DoubleVerify $DV CEO Mark Zagorski

Auren Hoffman (00:01.301) Hello, fellow data nerds. My guest today is Mark Zagorski. Mark is the CEO of Double Verify, a publicly traded company that provides digital media membership and verification software to major advertisers and platforms. Double Verify is a $3.4 billion market cap company. It trades under DV. Prior to Double Verify, Mark was the CEO of Telleria, which he founded with Rubicon to form Magnite. And he was also on the founding team of Exolate, which is where he and I met.

Mike 15 years ago. Mark, welcome to World of DaaS.

Mark Zagorski (00:34.158) Thanks for having me or good seeing you again

Auren Hoffman (00:37.205) Yeah, really excited. Now for listeners who aren't like deep in ad tech, which is probably like most of our listeners, can you explain like the types of fraud that's common in like ad tech and CTV?

Mark Zagorski (00:48.802) Yeah, so as you noted, where DV fits into the scheme, what we do is we actually work between buyers and sellers of digital media to ensure that transaction is safe and verified, right? So verification. And one of the things we check for is fraud. And believe it or not, fraud is a multi-billion dollar industry, if you want to call it that. And we see fraud across all different types of devices.

We see across connected television, we see it in the mobile space, we see it in the open web, and it takes different forms in each one of those spaces. So we see something called spoofed URLs, which are URLs that are pushed out into the ad buying ecosystem and made to look like legitimate, for example, connected television inventory.

Auren Hoffman (01:39.403) So it might, it's like somehow it'll say it's like ESPN, but it's not or something. Okay.

Mark Zagorski (01:43.012) Yes, yeah. So it misrepresents actual property. We see things like fake apps that make their way into the app store. So I always tell people, do not download Fireplace apps for your CTV. All those things are giant ad machines that secretly run ads behind those crackling flames that you see on your television screen. Those types, we see it in fake apps.

Auren Hoffman (02:05.94) Yeah, yeah.

Mark Zagorski (02:12.888) We see it really everywhere. It embeds itself in the buying ecosystem. It embeds itself in the application ecosystem. And it embeds itself even in the hardware, in some cases itself, in apps that end up in different types of hardware, everything from the obvious cases like mobile phones and CTVs to household devices that are connected. So we've actually discovered refrigerators.

connected refrigerators, impersonating connected televisions, which believe it not, and people running ads on single pixels on those screens. So it's crazy.

Auren Hoffman (02:45.766) hilarious. my gosh.

Auren Hoffman (02:51.467) And that was like embedded at the manufacturing or somehow like there was like a virus that got installed on the refrigerator somehow or something.

Mark Zagorski (02:58.521) Yeah, so someone basically hijacks the actual operating system of the screen itself and then represents that device as a different type of device.

Auren Hoffman (03:09.983) Got it. And, it's coming from a legitimate IP address. It's coming from a legitimate household in Kansas city or whatever it might be.

Mark Zagorski (03:17.516) Yeah, yeah, it's basically, think of it as again, hijacking your personal device. you know, again, we see that all over the place.

Auren Hoffman (03:22.271) Yeah. And how much money could someone make from like hacking someone's refrigerator and running ads in the background? Is that like dollars per day? Is it tens of dollars per day? Like how does it, and then how does it

Mark Zagorski (03:34.682) millions of dollars per day. And we've broken up schemes.

Auren Hoffman (03:37.215) But for each one, like how does it work for each one? how do they, like if they have one refrigerator, like, you know, how does it work or something in terms of dollars?

Mark Zagorski (03:45.548) Yeah, so the interesting thing is, know, a lot of, you know, there's that old saying is like, why do people rob banks? Because that's where the money is. It's like, why are people creating fraudulent CTV impressions, ConnectTV? Because they're the most expensive ones. So think if you can.

Auren Hoffman (03:54.004) Yep.

Auren Hoffman (03:59.369) Yep. So you can do a $50 CPM type of thing.

Mark Zagorski (04:03.264) Exactly. Sell it into a market at 50-dollar CPM and in someone's screen. So a good example of CTV fraud that occurs is ads that run in the background of an app, right? That actually don't get delivered. No one can actually see them or ads that run while a TV screen is off because people think when they turn their TV off that the OS turns off, but in many cases it doesn't, right? Think of in an hour or session, how many 30-second fake 30-second spots can you run? Many, many, many of them.

Auren Hoffman (04:14.783) Yeah.

Auren Hoffman (04:23.433) Yeah, correct.

Auren Hoffman (04:30.644) Yeah, that's crazy.

Mark Zagorski (04:32.268) And then you multiply that times tens and tens of thousands of devices, and you're looking at tens of millions of dollars a year just on a single fraud scheme. We've broken up fraud schemes that have generated upwards of $10, $20 million a month for fraudsters.

Auren Hoffman (04:49.097) And there's kind of the hard fraud, is you're talking about. And then there's also kind of the softer fraud, which is like maybe ads that the consumer doesn't see. Maybe they're below the fold or they're kind of on the side or, you know, and they don't actually. So someone's paying for the ad, but the consumer never has the opportunity to engage with it or interact with it.

Mark Zagorski (05:08.002) Yeah, and that's less, we wouldn't call that fraud as opposed to just ads that really shouldn't be monetized, right? They're not viewable by human. They end up in content that's not considered safe for an advertiser. It's pornography or something like that where an advertiser actually would never have bought those impressions. So we look for those types of incidents as well. So think of what we look at is everything from

Auren Hoffman (05:12.064) Yeah.

Mark Zagorski (05:36.246) true malicious fraud where someone's driving impressions and falsely misrepresenting it being a viable ad environment to bots, to impressions that are driven by bots, to misaligned impressions that end up in geographies that maybe that ad is not legal to be shown in or in places where it really isn't viewable. So an ad is not viewable at all.

Auren Hoffman (06:03.571) There's some idea, there's been some people talking about, okay, we're going to have this like, white listed of very, very reputable publishers, and you should only run your ads there or something, which obviously limits where people what people could do, like, what are your some of your thoughts on this kind of like controversy internally in the ad tech world?

Mark Zagorski (06:23.958) Yeah, mean, look, the beauty of what's come up in the digital world is this whole idea of like, there's tons of voices, right? There's lots of different places where people engage with content. There's not 500 great places. There's tens of thousands of great places, right? And the whole ad tech ecosystem, yeah.

Auren Hoffman (06:38.793) Yep. Yep. Like I might go to my little niche pickleball site or something like that, right?

Mark Zagorski (06:44.932) Yeah, yeah. And that's just as valuable to you as the New York Times is, right? With getting specific information about something. And, you know, so I think the beauty of the programmatic ad tech world and ad tech world as a whole is like, hey, we can help monetize lots of folks, know, local people, marginalized voices, people that, you know, focus on a specific niche. And there can be quality there too. So if you want like a thriving, open internet,

Auren Hoffman (06:48.395) Correct. Yeah. Correct. Yeah.

Mark Zagorski (07:13.89) It's not sites, right? It's not the AOL world of 20 years ago. It is the diverse and open and free universe of sites that there is today. So I get what folks are trying to do, but look, you and I both live this world. It was called an ad network, right? That's all it is. It's a fancy ad network in which you say, here are the top 500 places to run an ad, but we're, know.

Auren Hoffman (07:32.255) Yeah, yeah.

Mark Zagorski (07:39.374) But most of them are going to run on these ones over in this side over here anyway. So we'll put the logos up. But you'll get mostly the stuff that you probably didn't want to begin with.

Auren Hoffman (07:48.487) And if you think of just like data in marketing, like a lot of data is bad, like it's either wrong or the match rates are low or the attributes are wrong or the signals are noisy. Yet this kind of like data and advertising is still like a very, important thing. Like how do we how do we get that better over time?

Mark Zagorski (08:10.05) Yeah, mean, data fidelity has been a challenge since the day the internet was launched, right? And you make some strides, then they get knocked back. I think that the accuracy of digital data is...

Auren Hoffman (08:21.674) Yep.

Mark Zagorski (08:34.236) It's mostly found in places where users take an active role in providing that data, i.e. in opt-in situations, in social networks, in walled gardens in which folks are actually able to present that data and it can be verified. Once you start moving out of there, everything starts becoming algorithmically estimated or...

coming up with some type of pinpointing down to a more accurate take on it. That being said, you come from the data world and I live in the data world too, you can be incredibly accurate by using really smart models. I think the emergence of AI tools to work in that system, I think helps as well. Because again, the world doesn't exist within a opt-in walled garden universe.

So I do think tools are getting better to define audiences. However, you're working in a world that also has various levels of privacy agreements out there that challenge the accuracy of tools that actually sometimes get in the way of providing better information to consumers just due to the fact that they're so meat cleaver in their approach.

Auren Hoffman (09:59.561) Are these walled gardens? mean, they seem to be getting more powerful because there's this idea that they, you they, you could do whatever you want almost with first party data, but you have almost very limited things you can do with third party data. And of course they're like writing the rules in many ways. They are the regulator like Apple and Google is the ultimate regulator. They're the bigger regulator in many ways than, the FTC or something like that is. And then of course they're writing the rules with other places. Do you see that?

Mark Zagorski (10:09.7) Yeah.

Mark Zagorski (10:15.492) Of

Auren Hoffman (10:28.843) power that they have continuing or do you see they're going to have less power in the future? Where do see that kind of world going?

Mark Zagorski (10:35.832) No, I mean, look, I think you nailed it, which is, you know, they are both the rule makers and the people that benefit from the rules, right? Which is not really a fair ecosystem. And I do think, yeah, yeah. And I do think, you know, there's definitely not a fair understanding of the exchange that people realize when they enter some of these areas. Like this is what they're giving up and this is what they're giving back. And I think

Auren Hoffman (10:42.56) Yep.

Auren Hoffman (10:46.291) Yeah, it's the kleptocracy in a way. Yeah, yeah.

Auren Hoffman (11:02.581) Yeah.

Mark Zagorski (11:04.494) there needs to be more clarity around that. think, getting back to your question, it's getting, the power is getting to be more, right? So those platforms are getting stronger because in many cases, folks like Amazon have the ability now to tie that data into a commercial transaction. And that solves the holy grail of advertisers, right? Which is, hey, how do I connect an exposure to, yeah, a purchase? Like, you're done. Like, they can do it. They've got the loop. And now,

Auren Hoffman (11:27.561) Right, a full loop.

Mark Zagorski (11:34.22) as they move into the areas like connected television, right? Now it's like all media can now be part of the Amazon universe or all media that advertisers really care about, is digital display, mobile, connected television, retail media networks. It can be there. They can control the first party data.

Auren Hoffman (11:50.123) Well, by the way, retail media stuff is very powerful because you're searching on Amazon or Walmart or Instacart or wherever you're searching. know, it's like, and then they kind of show you some Dove soap. You're like, I'll take some Dove soap or whatever it might be. Like that's that's very, very powerful. And that that seems like very unlikely to ever go away.

Mark Zagorski (12:02.478) course.

Mark Zagorski (12:08.898) No, no. mean, look, is, you know, advertisers, think of this way, retailers have been dreaming of that cycle from day like, hey, let me get exactly what people want and tie them. Yeah. Yeah. mean, it's incredibly powerful. And, you know, I think people scratch their heads like, why is Amazon going into media? Like, why would they want to have a video service? And it's like, my God, this is beautiful. Right? They can control the means of which they engage human beings in one situation.

Auren Hoffman (12:17.759) Yeah, because they can extract more dollars from the merchant.

Auren Hoffman (12:32.715) Mm-hmm.

Mark Zagorski (12:38.306) and then ensure that when they get that information from them, they can know that the transaction will occur in their ecosystem. It is like, you know, if NBC would thought of this 40 years ago, they would have bought Walmart and had a media business and a retail business that totally tied together and crushed it.

Auren Hoffman (12:59.167) I mean, there's this joke in the industry that eventually everybody becomes an ad tech company. And, know, you're seeing that with like Instacart and Amazon and Netflix and Walmart and Uber and is it just going to go forever? Like, just like, eventually that's just inevitable that everyone becomes like an ad tech company too.

Mark Zagorski (13:13.54) you

Mark Zagorski (13:17.892) Maybe we like we mentioned the other day we work with like over a hundred retail media networks and you mentioned a lot like, know Instacart as a partner of ours Uber Ulta Beauty like name a retailer and they're like Dollar General has a retail media network, right? You know like yes So so like anybody who's selling anything in retail also is now engaged in media now a lot of those I think you start to get burnt out like a certain level. It's like do you need

Auren Hoffman (13:24.938) Yeah.

Auren Hoffman (13:33.811) Wow, I had no idea. Okay, yeah.

Mark Zagorski (13:47.46) retail media network 340 to try to track that. If you're a CPG company to try to sell, you know, Dove soap, I don't think so. But, you know, I think the ones that have been really successful have seen it as a lucrative revenue generator. I mean, you know, a nice ancillary of that is look at the credit card business for Delta Airlines. It's billions of dollars. I didn't realize this. I don't know if you ever looked at this, like Delta makes something tens of billions, I think it's like $10 billion from the Delta credit card.

Auren Hoffman (13:50.388) Yeah.

Mark Zagorski (14:17.292) It's insane how much money.

Auren Hoffman (14:17.523) Yeah, I think think United United is it's really like a financial services company masquerading as an airline essentially, right?

Mark Zagorski (14:26.18) Yeah, exactly. Exactly. So I mean, look, if you can make money off of your data, which is what retail media networks do, there's something to be said there for that. I do think though, there's a difference between Amazon as a retail media network and a real retailer and some of the other businesses who look at this as an ancillary revenue source, but will never truly capitalize it in the way that someone like an Amazon could or even a Walmart potentially could.

Auren Hoffman (14:56.683) You you worked with Nielsen and they've been kind of like, they're famous for their like TV demographics and, know, historically it's been fairly accurate kind of understanding, but now there's, there's kind of attack on that side of it and just people don't know who's watching what and ratings and all that other thing. Where, where is that world going?

Mark Zagorski (15:17.412) Yeah, Nielsen obviously has been blind for many years of saying, you have a panel of X size and how can you actually estimate the United States? And digital data is so much more accurate and that's what we really should be measuring on. But ultimately, when people started actually banging models against it, they're like, this is pretty accurate. So yeah, real people sitting in front of a TV screen, that's not a bad measure other than, you

Auren Hoffman (15:37.631) Yeah, it wasn't bad. Yeah, yeah.

Mark Zagorski (15:46.424) the other things that we're trying to estimate. Where I think it goes though, is I think, to be honest, we think a lot of that becomes irrelevant based on what we just talked about. So understanding the reach and frequency of a show or an impression is not as important to an advertiser as understanding did that program or did that exposure to a program actually drive a decision to buy something, right?

Auren Hoffman (16:11.551) And also back in the day, would, you would run ads to everyone who's watching that program. Now it's usually to a, to a small subset of people who are watching that program.

Mark Zagorski (16:20.592) Absolutely. Look, that was the promise of connected television, right? We're going to give you the sight, sound, and motion of TV, but we're going to give you that digital accuracy that you can get with traditional online advertising. I think that story is still one to be played out. I don't think we're fully there yet. But I do feel like, again, where it's fast-forwarding to is people said, well, digital is going to just help us do reach and frequency more accurately.

Auren Hoffman (16:25.184) Yeah.

Mark Zagorski (16:49.41) And it's kind of like, okay, we're going to make a horse and buggy go really, really fast, right? By changing, know, instead of putting a horse there, we'll put some other animal that runs faster. And it kind of like, well, maybe we should rethink the entire way of doing this. And, you know, rather than just having like a reach and frequency number, what about if we just tie an exposure to an outcome? And that's how I buy my ads. Right. I want to sell more shampoo.

Auren Hoffman (17:00.864) Yeah.

Yeah, yeah, the cheetah and buggy, yeah.

Mark Zagorski (17:18.124) If I exposed it to X million people and none of them bought, well, I got a great reach and frequency number, but it was worthless to me. And there's a whole industry built around trying to tie exposure to multi-touch attribution. Like how do I attach an exposure to an actual outcome? We can do that now.

Auren Hoffman (17:27.305) Yeah. Yep.

Auren Hoffman (17:39.849) Yeah, back in the day, would like run like they'd run the ads in like the Phoenix area and not the, you know, the the the, you know, maybe like the Tempe area or something or the Tucson area. And then they would see, okay, Phoenix versus Tucson, what happened and then, okay, the Phoenix sales were up 3%. Therefore, the only thing that I differently was run this ad. So therefore this ad had some sort of hopefully, you know, that was kind of the way they did it back in the day.

Mark Zagorski (18:06.628) because they couldn't really tie an actual consumer to an actual purpose. And it's funny because that's how I actually started my business. I started off in the catalog business. That was my first job out of school. And we would send catalogs to people with different prices in them. Like one person would get a price X, one would get like shipping, free shipping. And we'd see like, all right, well, let's wait three weeks to see what happens. Do these people buy or not buy?

Auren Hoffman (18:11.017) Yeah.

Auren Hoffman (18:24.747) okay. Okay. that's, that's so interesting. Yeah. Yeah. And then you would just use that data to hone it over time. that was your AB test, essentially.

Mark Zagorski (18:33.636) Yeah, exactly. Seriously, it was like a two month long A-B test. We'd be like, all right, in the first four weeks. And then we'd like look at the numbers, who we sent it to, did they buy us? That was early. I mean, look, and then, but the reality was, as you just noted, fast forward, it's kind of like what we did in digital 20 years later, but we just did it faster. was like, okay, run an A-B test, see who clicks, see who doesn't click, all that kind of stuff.

Auren Hoffman (18:39.422) wow.

Auren Hoffman (18:59.039) Now there's been this talk of cookies going away since you and I met 15 years ago. And it does seem like it is slowly going away and eventually go away. Like what has been the effect of these quote unquote cookies leaving the ecosystem?

Mark Zagorski (19:15.896) Yeah, well, I guess if Chrome gets sold or gets spun off, who knows what, like, does that mean cookies come back full force or just, you know, who knows what happens there, but.

Auren Hoffman (19:20.693) Correct. Right, right, right. And it's just Chrome anyway, right, which is only some portion of the browsers.

Mark Zagorski (19:27.298) Yeah. Look, think cookies are much maligned. They're not great, but they did serve a pretty innocuous purpose of which now people are trying to fill the gaps with stuff which is either less accurate or more privacy concerning. But that aside, okay, cookies go away. I think it does a few things. People who don't have first party data are then...

Auren Hoffman (19:44.895) Yeah.

Mark Zagorski (19:54.808) you know, searching for other types of proxies. And context is one aspect of a proxy. We look for things like potentially like location. But then you start running into other challenges, which is country by country, things like IP address are considered PII and some places are not PII at other places. So that's why I like again, going back to like cookies were pretty innocuous because users could control them. They could delete them. They weren't super personal. They had some value.

Auren Hoffman (20:11.967) Mm-hmm.

Auren Hoffman (20:21.577) Yep. And they would be different on every site. unlike a device ID or something, which is the same on every site.

Mark Zagorski (20:25.272) Yeah!

Exactly. Exactly. But I do think, when they go away, it will drive some more innovation on how to create more contextually relevant content for users. I do think it does play into the hands of the walled gardens a bit, because they have the first party data and they can control users. So I do think the strong will get stronger when it comes to data in that case.

Auren Hoffman (20:44.457) Of course, yeah.

Auren Hoffman (20:54.591) How much dollars in the ITech ecosystem revolves around cookies today?

Mark Zagorski (21:03.78) It is, I mean, it's a smaller amount, you know, the funny thing is that advertisers, they will hold on to whatever piece of old technology they can until literally the day that they disappear. Like we've heard about these stories, like cookies are going away, they're like, well, we're still going to do retargeting as long as we possibly can, right? Yeah, yeah, it works. So, I mean, there's still, you know,

Auren Hoffman (21:03.819) because it does seem like a smaller and smaller piece every month, right?

Auren Hoffman (21:18.399) Yeah, yeah, yep.

Auren Hoffman (21:23.859) Yeah, mean retargeting is super effective.

Yeah.

Mark Zagorski (21:31.236) millions and millions of dollars that are against retargeting. mean, look, Criteo is an entire retargeting business. I think they just mentioned the other day, they're moving into retail media, but it's less than 30 % of their revenue. So 70 % of Criteo's business, which is a public company that does hundreds of millions of dollars of ad sales, is still based on cookies, based on retargeting, some type of retargeting. So it's still a big business. Advertisers still use them to retarget.

Auren Hoffman (21:52.841) Yep. Yep.

Mark Zagorski (22:01.544) some level of kind of categorization, cookie-based categorization, the way X-Late used to do it back in the day, it's not as big as it used to be because again, think it's just a lot of advertisers, they've either moved money into social where they have much stronger first-party data targeting accuracy, or if they're in the open web, they're using things like context.

and other types of tools to better align their impressions to an audience I think makes sense.

Auren Hoffman (22:36.139) And every platform has their own definition of impression, of view, and engagement. Is there a world where all this is going to be standardized?

Mark Zagorski (22:48.26) It should be I mean there are some things look analytics can be individual to an advertiser There's things that are important to them right that they can build you know analytics around but I think when it comes to You need to have some basic building blocks around what like that everyone agrees on so, you know That's a role that double verify plays, you know We act as you know a quasi currency when it comes to things like a valid impression

So identifying something that is not fraud. There are viewability standards. So groups like the IAB come up with viewability standards that the industry has aligned on. So I do think you need to have some standard building blocks upon which everyone agrees on the definition. They may have different ways of analyzing it. So DV takes those definitions and analyzes it in one way. But you need definitions, just like you need standard.

understanding of what a currency is in the financial world, right? If there's no definition to what that currency is worth, there's no marketplace, then how do you transact on it, right? If everyone has a different definition, it's almost impossible to transact. Same with advertising. Everyone has a different definition of an impression or what is viewable. Then how does someone get paid on either side? Because you have a seller and a buyer, they need to agree on a definition. What you don't want is 50 different definitions that every time a buyer goes to a different seller,

they have different definitions of it. So single definitions are important.

Auren Hoffman (24:16.555) It's interesting. mean, Antec is just really hard business because like the entire industry changes like every five years. Like literally the whole stack is literally just kind of like blown up. And that's not really true anywhere. Like in the finance industry, a lot of financial stack is like still running on old cobalt from the 70s and stuff, right?

What does that mean for like the leadership, the CEO, the other leaders of these companies to be successful when everything is changing all the time? What type of person is going to be more successful there than maybe in another industry?

Mark Zagorski (24:54.116) Yeah, it definitely is. I mean, I would say it is a pretty, I like to call it dynamic industry. Maybe people call it, know, bipolar industry, crazy industry. I don't know. You're right. Because it just does, it does blow up. Things go away. look, I ran a company. And, know, and I think part of that is, Ryan, a little bit of a tangent. I think part of it's why is because a lot of companies in this space actually

Auren Hoffman (25:04.532) Yeah.

Yeah, it's creative destruction.

Mark Zagorski (25:20.066) aren't really companies, they're just features. They build features and those features get eaten up by bigger companies and then the rest of that sector kind of goes away and they get embedded into things. But when it comes to kind of leadership in the space, I do think some of the basics are always the same, which is like a sense of curiosity and enthusiasm. Number one is like, you have to be...

Auren Hoffman (25:22.975) Yeah.

Mark Zagorski (25:45.122) curious and enthusiastic about learning more because if the space changes so much, if you're not curious, you're going to be left behind. And because I think you have to have a willingness to disrupt and innovate, right? And move out of a comfort zone. It's not a place, like you said, financial software. It's like, yeah, that is one where we just want to need to make sure like the transactions get passed from A to B. And it's like really stable and innovation comes with risk around it. Like that's the exact opposite of space. We're more like, no, we need to innovate and take risks.

and push the envelope knowing that there will be a payoff to that risk. I think, so to be a leader in this kind of space, I think you need to be curious, you need to be wanting to drive disruption, you want to take risks. And think those are all, those are really the basics for any type of entrepreneurial or innovative space.

Auren Hoffman (26:38.047) Well, are there because I mean, DV is a public company, private equity and then became a public company. And then these like mid market kind of private public companies are in some ways, especially difficult today to run. How does how do you run that kind of like market cap company in an industry that is changing all the time?

Mark Zagorski (27:02.018) Yeah, it's definitely look, it's a balancing act, right? You have the pressures of being a public company, which are every quarter you need to produce and the public markets are incredibly unforgiving, right? They don't want to hear about what's going to tomorrow. You need to show me today what you're delivering against. But you live in a universe, like I just noted, where it's all about like, well, we've got to be building for tomorrow, right? We're lucky enough, we've got to...

Auren Hoffman (27:19.989) Yeah, yeah.

Mark Zagorski (27:30.58) very profitable business that continues to grow at a great rate. And we're able to invest in innovation and technology. And we get a lot of pushback.

Auren Hoffman (27:40.811) Do you have to kind of like help these shareholders along? Like because they're they might not be used to this these industries that are changing all the time.

Mark Zagorski (27:50.092) Yeah, mean, yes. if ad tech, if it's confusing to folks who are just in the technology space, imagine like generalists in the investor space. They're like, they don't even understand like what we're doing. And look, ad tech is also a world in which there are a lot of people touching the delivery of an ad between a buyer and a seller. And there's money to be made there, but you never want to be considered just a middleman who's taking a VIG without actually providing something that's incredibly valuable. you need to continue to drive that value prop.

Auren Hoffman (27:57.513) Yeah.

Mark Zagorski (28:18.678) investing in that value prop takes innovation, innovation takes money. investors are like, hey, why can't you drive your margins up? You have incredibly problem, drive your margins up. And I'm like, we could do that, but we're not going to innovate. In three years from now, we're going to be in trouble. It's like we have to have constant innovation cycle.

Auren Hoffman (28:38.153) Yeah, also there's a lot of ways to optimize for the short term and borrow from the long term, right? And so you don't want to do that. But of course, as a public company, you're going to have some pressures both ways, right? What other advice would you give? mean, if you were talking to your buddy who's now becoming a CEO of a similar kind of market cap kind of company.

Mark Zagorski (28:43.812) Of course. Exactly.

Mark Zagorski (28:52.782) Yeah, yeah, absolutely.

Auren Hoffman (29:02.643) What advice would you give them saying, okay, now you're, you're, you're now going to run a public company. Here's, here's, here's the Mark advice, the sage advice that I'm going to give you for my last few years.

Mark Zagorski (29:14.83) first I'd ask him, do you really want to do this? Do you really want to do this? please trust me. It's all pushed to the front, Orin. You can't even tell there's a giant hole in the back here. That's just, you I think that the, you've got to be willing to stick to your guns. And I know that it sounds like a cheesy kind of metaphor, but like you gotta,

Auren Hoffman (29:16.459) I mean, by the way, your hair looks great. You don't have that many gray hairs. So yeah, it looks incredible.

Mark Zagorski (29:44.58) If you believe in something, you're here to continue to build long-term value for your customers. And if you do that, you're going to be okay. You're going to have to suffer a bit again of the ups and downs of the public markets. And one of the hardest things, it's not even like what you do. It's what you don't do when you're a public company that is the most painful. There could be major economic events halfway around the world and your stock can go down 10%. You're like,

Auren Hoffman (30:09.45) Yeah.

Mark Zagorski (30:11.63) We had a great quarter of the teams and the team is like, we just delivered on our new product solution and the clients love it. Stock goes down 10 % because you know, somebody bombed somebody somewhere else and they're like, my God.

Auren Hoffman (30:21.535) Though, at least in that you can take solace that like everyone else in your industry probably also went down the same kind of thing, right? So it's bad when you go down and everyone else is still doing great or something. Yeah. Yeah. Yeah.

Mark Zagorski (30:26.412) Yes.

Mark Zagorski (30:32.214) Yes, yeah, that's the hard thing to discover. then I think, look, in that place, being transparent with investors in why you're doing what you're doing, again, going back to we get a lot of questions again, why are you continuing to lean in innovation? Why not just start taking profits and driving margins up and getting them to understand this is a long-term play? Every investor will say they're long. We're like, we're long for this business. I'm like, are you really long?

Auren Hoffman (30:59.679) Yeah.

Mark Zagorski (31:01.198) Are you going to be here with me five years from now when we're still like, you know, out there building stuff and growing, you know, and I think that's the thing. You've got to balance investors who are here to make money off your stock. And that is, that is what they're there to do. And the fact that you are here to build a long-term business, a long-term value prop, and you've got to balance those two demands.

Auren Hoffman (31:21.035) How do you balance like, as you mentioned earlier, like your own employees? Cause you can have the stock. mean, any, especially tech companies, but any company nowadays, you have the stock bouncing around a lot. You could have high lows, which could be like a hundred percent differences even within the year and stuff. So imagine it's a bit of an emotional rollercoaster. All that you think your net worth is X and now it's 0.5 X or something. Right. Yeah.

Mark Zagorski (31:40.1) Yeah. Yeah. Yeah. I mean, look, again, it's very different than a private company where really the team doesn't have a real grasp on what they get shares and they get options, but they really don't know day to day what it's worth here. You kind of, you know, some actually someone asked me one time, they're like, Hey, what's the difference? I've run VC backed companies, know, PE backed companies and probably companies like what's the difference between like public and, you know, you know, VC backed in a public company. I'm like,

Auren Hoffman (31:53.257) Yeah.

Mark Zagorski (32:10.466) You're in a VC backed company, you raise money once every two years. When I'm in a public company, I raise money every day. Like that is the nature of what you do. Like every day someone's grading you and buying, like people are buying you every day or selling you. So for a team, you kind of, it's important for them to understand that they're owners of this machine, right? They are all of our employees. We are very focused, like every one of our employees own shares. It's something I am adamant about. We get pushed back from our investors because stock based comp.

Auren Hoffman (32:15.753) Yeah. Yes. Yep.

Mark Zagorski (32:38.884) can get pretty rich when you get to be our size. But we're like, I want everyone to have shares. Our receptionist has shares. Everyone has shares in this business. And maybe it's like the old startup guy in me, but I feel like everyone should be part of this ride and should do it. However, you want them to feel ownership, but not look at the stock price every day. We can be successful. Let's focus on our goals as a company. Let's focus on our North Star. And if we do, my job as a CEO,

Auren Hoffman (32:56.435) Yeah, yeah, that's a hard thing to trade. Yeah.

Mark Zagorski (33:08.556) is to ensure them is that if we deliver against our goals, we will be fine. The stock price will go up, right? So don't worry about the bouncing around. Let's worry about hitting our long-term goals. And that's the biggest job I have is ensuring that our long-term goals not only drive value for our customers, but they drive value for our shareholders too.

Auren Hoffman (33:29.033) Now, you and I met almost 15 years ago when you running X-Lay and I was running LiveRamp. The industry has changed quite a lot since then. What are some non-obvious ways that the industry has changed?

Mark Zagorski (33:43.84) I think you brought up one of them, which was the, you know, the increasing power of the walled gardens. Right. And, know, 2010, when we met, you know, Facebook was in its early stages. You didn't see social playing a big role. I think the iPhone had just come out in 2010, right? So things like, short form video and, know, the Tik TOKs of the world and the, you know, the reels and YouTube shorts, like those didn't play a role.

Auren Hoffman (34:01.994) Yep.

Mark Zagorski (34:13.508) Fast forward to today, social dominates the ad landscape. Short form and video is how most people engage. And it's a different dynamic when it comes to ad dollars and where they're going to, as well as consumer engagement time. And consumers are ingesting video, they're ingesting it in social media platforms, and that's where advertiser dollars are going.

Auren Hoffman (34:41.963) What's your hot take of where the industry is going in the next kind of decade where, you know, or something you believe that other people don't believe?

Mark Zagorski (34:51.611) when I believe that other people don't believe. Hold on a second, I'm just gonna take a pause here, because the lights just went out and I'm trying to get somebody to come back here and turn them back on. This is motion lighting, you know? I don't know where the motion sensor is here right now. So, you know, I think that the one thing that I don't think anyone's 100 % sure about is what role AI will play in the whole space.

Auren Hoffman (35:01.493) Hehehehe... Hehehehe... Hehehehe... Hehehehe...

Mark Zagorski (35:23.561) in the advertising space, in the ad tech space. We're leveraging it in many ways. We leverage it with our coders to help them produce more code and not have to bang it out. They can use things like Copilot to help them accelerate that. Part of our business is looking at, we operate in literally almost a hundred different markets around the world. We operate in different languages.

We have to translate those languages. AI is playing a huge role in like lowering the cost of translation because we don't use people to translate. We use it to identify issues in video, right? So we have an AI tool called our Universal Content Intelligence that does predictive modeling on video. So that instead of looking at every frame of a video, we look at one out of 30 in the video and can predict ahead. So I think that the role of AI in advertising, think everyone agrees that it's going to be a

it's going to streamline a lot of operations. Where I think the discussion point and where the contention starts to come up is, will AI replace creativity? We talk a lot about data. We talk a lot about technology. But the reality of it is for advertising to work, it needs to have a creative hook. And I don't think AI, I think AI can be used as a paintbrush, but it ain't going to be Van Gogh.

right? You know, it'll make things move faster, it'll make things more seamless, but it will never be inspired to drive real creative ideas. And I think there are

Auren Hoffman (36:58.089) Why do you think that? I haven't seen, it seems like everything I've seen in the last year or two seems to be the opposite of that. Like, why do think the humidity is still going to be so prevalent for creativity?

Mark Zagorski (37:10.468) I'll use my high school son as an example. about this? I don't, he's a screenwriter and he writes really cool screenplays. and if I don't think any type of AI tool will ever create something that comes from someone's soul in the same way that a true creative, inspiration

that gets put on a piece of paper can. It can put the words on paper, but I've yet to see anything created by AI that's even close to being as uniquely as inspired as anything a human can create. I don't know. I feel like there's always something special there that humans are part of. AI can make it faster.

Auren Hoffman (37:59.251) Yeah, yeah. Well, certainly, think humans humans value things that other humans create. So if they knew an AI created it, I feel like they're going to they would they would they would devalue it. But if a human purported to create it and had AI in the background or something, then I don't know. I'm not sure. I'm not sure people would know that art piece or something like that was created by AI versus human.

Mark Zagorski (38:25.509) Yeah. Look, think, so I was on the jury at Cannes, the Cannes Creative Festival a few years ago, and an ad that won was called The Last Rembrandt. And what it was, was a Rembrandt created by AI that took all of the old Rembrandts and created a brand new Rembrandt painting based on what it learned. And I have to say, it was pretty.

Auren Hoffman (38:45.739) Mm-hmm.

Mark Zagorski (38:51.396) It's a pretty brilliant piece of art now. Now, mind you, the fact that I knew it came from there, maybe look at it and a lot of people look at it and like, this is kind of gross. But yeah, look, I don't know. I will, I am not a Luddite. I believe that, you know, we will continue to advance maybe in the future, like in the same way live events now have become the most valuable experience humans have, right? People are willing to pay for live events, but like digital media is very cheap. In the old days, it was the exact opposite.

Auren Hoffman (38:52.531) Yeah, it's amazing. Yeah.

Mark Zagorski (39:21.184) You bought a record, they were expensive, you could see a concert, it was like two bucks, right? Now, it's the exact opposite. I think maybe art and things created by humans will be seen as expensive and valuable, and creativity created by bots or by AI will not be seen as that much.

Auren Hoffman (39:41.349) There's been a lot of folks that have dabbled with the advertising world and made some maybe significant bets in it and then eventually pulled back. We saw Oracle recently do that where they made a bunch of acquisitions, DataLogix, they bought one of your competitors, Moat, they bought a few other kind of companies out there, BlueKai, et cetera.

Mark Zagorski (40:00.569) Yep.

Auren Hoffman (40:05.535) Eventually, they kind of like threw in the towel and didn't and decided this wasn't like the right thing for them. I think we all kind of understand like why it's seductive for a big kind of company like Oracle to play in the market. Why do you think it didn't work out for them? And what can like other companies learn from that?

Mark Zagorski (40:25.986) Yeah, think, look, I think it goes back to one of the things we were just talking about earlier, which is this is a space that's constantly changing. It takes a ton of focus, takes investment and innovation, and it's hard. It's like a messy space. It's not like the cloud business, right? Or the infrastructure business. like, okay, we're onto something here. We just got to build a shit ton of it, right? We got to build big stacks and big clouds, right? This is like, mean we have to build something specifically for PNG?

Auren Hoffman (40:33.408) Yep.

Auren Hoffman (40:41.984) Yeah.

Auren Hoffman (40:47.145) Yeah, yeah, totally.

Mark Zagorski (40:54.958) Like we have to do this innovation because this new platform can't, like there's this short form video thing called TikTok and we have to like, we have to build something for it. What if it never catches on? Like what if no one ever gets into this thing? know, there's something, do you remember Clubhouse? Remember Clubhouse was gonna be the next big thing. It was gonna be like hot. Yeah, exactly. Yeah, everyone's like, man, we gotta start building. My team was like, should we start building like verifications, you know, tools for Clubhouse? I'm like, let's feel it out, let's see.

Auren Hoffman (41:05.801) Yeah. Yeah. Yeah. Yeah. Totally. Yeah. It was big. Yeah. Probably a lot of people wrote for that for like at least a few weeks. Yeah. Yeah.

Auren Hoffman (41:23.699) Yeah, yeah.

Mark Zagorski (41:24.398) But what I'm getting at here is this is a space that's constantly changing because it's driven by creativity and humans and human engagement with media. And that changes all the time. So you have to be on top of it. You have to be willing to invest. You have to be willing to make commitments, to innovate. And when you don't do that, you die. And it goes back to another thing I just mentioned, which is I get investors talking to me all the time. Like, well, again, why do you need to put so much into R &D every year? And I'm like, well.

Auren Hoffman (41:44.618) Yep.

Mark Zagorski (41:53.548) It could be us or we could be moat. You know, like, they didn't innovate. They didn't have tools for social. They didn't have a robust dynamic pre-bid solution. They never built an attention solution or an optimization solution like we have in side bids. So like you start not focusing on things. You start to not be innovative and you're not innovative in this space. In the ad tech space, you're just, you're going to die. Right? There's no doubt about it. Like that's it. And it doesn't mean that big companies can't do it.

Auren Hoffman (42:19.209) Yeah.

Mark Zagorski (42:23.729) but it takes time and effort and, and money and that's it.

Auren Hoffman (42:28.585) Some of these bigger companies that have kind of flirted with it, whether it be Oracle or even Microsoft, Salesforce, some of these like very large companies, like if they were more involved, that would in some ways increase everyone's valuations, right? Because they would be, they're massive companies. They could acquire more things. They could pay more things. Like, know, there's...

Mark Zagorski (42:47.768) Yeah.

Auren Hoffman (42:51.359) There's really, there's very few, if not maybe zero acquirers of double verified it. Like, like you just kind of have to be an independent company because like, well, you not like nobody would allow you to sell to Google or Facebook or something. Right. So, you know, it's like, if there were more of these, it might increase everyone's value yet. It just doesn't seem that that's the, that's in the cards for the next few years.

Mark Zagorski (43:13.592) Yeah, look, the messiness of ad tech is that there's value and innovation in small features and functions, but there's also, there's a value in independence, like in many different aspects of the space, whether it's the data space, right, or the verification space. Like being independent has a good amount of value because as the people who are buying and selling media become more more concentrated,

Like more functions are held within this walled garden universe. Like the ability to actually stand outside that and be in call bullshit on things that don't look right. Yeah. Is, is, is, is really important. So, you know, that's a core part of our value prop is, you know, we stay out of the, the, transaction we're independent. no one tells us what to do, with respect to kind of how we judge things, you know, and,

Auren Hoffman (43:51.346) I'd be independent, truly independent, yeah.

Mark Zagorski (44:10.744) But even us, we get accredited. So we have people look at our processes, the MRC and other accreditation firms look to make sure we're doing the right stuff. But there's value in independence. And I think every industry has like the big players, the big trans actors, but also if it's going to involve some type of exchange of value between a buyer and seller, having someone who stands out of that exchange to be able to judge whether or not it's fair, I think is critical. And you see that, look, I mean,

Finance has that, advertising has it, retail has it in some ways. Think about it, like you have credit card vendors who, their job is to ensure that that transaction between a buyer and seller in a retail environment is safe and valid. So there's always a role for independence to play.

Auren Hoffman (44:51.893) Yeah. Yep.

Auren Hoffman (44:57.144) Okay, a couple of personal questions. What is a conspiracy theory that you believe?

Mark Zagorski (45:01.508) A conspiracy theory, I believe. I've always been one to believe that there is something that the government knows about aliens. I was a kid growing up.

Auren Hoffman (45:15.755) That is like, I think the most common one that people, there's something in the water where everyone is still like really in the alien thing. Yeah.

Mark Zagorski (45:19.591) You

Mark Zagorski (45:23.012) There has to be, there has to be. I grew up reading all those books and chariots of the gods and all that kind of stuff. They've been here, I'm telling you. They've been here at some point. Somebody knows something.

Auren Hoffman (45:31.72) Yeah, yeah.

Okay, I like it. All right, last question. We ask all of our guests. What conventional wisdom or advice do you think is generally bad advice?

Mark Zagorski (45:42.948) So I'm an avid anti-business book reader, i.e. I don't believe most business books are written so far past something actually being valuable to be talked about. I don't consider a lot of the conventional business advice.

Auren Hoffman (45:54.453) Yep.

Auren Hoffman (45:58.537) And you were anti because like when you're younger, you read a bunch of them, but they weren't helpful or okay. Yeah.

Mark Zagorski (46:02.08) Yeah, and I was like, yeah, this isn't working. Built to last, is, whatever, is it working? So maybe I'll say not unconventional. I'll say there's one thing I think people overlook all the time, which is a lot of people don't talk about luck and timing when it comes to business. That's something you can't predict and you can't build for and you can't like,

Auren Hoffman (46:11.018) Yeah.

Auren Hoffman (46:29.354) Yep.

Well, you can, you can build forward in a way by being resilient, right? So if you're resilient, then you, you could ride the bad lock and take advantage of the good luck when, when it comes, you don't want to be able to have to, long as you don't go out of business, you can take advantage of the good luck when it comes, right?

Mark Zagorski (46:32.056) You know, you can't plan. Exactly.

Mark Zagorski (46:45.324) Yeah, that's totally fair. mean, like, look, luck isn't a strategy at all and either is timing. But, you know, this thesis that the best company always wins is like, totally not true, right? You can build an amazing company and still if your timing is off, you're going to get crushed, right? And I think that timing and luck are an essential part of success and they're ones in which like,

Auren Hoffman (46:50.719) Yeah.

Auren Hoffman (46:58.687) Yeah, yeah.

Mark Zagorski (47:12.46) you can't control very much. So I don't know if that's just, that's probably bad advice. Don't take advice from me. Don't build your business on luck. But I like your take on it, which is if you're resilient enough and you're doing the right stuff, the timing will play in your favor at some

Auren Hoffman (47:18.079) Yeah.

Yeah.

Auren Hoffman (47:29.331) Is there anything like on hiring that you do differently or where you're like looking higher like people? Are there something that you think like most people overvalue or undervalue that you value differently?

Mark Zagorski (47:40.26) You know, I used to have this policy and unfortunately, I can't do it anymore because we're a bit bigger. I used to meet every person that we're going to make an offer to and even just for 10 minutes. And I always told the manager, the hiring manager, and this is when I was running companies that were 200, 300 people and I could do that, right? I was like, I just want a couple of minutes with them. And I always told the manager, I'm never going to make the decision to go or no go on that person. It's always going to be your call, but I'm to give you the direct feedback of how I feel and you can make the call on it. And I felt those couple minutes,

Auren Hoffman (47:56.384) Yeah.

Auren Hoffman (48:09.023) What did you do in those couple of minutes to get a feedback?

Mark Zagorski (48:10.798) You know what I did? I didn't do anything. I came in and said, hey, this is for you to ask me questions. Ask me questions. Were they curious? Did they want to learn more? Because most of them thought they were coming in for an interview. And even today when I interview senior people, most of the time is not me asking them stuff. It's like, I want you to ask me things so I can feel what you're into. I can't do that. We've got,

Auren Hoffman (48:16.839) OK, so just like the quality of good questions are quality. Yeah.

Auren Hoffman (48:25.897) Yeah.

Auren Hoffman (48:34.016) Yeah.

Mark Zagorski (48:39.62) almost 1500 people globally. and we're hiring, so I don't have the time. I tried when I first started here and I'm like, it's just not going to work. don't, can't fit them all, but I do, when I do meet with folks, I would say 75 % of the time I leave in any engagement or discussion, I leave for them asking questions of me, because I think it's, important to see how people are thinking, how, how much they're leaning into what you're doing and what their thoughts are.

Auren Hoffman (49:07.945) And what you're, you're trying to find like, you're trying to be like, wow, that question made me think, or that question was interesting rather than just kind of a standard kind of question or something or.

Mark Zagorski (49:18.156) Yeah, like I've never been one for like, let me get those five lists of gotcha questions that I can hone somebody into a box and see how they think. Like I want them to give me the gotcha question, right? That shows me like, this is going to be a person that's going to come in and challenge me. That's going to challenge what we do here that, you know, I don't want someone who's just going to take direction.

Auren Hoffman (49:23.626) Yeah.

Auren Hoffman (49:28.811) Correct. Yeah.

Auren Hoffman (49:35.615) Also, if they're going to ask you that question, means they have to have really, they have to have understood your business to, to an extent where they could ask that question, right?

Mark Zagorski (49:43.02) Yeah. Yeah. Yeah. And I think that's, know, and it's, don't think it's being lazy and not like going at somebody because I think the discussion that usually comes out of that is it really telling to see what kind of person that would be as an employee. Like if they ask you the right kind of question and you give them a feedback, you know, give them answer back. It's always interesting to see whether they take that and just nod and say, thank you for answering that. Or they go, wait a minute.

So what did you mean by that? do you really think that's And at some point, you don't want someone for like two hours to be arguing with you, right? But you want someone who's gonna challenge you because again, the thread that weaves through everything we do here is we've got to be disruptive, we've got to innovate. And people who want to innovate aren't people who are like, yeah, just tell me what I need to do and I can tell how great I can do it. Like, no, you want people who are like, all right, tell me what you think the problem is.

Auren Hoffman (50:11.539) Yeah, yeah. Double-click it.

Yeah, yeah, yeah.

Auren Hoffman (50:34.379) Hehehe.

Mark Zagorski (50:38.562) And let me see if I can come up with an answer. And you might not like the answer, but I'm going to give you some kind of answer, right?

Auren Hoffman (50:44.329) Yeah, this has been great. Well, thank you, Mark, for joining us at World of DaaS. Really appreciate you being on. Big fan of yours, fan of what you're doing at Double Verify. I follow you on LinkedIn. I definitely encourage our listeners to get you there. This has been a ton of fun.

Mark Zagorski (50:49.997) Of course.

Mark Zagorski (50:57.386) Awesome. Well, thank you, Auren. Great talking again and good catching up.