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In the context of today’s quickly evolving advertising landscape, agencies must keep pace with the rapid growth of digital media and adtech to meet their clients’ needs. Brands are demanding deeper insights and expertise around which platforms to invest in, how to leverage first-party data for greater impact, and more.

In this episode, John Lods, CEO of the agency Arm Candy, shares his thoughts on navigating these complexities. Together with host Noor Naseer, Lods explores how agencies can stay ahead of the curve, evaluate new technologies, and offer meaningful, data-driven advice that sets their clients up for success.

Transcript below:

A quick note — Noor Naseer: This episode of Adtech Unfiltered was recorded before Google released news they no longer plan to Sunset third party cookies. The industry is still inevitably going to be less reliant on cookies and hence, any conversation on the topic is still relevant for listeners. Hey, this is Noor Naseer, and you’re listening to Adtech Unfiltered. The world of advertising is demanding a growing range of subject matter expertise on evolving topics, trends and challenges. A core driver of that complexity is the rapid evolution of digital media and adtech solutions that brands need to adopt. In more recent years staying on top of the latest, and formulating meaningful perspective has become increasingly complex. With end clients demanding more information on what to invest in, why and how, media professionals need to know more – and fast. But if you ask John Lods, these are just the challenges that make advertising exciting. John is the founder and CEO of Arm Candy, a full-service media intelligence agency focused on delivering best-in-class media services. Emphasis on the media intelligence which he expects every employee to bring to clients. He shares his perspective with me on how to better consult and advise advertisers and truly meet the needs they need to deliver on. We talk about brand versus performance campaigns, evaluating the myriad of tech and solution providers out there, leaning into first party data and more. Let’s get into this episode right now.

Interview Start
0:10:43.0 Noor Naseer: I think what would be good is to just take me back a little bit to your origin story. You lead an agency now. But what got you going in terms of desiring to build an agency and make your own agency?

0:01:46.2 John Lods: Yeah, that’s a good question so previously I worked at a couple independent agencies and they were full service agencies. And what I learned with having a lot of colleagues, friends and Associates in the space when people say full service a lot of times they were creatively-led services. And so, as someone who is passionate for media it was really tough to get the focus and resources you need to build out a media team or really give it a go to do the greatest work and hire the greatest talent.

So, I had this thought that instead of trying to do everything for everyone, could you consolidate your thinking, energy, time and resources into media and build the highest quality media product out there. So, I thought full-service institutions it was really challenging for them to be number one at creative, and number one at media. And so went out started that and so far, the thesis has worked and we’ve plugged into a lot of creative agencies to help partner along with them and beef up their media team instead of them trying to manage a bunch of folks that they don’t necessarily know how to manage media talent as well as a media agency might.

Noor Naseer: And to get a little more background on the tech focus that you have at Arm Candy, can you tell me what that central pivot is for you all, how you’re leaned into that and how you’re attracting clients to some of those tech services you bring to the table?

John Lods: Yeah, for sure. So one of our unique strategic positions and we’re a full service media agency. And what I mean by full service is that we manage traditional, digital and shopper, retail investments. So all things TV, radio, out home, print we’re very comfortable with. All things programmatic, social and search and then retailer, like post pandemic – there’s a new retailer platform every week every other week CVS, Walgreens, Amazon, Walmart, media group Instacart – they’re all rolling out. And there are a lot of agencies that prioritize brand or prioritize performance or prioritize traditional investments or digital. And what we saw as an opportunity was to be a single source of a multitude of investments. That way, you could help the organization decide, when is it time to invest in a brand, when is it time to invest in performance, when is it time to grow our shopper and retailer relationships? And when you’re an agency that only does brand or performance or retailer, for instance, obviously you are going to use whatever data set you can to form the logical conclusion that they need to invest with you. Where I think a lot of our strategic positioning is really being unbiased around the investments that we make across those different types.

From a techstack perspective we have strategically remained fully agnostic. So, I like to think we make a lot of unbiased decisions. We choose the DSPs in the tech stack that we believe are going to drive the best results for our clients. And what we’ve done really well is we’ve actually aggregated all the historical investments that we’ve managed across the tech stack. And we’re learning what types of tech partners historically have derived certain types of results. Some are really good at driving viewability. Some are really good at limiting ad fraud. Some are really good at maximizing click-through rates. Some are really good at driving conversions in online commerce. Some are really good at driving app downloads. Not each tech platform is the best at each one of those. And so by diversifying our tech stack and the DSPs that we partner with I think we’re strategically positioned to make decisions that are in the best interest of our clients that continues to be the line of thought or strategic thinking that we’re trying to apply as a media service provider.

0:05:18.8 Noor Naseer: That context is really important. And I rarely ask people for background before jumping into the crux of what we’re going to talk about. But the reason why it’s really important today is that we’re discussing how do we maintain the best relationships we can with our clients on the brand side, and knowing where your focus is, where your priorities are as a leader who owns and founded an agency I think is critical to that because I could have that conversation with a lot of different people. But I’m- I’m uniquely curious about your perspective.

So, you just mentioned a bunch of different things, John that correlate with what you need to know about, your agency folks need to know, so you can vet them through and offer solutions to clients. How do you guide your people to know enough to be knowledgeable on emerging technologies while still being able to get their work done? I think that’s a never-ending agency challenge but are there any guiding principles that you expect your people to consider when you’re drinking from a fire hose?

0:06:15.3 John Lods: Yeah, I mean it’s a very difficult question and even harder answer and I think it’s getting rapidly more challenging because there’s so many emerging technologies that are existing today like the use of AI for instance. And everyone uses AI in some form or fashion, but there are so many different types of modules within AI that can impact a technology or ultimately a recommendation. One of the things I think inherently makes agencies in a difficult position is when they structure teams per technology type or per platforms. But when they’re only executing programmatic media, obviously that’s all they know. So, it’s hard to think holistically outside of the realm of programmatic when making strategic investments and recommendations for their clients. So, instead of sitting on a channel-by- channel basis we’ve organized our team to sit across the ecosystem. I mentioned that because obviously it’s hard to get super deep per person across every single investment type in technology out there.

So, what we’ve strategically deployed is somewhat of a subject matter expertise across everything that exists today. So, like TikTok Shop and them rolling out a new commerce platform, how’s that going to impact Amazon? Someone’s on that. What about the acquisition of Vizio with Walmart Media Group – How’s that going to impact CTV? What’s Walmart Media Group’s expected next step following that acquisition? So, we’ve identified certain sets of people that have different interests in those areas to continue to learn and apply that and what you need to do really well– and one of the benefits of running a sub-50 person agency is you can easily share information across the organization but you can also act on that information really quickly. When something works or what we do is tested across one client or advertiser and that test produces results beyond what our expectations were and we get excited. It’s really easy to roll that into future advertisers’ future campaigns, things that we’re currently working on.

So we’ve kind of conquered that challenge by one, assigning subject matter experts in a wide variety of resources and hand selecting those resources based on their interest. Two, testing it across different advertisers where it makes sense for that specific test and establishing what those testing parameters are what success and failure look like. Then three, when it wins, roll it out across the org, share it across your peers and try to implement it across additional advertisers. And I think if you can do those three things well, you’re probably going to be positioned for success even as technology gets wilder, AI gets more involved and there are new capabilities that exist. I think that’s what kind of keeps advertising fun and going.

0:08:53.9 Noor Naseer: So you’re doing a lot of things internally, you got a good system going, you’ve assigned that labor to people who have areas of interest in those different subject matter spaces. Ultimately you do have an existing workload and then you’re trying to react to client curiosity. But then you also want to be a leader and showcase that you have this proactive approach on occasion where appropriate. I say all that to set up this question: When are you looking to proactively educate your clients versus when do you want to reactively educate them?

0:09:23.4 John Lods: Well I think ideally you’re proactively educating the client 100% of the time. I think that is an unrealistic expectation but you know there’s no harm in setting the bar high. I think one of the challenges that a lot of the clients that we face and work with – the CMOS, the director levels, senior vice presidents of marketing – there’s just so much information to consume. Honestly, when you read some of this information it’s really hard to make an informed opinion. There are so many layers behind everything that you’re digesting. And so, certain investment types, because it’s buzzy, seems like the right type of investment that fits for us like “Oh no we need to react and be involved in this”. I think sometimes it’s hard to know when to act quickly, or when to exercise patience in deciding, Is that investment type helpful for my organization? What do we think those Investments are going to yield for us? That’s why it’s hard to be a CMO; you’re getting a lot of pressure from the CFO from the C-suite of the organization. You’re pulled in a lot of directions, but you’re also expected to be the subject matter expert in so many things. So, what we try to do, is we want to know what the organizational priorities are and how we can keep you informed, so you are that subject matter expert. The more you can empower your clients to be educated and be able to speak across a wide variety of topics, the more confidence they’re going to have across that organization and marketing which obviously as your agency partner that makes what you do easier. You don’t want to have to prove yourself to the org. You want to already have that confidence because I think it opens up the appetite to try new things. If you’re in a difficult position it’s dangerous to try something new because if you fail like you’re going to be in a difficult position. So, just knowing what the key topics are for that client, I think helps you prioritize what to educate the client on. There’s so much information out there it’s probably impossible to know everything. It’s all I do every day and I can tell you with extreme confidence I don’t know everything. There’s so much to learn and I think again that’s what keeps advertising exciting and moving forward.

0:11:31.9 Noor Naseer: You mentioned understanding organizational priorities, and it’s easy to want to do that but it’s very challenging to do in practice, and agencies have been in business for very long periods of time and continue to struggle with doing that effectively. What are the best practices as far as truly understanding what a brand or a client is looking for when they are asking for something but you start to sense that what they’re asking for and what they actually want are two separate things?

0:11:59.6 John Lods: Yes. And the answer is asking the right questions. One of the challenges that you receive working with a lot of different clients is the brief that you receive oftentimes is not necessarily what the organization wants. I think the most common experience with this is as a client asking for brand awareness or impressions or a certain level of market saturation when the end result that they’re looking for is sales. I always run this exercise. I’m like, “Client A, if we achieve a 300% increase in brand awareness but 0% increase in sales, are you going to be happy?” And most of the time they’re like “Absolutely not”. “If we achieve a 300% increase in sales but a 0% increase in brand awareness, are you going to be happy?” And they’re going to be like, “absolutely”. Instead of being briefed on the idea of brand awareness you’re now understanding and the client’s aligned on actually what you’re holding us accountable for is sales and revenue growth in that particular instance. I think part of the help navigating those questions is you just have a lot of experience listening to a lot of different client needs and you start to form correlations and similarities in the language that they use and the reasons they ask for different things. It helps you dissect and sift through what a client is asking for, and what they actually need. If you ask the right questions and you have a good enough relationship where you feel comfortable asking them, a lot of times, you can get to the root of the goals, and you and your clients can work together on really deciding how we’re going to form an action plan to achieve those goals. I would say that from a basic level.

I think two, what is really helpful to know is what motivates them and what makes their boss happy as well because that’s also what they’re held accountable for. So, there’s one thing on what your client is holding you accountable to but I want to know what the organization is holding them accountable to. I think a combination of those two data sets helps you brief your team to continue to make informed decisions that impact those criteria, versus what that superficial initial brief may have stated.

0:14:04.3 Noor Naseer: Many clients may say that they’re looking for awareness or whatever that other goal is but really in many cases (I don’t have the numbers in front of me) they want to invest money into media and then they want to see ROI on that. They’re looking for conversions in many cases in some capacity. How do you tow the line on having that conversation when in many cases they do need to make a media investment into something that doesn’t give that instantaneous ROI-oriented result? When I say “ROI” I mean conversions that equate to sales or sale of services or some other type of lower funnel activity.

0:14:40.0 John Lods: Yeah. I think one of the most important variables that you need to understand to answer that ques tion is, what is the expected time frame for that result to take place. Do we have three months to achieve that result, 6 months, 12 months, 18 months? What is the time horizon that you’re expecting to receive that impacted change as there are so many different investments out there. But certain Investments essentially deliver different types of profitability on a different time horizon, and some Investments are more profitable than others. So, understanding the expectation that those results need to be delivered within the organization, is number one. And then just on the second side of that, why is the organization asking for that and what type of Investments do we need to make? I think that’s where the value of a brand for instance is so powerful because ultimately if you have success, you work yourself out of a job. Ideally the organization would have to invest zero media and they would see success in the profitable growth that they would desire and you would have to invest in a ton of brand media to achieve that, versus a lot of companies start their process on performance media, and trying to achieve revenue to get from 10 million to 50 million to 100 million company. But they get so hooked on these Investments that ultimately have a ceiling to them and diminishing returns. The more you continue to invest the lower your expected returns are, but the org is also hooked on kind of just pumping the machine to get those returns, and they forget that there’s an entirely different type of investment portfolio that can yield those.
It’s often a balance between short-term and long-term gains and their performance side is more short-term and the brand side is more long-term and what’s the cash flow that the company has, how much patience do we have, and what are our expectations? Then we can navigate our clients through those investment types and help land on a plan that we believe is going to drive the greatest success for the organization in the short term and the long term.

0:16:36.7 Noor Naseer: Going back to some of the tech points you were making earlier, John, specifically around let’s say evaluation of DSPs things pertaining to programmatic or audience-based media buying. How much more knowledgeable do you think clients are today in 2024 compared to let’s say pre-pandemic? Has there been a massive step up as far as them knowing more or is there still a lot of distance especially when you’re talking to somebody who is in more of an executive-level marketing position?

0:17:03.0 John Lods: I think they’re becoming way more interested in the different partners that you’re selecting. I would say pre-pandemic, the idea of DSPs was still coming to fruition for a lot of clients, and having a DSP preference, I would say it was rare. Nowadays as we navigate new business opportunities and current client relationships, they’re asking about: “What about Basis? What about The Trade Desk? These companies are going public. Are these things that we should be interested in? Should we be diversifying our DSP investments? Those were questions I don’t think were consistently fielding pre-pandemic. I think they’re starting to understand different DSPs drive different types of value. and I think one of the things we do particularly well is just prioritizing what those criteria are across DSPs because there’s so many that we can weight our decision on when selecting a specific type of DSP partner. But I definitely believe there’s significantly more increase on DSP selection across the clients that we work with than there were previously pre-pandemic and below.

0:18:05.4 Noor Naseer: Outside of DSPs, do you think there are other aspects of the tech stack that there is also more curiosity around or do you think it’s still slow growing in some of those other spaces? I’m not looking to get into all the other aspects of the tech stack but have you noticed anything in particular where people are asking you about data clean rooms or CDPs or anything else that could potentially be touching the work that would come from a full service agency?

0:18:30.0 John Lods: Yeah. I would say the number one thing that we’re seeing in that space and really it’s out of fear the deprecation of cookies that’s been looming for a long time is the importance in reliance across first-party data. And helping establish a way to receive first-party data and make sure that you have the right information where you can filter across a variety of data sets and taxonomies within that to leverage it for advertising opportunities. Maybe not so much as deep as like a clean room but identifying what type of data warehouses do we want to work with? Do you have a preference on the CRMs or CDPs that we use? And a lot of them have that type of information or institutionalized already in the organization. I would say just the way that you receive and clean first-party data is definitely on the top of the list of things that clients are most interested in. I don’t know if that falls into the tech stack but it definitely is something that we’ve been partnering with them on making sure it’s established because at some point first party data is almost all you’re going to have you’ll have a lot of third- party interest targeting. From a lifetime value analysis standpoint, you just can’t do it without the first party side and there’s a lot of opportunity to be had with that data when looking for prospecting audiences. Clients are slowly starting to make important decisions that are going to help them collect that in a way so you can use it in the future.

0:19:48.5 Noor Naseer: What have you seen in that first party data space as far as the spectrum of absorbing the shift that we’re anticipating is going to occur by the end of this year? Are you seeing most clients saying, ‘We’re ready to build a really thorough first party data strategy?’ Or there are folks that are on the other end of the spectrum who are saying, ‘We’re waiting for something that’s going to really replace the cookie and we really don’t want to get into this (right now)’ You work with a lot of different clients. Curious what you’ve seen.

0:20:11.7 John Lods: Yes, most CMOs, the marketing leads that we work with, they understand the value of the first party. I think one of the challenges is getting that navigated through a C-suite and a board that doesn’t want to make a large investment today on collecting that first party data. So how does the organization prioritize CRM or CDP because that’s going to start to drive value slowly over the years, it takes a long time to implement. Do they even have the resources to maintain it? It’s a sizable investment or should they be rolling out new stores or increasing their products and SKUs that they’re offering to their consumer base or can’t you just work with the information we have and partners we have in place now? I think that’s one of the challenges of most companies, I wouldn’t say are doing particularly well in this economic environment. They’re not absolutely crushing it. You’re seeing a lot of layoffs in the space, and so how can an organization prioritize building a data infrastructure that sets them up for 2025 and beyond when there are so many short-term investments that they need to make. I think that’s probably one of the consistencies that we see which is totally understandable. It’s just working with our partners to educate them so they can make an informed decision is the best that you can do. And then you just work within the constraints that you have on a per client basis.

0:21:31.0 Noor Naseer: We may have already touched on this to an extent in some earlier talking points but just your mention of the fact that there have been layoffs. 2023 was a softer growth year for people on the buy side and sell side. What has been your experience around where there is the most fear for brand marketers as we’re getting into the heat of 2024? Some of it may be residual from 2023 but I’m curious if you’ve observed anything as an agency leader.

0:21:55.0 John Lods: Well specifically from a brand marketer mindset, they’re continually getting a little demoralized because so much of the talk around town is performance and attribution. One-to-one deterministic data sets where I can definitely confirm that Noor bought this product and purchased it in this time cycle. Brand in the last three to five years has taken a backseat and I don’t think it’s for the right reasons. I think performance has continued to be the question that executive leaders ask, and I believe that unfortunately sometimes that leads agencies to make decisions that may or may not be in the best interest of the organization. There are certain Investments that have that one-to-one matching are last-click based. So, you can report great results but are you driving incrementality and ultimately growth and that’s a hard balance to strike with your client on how to prioritize different types of investments.

I do think in some kind of odd sort of way, that’s where the deprecation of the cookie gets really exciting. Does that push us back in terms of what we can attribute and report in the audiences that we can build? Does that make advertising a little bit more theoretical again? Are we actually leveraging older school data providers to make more traditional investments and is that going to kind of bring the resurgence of the brand back?

I’m kind of slightly hopeful even though we run a ton of performance media, I think brand may make a return as cookies and the usage of cookies continues to decline and first- party data and retargeting and things like that tend to scale back or are slow to roll out– which gets me excited because as much as we are performance marketers and we run a ton of performance, there’s so much value in brand Investments and a lot of orgs again have gotten kind of hooked on the performance side of things, and there may be a shift here in the next few years which could swing back brand in the right direction.

0:23:40.7 Noor Naseer: John, I love your optimistic tone, but my guess is that anybody who’s primarily focused on the performance-based space would be very reluctant for that shift to occur. I’m curious if there are any other conversations that you’ve been having as of late or types of communication that have to happen now, so that clients are less fearful around the idea that they’re going to be abandoning some of the tactics that they’ve become so incredibly reliant upon. What do you think is critical to talk about right now in 2024 with this impending cookie loss to make sure that people can be a little bit more optimistic about what the future is going to hold?

0:24:15.4 John Lods: I will confess: I am slightly an internal optimist, so I can see the sunny sides of both equations. I think the exciting thing about performance competitiveness today is that so many people are running the same things and it’s somewhat an auction-based mechanic. People are running retargeting, they’re running branded keywords, they’re prospecting audiences leveraging first party data and look like audiences. Everyone is doing the low hanging fruit and because everyone’s doing it, we’re all stuck in this traffic jam. So, imagine if you take those capabilities out, you could argue that chaos is an opportunity when people have been so reliant on the same four or five or six versions of running a performance campaign, and you remove those capabilities from the equation. Now what helps stand alone are the people who are really good at what they do. You could argue it’ll be a talent-based economy. The machine learning and the capabilities may go backwards which relies on higher talent to execute proficient media types of Investments.

I think what you need to build and when we navigate this with our client is confidence that you guys can navigate this together. You have the team, you have the process, you have the knowledge and you have the ability to act quickly and make decisions that really are going to get you through that because, again, it’s going to be a new space, and there’s opportunity in that. I think the ones who win are going to win big and the ones who lose are going to lose big. I think it’s really a race for talent and capability and collaboration with the relationships that you have. Hopefully most of our clients feel really comfortable that they have a team that’s making decisions in their best interest and are going to partner with them to create opportunities for the org.

0:25:59.4 Noor Naseer: Beyond everything that we’ve discussed is there anything you’re particularly excited about as we get into the thick of this year?

0:26:05.4 John Lods: In terms of excitement, I would say the shopper capabilities have been really interesting to follow. Shopper has been something that we’ve been prioritizing since 2020. Again, Amazon leaks into Thursday Night Football. So, they’re somewhat getting into the brand side of the world or TikTok is rolling out shopper. I think Amazon is becoming everyone’s kind of infringing on their space. Meta rolls out a new partnership with Amazon so does that mean we can actually have attribution from a meta and Amazon capability? Who knows. I’m just kind of watching that space and I’m particularly interested in the rapid advancement of the capabilities that different partners have. In my opinion Amazon was definitely clear number one from a shopper side and then Walmart Media Group and some others were kind of leaking up in the two to three spot. Working with like the Home Depot and the Lowe’s and the CVS and the Walgreens who really didn’t even have an advertising product like pre-2020, now they have a little bit more of an emergence into the CPG side. I think CPG it’s a challenging vertical from an attribution standpoint and I think there’s more opportunity in that from a return on investment standpoint.

Naturally I just went on and sold this great idealistic look on brand and here I am saying I’m most excited about the performance capability. But I think Shopper is unique because they already have that first-party data infrastructure necessary. They have the shopper information. Amazon and Whole Foods, like that partnership and that acquisition was huge for that. I think more retailers are continuing to kind of Follow That trend which creates a lot of opportunities for advertising.

0:27:40.4 Noor Naseer: If you were to pick one thing that you feel is the most important to educate clients upon (and you may have already covered it across the conversation we’ve had), what would you say that thing is as it relates to a tech forward aspect of paid media and advertising?

0:27:54.5 John Lods: Believe it or not I would probably skew outside the tech space and I would say attribution and what’s most important with attribution is consistency and what I see is a lot of advertisers are making. They’re changing the attribution style and infrastructure that they had built, which naturally makes how they’re comparing previous results apples-to -oranges. The consistency in how you’re measuring performance, the different intent-based signals that you need, the different deterministic sets how you’re measuring lifetime value– this ecosystem just needs a lot of consistency and so many people see these shiny tools and they implement new things. If you do that year-over-year-over-year, there’s so many nuances to the data that you can’t decide if something worked or not. I would encourage clients to– there are pros and cons to every lookback window and attribution system that you make and I think you just have to accept those for what they are and find a way to keep the organization consistent in how they’re measuring performance; that way you have true comparison windows of year-over-year performance or specific seasonalties because, again, people are rolling out a lot of change in attribution, and it’s making it hard to really truly and accurately compare results

0:29:07.4 Noor Naseer: Completely aligned with you. I think that’s an area that a lot of people are far behind on. We’ve given so much attention to talking about identity and addressability, and not enough conversation around attribution. So, I am very curious about it and am going to be doing a lot of research myself on that particular topic. I think just to wrap things up I’ll say, I’d love to check in with you again maybe later in the year or some point in the future because I want to test that eternal optimism and see how things shake out.

0:29:33.6 John Lods: I would absolutely love that, Noor. Thanks so much for having me.

Closing remarks
Thanks to John Lods founder and CEO of Arm Candy for sharing his thoughts on advising brands and advertisers on navigating today’s messy and tech-centered ad industry. John shared an important perspective on the challenges that media buying now places on marketers. The burden of understanding what’s going on out there has risen tenfold and there’s a trickle down effect to anyone’s servicing media and marketing needs. When brands need to know more, so do agencies, service and data providers, tech solutions and others. I love what John said about developing SMEs and ensuring that subject specific learnings are communicated across an organization. POVs that stay in silos hurt teams that are serving clients– knowledge is critical to share. Also, remembering the balance between brand and performance marketing can’t be overemphasized. While a lot may be changing out there, the ratio of brand to performance campaigns remains an old dialogue that brands need to stay in touch with. That’s all for this episode. If you like the show, I’d love for you to share a comment in your listening app of choice and give us a five-star rating until next time. I’m Noor Naseer. Another episode of Adtech Unfiltered is coming up soon