 Hello everyone, welcome to theCUBE's presentation of the AWS Startup Showcase. We're in season two, episode three, and this is the topic of Mar-Tech and the emerging cloud-scale customer experiences, the ongoing coverage of AWS's ecosystem of large-scale growth in new companies and growing companies. I'm your host, John Furrier. We're excited to have Tim Barnes, global director, general manager of advertiser and marketing at AWS. Here at doing the keynote, cloud-scale customer experience. Tim, thanks for coming on. Oh, great to be here and thank you for having me. You know, you've seen many cycles of innovation, certainly in the ad-tech platform space around data, serving consumers, and a lot of big, big-scale advertisers over the years as the web, 1.0, 2.0, now 3.0 coming, cloud-scale, roll of data, all big conversations. Has changed in the game. We see things like cookies going away. What does this all mean? Silo's, walled gardens. A lot of new things are impacting the applications and expectations of consumers, which is also impacting the folks trying to reach the consumers. And this is kind of creating a kind of a current situation, which is challenging, but also an opportunity. Can you share your perspective of what this current situation is as the emerging Mar-Tech landscape emerges? Yeah, sure, John. I, you know, it's funny in this industry, the only constant has changed and it's an ever-changing industry and never more so than right now. I mean, we're seeing with whether it's the rise of privacy legislation or just breach of security of data or changes in how the top tech providers and browser controllers are changing their process for reaching customers. This is an inflection point in the history of both Ad-Tech and Mar-Tech. You hit the nail on the head with cookie deprecation, with Apple removing IDFA, changes to browsers, et cetera. We're at an interesting point. And by the way, we're also seeing an explosion of content sources and an ability to reach customers that's unmatched in the history of advertising. So those two things are somewhat at odds. So whether we see the rise of connected television or digital out of home, you mentioned Web 3.0 and the opportunities that may present in Metaverse, et cetera. It's an explosion of opportunity, but how do we continue to connect brands with customers and do so in a privacy compliant way? And that's really the big challenge we're facing. One of the things that I see is the rise of modeling or machine learning as a mechanism to help remove some of these barriers. If you think about the idea of one-to-one targeting, well, that's going to be less and less possible as we progress. So how am I still as a brand advertiser or as a targeted advertiser? How am I going to still reach the right audience at the right message in a world where I don't necessarily know who they are? And modeling is a really key way of achieving that goal and we're seeing that across a number of different angles. You know, we've always talked about in the ad tech business for years, it's the behemoth of contextual and behavioral, you know, those dynamics. And if you look at the content side of the business, you have now this new massive source of new sources, new, new, new, you know, blogging's been around for a long time. You got video, you got newsletters, you got all kinds of people self publishing. That's been around for a while, right? So you see now these new sources. Trust is a big factor, but everyone wants to control their data, right? So this walled garden perpetuation of value, I got to control my data, but machine learning works best when you expose data. So this is kind of a paradox. Can you talk about the current challenge here and how to overcome it? Because you can't fight fashion as they say. And we see people kind of going down this road of saying data is a competitive advantage, but I got to figure out a way to keep it, own it, but also share it for the machine learning. What's your take on that? Yeah, I think first and foremost, if I may, I would just start with it's super important to make that connection with the consumer in the first place. So you hit the nail on the head for advertisers and marketers today, the importance of gaining first party access to your customer and with permission and consent is paramount. And so just how you establish that connection point with trust and with very clear directive on how you're going to use the data has never been more important. So I would start there by with a brand advertiser or a marketer, trying to figure out how I'm going to better connect with my consumers and get more first party data that I could leverage. So that's just building the scale of first party data to enable you to actually perform some of the types of approaches we'll discuss. The second thing I would say is that increasingly the challenge exists with the exchange of the data itself. So if I may data control if I own a set of first party data that I have consent with consumers to use and I'm passing that data over to a third party and that data is leaked, I'm still responsible for that data. Or if somebody wants to opt out of a communication and that opt out signal doesn't flow to the third party, I'm still liable or at least from the consumer's perspective I've provided a poor customer experience. And that's where we see the rise of the next generation I call it of data clean rooms, the approaches that you're seeing a number of customers take in terms of how they connect data without actually moving the data between two sources. And we're seeing that as certainly a mechanism by which you can preserve accessibility data. We call that federated data exchange or federated data clean rooms. And I think you're seeing that from a number of different parties in the industry. That's awesome. I want to get into the data interoperability because we have a lot of startups presenting in this episode around that area. But while I got you here, you mentioned data clean room. Could you define for us, what is a federated data clean room? What is that about? Yeah, I would simply describe it as zero data movement in a privacy and secure environment to be a little bit more explicit and detailed. It really is the idea that if I'm a party A and I want to exchange data with party B, how can I run a query for analytics or other purposes without actually moving data anywhere? Can I run a query that has accessibility to both parties that has the security and the levels of aggregation that both parties agree to and then run the query and get those results that sets back in a way that it actually facilitates business between the two parties. And we're seeing that expand with partners like Snowflake and Infosom and even within Amazon itself, AWS, we have data sharing capabilities within Redshift and some of our other data lake capabilities. And we're just seeing an explosion of demand and need for customers to be able to share data but do it in a way where they still control the data and don't ever hand it over to a third party for execution. So if I understand this correctly, this is kind of an evolution to kind of take away the middleman, if you will, between parties that used to be historically the case. Is that right? Yeah, I'd say the middleman still exists in many cases. If you think about joining two parties data together, you still have the problem of the match key, right? How do I make sure that I get the broadest set of data to match up with the broadest set of data on the other side? So we have a number of partners that provide these types of services from live ramp, trans union, experience, et cetera. So there's still a place for that so-called middleman in terms of helping to facilitate the transaction. But as a clean room itself, I think that term is becoming outdated in terms of a physical third party location where you push data for analysis this control by a third party. Yeah, great, great clarification there. I want to get into this data interoperability because the benefits of AWS and cloud scale as we've seen over the past decade and looking forward is it's an API based economy, right? So APIs and microservices, cloud native stuff is going to be the key to integration. And so connecting people together is kind of what we're seeing as the trend. People are kind of connecting their data, they're sharing code in open source. So there's an opportunity to connect the ecosystem of companies out there with their data. Can you share your view on this interoperability trend? Why it's important? What's the impact customers who want to go down this either automated or programmatic connection oriented way of connecting data? Never more important than it has been right now. I mean, if you think about the way we transact and still to today do to a certain extent through cookie swaps and all sorts of crazy exchange of data, those are going away at some point in the future. Could be a year from now, it could be later, but they're going away. And I think that that puts a great amount of pressure on the broad ecosystem of customers who transact for marketers on behalf of marketers, both for advertising and marketing. And so data interoperability to me is how we think about providing that transactional layer between multiple parties so that they can continue to transact in a way that's meaningful and seamless. And frankly, at lower cost and at greater scale than we've done in the past with less complexity. And so we're seeing a number of changes in that regard whether that's data sharing and data clean rooms or federated clean rooms as we described earlier, whether that's the rise of next generation identity solutions. For example, the UID 2.0 consortium, which is an effort to use hashed email addresses and other forms of identifiers to facilitate data exchange for the programmatic ecosystem. These are sort of evolutions based on this notion that the old world is going away, the new world is coming and part of that is how do we connect data sources in a more seamless and frankly efficient manner. It's almost interesting. It's almost flipped upside down. You had this walled garden mentality. I got to control my data, but now I have data interoperability. So you got to own and collect the data, but also share it. This is going to kind of change the paradigm on identity platforms, attributions, audience as audiences move around. And with cookies going away, this is going to require a new abstraction, a new way to do it. So you mentioned some of those standards. Is there a path in this evolution that changes it for the better? What's your view on this? What do you see happening? What's going to come out of this new wave? Yeah, you know, my father was always fond of telling me, you know, the customer, my customers is my customer. And I like to put myself in the shoes of, you know, the Mark Richards of the world at Procter & Gamble and think, what is, what do they want? And frankly, their requirements and for data and for marketing have not changed over the last 20 years. I want to reach the right customer at the right time at the right message and I want to be able to measure it. In other words, summarizing, I want omnichannel execution with omnichannel measurement. And that's become increasingly difficult as you highlighted with the rise of the wall gardens and increasingly data living in silos. And so I think it's important that we as an industry start to think about, what's in the best interest of the one customer who brings virtually 100% of the dollars to this marketplace, which is the CMO and the CMO office. And how do we think about returning value to them in a way that is meaningful and actually drives this industry forward? And I think that's where, you know, the data operability piece becomes really important. How do we think about connecting the omnichannel, channels of execution? How do we connect that with partners who run attribution offerings with machine learning or partners who provide augmentation or enrichment data such as third party data providers or even connecting the buy side with the sell side in a more efficient manner. How do I make that connection between the CMO and the publisher in a more efficient and effective way? And these are all challenges facing us today. And I think, you know, the foundational layer of that is how do we think about, first of all, what is the, what data does the marketer have? What is the first party data? How do we help them ethically source and collect more of that data with proper consent? And then how do we help them join that data into a variety of data sources in a way that they can gain value from it? And that's where machine learning really comes into play. So whether that's the notion of audience expansion, whether that's looking for, you know, some sort of cohort analysis that helps with contextual advertising, whether that's the notion of, you know, more of a modeled approach to attribution versus a one-to-one approach. All of those things that think are in play as we think about returning value back to that customer of our customer. As interesting, you broke down the customer needs in three areas, CMO, office and staff, partners, ISV, software developers and then third party services. Kind of all different needs, if you will, kind of tiered. Kind of at the center, that's the user, right? The consumer who have that expectation. So it's interesting, you have the stakeholders who laid out kind of those three areas as customers but the end user, the consumer, they have a preference. They kind of don't want to be locked into one thing. They want to move around. They want to download apps. They want to play on Reddit. They want to be on LinkedIn. They want to be all over the place. They don't want to get locked in. So you have now kind of this high velocity user behavior. How do you see that factoring in because, you know, with cookies going away and kind of the converges of offline, online really becoming predominant, how do you know someone's paying attention to what and when, attention and reputation? All these things seem complex. How do you make sense of it? Yeah, it's a great question. I think that the consumer, as you said, finds a creepiness factor with a message that follows them around their various sources of engagement with content. So I think there's, at first and foremost, there's the recognition by the brand that we need to be a little bit more thoughtful about how we interact with our customer and how we build that trust and that relationship with the customer. And that all starts with, of course, opt-in process, Consent Management Center, but it also includes how we communicate with them. What message are we actually putting in front of them? Is it meaningful? Is it impactful? Does it drive value for the customer? I think we've seen a lot of studies. I won't recite them that state that most consumers do find value in targeted messaging, but I think they want it done correctly. And therein lies the problem. So what does that mean by channel, especially when we lose the ability to look at that consumer interaction across those channels? And I think that's where we have to be a little bit more thoughtful with, frankly, kind of going back to the beginning with contextual advertising, with advertising that perhaps has meaning or has empathy with the consumer, perhaps resonates with the consumer in a different way than just a targeted message. And we're seeing that trend. We're seeing that trend both in television, connected television as those converge, but also as we see about connectivity with gaming and other sort of more nuanced channels. The other thing I would say is, I think there's a movement towards less-interruptive advertising as well, which kind of removes a little bit of those barriers for the consumer and the brand to interact. And whether that be dynamic product placement, content optimization, or whether that be sponsorship type opportunities within digital, I think we're seeing an increased movement towards those types of executions, which I think will also provide value to both parties. Yeah, I think you're nailed it there. I totally agree with you on the contextual targeting. I think that's a huge deal and that's proven over the years of providing benefit. People are trying to find what they're looking for, whether it's data to consume or a solution they want to buy. So I think that all kind of ties together the question is these three stakeholders, the CMO office and staff you mentioned and the IS software developers, the apps or walled gardens, and then like ad servers, as they come together, have to have standards. And so I think to me, I'm trying to squint through all the movement and the shifting plates that are going on in the industry and trying to figure out where the dots connecting. And you've seen many cycles of innovation because at the end of the day, it comes down to who can perform best for the end user as well as the marketers and advertisers. So that balance, what's your view on this shift? It's got to land somewhere. It has to land in the right area. The market is very efficient. I mean, this ad market is very efficient. It'll be in itself. So from a standards perspective, I support and we interact extensively with the IB and other industry associations on privacy enhancing technologies and how we think about these next generations of connection points or identifiers to connect with consumers. But I'd say this with respect to the CMO and I mentioned the publisher earlier, I think over the last 10 years with the rise of programmatic, certainly, we saw the power reside mostly with the CMO who was able to amass a large pool of cookies or purchase a large sort of cohort of customers with cookie-based attributes and then execute against that. It's almost a blind fashion to the publisher. The publisher was sort of left to say, hey, here's an opportunity. Do you want to buy it or not? With no real reason why the marketer might be buying that customer. And I think that we're seeing a shift backwards towards the publisher and perhaps a healthy balance between the two. And so, I do believe that over time that we're going to see publishers provide a lot more, what I might almost describe as mini wall gardens, right? So the ability for a publisher a set of publishers to create a cohort of customers that can be targeted through programmatic or perhaps through programmatic guaranteed in a way that it's a balance between the two. And frankly, thinking about that notion of federated data clean rooms, you can see an approach where publishers are able to share their first-party data with a marketer's first-party data without either party feeling like they're giving up something or passing all their value over to the other. And I do believe we're going to see some significant technology changes over the next three to four years that really rely on that interplay between the marketer and the publisher in a way that it helps both sides achieve their goals. And that is increasing value back to the publisher in terms of higher CPMs and of course better reach and frequency controls for the marketer. I think you really brought up a big point there we can maybe follow up on, but I think this idea of publishers getting more control and power and value is an example of the market filling a void in the power law, you get the long tail, it's kind of a straight line and then it's got the niche kind of communities. It's growing in the middle there and I think the middle of the torso of that power law is the publishers because they have all the technology to measure the journeys and the click-throughs and all this traffic going on on their platform but they just need to connect to someone else that brings in the interoperability. So as a publisher ourselves, we see that long tail getting really kind of fat in the middle where new brands are going to emerge. If they have audience, I mean some podcasts have millions of users and some blogs are attracting massive audience, niche audiences that are growing. You know, I would say just look at the rise of what we might not have considered publishers in the past, but are certainly growing as publishers today. Customers like Instacart or Uber who are creating ad platforms or gaining, which of course has been an ad-supported platform for some time, but is growing immensely. Retail as a platform, of course Amazon.com being one of the biggest retail platforms with advertising supported models, but we're seeing that growth across the board for retail customers and I think that, you know, again, there's never been more opportunities to reach customers. We just have to do it the right way in a way that it's not offensive to customers, not creepy if you want to call it that, and also maximizes value for both parties and not for, and that being both a buy and a sell side. Yeah, everyone's a publisher now, everyone's a media company, everyone has their own news network, everyone has their own retail. It's a completely new world. Tim, thanks for coming on and sharing your perspective and insights on this keynote. Tim Barnes, Global Director, General Manager of Advertiser and Market AWS here with the episode three of season two of the AWS startup showcase. I'm John Furrier, thanks for watching.