MarTech Interview with Phil Schraeder, CEO at GumGum

Hi Phil, welcome to MarTech Interview Series. Could you please tell us how you arrived at GumGum?

I actually started my career in a big accounting firm in Chicago. I quickly realized the culture wasn’t for me. I was a closeted, gay man, trying to find my place in the business world and it was a very conservative culture. At that point I decided to pack up my things and move from Chicago to LA to see what else was out there. After working in finance at a couple of smaller entertainment and technology companies, I found GumGum. GumGum was the first place that I felt I could truly be my authentic self at work and thrive. I started as the VP of Finance and have worked my way up to President and now CEO. Finding a place that I could be myself and contribute professionally and succeed has been life-changing for me. Now as CEO, one of my main missions is to ensure that GumGum is a place that everyone can bring their true authentic-selves to work and help us change the world of digital advertising.

You are widely acclaimed as a seasoned expert on Adtech technologies. Please tell us how has Contextual Ad targeting technology evolved in the last 2-3 years?

Two to three years ago, contextual was still seen as a strategy of the past – something more from the Mad Men era of advertising than a new cutting-edge technology. However, now with growing data privacy regulations like GDPR and CCPA and people being creeped out by being followed around the industry contextual is having a resurgence! 

Three years ago we as an industry were still focused on brand safety, ensuring ads didn’t appear next to unsavory content, and we did this through keyword blocking technology. Fast forward to today, we are seeing many providers use that same keyword technology for contextual understanding purposes. 

However, the next generation of contextual technology can’t just be based on keywords alone. With computer vision and AI technology now we can understand all the signals within a digital environment, think text, image, video, and audio, to get a true understanding of the context of the environment without the need of personal data or audience tracking. Currently, GumGum is the only ad-tech company to offer this more advanced approach to contextual targeting and we are excited to lead the industry into the next generation of contextual. 

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Could you please tell us how GumGum fits into modern CMOs marketing and advertising technology (MADtech) stacks?

With the death of the cookie getting closer, CMOs are eagerly looking for privacy-friendly solutions to allow them to continue ensuring their digital advertising campaigns reach relevant audiences. Because it doesn’t require any PII (personally identifiable information) and only targets audiences based on the content they are viewing at the time, contextual advertising is becoming essential to an advertiser’s targeting strategy and a key tool within a CMO’s technology stack. 

Contextual also plays a key part in the ad verification process, allowing advertisers to scan millions of digital environments in real-time and spot any brand safety or suitability issues before an ad is served.

GumGum’s Growth and Technology Updates

How has GumGum seized the opportunity to be a leader in the contextual ad targeting software industry? What does your product and marketing roadmap look like in 2022?

GumGum has been developing and ittirating on our proprietary contextual technology for over a decade now. We did contextual before contextual was cool. In 2021, GumGum was accredited by the Media Rating Council as the first independent ad tech provider to have content-level brand safety, suitability, and contextual analysis technology. The only other person in the industry to have this accreditation is YouTube.  What this means is that GumGum’s technology went through a stringent process to prove that it can not only understand the text in a digital environment, like many of our competitors, but can also understand image, video, and audio giving a full picture of the context of a digital environment. 

Why is this important, right now many players in the industry are claiming to have contextual capabilities but each vastly differ from each other causing a confusion and a lack of transparency for marketers in the industry as to what they should expect from a contextual provider. Accreditations like the MRC help to set those standards and create a baseline of what should be expected. GumGum’s accreditation is helping to set that standard for contextual. 

The year 2021 was probably a game-changer for the adtech ecosystem. GumGum acquired 2 companies last year. Tell us more about these two acquisitions and how it has played out for you and your customers so far?

2021 was a pivotal year for our business. We started 2021 with a major, $75 million investment from Goldman Sachs Growth. This investment has supported our current rapid global growth and our ambitious M&A strategy. 

Last summer, GumGum acquired JustPremium, Europe’s leading platform for programmatic rich media. Following this, we acquired attention intelligence platform, Playground XYZ. These acquisitions allowed GumGum to launch in 14 new markets around the world and increase our global headcount to approaching 500 people.

How did you assimilate these companies into your existing product innovation and marketing strategies?

We have a strong vision for what marketers will need to advertise in the future. We believe the future will be all about a consumers frame of mind in each moment they are in. In just 5 minutes a human can think about 18 different topics and most likely the shoes they were looking at, or even bought 3 weeks ago are not at the the top of the list. Rather than basing advertising on insights from past behaviors we believe we should base it on meeting people in the moment they are in. We are calling the blueprint to achieve this the Mindset Matrix. 

The Mindset Matrix is made up of 3 components – contextual, creative, and attention. Each independently important but when combined to inform the other can have a powerful impact. These acquisitions help us to deliver on this blueprint. GumGum has the best-in-class contextual technology, JustPremium brings the best in rich media and Playground xyz brings the leading attention measurement platform. 

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What’s Verity? How do you deploy this software at the client’s end to deliver such phenomenal ROAS numbers? What’s the “secret ingredient” in this advertising solution that distinguishes Verity from other contextual intelligence software packages?

GumGum’s flagship contextual intelligence engine, Verity, is the result of over a decade of iterative data training and deep learning knowledge from the company’s in-house team of AI experts. Verity is the only independent ad tech solution to have earned Media Rating Council accreditation for Content-level analysis for brand safety, suitability and contextual analysis. This means it can analyze all of the data signals within digital environments (text, imagery, video and audio), giving it the ability to scan the content of millions of web pages in real time with human-like perception.

Because it reads content in granular detail – understanding subtleties such as emotion and object recognition – Verity can provide contextual ad targeting with a high degree of accuracy. Like other contextual platforms, Verity’s form of targeting inherently respects user privacy, making it an ideal tool in a cookieless future. But unlike other contextual competitors, it reads imagery and video as well as words: a skill that is particularly helpful for monetising video as a booming content vertical.

In a digital sphere that gets more crowded by the day, Verity aims to develop new opportunities for meaningful audience engagement. It drives revenue for publishers via the kind of watertight content compatibility that is crucial to the viability of new-era digital advertising.

AI and Adtech Innovations

You are a pioneer in the development of Deep Learning and Computer vision for superior contextual intelligence. Could you please tell us more about your work in these domains?

There are two important areas of deep learning that we are particularly advanced in, both of which are key to next-level contextual intelligence. The first is Computer Vision, which allows image-based content like photos, pictures and videos to be analyzed and understood on a human level. The other important area we specialize in is Natural Language Processing. This allows a contextual solution to analyze text-based content and understand the subtle nuances of language. For example, while a basic keyword blocker will spot the word ‘shoot’ in a piece of content, and likely block it as content related to violence, regardless of the fact that it may have been referring to a ‘basketing shoot’ or a ‘film shoot’. NLP allows you to analyze language on a deeper level and pick up these subtle nuances.

How did your customers reap the benefits of applying Deep Learning and Computer Vision in their performance marketing channels? Could you please provide some insights from your recent case studies?

Global chocolate brand, Galaxy, approached GumGum last year to deliver an online video campaign that would raise awareness of its global sustainability efforts. They wanted to reach consumers aged 18 to 34 years old, with an interest in Galaxy’s five content pillars; including empowering women and sustainable practices.

Verity targeted and placed the video ads within the most compatible content settings across GumGum’s range of premium lifestyle titles. As a result, the video campaign delivered 83% viewability, with 93% of audiences watching the videos in full. Spontaneous awareness jumped by 23%. This spike also gave Galaxy a responsibly sourced awareness lead over its key competitor, Cadbury.

Another Verity campaign, this time for KFC, targeted festive-related premium content to tap into the conversational buzz around Christmas specials. This led to a 19% hike in spontaneous awareness for the brand, compared to just a 2% increase from non-contextual ads.

Could you tell us how you equate the growing interest among brands towards “contextual targeting” software and the shifting media landscape towards an “Attention-driven” economy?

We believe the future of digital advertising will be about tapping into people’s active mindset – meaning advertisers will focus on people’s frame of mind and what they are viewing and feeling in the moment, rather than past behaviors. In order to do this, advertisers will need to activate what we call the Mindset Matrix, GumGum’s framework for the future of digital advertising. The Mindset Matrix is made up of three key components: true contextual understanding, dynamic ad creatives, and the ability to measure attention and optimize campaigns in real-time. Each of these components are powerful in and of themselves, but when combined they can understand a consumer’s frame of mind and drive predictable attention and outcomes without the use of personal data or the cookie. GumGum is one of the only providers that gives advertisers access to one single platform that offers the full Mindset Matrix suite – next generation contextual intelligence technology, innovative and dynamic ad creatives, and a leading attention measurement platform.

Marketing Technology News: GumGum Acquires Attention Measurement And Optimization Platform Playground xyz

Fast-forward Adtech Insights

Your recent report highlights online consumers are rejecting behavioral ads. Could you please elaborate on the findings?

We’ve been aware of the fact that behaviorally targeted ads annoy people and disrupt their online user experience. Very few people want to be followed around the web with ads based on websites they visited days or even weeks ago. We wanted to look into this and see just how many consumers reject this form of ad targeting. So, we commissioned Harris Poll to conduct a survey in the United Kingdom. The results showed just how unpopular behavioral ads are. A majority of UK adults (66%) say they are uncomfortable with brands tracking their browsing history in order to show them personalized ads online. However, the response from consumers on contextual-based targeting was much more positive. Three quarters of UK consumers indicated they are more comfortable seeing online ads that align with a digital environment over ads based on browsing history. Furthermore, 65% would be more tempted to buy a product from an online ad that is relevant to the web page they are looking at in that moment, compared to only 35% who say they’d be tempted to purchase from an online ad based on content they have viewed in the last 30 days.

For the benefit of our readers, could you please explain how to distinguish between contextual ad targeting and behavioral ad targeting? What’s the difference between technologies and data engines running the script for these two targeting channels?

Let’s start with behavioral advertising. As we browse online and visit different sites, third party cookies are placed onto our desktops, creating a record of our browsing history. Behavioral advertisers then use this data to serve you relevant ads as you continue to visit sites. So, for example, you may have browsed for articles on baby clothes and, as a result, you are served ads for baby clothing brands as you browse the internet on subsequent days, regardless of the web pages you look at. Browsing data is a form of personal data, so, many people feel behavioral advertising infringes on our privacy. This is one of the reasons why Google Chrome is planning to phase out third-party cookie tracking on Chrome next year. Contextual targeting, on the other hand, is a much more privacy-friendly way of reaching relevant audiences online. Ads are targeted based on the content they appear next to. So, if there’s an article on the plan to phase out diesel cars, the ad that is served on that page might be one for an electric vehicle brand. Because the ad is contextually relevant to the page, the person reading it is more likely to be in the right mindset for the messaging, without the need for using their personal data.

GDPR and CCPA have been around for some time now. Google and Apple have announced updates to their respective cookie tracking policies. As an AdTech leader who has followed and analyzed the contextual targeting trends in the adtech industry, what are your predictions for the contextual targeting software market for the next 2-3 years?

As third party cookies are finally phased out and as privacy regulations around the world become more and more robust, privacy-first contextual technologies will finally become core to most advertisers’ targeting strategies. I also believe that advertisers will wake up to the limitations of basic keyword targeting and keyword blocklists, and content-level contextual analysis will become the standard for our industry.

Many brands are looking to activate their “metaverse” strategy. How do you see the rise of metaverse through the lens of contextual advertising?

With the metaverse still developing, advertisers now have the chance to carve out a new genre of user experience that delivers value across the gaming ecosystem (from consumer to marketer and content operator). And in this sphere, contextual targeting and creativity have prominent roles to play. 

Imagine you’re playing a sports car game and you pass a billboard advertising the sports drink Gatorade. Because contextual advertising draws on nuanced AI to match ads with compatible content in any given moment – a key quality, given that metaverse users are non-identifiable – it can surface the type of ad that feels familiar to a user’s live experience. 

Advertisers could then use creativity to make the encounter feel even more natural and engaging from a user experience.Harnessing the power of contextual tech, along with creative vision, brands have the ability to build a powerful repertoire of in-metaverse ads that capture users in the right mood, and with a watertight approach to brand safety. And video gaming offers instinctive entry into this next-gen domain.

Marketing Technology News: GumGum Introduces Mindset Matrix – A Framework For the Future of Digital Advertising

Thanks for participating in our interview series! We look forward to working with you again.

GumGum is a contextual-first global advertising technology company that captures people’s attention, without the use of personal data. We believe that a digital advertising ecosystem based on understanding a consumer’s active frame of mind rather than behaviour builds a more equitable and safer future for consumers, publishers and advertisers alike. Founded in 2008, GumGum is headquartered in Santa Monica, California and operates in 19 markets worldwide. For more information, visit gumgum.com.

Phil Schraeder is a seasoned media industry executive and recognized thought leader in digital advertising and programmatic technologies. As Chief Executive Officer, Schraeder is responsible for GumGum’s success in revolutionizing the digital media and sports marketing industries. He is a regular contributor to Adweek, AdExchanger and Fortune, and a 2017 Los Angeles Business Journal’s CFO of the Year award honoree. Schraeder, who joined GumGum in 2011, served previously as the company’s President, Chief Operating Officer, and Chief Financial Officer. In those roles, he developed the management, revenue, planning, accounting, controls, and human resources infrastructures that fomented the company’s rapid expansion and growth. Prior to joining GumGum, Schraeder was VP of Finance for Verifi, a full-service provider of global electronic payment and risk management solutions. He has also worked in accounting and finance roles at the 3D technology licensing firm RealD, the film studio New Regency Entertainment and the accounting leader KPMG. Schraeder is an advocate for LGBTQ equality and lives by the mantra, “Don’t spend time with anyone or anywhere you can’t be your authentic self                      

                                                                      

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