The Investor Interview: Steve Farella and Steve Marshall
With our latest round of funding, Verto Analytics is pleased to bring a new group of backers and their expertise to the Verto family. These include two media industry veterans, Steve Farella (Chairman, MDC Media Partners) and Steve Marshall (CEO and co-founder, INVISION). We had the chance to sit down down and get their take on one of our favorite topics: data and the future of the media industry.
Verto Analytics (VA): In your words, give a brief summary of your background
Steve Marshall (SM): After getting my Masters degree in the late 80s, I worked on a handwriting recognition solution for a banking company, but we were still decades away from the CPU speeds and higher level languages that can do what machine learning solutions are doing today. Then I started a consulting firm and moved into media during the days when cable television was growing and thriving. Back then, the challenge was automating manual sales processes, yield management, and the optimization of audience delivery. I co-founded INVISION to tackle those challenges, and as a result, we wound up supporting most of the cable networks, and eventually many of the major broadcast, digital, and multi-platform players as well. I’ve been able to see from a vendor perspective how the industry has been impacted over time by the digital players and how the traditional media companies evolved to deal with it. While I’ve had the opportunity to work in other industries and dabbled in some ventures in clothing and sports, I love the edge that comes with working with media and technology. While I feel like I’m still an engineer at heart, I’ve always enjoyed working with stake owners in media businesses, helping them to understand and solve their problems.
Steve Farella (SF): My background is quite different. I entered the advertising business after college and joined one of the world’s biggest agencies at the time, Benton & Bowles (B&B) in New York City. At the time, media was becoming critically important to advertising strategy due to the growth of cable TV and the fragmentation of more traditional media. I left B&B after running all of their Procter & Gamble business and moved on to Director of Media positions at several New York shops, running large groups dealing with cost management, message delivery, and business building challenges. In 2002, my partner Audrey Siegel and I launched our own media agency, TargetCast tcm, and built the fastest-growing independent media shop in the U.S. We grew to be the number-two independent in the market before being acquired by MDC Partners in 2012. Today, I’m Chairman of MDC Media Partners, Managing Partner at VFL Investments & Advisory, and I sit on several boards.
VA: What sparked your interest in Verto?
SM: Initially, my interest was around Verto’s single-source panel approach and passive metering technology. But I really was most impressed when I learned about the company’s leadership, starting with [CEO] Hannu [Verkasalo] and how large media players have been leveraging Verto’s panel data to make some very strategic decisions. After decades spent working with both traditional and digital media companies, I know how critical it is to develop a cross platform currency to replace Nielsen, and that’s the opportunity I see with Verto.
SF: Media buyers have always encouraged the development of new vehicles to reach a client’s target audience – to the extent that our media options are almost limitless. However, as we encourage new media, we also must balance different databases for different forms of media. Today’s planning process is still mostly manual, although it’s assisted by lots of technology. A good planner is always balancing the mix of media to determine the most efficient impact for a client’s budget. Verto’s promise of a single-source database for multiple media formats will improve today’s planning practice and supercharge our upcoming use of AI in the media planning and buying process.
VA: You both have significant backgrounds in media, albeit from different sides of the ecosystem. From each of your perspectives, what do you think is the role of data in running today’s media companies?
SM: Media companies leverage data to support very strategic decisions in areas like content development, product roadmaps, and monetization strategies, and at very tactical levels such as in programmatic buying and selling, user experience design, and personalization technologies. For both strategic and tactical decisions, media companies need to be deliberate about how they integrate data and decision-making into existing business processes and organizational structure. At the strategic level, this means bringing in leadership that understands how to interpret and execute data-driven decisions. At the tactical level, leveraging data requires tech investment in the onboarding of the data and the systems to provide the insights for decision-making.
I still see lots of opportunity in the everyday operational business decisions on both the strategic and the tactical sides for media companies. But for most companies to enable data-driven decisions at this level, leadership has to be highly organized and willing to commit to considerable investment and to redesign business processes and technology solutions, which also carries the risk of business disruption.
SF: Data is the fuel for today’s media agency practice! A combination of data and creativity has typically driven how media planners and buyers moved their clients’ business forward. However, we’ve learned that data can even help measure the impact of our most creative ideas. Therefore, having and knowing how to master the best data is how media agencies excel with current clients and win new assignments from prospective clients. A great creative idea may help win business, but great data and analytics will help retain that client in the long run.
VA: In a similar vein, what do you think is the biggest challenge facing media companies today?
SM: I see data quality as one of the biggest challenges for media companies. Media companies and their supporting ad tech are all connecting disparate data sets, ingesting an increasing amount of first-, second-, and third-party data, and finding creative ways of ingesting offline and unstructured data. For years, media companies have been pushing to move data analytics and reporting out to the business users and away from IT teams. I’ve seen little focus on new and creative ways to ensure data quality and, more importantly, the quality of the numerous algorithms, spreadsheets, and data sources. It’s going to take innovation to figure out how to ensure data quality when the underlying data sources and structures change so often. It’s actually one of the reasons I still believe in panels for audience measurement: they have an inherent validation and consistency that can be ensured.
SF: Well, when I think of the challenges facing media companies, I think of either fledgling digital companies or more traditional media companies. In any event, their biggest challenge is to defend their business or show how they perform, compared to the other choices that a marketer has. Most media plans (and planners) like continuity, with a preference for fine-tuning what was done last year rather than a total disruption. Presenting something new to a planner or buyer is usually an uphill battle. More importantly, agencies are typically short-staffed, so getting through to the management team at an agency is a challenge in itself. Without getting into the details, a key challenge for media companies today is simply getting the proper time with the proper management team to present your offer…it’s simple but true. The best opportunity to attract the attention of the management team is with a single-source database. That’s why I believe that media owners and media agencies will embrace Verto quickly.
VA: What do you think is the most disruptive tool or technology to hit the media landscape recently? What is helping media companies do now that they couldn’t do before?
SM: Right now, I would have to say cloud-connected technologies, which are allowing media companies to strategize around and connect data and transactions outside of their traditional ecosystems. These technologies have significantly reduced development and integration timeframes for new solutions but also have put a strain on IT groups to retain the talent that knows how to execute on these platforms.
In the longer term, I see 5G as a major game-changer. It will dramatically accelerate mobile consumption of more personalized content and thus require more innovation on mobile formats. It will also drive the growth of many new distribution channels for both media companies and advertisers to connect to consumers: connected cars, mobile AR/VR, and anything out-of-home. Media companies need to leverage data and technology that can effectively support new distribution outlets without wholesale re-invention of their platforms. Competition for eyeballs no longer allows media companies to take a “wait and see” attitude.
SF: The media business is a game of inches: new ideas usually take time to make an impact. Yet things like social media, influencer marketing, dynamic creative (video) versioning, crowd-sourced video development, place-based media, mobile, and more have challenged our business to stay ahead of the curve. We’re not yet focused on AI and its possible impact on the development of media strategy and media buying, but AI can take programmatic buying to the next level. It can enable quick shifts in media strategy, enabling clients to optimize their campaigns by moving among different media as opposed to sticking with just the same media. VFL is already making strong bets with AI, and we think it can affect multiple points in the marketplace. However, it will work best with a single-sourced multimedia data platform!