This week’s guest is principal and cofounder of Sparrow Digital Holdings, Ana Milicevic.
Sparrow advisors is a digital advisory firm that works with companies across ad tech, mar tech, e-commerce and media to generate and grow revenue.
We talk about the disconnect ad tech has versus its intended value, our own perception of advertising, working with CMOs to get digital ready and building a business with a sibling. She is one of the sharpest in the game and a trusted voice of what’s happening in marketing.
Below are some great quotes from the episode, I have put a timestamp on them as well if you want to hear more on the topic.
On how she formed Sparrow Advisors with her sister:
2:54 She went very, very deep into Ad Tech. I went very deep into the MarTech side immediately prior, and we kept having these catch-ups where we would report to each other how we would be in very high-level meetings, where people were using the same language around data, around digital, around innovation. But they ultimately weren't really talking about the same things because what that looks like to a brand is very different than what that looks like to a media owner or a publisher or a tech company is trying to broker things in between them. And so oftentimes we felt like we were the only people in a meeting speaking this particular language, and everybody else was like arguing in different languages and not really connecting.
On what exactly is going on with Peloton and other tech-first consumer goods:
16:47 And this fact we see this in our day-to-day work pretty frequently where a company thinks it's one thing and tries to emulate that thing, whatever it is in Peloton's case, a technology company, etc. But in reality, they're solving for a different problem or their customers perceive them as something different. So it's pretty frequent in our engagements. When you talk about how do you grow a particular business line where you kind of go like, Well, where do you think you are? Like, what is your competitive said? And it's so bizarrely way off from where a company would realistically be. But then you kind of have to have that level-setting conversation with them. Like, I understand why you think you're here, but really you're here and you can see it in your business metrics. In the following ways, and that's why you're having challenges growing and you're having other kinds of challenges, and it's a pretty, usually a pretty sobering conversation that I wish more boards would have with their own companies and push back and challenge on the assumptions that they're making. But you know, there are people who will walk into a meeting and say really ridiculous things like, you know, we are the number one entertainment source in the world. I'm like, Excuse me, I didn't realize I was having a meeting with Disney or Netflix. Right? You are not one of those two. So what's going on here?
On the rampant consolidation of power on the platform side:
22:46 I think the biggest, most glaring change for me has just been the rapid, increasing consolidation of power on the platform side, both economic power in terms of how much revenue they command, but also just in terms of any type of decision making in the industry. We're having these conversations about the value of the open internet. And on the other hand, platforms and walled gardens are very, very eloquently saying we don't really care about that and they don't have to care because they command 80 something percent of the overall money pile. And I think that that's leading to an internet and media landscape that we as consumers perhaps will like for a short period of time. But five, 10 years from now, we might wake up one day and go like, Well, wait a minute, this doesn't really make sense for me.
On where the ad tech industry has gone wrong:
24:42 I think ad tech as an industry has flubbed two things. One is explaining the value that advertising in general brings to the consumer. The fact that you can watch content for free just in exchange for listening to a sponsored message like this is something that shouldn't be lost as a value exchange on people. But because of how predominantly digital advertising has evolved lately, we've kind of created entire generations of people who just wait for the skip button and place exactly zero value on ads.
On why short CMO tenures stifle innovation:
35:45 And that's the biggest challenge I have in general, mostly with holding company agencies and to a slightly lesser extent with the brands that they serve because brands could be bolder with their advertising efforts. But because of very short CMO tenures, this need to be perceived like you're doing something so that when you get fired 18 to 30 six months down the road, you can go and secure another CMO job and restart the clock and go, Yeah, so there's not a lot of incentives to try cool stuff. And on the agency side as well, they're not staffed or organized to be the ones pushing the envelope for clients and saying, Hey, how about this? We try this cool new thing. There's very few Marriages of forward thinking ad agencies and big budget brands that can do that kind of stuff.
On what she loves:
42:50 I'm a computer scientist, undergrad computer science and math. And I was very lucky that I kind of very early on during my university career. Now I say lucky, then it was just pure stupidity and just bravado. But I volunteered for a lot of kind of side projects that led to the formation of my first company as a software outsourcing company. Oh, cool. And so I learned really early on that I liked tinkering with computers. I like building things. I like writing code.
On growing up in Yugoslavia:
45:11 So I was kind of a third culture kids without realizing that I was a third culture kid. And, you know, growing up in Yugoslavia, I kind of caught the tail end of the good years and then got shoved into the bad years just as I was in my early teens. I don't even know when the bad times started, but I got a very eclectic education and exposure to a lot of things very early on. So I kind of got the benefit of learning what I like very directly.
Ana Milicevic, Principal and co-founder, Sparrow Digital Holdings