Rick Webb: Where Technology and Advertising Meet
The vast majority of the technology we use is funded by advertising now.
Don't call Rick Webb an advertising guy. The co-founder of digital ad agency The Barbarian Group, Rick has plenty of award-winning digital advertising cred. But his real passion is technology - and being an angel investor and adviser to social technology startups like FourSquare and Branch. Rick also writes a tech column for The New York Observer and Betabeat and blogs on technology, advertising, and economics.
Rick was on our SXSW panel this year and always has smart things to say about the intersection of technology and advertising. We checked in with him about how advertising agencies can make companies more awesome, the future of advertising, and what his must-reads are on the Web.
You're an angel investor in a zillion startups including Foursquare, Lover.ly, Sprint.ly, Branch, Timehop … it goes on! What's your filter for investing? What startups interest you right now and why? I have two investing paradigms: First, I invest in things where I can add value from the perspective of my former career in advertising. I am useful and helpful here in the marketing of the company, and in their understanding of the ad industry, who often are their revenue plan. I help them understand how to market themselves to agencies.
Secondly, I invest in companies that I think are doing interesting things with data and APIs. SimpleGeo, for example, which is now part of Urban Airship, or Mashape, which aggregates and documents APIs. I'm not sure why I have been investing in these companies. I think it's part hunch and part a belief that they are collecting interesting, useful, vital information that no one else is collecting, and that has value.
How can an advertising agency make companies more awesome on the Internet? Give us some examples … The art of advertising can be very useful for any startup on the Internet that is targeted to the public. In the tech industry we have our tried-and-true ways of getting the word out about ourselves, and they are generally confined, in the early stages, to PR and social. What's interesting to me, though, is that as every consumer Web company grows, eventually they embrace advertising in some manner. We see it most clearly right now with Google. Since so many startups are dependent on the network effect, more users are generally a good thing, and advertising can do that.
I also think many startups do a horrible job with their brand. They don't take the time to apply discipline to their brand, their story, what they stand for, their relationship with their consumers. Netflix's boneheaded moves with Qwikster, for example, are inconceivable to imagine had the company been engaged with a brand agency.
Your LinkedIn profile says one of your specialties is that whole "what is the future of advertising" problem. What is the future of advertising? Haha well, I am working on a book about just that. It crossed the 500 page mark today, so, there's probably not enough room to write about it here. The quick answer is that there has always been a pendulum swinging through advertising between data-driven and creative/emotional/brand-driven advertising. And that pendulum is due for a swing back towards the emotional on the Web. The other dominant trend is that social is a new, disruptive event in advertising, rather than just a continuation of the migration of media from traditional to the Web, and will have real ramifications on how we receive our entertainment and news.
You've been thinking about this for awhile too - are we in a bubble? And if so, what is it – and how's it different this time? We are in a bubble I believe, yes. It's early yet, but it's growing. The only reason it's different is that the larger economy around us is depressed still, so our bubble hasn't impacted the economy as a whole. Should we base our recovery on economic fundamentals rather than having another "dot com boom," where tech actually drives the recovery, then perhaps when this bubble bursts (and it will, all bubbles burst), we won't take the whole economy down with us. The erosion of Sarbanes Oxley in the JOBS Act gives me pause, however. Once it's easier for tech companies to go public, and the larger investing public sees tech as a promising investment, and more money begins flowing into tech, we'll be in real trouble. I don't see any reason to think that won't happen eventually.
Our possible savior is if some other high-risk, high-yield investment opportunity comes along to be the shiny magpie eye jewel to attract that money. I'd hope for green tech, but that looks unlikely for a few more years both for political reasons (Solyndra) and economic ones - the investment is still in government-sponsored R&D stages, and it'll take time for the private market to begin capitalizing on their discoveries. Pharma and health care seem plausible but everyone will wait to see how the health care market shakes out. China is possible, but the political instability there at the moment and their softening economy make that less likely. Real estate is still a dud. So what else is there for the risk-taking billionaire to put his mad money into but tech still?
You went to SXSW this year – any interesting trends you saw? It was basically more of the same from last year: location apps, social apps, and lots and lots of marketing. I think the trend is that in the next few years the music and interactive festivals will eventually merge. I've said already that brands like Twitter and Foursquare should stay in town for the music festival, filled with mainstream as opposed to tech influencers.
What are your must-reads on the Web these days? Who's doing it right? The Next Web is doing a great job. MG Seigler's killing it but can be dramatic sometimes. I love the positivity and discovery of Laughing Squid. Betabeat (which I write for) is getting better by the day. I love Felix Salmon. Grantland is awesome in its ridiculousness. I love xoJane.
I view myself as an optimistic cynic, so a lot of the Web still brings me down: I wrote some rules for myself to never criticize any attempt at doing good (i.e. Kony 2012), and to try and avoid being too overdramatic (Is Facebook the next Pinterest?) It's hard. And when you view things through that prism, a lot of things can be hard to read.
Pando Daily is promising, but I have concerns about the venture-funded model when they're journalists covering their scene. I think Arrington's views on them are logical - probably more logical than the opposing views. MG Seigler's exempt in my mind because his blog is his personal blog, and he can write about his investments all he wants, just like I do. But Pando Daily is a a media site so I worry.
What's your favorite piece of branded communication? Ever? Nike. Recently? Keith Stone.
As an advertising guy, what makes you click? I never considered myself an ad guy. I was a computer nerd with an economics degree who fell into advertising thanks to a Volkswagen campaign that featured my favorite band, Spiritualized. Once into advertising, it was the other two that made me tick. I've always viewed advertising through the prism of Economics and Technology. The intersection of those three are where I live. I love the creative, but I love the creative like a consumer. I'm much more interested in the way advertising effects our economy and how the vast majority of the technology we use is funded by advertising now.
Follow Rick on Twitter @rickwebb.