Host: Joe Zappa
Guest: Kurt Donnell, CEO of Freestar
Length: 35 minutes
Published: November 9, 2026
Kurt joins the pod to discuss how being an M&A lawyer informs his approach to acquisitions today, why a holdco was the right fit to acquire Freestar, and what it takes to get a deal over the line and foster success afterward. This comes hot off public holdco Stagwell’s acquisition of Freestar.
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Full Transcript
Joe Welcome to the Adtech Growth Podcast, a podcast about growing companies in the advertising industry. I am joined by the man of the hour today, Kurt Donnell, the CEO of Freestar, which, uh, was the subject of adtech's latest, uh, big acquisition last week to Stagwell. Kurt, welcome to the pod, and congratulations on the acquisition.
Kurt Thanks, Joe. Man, appreciate you having me. Uh, looking forward to chatting here today.
Joe So, uh, you started your career as a lawyer. Were you burning the oil more as a legal associate or when you were preparing to run this deal through as CEO?
Kurt Oh, boy. Uh, those were pretty equal, I will say. Probably more this deal because I had two jobs. I had a full-time job of running a company and then a full-time job of selling the same company. It is something that not many people, uh, probably understand how much effort it takes to actually get a deal signed. I think they say every deal dies three times. Thankfully, it wasn't three times on ours, but there's just these moments when you're like, "Something's gotta break my way, man." Like, we can't, uh, we can't let this slip another week, but it does. We thankfully got it over. It is not easy, but really thrilled, and it's a very weird thing where you go through these periods in life, whether it's an acquisition or just an intense thing, you launch a new product, and you're just grinding, and then you get done with it, and you're kind of like, "Oh, so now what?" Definitely a little bit of a come down. Got to sleep a little bit this last weekend, which was lovely.
Joe Interesting. So I was just talking to Zach Dugow, the CEO of The Cool Company, and we were talking about persistence as the defining trait of successful companies, and I think that applies to Freestar. I believe the company was started in twenty fifteen, and you've been there since twenty nineteen.
Kurt Yeah.
Joe So you guys have also had a few different chapters, I imagine. But then you're also applying that same idea to the deal process.
Kurt Yeah.
Joe So I'd be curious to hear about both, like the persistence through the different stages of Freestar and sort of what it was when you joined and what it became, but then also maybe we can get into, like, a deal like this and sort of how it comes together and how you steer through those periods.
Kurt Sure. First of all, Zach's a good buddy, awesome guy to chat with. He's, uh, very smart and a lot of fun. When it comes to persistence on something like this, these things always kind of take on a life of their own. In all honesty, we felt we were in kind of launch up process a year and change ago. We had engaged a banker. We worked with Needham & Company, who's been just fantastic. I've known those guys for a while, did a good job. Then the market was kind of funky last year. If you'll recall, Q4 video was sort of all over the place. It seemed like CTV rates had fallen to the point where some online video dollars were going to CTV, and so it was just kind of a unique moment, so we kind of hit the pause button and then restarted, in all honesty, because of a ton of inbound interest again earlier this year. Kicked off in February or March, and then finally had sort of first bids in in, I would say, April, May timeframe, and then you kind of go through the process of weeding it down from a few good potential opportunities to the last couple suitors, and then ultimately chose Stagwell here and, uh, worked through that process. I would say we're pretty efficient in getting the deal done kind of post-LOI, but that process to get to who is the right suitor, what are the right deal terms, and everything look like takes a little while. And I think advice to anybody is you want it to be done tomorrow, but it just runs course a little bit. But definitely takes some persistence to get through it.
Joe When you took over in twenty nineteen, was it with the express idea that you would sell one day? Was there the thought of going public? What was sort of the ideal outcome when you joined in the timeframe, and then how did it work out related to that in practice?
Kurt Yeah, we definitely knew it was gonna be a sale. The company originally, when David and his original co-founder had started, it was actually intended to be almost like a little mini PE model, but run like buying websites, juicing the revenue, flipping them like real estate was kind of the original play. A year into that, realized they were awful at the content side of things, good at monetization, but awful at the content side of things, and just pivoted to what has become Freestar's kind of full service ad management model. With that, they had brought in some early friends and family, not a lot of capital, but legitimately David's, like, mom and sister and those folks. So there was some capital into the business that we knew we needed to be stewards of. Thankfully, able to return that to them very, very quickly and ultimately brought in private equity at the end of twenty twenty. But going back to twenty nineteen, got to tell this story a lot lately.
I think it was February twenty nineteen, about a month into the job, David and I are sitting in a conference room in our office, back when we used to have one of those, kind of going back and forth a little bit on, like, what is the ideal buyer for this business? Not that you necessarily wanna build your business for any one particular, but you wanna make it attractive to a number of folks. And so we went through the normal suspects here, the competitors, SSPs, various people. And at the end of the conversation, we both agreed that the right buyer actually was a holding company. We just didn't know if anybody would be creative enough to do it, and eight years later, here we are. Stagwell's creative enough to do it. So we definitely knew we were going to sell. Brought in private equity, as I said, end of twenty twenty, grew through that process with them, and then they exited in this deal. So particularly after bringing them in, we knew that it was an acquisition I had done, and I owned my last company, and it's a pain in the ass to be public, man. I'm not gonna lie. Like, I have a lot of-- I give a lot of credit to folks that do that, just the sheer reporting elements to the whole thing, compliance, all that stuff. Unless you're a relatively big company, it's not worth doing. So definitely had the sights set a little more on an acquisition than an IPO, but now I guess get a little bit of best of both worlds 'cause Stagwell's a public company that's been doing really well.
Joe There are a lot of adtech companies also that are in an interesting spot being public because they're sort of like micro stocks, right? Their market cap's like five hundred million to a billion. Do you think a lot of those companies would be better off if they hadn't gone public?
Kurt Can't say if they hadn't gone public, but being public at that size is tough. It just takes so much time, energy, and effort, and then just dollars, things you don't think about, like directors and officers insurance, freaking expensive. And you gotta go through these things, and you're managing the business quarter to quarter and have to do all the prep it takes and the investor relations and all those things. Having lived this in a too-small public company, my last Go around, I've always said I would never do something until it was well over a billion in valuation and probably closer to two or two at this point in time, just as the markets have done what they're doing, just more from the admin side of things than anything. And unfortunately, at the smaller side of public companies just don't really have access to the capital markets, which is the one real advantage of being public, is that access to capital. And if you don't have that, you're kind of going through some of the hoops and living inside of a, a fishbowl a little bit without all the benefits. So I would definitely say it'd probably be easier for any company that's not adtech specific to be private up to a certain scale. When people went public, though, you can't fault them. You know, it's a liquidity event for people and, and valuations were a lot different twelve months ago, and certainly thirty-six, sixty months ago. So you can't really fault anybody for doing it at the time. In hindsight, that was, uh, an interesting thing, right?
Joe Yeah, it's sixty now, right? That was the watershed year for adtech was twenty twenty-one. I think a lot of adtech companies went public, and a lot of them are still, if they went public at that time, trying to recover the market capitalization that they achieved. It also like something I see working with a lot of adtech company CEOs, some are public companies, some are private companies, is you need to maintain long-term thinking despite the quarterly reporting cycle, and I think it seems that that becomes a lot more challenging when you're public. How do you think about that in terms of sort of the public cycle and then when you're building, like after a PE investment and you know you're gonna flip it in like three to five years, how do you sort of balance short-term goals and long-term goals?
Kurt I'd be lying if I say it isn't a little cognitive dissonance when you're in those moments of like, I wanna make this big long-term play and this bet, but I don't know what it's gonna do next quarter, and I'm gonna have to go answer to that publicly and get on the earnings call and explain these things. For better or worse, investors don't tend to understand adtech particularly well. It's just there's not that many of us that really do it. It's not like there's tons of analysts that were in this and left to go be analysts or something like that. Similarly, my last business was in the yoga space. Definitely no public, uh, yoga experience there. And so when you're in these markets, people don't quite understand their ability to see long-term. A little bit harder. I mean, you look at an Anthropic or something, everybody's maybe bad couple of weeks to talk about this, but sixteen billion in revenue, eighty billion in losses. But everybody can somehow see this future out in front of it, where I think adtech can be a little bit tougher there. I think, again, it goes back to size a little bit 'cause when you make big bets, there's gonna be bumps in the road, but if you're big enough, you can easily absorb those, and it's not gonna be a massive swing in what your earnings look like in the quarter or something like that, and a few less surprises. So being bigger makes it easier to absorb kind of some of the long-term thinking, I would say.
But yeah, it's definitely a tough one when you're in the operator seat of I make this bet, you know it's the right thing to do for the company, but there's this other like, kind of the devil angel thing on your shoulders of like, "I wanna do this, but man, what does that mean for my next earnings call?" That's a tough thing to balance, and yeah, like you said, the smaller you are, the tougher that is to do.
Joe Yeah, I was listening to Adam Feroci on the, uh, David Sondler podcast, and he was talking about navigating that and also the interesting dynamic it fosters between the CEO and their team, right?
Kurt Mm-hmm.
Joe Because when the stock is soaring, people are just like, "This is great," you know, "and I earned this," and like, "We're all..."
Kurt Yeah.
Joe But then when the stock is dipping, they're looking at the CEO like, "What the hell is wrong with you? You're just tank-- You know, your decisions are tanking my comp." So, uh, it probably also, when you're public in particular, it incentivizes having a really strong team around you, especially those who are, have equity, um, as a huge part of their compensation.
Kurt Yeah, I, I often will say revenue cures all ills. I think a stock price can do that to some extent too 'cause everybody's just happy. Like, "Oh, we're making money. This is easy." You can kind of gloss over the little things. Then when, you know, sledding gets a little bit tough, everybody can feel that one, and I think a stock price is a bit of a public barometer on that at times. There are moments when you know you're doing the right things in a business, though, and you're not rewarded. I don't mean to keep going back to my last deal, but it was a roll-up, and so every. -publicly stated roll-up of yoga studios, in that instance, every day announcing an acquisition, the stock price went down. Like, we're doing the thing, like we did what we said we were gonna do. Those moments are really frustrating, and that's where you gotta have a good team. You dig in, like, "No, we're gonna, you know, keep put our shoulder into the grindstone here and keep pushing it forward 'cause we know it's the right thing to do." And so I think that ability to be resilient, teaching your team to ebb and flow with things 'cause it's not always gonna be up into the right, whether you're public or not, tough quarter or the market turned against you or whatever. You can't kind of let the morale necessarily swing on that, but I will say things are a hell of a lot easier when the revenue's up or stock price is up in this instance, right?
Joe So we came back around to resilience. So talk to me about deals and resilience through them, right? Because just like building a company isn't really a linear narrative, I imagine like a deal process, there can be moments where you're like, "This is perfect, and we're going for it." It's like getting married. You know, like you're like you have like a three-year courtship, and there are points where you're like, "This is perfect. We get along so well." And other points where you're like, "Oh, sure. Is this the right fit?" Yeah. So how does that play on the deal process?
Kurt I can say this as a recovered attorney myself, like sometimes when the lawyers get involved, it brings out different elements of the structure where like, yeah, we've agreed on this, but then you gotta actually write it down, and then you gotta go get accounting and finance involved, and particularly in a public company, there's different things and SEC reporting, so kind of like a best laid plan thing. Like it starts to throw like a little hitch in the giddy up of like, what are we trying to get done here? And then you gotta go problem solve with the other side. I think it's those moments when you figure out, like, do I have a good partner in this where we both have a shared goal and we're trying to do this together? And in this instance, we had a, just a couple of those we had to work through, and we ended up holding hands and getting creative on how to just solve some problems that we just hadn't anticipated. They ended up being fine, but I think those are the moments that can show you, like what are the true colors out of the other side? Are they just gonna dig their heels and gonna be- You know, good thought partner on this and get strategic and work with you. And in this instance, I was thrilled at every pass.
While dealing with the lawyers and accountants can be frustrating sometimes, the business folks were great throughout that process, and we got it done kind of because of that, that shared resilience. Like, there was a reason- why if we both didn't believe in this as much, you probably could have said, "Ah, it's just too much of a pain in the ass." I, I guess. Like, this one wasn't bad. I've seen that more in other deals. But there's always a moment. Like I said, most deals die three times, and those are the, the things you have to battle through on both sides. And you have to also, if you're the buyer, I know I've been on the buy side a lot, like you have to finally know, "Okay, I gotta give a little bit here. I know I'm right, but in the spirit of getting this done, the spirit of being a good partner, and frankly, somebody's gotta go to work with the person that we're buying the next day, like let's not dig our heels in too tough on every single thing." Like, pick your four or five points that matter and let the other four or five go.
Joe We're going pretty deep on deals here, but I think most people don't have as deep, uh, an experience as you do, and it's very fresh for you, so let's stay on this. So as the CEO, what is your job in the actual deal-making process?
Kurt Think I probably have a bit of a unique role there just given my background. M&A attorney, ran corp dev for years, roll-ups, all of that stuff, so I think it's just kind of in my wheelhouse a little bit. I was probably more involved there than some. I think a big piece, though, is making sure that everybody, as you're leading up to, is kind of on the same page. The extent, I was talking some about this earlier, like you wanna keep things confidential, right? Loose lips sink ships. We all know that. At the same time, bringing people in under the tent from your team when you can helps them be part of that process, and once you're getting closer to things, they can help you pour the Kool-Aid. And like know this is a great idea for their individual teams, 'cause they're not having that initial like, "Oh, my God, what does this mean?" Or going through, hope it's not stages of grief, but you know what I mean. They're, everybody has their thing they've gotta deal with with change. Some people like it better than others. And if they're part of that process, it's important. So getting everybody comfortable is a big piece of my job, explaining the why to them, then kind of really beating that in. People need to hear things, read things, watch things seven times until they understand it, and then they can start to repeat it. And so that made my job easier post-deal when they're, the senior folks on my team that knew about this can go do that stuff.
I would say another thing is making sure you're prepped on the things you can get out in front of, because there's gonna be unexpected things. But the PR and kind of running through where things could go wrong or whatever that is, like do a little pre-mortem on things, and so you're kind of not doing any firefighting after the deal is done. So I think it's a lot of the, the prep, the storytelling, the getting people comfortable, and then being very clear about sort of the why on, or peop- for your employees, for your customers, for everybody of why this is a good thing. 'Cause people will fill in the gaps. If you leave gaps, they will fill them in with their own stories, so you may as well tell them yourself.
Joe So set the strategy, align the stakeholders, and then see around corners too. And it strikes me that in particular you're talking about lawyers, and you are one, so, you know-
Kurt Used to be ...
Joe uh, we won't, we won't hold that against you too much. But, uh- Yeah, the, uh, it's interesting, right? 'Cause I know even as the owner of a, you know, 10-person company with 20 clients, like when you get the lawyers-
Kurt Yep ...
Joe involved, even in a simple thing like a contract, you know, for a customer, they start raising all this stuff, and you're like, "Ugh." And you gotta kinda like, the job of the CEO is always to figure out, like, what do we really wanna go down that rabbit hole on, and what are we like-
"Yes, I understand as a lawyer you wanna do this, but like we gotta just, like move beyond that."
"And we can't get too bogged down in that." So is that a lot of it too, is like sort of as a CEO is keeping your, like, legal and accounting teams, like hearing them, but also, like aligning them on what really matters?
Kurt Completely. And our lawyers were great on this deal, to be clear. There was just nuances given it's a public company, a private company, and we had private equity, and there was just a lot of things involved, not that it was bad in any way, just there's a lot.
And our lawyers were great, but lawyers are paid to be risk-averse. It's one of the reasons why it was not a good life fit for me to be a lawyer, 'cause I'm not particularly risk-averse. I try to be very thoughtful about these things, but pretty quickly assess, is this a real problem, or is this sort of a paper tiger here? The funny about indemnity in contracts, I'm sure you've had to deal with it, it just goes back and forth, takes people a million years. I've been doing it for 20-plus years. I think I've, like, seen two legit indemnity claims ever get made. But it takes all of the time, energy- effort. You fight about them, you fight them. Everything either just gets settled, or they never pop up to begin with. So, but that is the lawyer's job, is to protect you from catastrophe. And so on the flip side, you've gotta be able to assess as the CEO or a senior member of the team, like, what's the probability-weighted outcome here? Is the risk of this very high? No. Okay, I can take a little more risk there, whatever. Accounting, a little bit more black and white just given the way that the rules are. But the kind of the classic law school and lawyer answer is, it depends. Like, it always does depend. You never know what is gonna happen or what the set facts and circumstances are, so you're drafting around a hypothetical in almost every instance. And so being able to cut through that quickly as a CEO and be like, "Yeah, I actually don't care about that. That one's never gonna happen. Let's move on," save you time and energy. And frankly, like toss a bone if for whatever reason it's super exciting to the other side. Whatever this thing is, like, "All right, I'll throw you the bone on that one. I'm not gonna fight you here, but you owe me this one." Like, the horse trading is important.
Joe You mentioned PR, which is, uh, a topic near and dear to my heart as the CEO of a marketing communications agency.
Kurt Yeah.
Joe So how do you think about the role of PR in sort of setting and amplifying a narrative heading into an ac- an acquisition and coming out of one, with the latter of which is a process you're in the middle of now, having announced this, uh, a week ago?
Kurt It's always interesting trying to get the timing of these things right. Rarely do you have the advantage of, we are gonna close this deal on October 15th, and we're gonna work backwards, and we're gonna start having embargoed conversations on exactly this date and everything. You're kind of in this hurry up and wait thing. We had done, I think, a really good job with our internal PR team, then the Stagwell PR team of having, you know, the press release and various things ready to go. We ended up closing it on a Friday and announcing it on a Monday, which meant we couldn't go really talk to Reporters until like midday on a Friday. As you can imagine, not exactly their favorite time to be getting phone calls from PR folks to have to like get something done over the weekend. So, you know, that's something we didn't control for and, or couldn't control for, I should say, but we had everything prepped, we had everything written. We had the internal FAQs, external FAQs, customer things, whatever that was ready, so whenever the day came, you hit the button. There's always gonna be a take on everything, like we've got our narrative, and there's gonna be some story. Thankfully, the news was wildly positive last week, but you gotta be ready to respond to whatever kinda pops out of the LinkedIn machine on the other side, and so that was something we had to do a couple quick fast follows on. But even that stuff, we'd kinda brainstormed what, you know, what would be the pushback on this and got out in front of that. So giving recommendations to anybody, obviously PR, as you well know, is much more of a plan. Sometimes it feels like it just like magically happens, it takes a heck of a lot of work in the background to do it, but that's something you can do weeks in advance for a deal like this. You gotta maybe clean up a couple details at the end, but get the team prepped and ready as soon as you can so you can be reactive afterwards, but very proactive in advance.
Joe Well, there's so much more communication now than there was twenty years ago, right?
Twenty years ago, you would've worked with your PR team, you would've very carefully crafted a narrative, you would've picked one journalist to give the exclusive, and then they would've written a story, right? And then there would've been some follow-on stories. But it's sort- of a group of like five, you know, journalists or whatever who are gonna write about this, you know, advertising industry deal. Now, everyone in the peanut gallery, myself included, can have a take, right?
Kurt Yeah.
Joe So it's like, and it, and you can have a take, and you can sort of iterate and articulate the take over and over on, you know, LinkedIn podcasts, et cetera, like we're doing now. So I think having that narrative predetermined and then also anticipating potential responses and having, um, responses to those solidified has become more important because of the increase in the overall volume of communication.
Kurt Completely agree. I mean, it is a real time evolving thing in the comment section, right? Like that you said twenty years ago, there was no comment section. People might have talked about it over a drink or something after work when they read it in the paper. Like that's a different thing and a different news cycle, and the other side of that too is things can get swept through really quickly, and so you do wanna make sure you capitalize on these moments and have a plan to keep it top of mind versus just, you know, that was this week's deal, and then onto the next. So that's something we're working through right now is how do we continue to get to tell the story, and it is, I guess, things like this a little bit.
Joe Now, in terms of a commentary, you said that years ago you identified Holdco's as the best constituency to acquire the company. Why?
Kurt I think there's been a big disconnect between the buy side and the sell side, and that's not just the economics of the whole thing, it's understanding the incentives and outcomes both are trying to drive. If we take this back, I've been in the industry for about fifteen years at this point in time, sort of the tail end of the IO era, and programmatic was just kind of getting started. But back then, like our sales team was out there talking to the actual advertiser about what their goal was, what is the focus of this campaign, kind of what was your ROAS, what are you seeing as the outcomes you're driving? And one way or another, from an efficiency standpoint in many ways, we've sort of divorced those two things a little bit. If you're really on the sell side and you're just getting programmatic dollars, the publisher versus the advertiser agency, there's so many people and steps in between, you just don't get the chance to kinda align those things. And something that I really genuinely believe about this deal, we can learn the buy side, and the buy side can learn from us more on the sell side of driving better outcomes at more efficient rates on both sides and better ad spend. We've seen the famous PWC study of fifty-one cents made it through ten cents plus or minus on that. But like a dollar goes in the top of the machine, forty to sixty cents comes out the bottom, and people don't necessarily know what they're buying or how performant it is. And I think the opportunity to work more closely, not steal data or share data in like a bad way, but actually understand what drives outcomes for advertisers, which obviously is the point of advertising, is an incredible opportunity, so I think that's the piece that excites me the most. I've been talking about this for years. I wrote about it. It was almost a year ago, I wrote a Sell Sider article about this, like the buy side and sell side need to come together to keep the open web great, otherwise it's just gonna keep going to the wall gardens because they've connected the buy side and the sell side, and they know what does what, and here's what the ROAS looks like.
Joe Something I was thinking about last night, um, another deal was announced this past week as we're talking, which was, uh, Affle acquiring-
Kurt Yeah ...
Joe uh, Perion, and there were some, uh, aspersions being cast about that deal and whatever. Without getting into the details of those companies, I think to your point about consolidation and supporting the open internet as a whole, there is so much infighting in the open internet advertising ecosystem, and I think the, the people who love to do that fighting, first of all, I think they do it because it's fun for them.
Kurt Oh, yeah.
Joe And this is like their topic of expertise, so-
Kurt Yeah.
Joe They, they just think it's interesting. It's the truth.
Kurt Yeah.
Joe It's like a lot of it isn't even strategic, it's just like, yeah, people are like, "Yeah, I know a lot about this, and I wanna call someone else a fraudster," whatever.
Kurt They gotta drive page views too, just like the publishers do, and so the more controversy, the more page views you get for your own business. Let's not misalign-- think about the incentives being misaligned there. Stirring the pot is good for business.
Joe Yeah, no doubt about that. I sometimes call it, uh, productive controversy, right? But- ... I guess what I'm-- Like the question is, how productive is it? 'Cause I think what a lot of the companies that, and people who think of themselves as the white knight of the open internet adtech ecosystem, what they do when they're throwing those bombs is they're sowing doubt about the whole thing. 'Cause I think the end result is the advertiser is just like, "Well, it's less directly performant to begin with, and all these people who are experts in it are telling me it's full of fraud and shady practices, so I'm just gonna skip it."
Kurt It's so weird to me. I don't know any other industry that hates itself as much, and maybe it is that we are so close to the publishing business to what I just said of we know how the bread gets buttered, and the bread gets buttered with page views, and the controversy gets page views, therefore you do that thing, I guess. I-- It's very weird to me. The other thing is, and this is genuinely not like calling out any specific companies, there's a lot of problems that are created, and then their company goes and solves that problem. Right? We've seen that story because people don't understand it. It is complex. It is changing every single day that if you can create a problem, real or perceived, you can be the solution to it and take a five percent or ten percent rev share in the middle of that. And I'm not saying everybody's got misaligned incentives, but having the opacity and the chaos changes, all of those things can be good for business too. So there is a little bit of an element of, "This is too hard. You can't understand it. Let me fix this for you." That's, that's good for a lot of people, you know? Complexity is our friend. If this was easy, publishers would not hire us to run everything for them, but they're not gonna go manage, you know, forty, fifty different demand partners, keep up with every technology update, working every identity provider. What's that new ad product? This, that, and the other thing. Like it is complex by definition, and that's, you know, our friend in some ways, but we're doing it, I think, with the right morals and doing it for the right reasons, not to just like create a new fee.
Joe That is the double-edged sword of the much-bemoaned complexity and fragmentation in adtech, is that its existence is the raise on death of so many adtech companies, but it also sows fundamental doubt about the viability of the entire ecosystem, which causes the, uh, walled garden concentration problem against which, uh, everyone is constantly railing.
Kurt Sure.
Joe On cons-consolidation, I think with the advent of AI, there has been a lot of speculation about, first of all, about consolidation in general in adtech, which seems to be happening. Like, we're definitely seeing an uptick in deals. But then also folks are wondering if we could sort of reinvent this ecosystem, simplify a lot of the complexity we were just talking about, and sort of move toward a model where maybe you don't have SSPs and DSPs, maybe there's just one ad platform. And then in your case, not only does the, the Stagwell purchase, uh, raise the question about DSPs and SSPs, but also like will agencies just operate tech stacks? And could you hypothetically have a situation where you have like advertiser, one intermediary that's sort of buying the media and operating the tech, and then the publisher? What level of consolidation do you think we're headed for?
Kurt I think we're definitely moving toward consolidation to get to it's truly just one platform, I think is years and years and years away. Uh, and there's a host of reasons for that. SSPs and DSPs do provide value in the targeting and going to find the right audience. While we at Freestar have a big audience, we don't have everything. We don't have all multi-platform, CTB, digital out of home, everything. So if you're trying to put together a multi-platform campaign, you need to kind of by definition go a number of places. Whether we need DSPs as a separate thing from SSPs, I definitely can see those layers becoming one layer of some sort of platform in the middle, and that makes sense. And different advertisers and agencies are gonna have different preferences for who they work with, different commercial deals, or this is better my D2C brand, while this is better for my, you know, brand advertising, whatever. So there's just gonna be different needs, and we will still will have platforms. I don't know that we need the proliferation of like five hundred-- I, um, not five hundred, but I think there was like seventy different identity modules in Prebid at one time. Do we really need that? Probably not. Do we need fifty DSPs and SSPs? Probably not. We probably need five or ten really good scaled ones and then some niche ones in healthcare or something like that. So I think we are gonna see the consolidation, but this is normal. Like, every industry, when it grows up vertically integrates to some extent, and you take out pieces of that, whether it's automotive industry over the last hundred years. I've used this a lot, like Netflix used to be a DVD mailing company, now it's the biggest content creator in the world. Why? 'Cause they freaking vertically integrated from shooting the thing, to distributing the thing, to charging the customer.
Ours is just finally reaching that point, but our industry is only twenty-five, maybe thirty years old in a real commercial sense. Like, this is when these things happen. Like, I'm really excited. I hope we get to be part of this new version of what the open internet can look like. And it probably took AI pushing us and various things, but that's what excites me so much about the Stagwell acquisition, is us getting to bring the brain trust together on both sides of this market to make it better for everybody. Like, it sounds cheesy, but this is not like a zero-sum game where somebody has to lose. Like, we can genuinely make this a win where advertisers get better outcomes, more efficient spend, our publishers can make more money while they constantly both know what the other person wants. And you know, we obviously get a fee in the middle being the intermediary there, but I think this is a good thing in the long run, something that needs to happen as a market matures.
Joe Apropos in the long run, I was gonna ask you, when the AI boom, the consumer AI boom first hit, you know, early twenty twenty-two I think it was, into twenty twenty-three- Yeah ... what was your initial reaction in terms of the impact it would have on the media ecosystem? And then how do you view it now and going forward?
Kurt I overestimated how quickly it would actually be able to help transform businesses operate. I underestimated how quickly it would change how people find information. I thought it was gonna be far more of this transformation of the workforce, and we wouldn't have accountants necessarily doing that or whatever. It still takes really smart people to use AI. I can-- Man, my productivity is through the roof. I have fallen in love with Claude to the point where I'm like, I get excited if I've got two hours, I can just go jam and like build, and that's personal and professional. And not even building things, like figuring out, I'm doing an addition to my house, like this weird wiring project. Like, it was fun to go have the thought exercises with that. But it also didn't necessarily like get rid of people on our team. Like, you still need good people doing that. And so I think finding that balance has taken us longer as a, a business community or whatever that is. At, at, for a while, I thought it was like a solution searching for a problem.
What it has done, though, is made it a hell of a lot easier to find information, and I can go have those thought exercises. It just doesn't automate the people side of things. So it's been both quicker and slower than I thought it would be. I didn't realize how much you really do need that human in the loop to make it good. I thought we might get there a little quicker. I think the new tools let us get there from a productivity standpoint inside of businesses, but that's taken every bit of the three years you just mentioned. Clearly changed human behavior. ChatGPT coming out has just made it wild how people go find things, and so that I did not quite see coming.
Joe It is paradoxical.I haven't heard someone else put it in that exact way, and I think that you would think that businesses which have a very strong economic incentive and generally, you know, sort of white-collar people working for them would have more of an incentive to change fast, and that consumers might take longer to catch on. But actually, like my like not particularly technical, like sixty-something-year-old parents are using ChatGPT to find information. But businesses are often-- even if everyone's using it, the fundamental structure of businesses in many cases has not changed. Like, you still have the same people- doing the same jobs. They're just using AI, and that is a bit of a paradox.
Kurt It's interesting. I mean, I think that continues to evolve. I also think the promise of what it could do outside of simple, like being a much better Google search, was maybe a little overhyped. Remember, like, was the Will Smith image thing? Like, it took a really long time for that to be good, and I would ask it to create a slide deck, notoriously difficult for AI to do. It's really good at them now, but it just needed that application. I think OpenAI focused in a good way on the consumer side of things, whereas Anthropic went more business. And what they've done with Claude as a business tool is just fascinating and incredible and iterating. But I think the, like, consumer side, this is fun, let's make this goofy image or video or whatever, got a lot of the press, but the business tools weren't quite there yet, and they have caught up now.
Joe So moving forward, and maybe we can end on this note, what did you see early on as an M&A lawyer in terms of what made deals successful after the fact? So from that vantage point, and then how do you take that now into being a CEO of a company that was just acquired? How do you take all the, you know, relationship building and the structure of the deal and now foster a successful post-acquisition phase for the combined company?
Kurt Use the word relationship, and I think that's what it comes down to. No matter what you're doing, how much AI or technical it is, all businesses come down to people and, to an extent, the culture. You know, culture is the boss, and when the boss isn't around type of thing. If those two things aren't aligned between the companies of kind of the people and how they see the world and just generally the culture, how people work and what they want to do, it's almost destined to fail. You got company that's really stayed and slow-moving, and then you want to bring in this fast-moving whatever, they are just gonna bang heads the whole time. It's not gonna work. And the deals I've seen go incredibly well are where there was a culture alignment or an alignment or at least where they both wanted to go. That's gonna work really well. Where you're trying to jam things together 'cause it makes sense in a spreadsheet, the spreadsheet doesn't matter. You can say, "Well, there's four accountants. We only need two accountants." Yeah, but you get in there, and you didn't know that Bobby did this, and Julie did this and whatever. Like, oh, you never get the synergies. So it has to be something where the soul of the companies can coexist going forward. That's gonna let people do what you need to really bring things together and actually harvest the synergies. It has to be a cultural fit as much as it needs to be a spreadsheet exercise, is what I've seen in the past. Spreadsheet never usually wins in, uh, in the long run.
Joe Yeah, it applies to deals, and the reality is, as you said, it applies to everything in business. That's something I am-- have learned and am still learning five years into owning an agency is the agency in particular because it's a service business is famously-
Kurt Yeah ...
Joe a relationship business, but all businesses are relationship businesses and like-
Kurt Yeah ...
Joe you've gotta take time, you've gotta build trust, you've gotta get in-person face time with people. All of these things are required to make a business work and to foster good relationships with your team and your customers. And so it makes sense to me that, you know, a deal in a post-acquisition phase is no different.
Kurt Hundred percent. There are always gonna be bumps in the road, and what gets you through that is trust, good relationships, putting in the deposits so you can take the withdrawal when you need it. And yeah, whether that's a deal, a, a personal relationship, anything in life, it kinda comes back to that.
Joe Cool. Well, Kurt, thank you so much. I really enjoyed this. We all wish you well as you, uh, head into this next phase.
Kur Thank you, sir. I'm excited to get a little more sleep here, and I appreciate you having me today.
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