Amazon has teams structured around specific brands rather than agencies. Still, this person said, “You never have a holistic idea of what’s going on.” An Amazon spokesperson said the company does not reveal how many people work in each division or how many teams fall under client services.

Moore said after months of pestering Amazon, she finally secured her own rep who directs her to other groups within the company that might be able to assist her. But that’s where the help stops.

“It’s such a black box,” said Moore. “They’ve been really nice, but the groups at Amazon don’t know who does exactly what I want, which is to run video ads.”

Even PMG, with its eight contacts and several Amazon campaigns under its belt, has trouble navigating Amazon’s internal client services teams.

“The teams have really focused expertise, so when you ask a question about another ad product or product road map, it tends to get lost in translation, and you have to be directed to another product team,” Glomski said. “Fortunately, the Amazon team we work with is really good, but even they come back to us and say, ‘Sorry, it’s a development in progress.’”

Ad buyers said Amazon is following the playbooks of other ad platforms like Google, Facebook, Instagram and Snapchat, which were slow to make their client services teams available to agencies and ad tech providers while developing ad offerings. Rather, they initially focused on building relationships with large brands.

“Amazon definitely gives more interest and more resources to the larger brands,” said one ad buyer. For instance, one brand this person works with has its own assigned Amazon contact.

Moore is not surprised that Amazon would take this approach. “At the end of the day, brands are the ones that have the creative and the customers,” she said. “Amazon can get the information they desire straight from the brands without having too many chefs in the kitchen.”

“Everything Amazon does is to benefit Amazon,” said another ad buyer. “Everything they’ve built, from their tech stacks to their ad units to their content pages is all to benefit them, so why wouldn’t they go to brands with the big budgets first?”

But this might not be the best tactic for Amazon, as ad buyers at agencies and brands with smaller budgets get antsy about spending on the platform. PMG’s smaller clients, for instance, are eager to spend more on Amazon. Glomski said PMG estimates another $20 million to $25 million is on the table for Amazon from the agency’s midsize brands.

“You can tell [Amazon] is continuing to grow, so for some of our smaller clients, which are still good brands, they just don’t have as much mind share for them,” said Glomski. “What needs to happen quickly in order for advertisers to not get frustrated with Amazon is for Amazon to start building out their strategic group to help grow and train advertisers that will be in the system.”

Amazon has made strides in the past year, like bringing training teams to select agencies and making client service hires. The fact that Amazon’s user-experience team is reaching out to ad buyers like Moore also shows the company is considering ad buyers’ efforts to advertise with the behemoth.

“Agency relationships are very important to us,” said Seth Dallaire, vp of worldwide sales and marketing for Amazon Media Group. “We’ve made investments in both agency development and services as our advertising business grows, and this will continue to be the case.”

Some agencies are seeing the effects of these investments. “They’ve gotten much better in terms of having contacts you can work through, and they’ve made themselves more available to agencies,” said Kevin Packler, vp and director of Amazon services at independent agency The Tombras Group.

But Glomski warned that until the majority of ad agencies and smaller brands feel they are getting the attention they need from Amazon, other platforms with robust client services teams like Google and Facebook will continue to retain more market share. This is especially true, he said, when it comes to transparency and data, another area in which Amazon is known for being a black box.

“With Google and Facebook, any CMO can go in and pick apart different aspects of their marketing strategy,” said Glomski. “If Amazon can provide optics to performance on a daily and hourly level, which is what most marketers today need, that will create a sense of trust and willingness to spend $10,000 dollars a day on Amazon.”

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2017 was the biggest year in media and marketing since 2016. Whether it was the duopoly increasingly controlling the digital ad market, digital publishers and traditional media companies fighting back against the duopoly, advertisers pressuring the duopoly to improve its advertising and measurement products or things that had nothing to with the duopoly, the duopoly reigned supreme. But Google and Facebook weren’t winners on all fronts. Here are Digiday’s biggest media and marketing winners and losers of 2017:.

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His new business is a text-audio editing company called Descript.

On this episode of Recode Decode, hosted by Kara Swisher, the former CEO of Groupon, Andrew Mason, chats with Recode’s Kara Swisher and The Verge’s Casey Newton about his new company, Descript. The three discuss how his three companies — Groupon, Detour and Descript — are nothing like one another and why now is the perfect time for a text-to-audio service. Plus, be sure to stick around for the part where Mason tries to give Michael Bloomberg a horse.

You can read some of the highlights here, or listen to the entire interview in the audio player below. We’ve also provided a lightly edited complete transcript of their conversation.

If you like this, be sure to subscribe to Recode Decode on Apple Podcasts, Spotify, Pocket Casts, Overcast or wherever you listen to podcasts.

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Kara Swisher: Recode Radio presents Recode Decode, coming to you from the Vox Media podcast network.

Hi, I’m Kara Swisher, executive editor of Recode. You may know me as the only person who still says, “Merry Grouponicus,” but in my spare time, I talk tech, and you’re listening to Recode Decode, a podcast about tech and media’s key players, big ideas and how they’re changing the world we live in. You can find more episodes of Recode Decode on Apple Podcasts, Spotify, Google Play Music, or wherever you listen to your podcasts, or just visit www.recode.net/podcasts for more.

Today, I’m in San Francisco with Casey Newton, the Silicon Valley editor of The Verge and host of the upcoming podcast Converge.

How are you doing?

CN: Hello, Kara, I’m doing great. How are you?

KS: Good. You’re here practicing for your upcoming podcast, Converge.

CN: That’s right. This is the second go-round. The first one was so successful, people demanded we make more audio content.

KS: Nobody demanded it. You demanded it.

CN: Well, I demanded and they did not oppose it.

KS: Yes, they did not oppose it. It got well received on Twitter.

CN: Yeah, it was good.

KS: It was well received, it was quite good. Now we’re here today and Casey’s joining me for several episodes of Recode Decode and today we’re thrilled to have one of my favorite entrepreneurs, Andrew Mason, in the red chair. He’s best known as the founder and former CEO of Groupon, and in 2013 he co-founded the mobile audio company Detour. He just announced another new company we’re going to talk about, and he’s declining to put on headphones. I don’t know why. Are they too …

Andrew Mason: I feel like I’m going to do it at some point, but I’m worried it’ll throw me off my game.

KS: No, it’s …

What game is that having not spoken, it’s not clear.

KS: No, I like it. It’s more intimate. Put them on right now. It creates a feeling of intimacy between us.

I think what is does right now is it creates a power dynamic.

CN: Oh, interesting.

KS: Just put on the headphones. Put them on right now. Thank you. Isn’t that better? Don’t you feel better? Don’t you feel closer affiliated with me and Casey here?

Well …

KS: We’ll wait and see.

Yes.

KS: Andrew, when last I saw you, you were doing Detour. First let’s talk about your history because I want to get into your new company. We have a whole hour to talk. Give the people who don’t know you’re famous … oh, he took off the headphones.

I can’t do it. This is better.

KS: All right, fine. Whatever you … all right. As usual. Andrew and I have a long history of struggling with each other over a variety of issues.

CN: That’s what I like about both of you. Neither one of you likes to play by the rules.

KS: No, none of us do.

CN: And now it’s really playing out.

KS: No, not since he showed me his …

I’m sorry, are you going to throw down on the headphones?

KS: I might, I might.

Because this … is this the place to make your stand?

KS: Could be, who knows. Let’s discuss your history.

Yeah, let’s.

KS: Our long history together. I first met you when you were a young entrepreneur at Excel. I think it was Excel I met you at, at the time you were there, you came in. You stuck your head …

I came to a …

KS: You were there. You were just there.

We raised money from Excel, so it might have had something to do with that.

KS: Yes. You were there and they said you have to meet this guy and you were …

Yes. Boy, were they right.

KS: They were … you were extremely obnoxious, I remember. I liked it. I thought it was kind of funny. You were talking about museums and how you started Groupon, and you were unusual for an entrepreneur, comparatively. You weren’t from Silicon Valley.

What do you mean museums?

KS: You were talking about people you were interested in helping, museums and other things.

We had just done a deal for the Art Institute of Chicago and sold 5,000 memberships.

KS: Right.

CN: Wow.

Something like 10 percent of what they sell in a year. Many of those people went on to renew. Check it out: www.groupon.com. Daily deals on the best stuff to do in your city.

KS: Okay. Talk about your short journey. People know what happened to Groupon and we’ll talk about where it is right now. You don’t have any involvement in that, do you?

No.

KS: Not at all.

No.

KS: Not at all.

CN: It started in secrecy …

I keep waiting for them to call so I can make my grandiose return.

KS: You and Travis Kalanick are just waiting by the phone.

I’m just waiting but keeping myself busy, you know. I have hobbies …

KS: Yeah.

CN: Is it true that the whole thing started because you couldn’t get out of a cellphone contract, and that led you to your first thing, which then led you to Groupon?

Yes. It started out as this thing called The Point, and at the time I was … before that I was getting my Masters Degree in the University of Chicago in public policy. I was learning about collective action problems and had this issue with my cellphone contract. These egregious contracts that they lock you into.

KS: Sure.

It seemed like, man, if I could get a critical mass of people, a tipping point of people together and we all threatened to cancel our contract, then maybe they would take us seriously. Then the point became just a broader, or more abstracted, platform for that kind of concept. You get a bunch of people together, and they all agree to do something if some conditions are met. That thing could be doing something, it could be giving money toward something. One of the ways people were using it was to buy things as a group, group purchases. Then we just focused in on that and it became Groupon.

CN: So what started as a radical left-wing idea quickly became a capitalist tool.

That’s right.

CN: That’s fantastic.

I mean, I always had a lifelong love of coupons since I was a small child.

CN: Would you wake up early on Saturdays to cut them out of the circulars in the newspapers?

Yeah, and I would stitch them together into clothing.

KS: I bet you did in that case. So you started Groupon, and I remember you announced the public offering at our conference onstage.

No, I didn’t announce it. I totally played you, if I remember correctly.

KS: Okay, all right. Explain that to me.

You were trying to get that information out of me.

KS: Yes, we were.

I won’t fault you because you tried your best …

KS: I know.

You’re not used to dealing with people as adept in rhetoric as I am, so you didn’t know up from down.

KS: I didn’t know up from down, but you released it right afterwards. That’s right, you released …

Oh yeah, that’s right.

KS: The public offering. Tell me about that experience, because it didn’t go well, I would say.

What do you mean?

KS: They fired you, as you recall, as you wrote about.

Well, I mean, that’s one way to look at it.

KS: Okay.

I would rather …

KS: How would you …

CN: Before it maybe went south, it went incredibly well.

KS: Yes, I know. I want to know that experience. How did you look at that experience?

How did I look at what part of the experience?

KS: What was the whole …

CN: It was the fastest-growing company of all time up until that point. That had to have been a pretty crazy ride for you coming out of a Master’s project that turns into the fastest-growing company of all time.

KS: You had that great office and on the walls of that office you had all the failures, I remember, in the lobby.

Yeah.

KS: That what happened including the ones …

The whole thing from the ride up and down was surreal and absurd. The absurdity … there was something absurd about the heroification that happened on the way up.

KS: Right.

Then also the opposite of that on the way down. Luckily the ride up prepared me for all of that and I just look back on it as this crazy experience that I feel really lucky to have been part of.

KS: Talk about what you were trying to do there. What do you think you did well?

With starting Groupon?

KS: Mm-hmm.

What do you mean?

KS: I mean, what do you think you did well?

It’s still a multi-billion dollar business.

KS: Mm-hmm.

People still use it all the time and get a ton of value out of that, so we got that out there. What did I … what else did I do well.

KS: As CEO.

CN: The name was really good. Where did the name come from? There’s very few companies where the entire idea is in the name, and the name is less than 10 letters.

Yeah.

CN: Did that come out of a hat, or an intern, or who gave you that one?

The guy that actually was in charge of all of the content came up with that name. His name is Aaron With and when we were like, we need to come up with a name for this group coupon company and he was like, how about Groupon? I make it sound less genius than it was, but that’s where it came from.

CN: It points to a great point, which is you should always hire content people for your company.

KS: Absolutely.

CN: Some might say we’re the most important people you can have in a company.

KS: I don’t think so. I think we’re not at all important.

CN: I don’t know.

KS: Where I’m trying to get at is, what did you expect to happen there in terms of your CEO experience. You were always a reluctant CEO. A lot of stuff you did at your headquarters pointed to, this could all go to hell, I might not be the right CEO, you did a bunch of … remember when you were going to interview the little girl? Have the little girl interview you, the kindergartner?

That never happened.

KS: I know, but you thought about …

You told me that was a bad idea.

KS: You thought of the idea. He was going to have a third-grader, right? A second-grader?

I don’t remember why.

KS: They were going to discuss how you don’t disclose things. The SEC rules. She was going to interview you on how bad you were at SEC rules.

CN: That’s amazing.

KS: Yeah, he wanted to do that and I said he shouldn’t, although I should have let him and then written about it.

Let me tell you what I wasn’t prepared for.

KS: Right, okay.

What I wasn’t prepared for is I had a hard time taking myself seriously.

KS: Right.

There’s something true about tech. Here’s the secret. I like people to believe that I’m this super genius who’s like, no I’m sorry. Nothing had anything to do luck. This is all skill and capability and razor-sharp instincts. The fact of the matter is, there’s an incredible amount of luck. There’s a lot of people, entrepreneurs, out there who are way smarter and more capable than I am that have never had the kind of success of Groupon.

KS: Mm-hmm.

I don’t think I’m incompetent, but I do think that luck had a lot to do with it. I was just never comfortable with the amount of adulation on the way up, and I responded to that aggressively by going out of my way to seem stupid.

KS: Right, right.

CN: Were you at all insulated from that being in Chicago, or did the fact that it was this unique tech story in Chicago make it all the more intense because they had never seen a tech titan emerge there?

I think in Chicago, there was … I was just in Finland and Finland had all of their hopes and dreams tied to Nokia and now the country’s in an identity crisis because of its collapse. I think, at least in tech, for a period of time, Groupon was carrying that weight for the city.

KS: Yeah, you had a great headquarters by that section of the city that was …

Yeah, and so I think it was then disappointing for people in Chicago when it didn’t prove to earn its place alongside Facebook and Amazon and Microsoft and blah blah blah.

KS: Right, right. One of the stories I remember writing about, before you went public, was selling to … you just handled everything different than everyone else. It was a delight for a reporter, I’ll tell you that, because you just said what I asked you. You usually answered the questions.

That was the problem.

KS: Yeah, yeah.

That always worked for me when we were a private company.

And getting back to what I wasn’t prepared for, what I wasn’t prepared for was the degree to which you entered the Big Leagues. It’s an entirely different game once you’re a public company. I just had this incredibly naïve attitude, like, oh I’ll just be myself and I’ll just keep doing what I’ve been doing and it’ll be fine.

KS: Right, which made me successful …

The world and the markets were like, no. This is mincemeat.

KS: So you couldn’t bring a goat … did you bring goat to the office, or a horse, or a Shetland pony?

A horse.

KS: A horse, that’s right. Who was that for?

It was different than the Shervin horse. I just want to, I just feel … I think that was not a cool horse to just, oh look at me. I’m at a party. I’m a horse. The reason …

CN: The idea that venture capitalists would bring horses to parties to avoid future accusations of sexual harassment was still many years away.

KS: Many years. Why did you bring the horse to the party?

The horse: The story is that … do you want the whole story?

KS: Just the short version.

The whole story is good.

KS: All right, go ahead. Go for it.

The whole story is that Michael Bloomberg was coming to visit our office.

KS: Yes. Everyone came to visit you.

We thought, let’s give him a gift and something to say thank you for coming. We were like, it would be funny to give him something that would be this incredible responsibility, because how to you react to something like that? At first, we thought we’d give him a dog. But then it just seemed like he might believe that and it would be weird, so we pushed a little bit further and made it a horse. So we got the horse and then it came to the office and we do — By the way, I’m mostly here to sell my product.

KS: I know. We’re going to talk about that.

CN: There’s plenty of time for that.

KS: Yeah, plenty of time.

He sent his security guards up to look around, and that was new to me, I never had that, where security guards are going to come and do a sweep. I was like …

KS: You had a lot of dangerous items at that office.

Exactly. I was like, it would be funny if we just dressed up one of our customer service representatives as a terrorist.

KS: No, don’t do … that’s not funny.

We gave him a ski mask and put some fake grenades next to his …

KS: Oh, God.

Next to his desk and we gave him a machine gun that he was wearing on his neck and then he just had the customer service headset on, and he was sitting typing at his computer. The way I thought of it is these poor security guards never find anything. This at least will be good for a laugh for them. They’ll give me a high five. Anyway, my COO at the time saw that moments before the security guards came up and shut it down.

CN: Probably for the best.

“This is why you hired me: to stop you from doing these things.” I regret that.

KS: Which part?

Shutting it down.

KS: Oh, all right, okay.

I should have gone through with it.

KS: So the horse, then, is backup.

He came … that was unrelated, but that’s part of the long version of the story. So then Bloomberg is coming up the stairs and we’ve got the horse ready to present to him and then our PR person found out that his daughter had just been injured in a horse riding accident.

CN: This is an episode of “Veep.”

There was this last-minute scramble to hide the horse. We ended up hiding the horse in the kitchen elevator.

KS: Not that weird office that you had? The fake office of the person …

Oh, Michael’s room?

KS: Michael’s room, yeah.

No, not there because that’s part of the tour.

KS: That’s part of the tour, that’s right.

CN: So you have a backup present to give Bloomberg?

No present for Bloomberg.

KS: No present.

CN: Wow.

We haven’t been in touch since and that might be why.

CN: He’s never forgotten it.

KS: Yeah, oh my God.

No present.

KS: Oh my God, oh my God.

Vindictive guy.

KS: In any case, you had a number of stunts and things that you did at the company. You had a very colorful CEO career. We’re going to get to your next thing and then what you’re doing now, but what did you … you’re one of the few people also who said, “I was fired.” You said that at a press release saying, “I was fired.”

CN: I remember when that note came across all of our screens and it was crazy because it felt like the first time a tech CEO had been honest on their way out that anyone can remember.

KS: We were going to say you were fired anyway, but why did you do that?

I’ll tell you why I did it and I’ll tell you why it’s probably a mistake to do that for people that are considering such a thing.

KS: Personal reasons.

I did it for that reason. It was so obvious to everybody that I would have been fired, right?

KS: Right.

Even if there was a family emergency or whatever, nobody would believe it.

KS: No, no.

So, the only thing that I’m doing in my mind at the time by pretending like I wasn’t fired is deluding myself. Here’s the reason it makes sense. Now, every time anybody writes about me, or at least when Detour came out, it was always like, “ousted Groupon CEO starts a new company.”

KS: Right.

It basically gives reporters permission to bring that up over and over again. We keep talking about it. Also, it’s weird because I meet people at parties. I go to a lot of parties. I meet … I don’t really go to a lot of parties. When I meet people, they’re like, “Oh yeah, I loved your …” Like that’s what they remember me for is the letter.

KS: Ousted is a good word.

Anyway, so if you don’t do that, I remember reading about Joshua Topolsky’s resignation letter and he had been fired and, wait, he used to work here. It was from here that he was fired. Maybe I should find another example.

KS: No, go right ahead.

Anyway, he was so clearly fired and the letter was all, no awareness of that whatsoever, and it’s worked for him.

KS: It’s worked, yeah.

It works for people all the time.

KS: Yeah, yeah.

I feel good about it. I would do it differently, but I also wouldn’t recommend … it’s probably not worth it.

KS: You also seemed somewhat relieved as I recall at the time, when you were just, you told the truth and then you moved on. No?

Relieved in what sense?

KS: I remember you talking as if you were relieved, maybe, or you were just lying.

Relieved to not be at the company anymore?

KS: Yes, yeah.

CN: Or, to not have the pressures that came with being the CEO and having to be this person who maybe you didn’t like to be.

Yeah, oh no, God. Running a public company, not for me.

KS: Yeah, yeah.

I wouldn’t have chosen to be fired. If I could go back to that moment now and have not been fired, I would’ve not been fired. Even though I’m really glad to not be working at Groupon anymore, I still feel a responsibility to the to the company and to do what I can.

KS: Yeah. So, afterwards you moved to San Francisco, right?

Yeah.

KS: Relatively soon.

Yeah, yeah.

KS: Yeah, and started Detour.

And started Detour.

KS: Talk a little bit about that and where it is right now.

There were about six months in between leaving Groupon and starting Detour. I moved out here, I had a kid.

KS: You had a kid.

I recorded an album of motivational business music. Then, Detour was actually an idea that I had before Groupon. What it is is it’s an app for taking audio tours of cities. It’s something I always did when I traveled. I always wanted a really exceptional way to explore cities with people that know them best and on your own terms.

KS: It was quirky and interesting. Not your typical stops along the way, too. It was neighborly things.

It was good. It is good. People who have done it really love it. The challenge is when you pitch someone like, “Hey, let’s go take an audio tour this weekend.” The pre-existing ideas people have about that like, “Oh, an audio tour.”

KS: Yeah.

“You mean like that kind of lame thing I do when I’m in a museum and it happens to be there and I’ll give it a try?”

It’s just been hard to build a mobile app that has such a high on-boarding requirement where you have to go out into the city and block off two hours before you can even have any idea of what the experience is like. I think it’s really hard as a stand-alone travel startup. It’s not going anywhere. I’m not working there anymore and we don’t have anything to announce about what’s happening to it right now other than it’s not going anywhere. Hopefully I’ll have something happy to say about it in the next couple of months.

KS: Mm-hmm. Is it sold, has it been sold?

I can’t say anything about what’s happening to it.

KS: I understand it’s been sold, but okay.

Do you really want to do your hard-hitting thing on this poor little startup?

KS: No, not on your poor little startup. No. I liked it a lot, that’s why.

Save it for Yahoo.

KS: I think it’s a high … yeah, they’re done. We’re done with them.

You finished them off.

KS: We finished them off.

CN: The question that I have for you, though …

KS: No, but I liked it. I’m serious. I thought it was a great product.

Thank you.

KS: I realize the difficulty of execution there.

Yeah.

CN: I did too, and my parents actually would come up and visit me and request that we would do another one. It wound up being a really fun thing that I did with my parents a bunch. What I found so interesting from it was that when we first met, because I actually didn’t meet you during the Groupon days. We met when you started Detour, and I couldn’t imagine a company less like the one that you had previously been at, right? Some founders scratch the same itch over and over again, and you just went somewhere completely different. Why?

Well, it was hard. Like I said, I did have this lifelong love for coupons.

KS: Mm-hmm. But that was scratched.

I do tend to get back … I have some coupon 2.0 concept …

CN: Ooh. Two-pon might be an interesting …

That’s percolating.

KS: Two-pon? Did you just say two-pon?

CN: Yeah. A good company name.

That was more of a diversion than anything else. As reporters were ever so fond of pointing out during the tough times, I was a music major. I worked at a recording studio for a couple of years out of school, so getting into audio and content was something I was always interested in. Also, I just, I’m looking to do things that I think are interesting and products that I want to exist and they don’t all fit into one category. I’m not driven by starting another $20 billion company.

KS: Right.

CN: Right.

KS: All right, we’re here with Andrew Mason. By the way, we like to point that out because it’s interesting and it makes you different from all the other horrible geeks, just so you know.

Does it really?

KS: Yes, it’s a compliment. In any case, we’re here with Andrew Mason. He’s in the red chair. He’s the founder and former CEO of Groupon, and he founded a mobile audio company called Detour, and he’s just going to talk when we get back on a new company he just started.

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KS: We’re here with Andrew Mason, the entrepreneur who started Groupon. He also did a company called Detour, which is a mobile audio company that did tours in cities, which was a terrific little company. Now, he has a new company we’re going to talk about. Andrew, would you like to discuss your new company and what it’s called?

I would. For those of you who are just joining us, congratulations. The first part of this was basically worthless.

KS: It’s not, actually. You’ll see.

Now we’re getting to the good stuff.

KS: All right, good stuff. Leave behind the old, bring in the new.

My new company, much like … one could think of it as a pivot, much like Groupon was a pivot.

KS: All right.

It’s been incubated inside of Detour for the last couple of years. At Detour, we’re basically making these things, podcasts, that are scripted. We recorded hundreds of hours of voiceover sessions and our ultimate vision was to make Detour a platform where anyone would be able to produce these things. As we were using these tools that existed to create audio content, like talk-driven audio content, it became clear that it was just never going to happen with the tools that existed.

KS: Mm-hmm.

The learning curve is super high and then even once you understand it, it’s tedious and slow because you’re looking at these wave forms, just timelines and of wave forms, and even if you understand that stuff, you have to turn off your editorial brain and engage your engineering brain and it’s really difficult to work with. We were aware of the explosion in progress that was happening around speech-to-text automated transcription, where now you have models that are transcribing audio and comprehending audio at rates higher than humans can.

So we thought, what if we could use that to create an audio editor that looked like a word processor and acted like a word processor, where instead of editing these wave form timelines, you could just edit text.

KS: And it would change the audio.

And it would change the audio. Exactly. So we built that inside of Detour as a way to make Detours, and then we would bring people into the office who were working in audio, or even in video, and they would just lose their minds. Half of them would be like, “Yeah we’ve wanted this to exist for 20 years. Why has it taken this long to build it?” People would just see the shortest little demo of it and get it right away. It was one of those things. This was happening as long as a couple years ago where it became clear that might be the actual thing.

KS: So, a little bit like Odeo, which became Twitter, or Slack was out of the gaming company. I can’t remember the name of the gaming company that Stewart started.

CN: I can’t remember. It was tiny something. Tiny something.

KS: Yeah, similar. So, you were trying to create …

Any example that you can come up with of something that was really cool, but maybe not really popular, and then out of it something awesome and super popular that made a ton of money.

KS: Right, a ton of money, right. But talk about the technology. Why has it taken 20 years? “I wanted this for 20 years.” People do meet engineering challenges for lots of people and lots of products. What was the problem?

We’re leveraging the progress that big companies have made by using machine learning and artificial intelligence in speech-to-text recognition, where you now have a 95 percent accuracy with a decent sounding audio. Now all that stuff is becoming commoditized, where there is a zillion different APIs that you can use to get that stuff really fast and really cheap. That’s really foundational.

The other thing that we do is this technology called text-audio alignment, where we can analyze the phonetic content of the audio and compare it to the text, and then basically layer the text on top of the audio, know the starting and ending point of every word, and that’s stuff that we’ve built.

The way we realized it was viable was a guy that was getting his PhD in this stuff at Berkeley, and we got him to come work for us. All this stuff is just starting to happen. In the last year, there have been a slew of different companies that are doing automated transcription, disrupting the human-powered transcription market, which ends up being a $10 billion market. Then we’re taking that to the next step, which is not just …

KS: So it’s editing.

Yeah, but actually editing and producing content.

KS: Right.

We spun it out of Detour and we raised $5 million from Andreessen Horowitz, and the vision of this is to make audio and eventually video as easy to edit as it is with print. You know, print has this killer feature where you can write something and then you can rewrite it. You can edit.

KS: Right, word processing.

Yeah, and audio doesn’t work that way. And we’re seeing this explosion of audio in popularity as a medium as evidenced by the fact that you guys are basically sitting in here all day recording podcasts.

KS: Mm-hmm.

We really need the tools to keep up with the consumer demand.

KS: What had been the most advanced tools then? Because I’ve used various [methods], but the idea of placing audio over text, essentially, or text over audio, really. You haven’t been able to edit it, you have to have editors.

That’s right.

KS: Experienced editors. And so this is to remove them from the equation.

This allows you as … We need a lot of people who come from a print journalism background and are getting into podcasts and they are beholden to some audio engineer. So they might do a piece and then they might do a paper edit of it, send it off to the audio engineer who does the edit, and then you get it back and you find out that the audio doesn’t sound right when you cut it that way. We basically pair the two into one thing that the editor or the producer or the journalist can use as long as they know how to use a word processor.

KS: What is it called, this company?

Descript.

KS: Descript. So, why is it called that?

It’s derivative. It’s not as good of a story as Groupon or something like that. It’s basically, we had Detour and Descript. They both start with D.

KS: Okay. All right.

CN: And the company is headquartered in an underground crypt.

Yeah, it’s Descript with a Y.

CN: Who’s your main customer? Is it podcast producers, or does it go beyond that?

KS: You’re saying video, you brought up video.

For now, we’re starting with people that need transcriptions. It’s a great stand-alone transcription service. You can drop an audio file in that’s two hours long and get a transcript in a couple of minutes. Anyone that needs transcription, and then people who are working with audio as their primary medium: podcasters, radio. As we grow and as we add more stuff, the goal is yes, to become the new standard for how talk-driven media gets made.

KS: Mm-hmm.

So if you’re working in talk-driven media, it just makes sense that you would be doing it from a script-driven viewpoint as opposed to a timeline-driven standpoint, where you’re looking at these abstractions. For the same reason that people aren’t programming in binary anymore, they’re writing words, people would be editing using language and scripts if the technology existed, and now it’s just starting to exist. Whether it’s us that does it or somebody else, I think this is where it’s headed.

KS: Do their competitors in the area … There’s all kinds of different tools of transcription, as you said.

Oh yeah, there’s quite a few transcription …

KS: Right, immediate transcription. I’ve used a bunch of them.

Immediate transcription services. And the dirty secret of them is they’re all using one of the same series of APIs that’s provided … I mean, for the most part, they’re all using the same series of APIs like Google and Nuance and IBM and now Amazon. We use the Google speech API, but we’re relatively agnostic and we’re focused on creating the instrumentation to measure these different APIs and their accuracy for different types of audio and pick the right one for the right type of audio. Then build tools beyond that, because it doesn’t stop at the transcript, right? You do stuff with it.

KS: Right. Well, that’s the point. Sometimes they’re separate. You do the transcript as separate from the creation completely.

CN: I’ve sort of always assumed that the basic transcription stuff will eventually become free. Do you think that’s the case?

I do, yeah. It feels like storage where it’s just getting cheaper and faster and more accurate and commoditized.

CN: So you can sell it today, but eventually your business is going to be something else.

Yeah, and we sell it pretty cheap. I mean, seven cents a minute. And then we have a subscription fee and that’s where …

KS: So, your thing is the technology of being able to edit. The editing technology, essentially.

Yeah, editing, and for people that are doing it today but hopefully very much if you think about how the number of people that had darkrooms before Photoshop came along. Hopefully we can create that same …

KS: I had a darkroom.

You did?

KS: Yeah.

Yeah, okay. So my point is completely invalid then, is that what you’re saying?

KS: No, no. I just liked it. I just was thinking of it yesterday, for some reason.

Okay. You just were mentioning that you had a darkroom.

KS: I did. I just said if people had darkrooms …

Maybe you could have saved that until I finish my point.

KS: All right, finish your point.

It’s a good …

KS: Finish your point, finish your point.

CN: Some people say that any room Kara Swisher is in is a darkroom, but that’s another story.

KS: Finish your point. I was going to be nice to you, but go ahead.

What was my point?

KS: People had darkrooms and now …

Oh yeah.

CN: And now Photoshop.

And now they have Photoshop, and there’s a lot more people that have Photoshop than had darkrooms.

KS: Right.

We hope it’s the same kind of thing with audio and video, where it’s prohibitively difficult to manipulate that content, and by taking away those prohibitions but reducing the friction and making content creation as expressive as print or text, you can enable a whole new class of creators.

KS: Why has this not been done in the past?

The technology hasn’t existed.

KS: Right.

Or it hasn’t been mature enough to be able to …

KS: You mean the transcription technology.

Yeah, and the text-audio alignment and all this stuff is being enabled by machine learning and artificial intelligence and blah blah blah.

KS: Mm-hmm.

CN: Is the technology such that I could take, say, a long speech that Kara gave and just sort of pick and choose the words, and then rearrange them and then create new audio of her just saying whatever I wanted her to say?

Absolutely. Now, we’re not going to re-sample at the boundaries of the edits in a way that it’ll sound natural so you’ll have to … There will be a little bit of skill involved in that. But that’s where we want to take it. We can talk about the ethical implications of that.

CN: Yeah.

But that’s definitely where we want to take it, where you can move things around and as thoughtlessly as you would move around text and still have it work and you don’t have to get in and do a cross-fade and adjust your edit boundaries. Really, what we’re doing with Descript, by pairing the text and audio as one thing, we’re setting ourselves up for this future of artificial-intelligence-assisted media synthesis. That’s one example of it, because all of a sudden, your media, your audio or your video, you have meaning behind it because of the natural language processing you can do on the text.

KS: Mm-hmm.

It’s really cool to think about what you could do. Like in this case, we know if you put a period at the end of a sentence, or a question mark, there’s things that we can do to make that sound natural.

KS: Mm-hmm. So your clients would be initially journalists, or people who are creating audio products.

Right.

KS: Then this is something you’ve been interested in a long time. You and I had a very interesting discussion in Germany once about you wanting to do group source … I think it was group sourcing journalism or protection … is it out of that interest in journalism? You actually like journalists, I think, secretly.

Why do you think I don’t like journalists?

KS: I just, I … because sometimes you’re quite hostile, but go ahead.

I can’t imagine what you’re referring to.

KS: You’re funny hostile, but hostile nonetheless.

When I was … I was actually working on another startup idea when I was in school for public policy. I still want to go back and do it. It was called Policy Tree, and the idea was you would take the bait and break it down into the atomic assertions and show them on a flow chart where you would have some like … at the time, it was like, we should invade Iraq. Then, stemming from that, in green and red bubbles or leafs, would be the arguments for and against and then more arguments would stem from that, and so on. It wasn’t like this public forum for debate. The idea was that it was aggregating all of the things that people were saying in the popular media outlets. Breaking it down in a way that …

KS: So you can see the arguments.

To make sense of it all.

KS: Right, right.

It’s been a fascination of mine for a long time and I think audio as a medium is a … I can’t believe what I’m about to say, because I’m talking to Casey, but it has an empathy bias, or an empathy handicap where there’s something about not needing to stare at someone’s ugly face that makes it easier to relate to them.

KS: Yeah. I would agree with you. I think it has a different … I mean, when they’re on television, it creates a circus-like effect, and audio is much more intimate.

Yeah. The reason I said I can’t believe I’m going to say that is I feel like every startup founder finds a way to talk about how their company is making the world more empathetic. It must be even though the fact that I’m aware of it, I can’t stop myself.

KS: Talk more about this journalism, because this would be an aid to creating businesses, media businesses, or helping people do media businesses cheaper, or bring down the costs for doing them, because a lot of these things are not prohibitively expensive necessarily, but they’re prohibitively creative, I guess. You can’t be as creative as you want if you’re not in charge.

Yeah. Yeah, yeah. I feel like a lot of the …

KS: Word processing has changed everything for journalism.

Right, totally. The beauty of the word processor is it’s kind of like they built it. You know, even the typewriters, the basic concept, they built it and if that’s your medium, you learn the tool and you’re done. Everything else in your career is about evolving your craft.

KS: Right.

Being more effective at getting the ideas in your head down onto paper, and it doesn’t work that way with audio or video. You have to constantly be invested in learning the latest tools. Our goal is to make it as intuitive as a word processor, but also a lot of the creative tools that have come along for people are about, oh you press a button and all of a sudden we’ll cut your video in a way that’s magical, and we’ll put background music, and we’ll do all this stuff automatically, but I think there’s still …

KS: Automagically.

Automagically, yeah, I love that. I love that. There’s still a role for craft and intention, and that’s the kind of media production that we’re focused on, is people that have a specific idea of what they want to create and they just want tools that get things out of their way so they can express that vision more effectively.

CN: Let’s talk about video. One of the big trends this year was the pivot to video for all of us media types. We were once more heavily invested in other forms but then certain other platforms started demanding video media in a huge way. It’s incredibly labor intensive, time intensive, it just costs a lot of money and time to make video. What can you do to make that faster for these companies? If not now, then eventually.

I don’t …

KS: You’re starting with audio.

Yeah, we’re starting with audio because audio is part of video.

CN: I like to dream though, Andrew, I’m a big dreamer.

KS: I like audio.

I don’t know how far we can take that. I know that we had … What got us thinking about video was at one point, one of Errol Morris’s editors came through our office and he had just finished editing 30 hours of Donald Rumsfeld interviews for that movie, and he was just begging us to do a video version because of the amount of time it would have saved him instead of scrolling through a timeline, looking at a talking head. To be able to search by a script and do everything in that way. There’s some really incredible implications of moving to this word processor format.

The way that … we haven’t released it yet, but in the next … our near-term focus is doing a multi-track version where I can add music and multiple tracks of voice. And the way that works is if I want to add a music file to my piece, I just drag and drop it at the word where I want it to start playing, and it starts playing. So, that’s an example of how well this idea of the word processor, or this UI paradigm …

KS: You can put pictures in and stuff like that, the way you do.

Yeah, totally, totally.

KS: All right, we’re here with Andrew Mason. We’re talking about his new company, Descript, which is, what are you calling it, what’s your little two-second word description. Audio software company?

Yeah, we call it an audio word processor.

KS: Audio word processor. When we get back, we’re going to talk more about it and also, where he thinks things are going in the tech space. I know you have some opinions, Andrew.

I’m not …

KS: All right then, fine. We won’t talk about that. We’ll talk about your baby and everything else. We’re also here with Casey Newton on Recode Decode.

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KS: We’re here on Recode Decode with the obstreperous Andrew Mason, who is difficult as usual despite the fact that I’m trying to hawk his new company, Descript. We were just talking about it. We’re here with Casey Newton from The Verge, who is my co-host over several episodes.

CN: We’re having a great time.

KS: We’re having a great time. I want to get back to this concept of where audio is going because it has boomed in terms of podcasts, and in terms of where you were into it doing Detour, your last company. You talked about the intimacy of it. It really is. It’s been something that’s worked very well with mobile. Where do you see that industry going overall, the audio industry, because I think it’s a bigger one than people realize.

Yeah.

KS: Just sort of a bold thought, I suppose.

What gets me excited is just how much more time of the day seems to be coming accessible to audio-first experiences. Obviously mobile phones are enabling that, things like carplay are enabling that. I think we’ll look back and see airpods and really great wireless headphones as another kind of step-function enabler of audio, where all of a sudden this relatively simple innovation of taking the wires away reduces the friction of having headphones with you and taking them out of your pocket and putting them in your ears, right?

KS: Mm-hmm.

I mean, if I’m going now to take a walk and get a coffee, I can take my headphones out. I have them with me all the time, which wasn’t always the case. Even when I did have them with me, you have to untangle them, it’s stupid stuff, right? But it’s often like solving the stupid little things that makes all the difference. I think all of that is just getting us to the point where audio has a lot of head room.

KS: Right, because you could also have our heads up. We could look around at the same time you’re listening.

There’s just these incredible examples of content that don’t exist anywhere else.

KS: What do you like?

I like Sam Harris’s podcast. I’ve learned more from that than anything I can remember in recent memory, because he has these three-hour-long incredibly nuanced conversations with people. Even the same kind of format as this, right, where people can just have a conversation and it’s not about just pulling out one quote.

KS: Mm-hmm.

I think stuff like that is really exciting. Stuff like The Daily. Do you guys listen to The Daily?

CN: Yeah.

KS: Mm-hmm. Yeah, we just had Michael Barbaro on.

Yeah, like oh my God. The Daily, for me, you listen to something like … You think about how you read about gun violence in the press and you might go around and read 15 minutes of articles and you just feel like shit and the world is hell in a hand-basket and everybody’s stupid. Then you listen to an episode of The Daily and they interview somebody that you just couldn’t agree less with, but yet you walk away with an appreciation for their sincerity and the fact that they’re not evil, crazy or stupid. They’re doing what they think the right thing is. I think there’s just something about that medium and their approach. It’s weird listening to The Daily. You listen to an episode and you walk away feeling good.

KS: Mm-hmm.

You understand things a little bit better. That’s not how you’re used to feeling.

KS: Well, does it have to do with the intimacy of being … you’re pummeled everyday with visuals, everything’s visual. Either it’s Twitter, reading visual, or imagery. It’s exhausting and not understandable.

Right.

KS: I think audio creates an intimacy. I do find it interesting, the people that talk — and you’ll find this, Casey — the people that talk to me who love the podcasts are a very different fan base.

Mm-hmm.

KS: They almost love you. It’s really, they feel … I may be putting it in their ear. No, it’s …

How’s that different?

KS: Well, they don’t love you. In the other, they don’t. They’re sort of like, “That annoyed me,” or, “You pissed me off.” Even if they don’t agree, they’re … first of all, it’s much more civil. I know it sounds crazy, but it’s much … the way you present yourself, I suppose. I’m not like Rush Limbaugh going “ahh!” like that all the time, but it has evolved into a much more thoughtful medium, I guess. Where people can actually think in long sentences.

CN: I also think one of the only times I feel relaxed in this day and age is when I’m having a conversation with someone, right? Where you’re just able to get a different point of view. Where you are able to wander for a really long time. I often think the longer podcasts are often better, when in print a longer story is often, usually, not better.

KS: Sometimes, yeah. You’re right. And also, it’s evolved from talk radio, which was very screamy. How does that work, for example, when you put talk radio on your thing? Because that’s just a lot of screaming.

I don’t think those are super highly edited. I think they’re broadcast live, it may not be the best use case for it, or maybe they’ll find ways to edit in some more screams.

KS: Yeah, or something like that. But it has evolved in that way. When you’re talking about this business, you’ve got $5 million. What are you charging for the software, what is the … is it a subscription service?

Yeah. It’ll be $20 a month right now. For early adopters, it’s $10 a month. Then we charge per minute for transcription, 7 cents a minute. We also have a version that has no monthly fee for people that just want to use the transcription service. It’s 15 cents a minute for that version. You can download it and get 30 free minutes of transcription and demo all the audio editing features. We also have a promo going where your transcript is guaranteed in fiv3 minutes or less or your pizza is free.

KS: Oh, all right.

Yup.

CN: When you’re doing the transcriptions, are you relying on humans at all for this? Do humans ever touch the audio?

No. Humans don’t touch the audio, it’s all automated.

CN: It’s all algorithms.

Yeah.

CN: All right.

Although we do have a white-glove version too if you’re not happy with the quality of … because there’s still, for certain types of audio … for something like this, the transcription would be great. It’s probably 98 percent accurate, but if you’re recording on an iPhone in a …

KS: Noisy place.

In a cavernous conference room and four people are having a conversation, it’s going to be lower, and we have human powered transcription for those people.

KS: So they listen to it also. You do it, and then they …

Yeah, that’s how it works.

KS: Yeah, I figured. When you think about this, you’re going to have a subscription service, who are your customers then? Are you going to aim at media, you’re aiming at who?

People that need transcription services and people who are working with audio as their medium.

KS: The market now, again, there’s just transcription services that I can think of, and then there’s audio editing software.

Right, so between all of those professional creative tools, there’s millions of people that are using those things already, so the hope is that some of them will also use Descript and that we can increase the size of the market by creating a tool that makes it easier and more accessible to use this stuff.

CN: Are you interested in other parts of the podcast tech stack, like all the things you would need to create a podcast, whether it’s the actual recording software or hosting or distribution. Does any of that interest you over time?

Should we be? Is it a pain?

CN: Yes, there are a shocking number of podcasters still using Garage Band, a tool that was made primarily for making …

That I think we’re very interested in, that part of it.

CN: Yeah.

We’ll be at a point within a relatively short period of time where you can produce a soup-to-nuts podcast in Descript.

KS: Mm-hmm. In Descript, doing this. All the different things including music and whatever else you want to use.

Yeah.

KS: How many people do you have running this?

Eight.

KS: Eight. Small.

Small.

KS: How are you going to run this differently? Will there be horses and things like that?

How am I going to run it differently than …

KS: Than Groupon.

Than Groupon? Man, that’s … in a lot of ways, I guess. But …

KS: What have we learned, Andrew? What is your learning lessons?

Most of the things that I’ve learned are relatively banal. They’re things that we could pick up in numerable business books, and they’ll express it better than I would. It’s about how to be a … managing people is not an innate skill. It’s like learning to golf or something. It just takes practice and learning from better people. I learned a lot over the course of my time at Groupon and I continue to learn. I don’t know, I don’t have anything super …

KS: I’m trying to get to the wider venture space and how you look at Silicon Valley because, again, you’ve had an unusual relationship with them, I would say. I mean that you were not highly impressed by the scene. You weren’t a scene maker. You’re not someone who shows up everywhere.

CN: And you didn’t …

I like being invited to things. I just don’t like going.

CN: You didn’t raise capital for Detour, did you?

I didn’t.

CN: Yeah.

Part of that was because I always knew it was … I take it very seriously, the idea of being a steward of other people’s money, and I didn’t want to take that on. It always felt experimental in a lot of ways.

KS: Mm-hmm.

I thought it could be a really big business, don’t get me wrong. But I wanted a little bit of meat on the bone before I asked somebody to take a bet on me on that. I also just wanted a little bit of a break from working with investors. For the most part, my experience was good. My experience with the investors out here was largely good, but I just wanted to see what it would be like to not have to think about that. I actually miss it now.

CN: I was going to ask, what was different about this company that made you say, “I’m going to go play in the VC world again”?

Two things. One is we’ve had this product in beta for a while. We have people using it. We really feel pretty strongly that there’s a there there. We feel better about product market fit. It doesn’t feel as experimental. It’s like a beautiful thing to be building just a tool that exists in the tool chain, instead of making a bet that, oh I’m going to invent this new consumer behavior.

KS: Mm-hmm.

The other thing is, I like having somebody on the team who’s super smart and just relentlessly focused on the financial outcome to counterbalance the focus on how to come up with some ridiculous horse-involved scheme.

KS: I don’t think you’re going to do that. But how do you look at the Silicon Valley … Who’s the venturist, is it Chris Dickson, or who is it?

Alex Rampell.

KS: Oh, interesting.

Yeah. Do you know him?

KS: Yes, I do.

He’s awesome.

KS: Yeah. How do you look at this … how are you thinking of this experience, though? That’s what I want to know. How do you look at Silicon Valley now? You live here, you’ve had a lovely child, you’re still where you lived before in the city.

Yeah.

KS: I think moving here, you were one of the people I wouldn’t have ever thought would come to the San Francisco scene.

Oh, really?

KS: Yeah. I don’t know why. You’re too good for it.

Why do you think that is?

KS: You’re not like other entrepreneurs. That’s a compliment, trust me. They really irritate me, most of them. They just, you know, they’re on the make, they’re just always …

You’re going to be disappointed in my answer. I love it here.

KS: Do you? Okay, tell me why. I’m not disappointed. I want to know how you look at it. I don’t care what you think.

The people out here are so smart and so engaging and you really feel … like to complain about it out here, I feel like it’s 450 BC and I’m in the Roman forum and it’s like, “What the? That Socrates guy is such an asshole. He’s just going on and on and bloviating.” For better or worse, we’re in a special place in a very special moment of time.

KS: That is a fair point. Socrates still could have been an asshole, but go ahead.

Right.

KS: He probably was.

It just feels really exciting to be out here and the quality of life. The weather. Having lived in Chicago, you know, Casey, it’s like you come out here and you’re like, do those people know that this place exists? That you don’t have to be freezing your ass off? It’s really simple and trite to say that it’s cold in Chicago, but it’s fucking cold in Chicago.

KS: It is.

CN: Also, the thing I’ve never gotten over about Chicago is the way that a sunny day is an event there on the order of a Federal holiday.

KS: It is such a nice sunny day there.

CN: Yeah.

KS: They do have nice sunny days.

They do. There’s wonderful things about it. The people are wonderful but …

KS: I love the architecture. I love Chicago.

CN: That’s great. Chicago just needs a big industry. That’s its problem. Chicago just, you know …

KS: It’s such a beautiful city. I think it’s such a beautiful city. So, you like living here. You enjoyed moving here.

Yeah, it’s been great.

KS: Yeah. When you look out on the scene, and we’re going to finish up talking about … where do you see tech right now, and try to be a big thinker here. Try hard. Do you …

I hate doing big thinking.

KS: Then don’t. Think small then. How do you look … Where are we?

You’ll have to direct me a little bit more.

KS: Where are we in the innovation cycle, if you think there is such a thing?

I’m so bored by this question.

KS: All right. All right then.

CN: Is there a small thing out there that …

KS: Let’s then talk about “The Patriot” and why you don’t like it.

Did you really watch “The Patriot”?

KS: I love “The Patriot.” I hate Mel Gibson, but I love “The Patriot.” It’s really bad.

I mean, I …

KS: Anytime it’s on, I totally watch it.

It’s been 20 years since I watched it, so I’m going to watch it again.

KS: You need to watch it.

I’ll give it a second chance.

KS: Heath Ledger is in it.

I respect your judgment.

KS: It’s so good.

CN: All I remember is that there’s a loose nuclear weapon.

KS: What? No.

CN: No wait, that’s “Broken Arrow.”

KS: Yes.

CN: What’s “The Patriot” about?

You said that earlier and I was like, okay, nuclear weapon. It’s about the Revolutionary War.

KS: The Revolutionary War.

CN: Oh, that’s a totally different movie.

KS: Mel has a little thing in his hair. Whatever he wears …

CN: Wow.

A ponytail.

KS: Ponytail.

CN: Such a different time.

KS: He has a ponytail and he runs around with a gun and then there’s this really bad British guy.

I’m going to watch it again and I’m going to send you notes back.

KS: A really bad British guy.

CN: Is it just American “Braveheart” basically?

KS: Yes.

Yes.

KS: But better. “Braveheart” is …

It’s like, how do I keep this “Braveheart” thing going?

KS: Yes. But it’s much better. It’s much better. It’s so good and it’s very sad in parts.

CN: All right, it sounds like we’re having a movie night.

KS: It’s really good. It’s sad, too. It goes there on the sad, don’t you think?

I don’t … it was 20 years ago.

KS: Oh my God.

I didn’t bring it up.

KS: I literally just saw it the other night

I wasn’t prepared for somebody who was such a “Patriot” aficionado.

KS: But why don’t you like it? You were saying you didn’t like “Hamilton,” you didn’t like …

Oh, no. Why did you do that?

KS: Because you won’t answer my innovation question.

Why did you tell people I didn’t like “Hamilton”?

KS: We have five more minutes and I want to know how you’re doing.

I think it’s my problem that I didn’t like “Hamilton,” to be clear. I don’t know, I just think …

KS: All right, what do you think of Trump?

I don’t know. What do you guys think?

KS: Are you political? I don’t like him.

What is it about …

KS: Every single part.

Yeah.

KS: Yeah.

Well, that’s interesting. I haven’t heard that.

KS: I think he’s entertaining, but in a really awful way.

Yeah. I’m on the edge, you know. I keep on … I see both sides and I can’t make up my mind. These people need to write some more articles about it.

CN: Undecided voter, Andrew Mason.

KS: Undecided voter, Andrew Mason. So, you’re going to run this? You’re going to hope it gets to be enormous and makes a ton of money?

Yeah.

KS: What is your valuation now?

It’s a little pre-launch product.

KS: Pre-launch.

To utter that out loud would be a disservice to your listeners.

KS: Can they get it? They can get it now.

They can get the app, yeah. Starting … we launched on Tuesday the 12th and it is now after Tuesday the 12th.

KS: And it’s available on what platform?

Descript.com. It’s on Mac for now.

KS: Okay.

We’re working on web support.

KS: Okay.

Where we are right now, the kind of audio editing, there’s not really any good examples of web-based technology doing it.

KS: Right, and then people can do these on the fly or not? You could have people in foreign countries doing a lot of your reports, right?

For sure, yeah. We only support English right now.

KS: Right.

So that’ll get in the way, but more language is coming.

KS: What about a mobile version?

It’s just Mac.

KS: It’s just Mac.

You can also … oh, another cool thing you can do is you can publish your compositions that you create. Your audio-linked transcripts to the web and then other people can comment on them, like Google Docs style, so that’s for anybody that’s reviewing audio or doing it in a collaborative environment with other people. It’s a really awesome way to get feedback.

CN: So, as I’m putting my podcasts together, I could let my editor sit, actually look at the transcript, and just be like, “This is where it went completely off the rails.”

Right, exactly.

KS: So many places. All right, I have one more question. When you look at Groupon now, what do you think about this being run in Chicago?

I don’t look at it that closely. I thought you might ask me this, and I remember coming up with that answer. It took a lot of work, but also just realizing how untrue it would sound.

KS: Yeah.

But it’s actually true. I don’t really know what’s going on. I do Google Groupon and I look for news, but there’s no news. Everybody I know is gone.

KS: Right, yeah. Some companies are like that.

Yeah.

KS: But you’re not like, my time as CEO. You’re the opposite of Travis Kalanick. You don’t want to get back in there, into the big game.

No.

KS: No.

No. Yeah, I’m good.

KS: Okay. Do you have any more questions for our lovely Andrew Mason?

CN: My final question was, you mentioned earlier that you had recorded this album of inspirational business music. I just wondered if you felt like you had a follow-up in you. I was wondering if there’s an album of business protest music, where you could talk about how important it is to be able to keep your profits offshore, that kind of thing?

KS: I enjoyed your business …

Yeah, I mean, you know the impact has been humbling. It’s just, I look around …

KS: That Grammy was amazing.

Just the impact in the business world. Some things it’s hard to measure by sales, or just the quantity. It’s the quality. I read an article about a Twitter all-hands meeting, where they were talking about how, “Look guys. We need to turn this around and you know who’s going to do it? We are. Nobody else is going to get in our way. Nobody’s going to help us get there.” Of course, I have a track on my album called “It’s Up To Us.”

KS: I remember.

That’s where they took those ideas. That was really humbling. Just in general, seeing how the economy has been growing and just up and to the right, since the album came out. I don’t want to do it again and be like David Bowie or Elton John, where it’s just …

KS: The same thing.

I’m more like a Billy Joel. You just quit while you’re ahead.

KS: Andrew Mason, you’re very funny. I do miss you, I have to say. Not that much.

Miss you, too.

KS: Not that much.

Yeah, let’s do this again in three years.

KS: For your next business. No, I like this idea, I have to tell you.

You liked the last idea too. A lot of good it did me.

KS: I liked it. I did think it had limited capabilities because of the platform.

Yeah. No, that’s legit.

KS: You had to be … it was quirky. It was quirky tours by Andrew, essentially, but it would have been cool if you could’ve made a platform for people, and then anybody could have made. You know what I mean?

Well, maybe you should run the company next time, Kara.

KS: No. No thank you. I’m doing just fine here with Casey Newton. We really enjoy it. I’m an entrepreneur sometimes, every now and again. Anyway, it’s been totally enjoyable having you. I forgot how much I really did enjoy talking to you and I think I was completely right about you not being interviewed by a 7-year-old when you were a public company CEO, and I’m sticking with that.

Well, I still got fired, so …

KS: You got fired later.

I would have rather had done that.

KS: Yes. Oh, you would have?

Yeah, sure.

KS: You can do that to this day.

Okay.

KS: All right. Andrew Mason, it was great talking to you.

Thank you for having me, it was a lot of fun.

KS: Thanks for coming on the show and you’re fantastic and Casey, thank you for co-hosting.

CN: No, it was my pleasure.

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Indian e-commerce giant Flipkart has  unveiled its ‘artificial intelligence (AI) For India’ programme to give a push to its AI ambitions and keep up with rivals Amazon and Alibaba.

The new AI team will be headed by chief data scientist Mayur Datar, with Flipkart co-founder Sachin Bansal and Flipkart chief executive Kalyan Krishnamurthy directly working on some key projects.

In an interview, Bansal said that AI will become a significant driving force of innovation and change across varied sectors in the Indian economy and emphasised  why India needs homegrown AI solutions.

He said: “Even before AI came into the picture, we’ve seen that you can’t just apply global solutions to Indian problems. You have to think of Indian problems from first principles and then come up with solutions, whether they are visible — like Cash-on-Delivery and payments — or in the background — like warehousing and logistics. For example, we have unique problems in the payments space for which UPI, which is a very Indian innovation, has worked wonders.”

As to how Flipkart is positioned to tackle some of these problems, he said: “Flipkart also has a core tech and innovation DNA, coupled with the best product engineering team in India. We’re investing in cloud and technology infrastructure to build scalable computing capabilities in ecommerce, so we’re positioned very well to tackle problems head on. Ultimately, I believe data, talent and infrastructure are critical factors to be successful in AI — and Flipkart has all three in abundance.”

Alibaba is already using AI to create tailor-made shopping experiences for consumers and targeted marketing for brands as it seeks to “empower people in the virtual economy”. Alibaba Cloud is set to open its first data centre in India to aid SMEs.

Meanwhile, Flipkart’s rival Amazon too, has intensified its AI plans globally. It recently announced Amazon SageMaker, which lets companies build and quickly train machine learning algorithms and Amazon Rekognition Video, which uses AI to detect objects and faces in customers’ video content. 

 

 

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The Liverpool-based creators of national mental health database The Hub of Hope  have launched a poster campaign to raise awareness of the vital resource in the lead-up to Christmas 2017, six months on from its launch.

Mashbo, creative designers and trustees of Chasing the Stigma (CTS) – the charity behind the web-based app – have funded the fly poster campaign, which will promote the Hub of Hope in Liverpool city centre using funds ordinarily reserved for client Christmas cards and gifts.

The 50 posters carry details on how to access support via the resource, alongside the striking yet simple message that ‘the doors are open’ to thousands of grassroots and national organisations 24/7 throughout the Christmas period.

The decision to launch the campaign was made based on research from multiple sources including Rethink Mental Health, which revealed that the pressure to be cheerful and splash out on presents can cause mental strain, exacerbating symptoms such as panic attacks, depression, low moods, sleeping problems and cause thoughts of self-harm and suicide.

Since its launch in July 2017 the web-based app, which brings help and support together for all mental health issues in one place, has received almost 10,000 unique visits from 751 different cities and towns across 59 countries.

The digital platform has been designed to revolutionise the way people seek help for their mental health difficulties by using the device’s location to discover the nearest services to its user, as well as national organisations. The campaign reiterates the message from CTS Founder and Liverpool comedian, Jake Mills that “there is always hope”.

Jake said: “Christmas can be an extremely difficult time, especially for those who are affected by mental health issues.

“Since its launch in July we have seen an amazing response to the Hub of Hope and the Christmas we want to ensure that people know there is a place they can go to easily find access to free and immediate help available.”

The launch of the poster campaign also comes in the same week of the first anniversary of CTS becoming a limited charity.

Gavin Sherratt, managing director of Mashbo, said: “The initial response to the Hub of Hope has been incredible and we are proud to be lending even further support to this fantastic resource. As a business we are focused on using technology for good and the Hub of Hope has been a fantastic way for our team to use its skills to really help people, especially at this difficult time of year.”

The Hub of Hope database, which the first of its kind in the UK, has been publicly commended by mental health charities such as the Samaritans and public figures including Jeremy Corbyn and Davina McCall.

The web app is free to use and also free for organisations to register.

 

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Amazon is gearing up to be the next big player in search for 2018, predict industry experts

“We are all kind of pretending to know what we’re doing with Amazon, but no one has really become an expert yet. I’ve tried Alexa. It’s interesting and it’s there in your house listening. That’s an amazing experience,” according to Greenlight Digital director of paid media, Hannah Kimuyu.

“Earlier this year, I was at the annual Independent agency summit in New York and Google stood up and said that they’re worried about Amazon. That’s the first time they’ve ever said they’re concerned about anyone.”

Many believe that voice search will be making leaps in the new year, MediaCom senior executive officer, Edward Cowel does not dispute this: “2018 isn’t going to be the year for voice search, that will be further down the line. The big trend for next year is the search industry understanding their audiences more and from an organic search perspective, that will feed into what Google does around artificial intelligence, personalisation and results.

“It also will affect us from a local search perspective with things becoming increasingly localised and personalised. And on the paid search side as well. From what I saw as a judge of The Drum Search Awards, was people really using audience data in very smart ways, not just to target key phrases but to really understand who they are targeting.”

The Drum Search Awards showcases data-driven work driving performance across screens from agencies, search engines, technology providers and all other outfits active in the space. The awards are open to entries for 2018, with the deadline fast approaching on Friday February 2.

Jessica Leader, client partner at Propellernet, the winner of the Grand Prix and best use of content awards, said: “Winning a Drum award has been an incredible accolade for us at Propellernet, and winning the Grand Prix even better! We’re incredibly proud. It’s helped to showcase our agency’s talent, insight-led creative approach and our impactful results.

“It has been a fantastic confirmation for existing clients, a great endorsement for new prospects, but most importantly, motivated and rewarded our incredible team.”

Founder of VCCP Media and chairman of the 2017 judging panel, Paul Mead,  believes that the full potential of search is yet to be realised. He said: “Search is a point of connection between all of a brands activities and one of the most effective ways to measure the health of a business. It is therefore vital that we provide a platform to promote this and to celebrate the amazing thinking and creativity of the talent in the UK search industry.”

The Search Awards return for 2018 to recognise and reward the very best in the industry across both SEO and PPC. These awards create collaboration across the whole industry bringing together search engines, agencies, technology providers and all other businesses and brands that contribute to the search industry.

What categories will you enter? There is a wide variety of search areas you can choose, including: performance agency of the year, most innovative search campaign, best use of connected devices, biddable team of the year, organic team of the year and many more. 

To enter, submit your application before Friday February 2.

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As we enter the era of mass personalisation, tempered by strict data protection rules, we at iCrossing gaze into our crystal ball to reveal eight predictions for digital advertising in 2018. 

1. The Duopoly will finally be breached

Google and Facebook have ruled the digital advertising roost for years, hoovering up nearly all the growth this year. After numerous failed attempts by pure plays to breach the duopoly, Amazon will emerge in 2018 as the realistic challenger. When it comes to searching for products, Amazon has no equal – and over 70% of us search Amazon at some point during a purchase journey.

It’s the rich consumer behaviour data that powers advanced targeting through Amazon’s digital signal processing (DSP) onto unique ad placement that will attract share of spend – plus, of course, the invaluable sales and data reporting so craved by the advertisers.

Expect 2018 to be the first of several big years for Amazon, as the duopoly becomes an oligopoly for the next decade.

2. Watch out for a high profile bust after a short GDPR honeymoon

Friday 25 May 2018 will be a date etched in the history of digital advertising. When the day dawns, the General Data Protection Review (GDPR) legislation becomes law across Europe – and the UK has opted in. That means we have to gain specific, unambiguous consent to use personal data – including cookies, IP addresses, device IDs and so on. It all becomes personal data.

And while the likes of Amazon, Google and Facebook are sitting quite pretty with tens of millions of registered users, the opposite is true for the swathes of ad tech businesses most people have never heard of. I expect a short regulatory honeymoon period from the Information Commissioner’s Office, before investigations begin in earnest. We could see a high profile bust in the autumn.

3. Could the Government finally announce legislation over harmful and illegal content?

This year has been an annus horribilis for brand safety exposures, from Jihadi websites, to fake news and even child abuse. So it’s no wonder marketers cite brand safety as their number one concern. This month the Prime Minister’s independent watchdog, The Committee on Standards in Public Life (CSPL) recommended that social media sites be recast as publishers to stop them describing themselves as platforms with limited control over the millions of messages and videos that they host.

This would have huge implications, and any future legislation could lead to fines or prosecution for not complying with new rules surrounding control of content and take-down. Watch this space over the next two years.

4. Voice search reaches early majority

Voice search has already reached 20% of all queries. That’s critical mass in my business book, so we must be heading for the early majority on the old bell curve. With Google, Siri, Alexa and Cortana there’s a whole gang of virtual assistants taking our commands, and getting smarter in the process.

This will have a positive impact on our SEO strategies in 2018, as we optimise and generate content to respond to longer (and sometimes surprising) consumer voice queries. For those who do it well, this should become a seamless element of the modern brand experience 

5. Chatbots take over the sales and service front line

Businesses successfully implementing chatbots to help answer consumers’ questions in real time have realised great efficiencies in customer service and sales conversion. And it turns out customers love the convenience of chatting with a virtual assistant – just be sure yours is an intelligent one who knows when to hand over to a real human being if the questions get harder.

Your customers expect excellent, fast service and in 2018 we’re going to witness the emergence of some seriously talented virtual helpers.

6. AI rules ‘mass personalisation’ targeting revolution.

Once upon a time, demographic targeting was the height of sophistication. Now we’re entering the era of advanced audience insights. Not just time and place, but known consumer likes and dislikes, search, social and purchase history, even preferred formats.

It’s that ‘big data’ we kept talking about five years ago that can now be analysed in nanoseconds with artificial intelligence to customise messages in the moment. Welcome to the era of mass personalisation.

7. Wholesale shift of programmatic to private marketplace.

Programmatic ad trading is highly advanced in the UK, and in 2018 we expect a whopping 80% of display spend to pass through the trading desks. In the early days, nearly all the programmatic spend was on open exchanges, but as the market matured and the big publishers started to take part we saw growth in the Private Marketplace (PMP) offering premium inventory.

While the open exchanges gave us access to millions of consumers on thousands of sites at low CPMs, the brand safety and fraud risks were higher. Witness then the inexorable rise of the PMP which should cater for around 75% of programmatic spend in 2018, with growth formats in video, native and high impact display. Again – it’s all about the brand experience.

8. Static banners die off as video becomes all-pervasive.

The first ever online ad was a banner for AT&T on www.hotwired.com back in 1994, and for almost 20 years the majority of digital display spend went on banners, skyscrapers and things called ‘mid-page units’. These formats have not only been in decline for the last few years, but the far more dynamic and engaging video, social, native and paid content ads are due to account for three quarters of online display spend. All very much better for the consumer experience, and improved brand engagement for the marketer. Which also means…

A bonus prediction… CPMs will go back up (at last).

OK – I’m sticking my neck out for the publishers here. After years of decline, following not just the recession, but a veritable tsunami of cheap content available on the exchanges – which led to ad blocking, ad fraud and brand safety issues – we took a long look at what actually worked and what the consumer might actually accept.

So, given the above predictions for the continuing growth of video, content and native, traded on private marketplaces; and the associated declines for static display formats and spend on open exchanges, the outlook for CPMs is…. pretty encouraging.

So there we are. As always, the New Year is full of exciting and innovative opportunities, but it’s also tinged with tough challenges as the digital ad industry continues to mature and take the lion’s share of media budgets. We at iCrossing are all over this stuff, but, like everyone else at this time of year, we’ll press pause for a few days before whacking the fast forward button in 2018.

Guy Phillipson is the chairman at iCrossing UK and the former chief executive officer at the Internet Advertising Bureau UK.

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On stage at Edinburgh’s Leith Theatre one evening last week, the Scottish stand-up comedian Vladimir McTavish was playing his part in funding the rise of an alternative UK news media.

McTavish, a popular act on the Edinburgh Fringe, was part of the bill at the Festive Ferret Fundraiser, an event generating income for the investigative journalism website the Ferret, which launched two years ago and is already having significant impact on Scottish politics and society.

Backed by nearly 700 paying subscribers, who have input on the subjects that the site’s journalists probe, the Ferret went undercover to expose a neo-Nazi backed group, Scottish Dawn; it revealed how Donald Trump received a £110,000 hand-out from Scottish taxpayers; it disclosed how Police Scotland extracted data from 36,000 private mobile phones; and it ran a ten-story series on the potential impact of fracking.

Nearly 400 miles away another member of the new publishing breed, the Bristol Cable, lays out its investigative reporting on a sharp website, and on the 36 pages of a monthly magazine produced on high-quality paper stock and distributed throughout the city. The Bristol Cable is the product of an 1,800-strong co-operative who contribute an average £2.70-a-month and are invited to monthly meetings around Bristol to discuss the progress of the three-year-old project and where it should be directing its editorial resources.

The Cable’s impact on Bristol life has been considerable, affecting council policy on housing developments and helping to persuade Bristol University to stop investing in fossil fuels. It also uncovered the use by local police of eavesdropping IMSI-catcher devices used to intercept mobile phone messages, prompting a national news story. Operating out of an old factory building (now a community project space called ‘The People’s Republic of Stokes Croft’), it is also backed by the Chicago-based Reva & David Logan Foundation, a philanthropic trust which gives grants to social justice and investigative journalism projects.

Its various income streams, including five pages of print ads sourced by Ethical Media Sales & Marketing, an agency dedicated to social justice, allow the Bristol Cable to sustain the equivalent of six full-time jobs across its team of editorial ‘co-ordinators’ and to pay its large pool of ‘contributors’ for their work on articles. The team has won a reputation for its data journalism.

But projects as ambitious as the Ferret and the Bristol Cable are isolated examples in the landscape of UK news media.

As we near the end of 2017, the overwhelming majority of news produced in the UK – including that on social media – is still the output of organisations founded before the digital revolution. The emergence of digital-native news brands has been limited in a market where audience loyalties to public broadcasters and well-established newspapers run deep.

In the United States, venture capitalists and legacy media companies have poured money into new digital news initiatives which have become part of popular culture, from trailblazers such as the Drudge Report and Slate to the likes of Vox and Mic. Some, such as HuffPost and BuzzFeed, are now major international news operations.

But the economic signals for digital news media in general have not been good. BuzzFeed has this month made major job cuts, including to its UK newsroom. Its founder, Jonah Peretti, previously a big supporter of Facebook as a distribution platform, has complained bitterly of the social media giant’s failure to share its advertising revenues with companies that provide it with content. The female-focused publisher Refinery29 last week became the latest in a long line of digital publishers to lay off staff this year.

In such a climate, projects like the Ferret and the Bristol Cable – and other UK operations that choose to emulate them – face a challenging future. But both have been careful to limit their dependency on commercial backing, in fact, neither publisher carries digital advertising.

“We had to do something that made us different, more credible, more transparent….,” explains Rob Edwards, one of the founders of the Ferret. “We had long discussions and we decided we didn’t want to use ads, we wanted to raise money by subscriptions and grants.”

Lorna Stephenson, a member of the editorial team at the Bristol Cable, says that digital ad revenues have fallen so low that “there’s almost no point” in the project even looking for clients. Furthermore, the project has an “advertising charter which is voted on and agreed by members and is quite strict”, taking business only from “local and ethical businesses”. So the site is ad-free.

The Bristol Cable launched in both digital and print form in October 2014 after a series of meetings attended by journalists and other interested parties. “People liked the idea of co-creation of the media and they liked the idea of it being independent,” Stephenson says.

The motivation for the Ferret, which was first mooted in 2012, was to create a platform for the kind of probing, in-depth reporting that the founders felt was in demise. “We were very conscious that, with the malaise that’s causing the decline of the mainstream media, investigative journalism was suffering,” Edwards says. “We all felt very strongly that a modern democracy like Scotland was incomplete without proper investigative journalism to hold power to account.”

The Ferret is run by a board of five journalists (Edwards is also the environment editor of the Sunday Herald, a Glasgow-based national Scottish paper) and four ‘reader’ board members. As well as having no advertising, it opted for a co-operative model “to show we were not-for-profit and were working together and that we were not run by some distant corporation or some media mogul”.

It publishes an annual report of its finances and editorial record. The latest records show that it has published over 330 stories and now has a base of 6,000 people signed up to receive push notifications of latest articles.

Its subscriber base – paying £3-a-month for access to a website that allows three articles free per month – is currently insufficient to sustain full-time employment of journalists or an office (the Ferret’s team mostly communicate via an online chat group). Contributors are paid £110-a-day for their journalism.

Edwards says that the Ferret is anticipating new income from grants. It already has a €50,000 grant from Google’s Digital News Initiative which funds the Ferret Fact Service, compiled by Alastair Brian. The service, which typically analyses the veracity of claims made by Scottish politicians and pundits, is also published in the Daily Record newspaper.

The Ferret might be an alternative approach to producing news but Edwards says that it is not intended to undermine existing media. It has partnered on stories with many news outlets, including the Guardian, the Times and the BBC. And it recently co-ordinated a complaint by 23 journalists from different news outlets over the Scottish Government’s failings in responding to Freedom of Information (FoI) requests.

What marks the Ferret out is its openness, publishing its FoI documents and other material, provided it doesn’t reveal confidential sources. “We try to be as transparent as possible and give readers all the tools they need to make up their own minds about what we are writing about,” says Edwards. “It’s all about trying to re-establish trust with readers.”

Unlike other websites that emerged in Scotland around the time of its 2014 independence referendum – such as Bella Caledonia and Common Space – the Ferret is studiously non-partisan. “None of our journalist directors are members of any political party and we don’t do opinion or editorialising,” says Edwards. “We just look for fact-based investigative reporting.”

The climate for digital news publishers might be a harsh one, but the Ferret, with its mission of “nosing up the trousers of power”, is convinced by the evidence of its first two years that it has a viable future. “We were embarking on something that none of us had ever done before,” Edwards points out. “We have written hundreds of stories, broken dozens of exclusives, we are talked about and we are gradually raising our income to a point where we can become a sustainable operation.”

The Bristol Cable is now a fixture of the local media scene, alongside the 85-year-old Bristol Post newspaper and other outlets. Its stories evoke the campaigning spirit of the lively West Country city but Stephenson believes that its ground-breaking model is one that could be adopted elsewhere in the UK, citing Manchester, Leeds and Brighton as examples. “Bristol is a creative place but there are other very vibrant cities where you could definitely do something like this,” she says.

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