Frost Prioleau, CEO of Simpli.fi, joins Michael Beach to discuss the unique needs of local advertisers, the convergence of performance and branding in CTV, and the challenges of optimizing creative delivery and measurement. Watch our latest Screen Wars Thought Leader Interview here and read the full transcript below!
MB: Frost, welcome to Screen Wars.
FP: Thanks, Michael. Great to be with you.
MB: You and I met in 2017, when I was getting Cross Screen Media off the ground. I have followed Simpli.fi really closely ever since. The business has grown tremendously, it is clearly the most successful local ad tech exit in recent time, and one of the top exits overall in the ad tech industry. Where did Simpli.fi start, and how has it evolved over time?
FP: We started Simpli.fi in 2010, when real-time bidding and programmatic advertising was coming out. Our big founding thought at the time was to move away from the legacy approach of other platforms. Everyone is bidding in real-time, creating this fantastic ability to bid on each impression at the time, but all the platforms that started at the time carried over the old approach of targeting prepackaged audience segments. Simpli.fi focuses around “unstructured data,” the ability to target people instead of bundles, based on particular pieces of detail or actions. It’s very much like search. A local Toyota dealer will not go to Google and say, “Hey, give me Toyota in Tenders.”
They say, “Here’s a thousand keywords and I want to target people who have searched on one of these.” And that’s how we started out with what we called “search retargeting down to the keyword level.” That sort of granular data capability could work across campaigns of all sizes. It specially had real advantages in localized campaigns, because they could create custom audiences very easily. I always say, the Toyota dealer in California has a lot full of electric cars, while the Toyota dealer in Forth Worth, Texas has a lot full of pickup trucks. So, with different audiences, it’s to be able to customize locally. And because the data is so granular, you could optimize it on smaller run campaigns. So we evolved from this focus on search, and decided that we would be the ones who bring these programmatic capabilities to mid and long tail advertisers. And that’s been part of our main focus since then.
MB: I was in New York a couple of weeks ago for upfront week, and I was talking about how someone’s going to build the video platform to reach the 1 million local advertisers that are out there when everyone’s focused on the top 200 there. The audience dismissed me then, but obviously, you’ve done that at a scale. The number of campaigns ran per week, and the number of brands, is a huge number.
FP: Thank you. We’ve got about 600 people in the company now. In a typical month, we’ll run about 140,000 unique ad campaigns for about 35,000 unique advertisers. And those are a mix of CTV as well as display both mobile and desktop and video. And CTV is about a quarter of our business, and we run a lot of sub-thousand dollars a month CTV ads. There’s a huge market out there where CTV is very appropriate for them, as opposed to linear TV, and I’m as excited as you about the ability to open up the market.
MB: Sometimes it’s frustrating to look at the audience and know that I’ve completely lost them, but then I also think that maybe this is our little secret for a huge market.
FP: What’s also interesting to me is that we’ve been focused much more on mid-tail and longer tail advertisers, and it’s often said that local advertisers are going to be a year or two behind, but TV is an area where I think the local advertisers are a little bit ahead of national. They’re not messing around with panel based ratings, they don’t care about all the details of Nielsen or anything like that. They’re like, “Just make customers come to my website, just make customers show up at my door.” They’re performance-based, and I always think that is the way. So they’re actually ahead of the national advertisers in being performance driven and using TV as a performance medium much more than the national guys have been.
MB: Absolutely. How does your ideal customer look like?
FP: Typically, we work with companies who have very specific targeting needs. We have a unique capability in having very precise data that we can optimize on the fly. Usually that means someone who either has a specific targeting need, whether that’s location wise (Like targeting a zip code, or demos within a zip code), or multi-location wise I (Like a grocery store chain with 400 stores, looking to target people within 5 or 10 miles of the grocery store). And so, we do a lot of multi-location customers. We work with people who value this more precise targeting, and typically want to see some performance metric other than just delivery or CPMs.
MB: Excellent. Companies with a heavy performance base are starting to get a tremendous amount of CTV now, how do you see those two blending together?
FP: Just like you have CTV bringing TV advertising to smaller advertisers, I think there’s a whole host of performance advertisers that are using it. We acquired a company named CoreMedia Systems, that makes software for linear TV advertisers. So a lot of our customers are used to linear performance TV, and, generally speaking, a lot of them are interested in what worked in linear TV, which is high volumes of very low-cost TV. And so, they say, “Hey, let’s carpet bomb low cost.” And they want to optimize around what sites are working or what time of day is working. They want to optimize using publisher type data over audience type data.
And on the other hand, we have customers who sell very specific products, whether that’s in the B2B space, or particular products at age groups or demo groups. And they find that targeting those groups with the CTV ad, and then following up with a display ad of some sort in a mobile or desktop device in the same household, has been super effective. So we see this barbell approach where we have some advertisers asking for high quantities of fairly low cost CTV that can rival the low cost of unreserved linear, and on the other side they want to target a particular customer base.
MB: Is it the same customer that is thinking about performance and brand? I know that at the national level, you see these agencies with 1000+ employees, and they’ve got this division of labor, and they almost can’t think that way. They talk about, being top of funnel, mid-funnel, and bottom of funnel. Do you find that you actually got a nimble enough customer where they could think both ways?
FP: What’s interesting about the smaller agencies and advertisers is that they’re much less siloed. The holding companies you are thinking about got a team doing local linear, and a team doing national linear, another team doing search, social, programmatic, and different teams for each thing. So the cross pollination there is a little tougher. In many cases, with a smaller advertiser or a smaller agency, you’re dealing with an immediate team of one to five people. And so, they’re switching between all these systems. In those cases, you might have the same thinking of being upper funnel and lower funnel. But in many cases, those smaller advertisers tend to think more of being lower funnel, or they don’t think in terms of upper funnels. They tend to be in the bottom half of the proverbial funnel there.
MB: With the CoreMedia Systems acquisition, you got this data set of all these TV advertisers and what they’re doing. What’s the opportunity of bringing them into other digital channels? I assume that’s a huge opportunity.
FP: Yes, it is. Since we’re dealing with silos, in some cases, the people buying digital are the same that are responsible for buying performance linear if their media buying teams have converged. In other cases, that team buying performance linear TV are in silo, and they’re not the ones who are working on digital. I would say it’s a mixed bag. We tend to think the movement is going towards converged media teams. We’re seeing the outset of going to a converged video team, where one group buy all videos, but over time we’d expect that to be a converged media team where they buy digital and linear together. Because there are significant advantages on targeting to doing that. You make sure you’re getting a duplicated reach as well as performance. So they’re using the same tools to see what’s really driving performance.
MB: We saw each other at the LUMA DMS Summit in New York. What was the key takeaway for you?
FP: It was a couple of things. One, that we’re still talking about attribution and measurement in TV. That is the gift that keeps on giving for panels. If you’re putting panels together, that’s always a hot topic. There’s still a lot to say in that area. And retail media continues to be a big theme of the space. It is one of the new three legs of the stool of what’s driving growth in programmatic. In CTV, measurement continues to be a big theme. There are a lot of big advertisers who want to use a tool like Nielsen, or whatever the follow on is going to be. Measurement remains the discussion, year after year there, and what’s going to be the “right” measurement tool continues to be an issue in that space that’s probably keeping some budgets from coming over to CTV.
And then, identity is also the gift that keeps on giving. How’s the world going to continue on in the post cookie world? Something that frankly doesn’t impact CTV too much, but that remains a good topic.
MB: Yes. Two kind of takeaways. First, It was good to see both in the presentation, a local call out on CTV, which showed how the market is growing. And then you had someone from Madhive on your panel. Roughly 40% of the presentation was local-focused.
And second, Terry is always focused on CTV and a lot of the things about data and identity that have gotten a lot of attention over the years. But one thing he’s talked about in the last couple of years, is creative and creative technology. He even used an iceberg analogy, where what you see above the water is the data and targeting measurement, and below is the creative and the messaging. Why do you think creative is not getting anywhere near as much attention as measurement and analytics with as many companies?
FP: I think the current infrastructure needs a lot of work done to deliver, measure, and optimize those creatives. It’s one thing to create a bunch of creatives (AI tools are allowing that today), but it’s a different thing to take those creatives and store them up in the pipes, ready to be delivered by a system based on what the information around that particular impression is. All that optimization needs to flow downstream through the programmatic pipes. And companies still need to do a lot of work in that space. I think one of the interesting things in the world as we’ve thought about it is that you can fix your creative and then find an audience that responds to that, and it’s most like to buy or take an action based on that.
So there’s a different way of thinking that has an audience they want to target, and they will swap creatives to find the ones that the audience responds to. And that’s a different problem, that the optimization algorithms and ad serving, and measurement tools, need to work through to make that more widespread.
MB: All right, big picture question here. You started the company in 2010, where do you see Simpli.fi in five years?
FP: We think there’s a huge opportunity in this smaller agency and advertiser space. We work with about 2000 customers on a regular basis today. There’s a market opportunity for us with 13,000 customers. So we will continue to keep looking at those customers. We believe that the needs of some of these smaller and mid-size advertisers and agencies are quite different from the needs of the larger agencies. And we will continue to build out the feature set around those customers. We look at omnichannel, CTV, and automation, among other stuff. There’s still a lot of inefficiency in the system. If you look at the time spent in a media buyer’s life, sending out orders, optimizing, moving budgets between different types of media that are performing and not performing, cutting and pasting spreadsheets together for aggregated reporting. We think there’s a lot of friction in the system. So we’re very much focused on how to make life easier for our customers by automating and aggregating these processes.
MB: Excellent. If you could wave a magic wand and change one thing about the local video space, what would it be?
FP: I think it would be educating a lot of advertisers that CTV is very different, it brings new capabilities to the world of video advertising that they’re not used to from linear TV. We often do a lot of auto ads. And auto dealers usually have a pretty big marketplace within a DMA. So there’s a bit of waste, but that might work well. But if you think about local service providers, they only service an area of a few zip codes.
And a local advertiser, especially stores that people visit in-person, can get a lot of benefits from localizing delivery and optimization and budgeting. So, I think I would just change the education about how there are a lot of the capabilities of CTV, and how that makes it very, very applicable to any advertiser who is working on people visiting a physical location.
MB: Well, Frost, I’m grateful for your time. I know our audience is going to love this conversation. Thank you.
FP: You are welcome. It’s great to connect.
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Frost Prioleau is the Co-Founder and CEO of Simpli.fi. An experienced online advertising executive specializing in targeting, optimization, and technology, Prioleau focuses on corporate strategy, driving Simpli.fi‘s growth, and ensuring customer satisfaction.
Prior to Simpli.fi, Prioleau was the CEO and Founder of Personifi, a contextual and behavioral targeting company. The firm was acquired by Collective Media in 2008. While at Collective, Prioleau served as General Manager of the Technology Solutions Group.
Considered to be a thought leader in online advertising, Prioleau often speaks on the topic at industry trade shows. In addition, he shares his opinions and insights about retargeting in his monthly column published on Search Engine Land. Prioleau is a graduate of Princeton University, where he earned a Bachelor’s of Science in Engineering Management Systems.
Cross Screen Media is a leading CTV activation managed service for marketers and agencies, built on a proprietary technology platform that enables advertisers to plan and measure advertising across Connected TV and audience-driven Linear TV at the local level. We seamlessly fit into existing workflows to help agencies scale, differentiate and deliver high-impact campaigns for their clients. For more information, visit CrossScreenMedia.com.