Attention Capital's Joe Marchese on the crisis - and opportunity - in how we measure eyeballs on the internet
Welcome to the digital podcast Brian. Marcy this week I'm joined by Joe. Marquel JOE is the former Fox executive who is now the CEO of attention capital an investment firm and operating company. That's focused on those media. Companies THAT CAPTURE ATTENTION. Attention is required. One property girl boss. Jani discuss why he thinks the attention. Konami is in what he calls a state of subprime. And why you can still build an AD media company in two thousand twenty but just not one that's based on. Cpm DISPLAY ADS. Hope you enjoy Joe. Walk into podcasts. I thank you for having known each other so long. We have this is this is Serious throwback here so going back to social vibe you're we're GonNa talk about Social Vibe later. Gay But what you're doing. I mean you've had you've had a really fascinating career. I mean I think when we first knew each other You start up then And you went through that startup pivoted. You did the pivot and everything this you sold it. Yup He had an accent the and then instead of doing the sort of serial entrepreneur route you went in to like a large media organization. Yeah and so You saw the innards of that right and now you're back sort of on. I would say the investor side but something more explain. What attention is so? I mean attention is a company. It's an IT's an operating company It's just a company that's built to buy other companies And and kind of that fit a particular thesis okay. What's the thesis That the entire global economy runs on top of the attention. Economy of which advertising is the most visible market And that the attention economy is in a state of subprime. Okay explain The mets like subprime. Yeah yeah the the metrics that we use to measure Attention or that we used to represent attention or becoming less and less tied to what people are actually spending their time doing so. I think that there's An opportunity right now to say that there are things that have better and more attention or higher quality attention than the metrics give them credit for I mean you guys talk about this plenty and digitally as cover the industry of advertising but in the in the chase of really what we'd call vanity metrics impressions and page views an There so uncoupled from what people are actually what quality attention is and so therefore things that have quality attention are probably undervalued of put simpler We've kind of convinced the world's been convinced by by big tech for the most part that everything can be measured And if you can't measure it don't buy it then that to me makes makes me think everything that's hard to measure is probably undervalued. Yeah but you've kind of been on about this for a while you're right because I can remember talking to you about different like different metrics. Vp and whatnot. Because you saw the problems when it comes to CBC or CPM right And then I'm sure like within than Fox. He saw the limits particularly of of how. Tv is measured. Yeah and and you know it's funny People assume that you'd really hate TV. Measurement as a digital person. Yeah but to be honest like I'm kind of bullish on panel data because panel data. It's hard to fraud Like like I mean they you know. There's there can be entire phone farms. In other countries that Census data like digital data. Pick up but sit at digital guys. Were always an usually. They're all guys. I were always railing against Nielsen. And how terrible Nielsen is and you get to the other side and your leg. Actually this isn't that no no. It's not that bad I will say like look. Nielsen can be inaccurate. But there's not a warehouse full of TV's racking fake impressions right like like panel. Data is a representation of What a certain set of people are doing. And then you extrapolate like. This is how much time we have the. You know. It's all the classic things like every every four there's more ad impressions in the world and digital world. The more people are watching more ads. And Chiavari think we're just trying to shove them in there so this is all true so why in the world of all the things that you would want to invest in would media. I mean it seems like a terrible. I don't WanNa talk you out of it. It's too late to do too late. I'm here explain to me why this is an opportunity so I actually think that I think there's a couple of things that that are huge opportunities right now which is As platforms grow and as as they chased these vanity. Metrics Trust begins to erode right quality. Goes Down I mean look all platforms engineered towards volume not quality. And and what I mean by that is they are if you make something for a penny and sell it for two pennies. You've made a penny of profit if you make something for ten dollars until it for twelve dollars you've made two dollars of profit. Humans like the two dollars of profit that makes sense computers. Say That none of that. Penny one hundred percent margin. Let's do that a trillion times right and that is why you see like some of the largest advertisers in the world on on the major platforms. are selling very low cost goods right so same thing applies to products as applies to news so in this world where trust is a roading. the curator brands kind of become king. Like no one goes to the front page of Amazon negotiating. You don't you. Don't start at the front page of time to go shopping. You come there with an idea of what you're going to buy And I think the great example of this wire cutter right. I mean wire cutter which you know. curates what electronics. You should buy. has built trust with the community Obviously The New York Times acquired a while ago but these curator's in wire cutter I think is to the next evolution of of the web. I guess we're still going at the Web. Go for here. What craigslist was to the window version? and then post craigslist. There was Angie's list and that was a brand being put on top of it. I mean I have something to shock you With Angie did not meet every contractor. Angie's list those are those are television. Commercials Yeah and that's a brand that got built up and why does that matter? We'll because people would start there rather than starting out a search engine or starting an open platform. I think what's interesting is particularly. Let's stick with the wire cutter as an example. I mean people in media. I think love love the wire cutter. I think with good reason Mostly because it's an anti-scale play anything algorithm mic. It seems like is gamed. Yes I mean because when you go to Amazon and like I don't know about you but if I'm buying those like okay the bestseller best reviews whatever and then you're like you know we've written about it you know there's Yup armies of fake one hundred dollars and anything that can be gamed like that will be and that's what brands are supposed to be. So I I'm a huge fan like I am. I am anti a lot of things in the way. Advertising is kind of polluted The Internet and chasing kind of the metrics that don't matter I'm a huge fan of brands. See Brands are the things that you hold responsible for that you trust too right like Brand less like Kind of commodities. If there's you know lead in the toy or they're you know the you know the classic stories of you know Tylenol. An the the brand is the thing that consumers hold responsible when you go to a platform It's almost like you. They're extracting the margin from brands. And I think that there's a huge role to be played in. In consumers minds to be building up brands that can be cures for them for different areas of life. Okay so this was the the the thesis differentiated. Good time because trust is is you know. I think there was that article Max read wrote. It does sort of everything is fake on the Internet a couple years ago. That sort of summed up this this period that you know we were talking over the years right. It was all leading up to this this primis of online advertising See Pile of money That'd be nice right money. It's attention capital capital. So it's a great way nickname your company capital and people like you and I can only imagine So how much what is like two hundred million. I NOT NON reported non real time to to talk. I don't know so. What have you bought so far So first partnered with James Murdoch's lupus systems we bought the TRIBECA Film Festival invested in controlling stakes together and then Girl boss most recently company. Okay so explain. Each of those different types of properties. But why does this fit your thesis? Well so you look at areas of life where people are looking for curation in so tribeca in the entertainment space and girl boss kind of in employment career Lifestyle and so the way we look at it as he'd attention capital is there's two types of things there's community brands so we define a community. Brandis if they threw an event. Would someone get on an airplane and go there Do they permission to curate? Some aspect of the world's tribeca. Obviously they haven't event They literally curate films. They don't make all the films they tell you. Here's what to see with someone. Where the brand on their t shirt. They don't have to be an apparel company but people would wear tribeca shirt and is the community self sustaining without always having to make content right because if you always have to make content. That's a treadmill that you have to run on versus. Is there a community of people who people go the events The thing that gets the most exciting about TRIBECA 's ethos as a brand that was founded after nine eleven downtown. We're here in downtown. New York and And the idea of independent storytelling equality versus volume. Like you just can't see that many movies like we have to be able to curate down to select few all of those things I mean. That's a brand that were incredibly excited about and a founder and CEO. And Jane Rosenthal that we want to work with and kind of expand I. I'm struck that both of them have a quote unquote events component. They're able to turn people out Yup We we are big believers digital so I might be talking my own book cure but we think that there is something to be said about you know and I think people are coming around to about being able to turn out a community of people. Hundred percent We are huge huge believers in in a I R L digital connection real life to digital connection that it's proof that you have that type of influence in the world like versus again factory said the algorithms can be game but people showing up at a movie theater camp. Yeah I mean like you know. I always went back to the sort of game. Of Game of thrones recaps. It's like you know the the reason that there were. So many. Game of thrones recaps. Is I mean it's not just because of like passion or the brand is it's it's because that's what turned page views right exactly. It's entrepreneur right. I don't hate the player. Geno hate the game. I agree on some of the players.