It's been 12 years since Sarah Fay stepped down from one of the most powerful jobs in the media services industry -- CEO of Aegis Media (now Dentsu) -- and more than five years since she joined the team at Glasswing Ventures, a Boston-based venture capital and private-equity firm backing some of the most bleeding-edge and disruptive startups, including many focused on AI and advanced machine learning.
In the following Q&A, Fay explains what her friends and former Madison Avenue colleagues and clients might most want to know about from her new perspective.
MediaPost: You’re on your fifth year at Glasswing Ventures. What have you been working on that would be most interesting to your friends and colleagues on Madison Avenue?
Sarah Fay: I continue to be amazed by the volume and quality of game-changing ideas presented to us each and every day. And I’m fortunate to work with entrepreneurs who are brave enough to take their ideas and make them realities -- especially in the exciting areas of automation, data access, security, and first-party data enrichment where so much innovation is happening.
Investments of interest to Madison Avenue and the marketing world -- you can check these out on our website -- include disruptive solutions that produce in minutes access to data and insights that would take weeks to gather manually, privacy-enhancing technologies that allow organizations to analyze data while it remains encrypted, and technologies that improve work processes with real-time information that allow for more effective collaborations.
All these solutions make you realize how different marketing processes and decision making will be -- soon. They truly shine a light where guesswork and lack of information exists, and the difference between using and not using these technologies is significant. I will give one example: think about how marketing teams operate in silos of expertise without knowing what is happening in other vertical teams.
Plannuh is a good example of a platform that is adding rigor to marketing operations by giving management a real-time view of how budgets are being spent and goals are being met across all marketing functions.
The old way is to look back quarterly, but that is often too late to make impactful budgeting decisions across functions. With an average tenure of 18 months, CMOs need to move faster than that. This gives them an edge.
MediaPost: How has Glasswing’s portfolio evolved in the time you’ve been there, and have you been surprised by any turns and new directions?
Fay: I joined founding and managing partners Rick Grinnell and Rudina Seseri when the vision to create a VC firm to focus entirely on AI investments was novel and disruptive. We often had to explain why AI technology provided a broad enough investment thesis.
Clearly since then, AI has been driving the biggest wave of value creation in history, and today no one asks if it is a broad enough category.
If anything, we have become more focused on the opportunities we pursue in frontier tech -- from B2B SaaS enterprise software to vertical categories such as cybersecurity, manufacturing and marketing.
The turns and new directions are a part of most startup journeys, so it has been a fast and interesting few years.
A good example is the road I’ve been on with Narrative.io, which is completely changing the way data is bought and sold by automating access to raw data. They began by simply removing friction from the process of buying and selling data in the existing marketplace.
But they have evolved to create a platform called Data Shops, which is enabling literally anyone with valuable data to become a seller -- sort of like “Shopify for data.” I never imagined when we first made the investment that it would turn into an opportunity so much broader than the original concept.
MediaPost: You’re a big booster of the transformative power of AI to make advertising and marketing more effective and efficient, but what’s the downside as AI gets better at doing things only people could do before?
Fay: You are referring to automation, and it’s true that this form of AI technology can significantly reduce the hours required to perform certain tasks. But it can also make possible things that could never have been accomplished manually.
You might recall an article I wrote for MediaPost a few years back, “To Automate or Not to Be,” which noted the reality that some forms of automation will reduce weeks of work to hours, maybe even minutes.
This may impact the number of people needed to do some forms of work. But it also allows companies to ask “What else can we do that wasn’t possible before?”
One example I can offer is Elsy, which uses AI to allocate granular placements across all paid media to produce the optimal return -- basically automating the creation of what media planners are hired to spend A LOT of time to produce. It also predicts the exact ROI and gets better at predicting exact outcomes over time.
This is a scary thing for agencies to embrace, especially if their fees to create media strategies are time-based.
But imagine now how this changes things -- enabling agencies to put more time into negotiating and activating plans if they can know very quickly where the budget will be placed.
Activation of big media partnerships is often done hastily at the end of a long planning process, sometimes losing branding synergies along the way.
If saved planning time can be redirected into creating more nuanced, more creative and better executed media plans, the agency can maintain a significant role and produce better work for its clients, and ultimately improve its position to win more business.
MediaPost: Do you have any reservations about backing companies that could disrupt more than just business models? You know -- the law of unintended consequences and how that might impact society at large?
Fay: Yes, the entire Glasswing team will not back any company that might violate human rights, which is why our investment processes consider the Universal Guidelines for AI, and we are also a signatory for PRI (Principals for Responsible Investment).
There are many examples of things technology can do that cross the line of what it should do -- we are committed to supporting founders and startups that are ethical, legal and right when it comes to applying AI.
MediaPost: What’s the next-newer-thing? Are there any companies you’ve been meeting with that are pushing us into sci-fi territory, and what kind of traction do you think they will have?
Fay: Okay, I’m thinking of “The Matrix” and the sci-fi category is cybersecurity. Every sci-fi movie has some bad guys, right? And as we all know from watching the news, cyberattacks on companies and cities are getting worse all the time.
These hackers (which include nation-state actors) are fiercely trying to break in to almost every company and government network at every hour of the day and night. Of course, AI must play a role in keeping them out. It simply isn’t possible using manual methods.
We have several companies in the Glasswing portfolio that offer superhuman insight and protection from hackers, and man -- are they ever getting traction! One of our investments, Black Kite, uses AI-based hacking simulation to quickly report on the weaknesses of any network.
This is particularly useful for companies integrating with outside networks. The partner infrastructures you tie to may be your weakest link -- think about how many integrations are agreed to across the marketing space. They need a cyber-hero like Black Kite on their side.
Another cybersecurity company in our portfolio, Allure Security, detects hackers who try to fraudulently use a company’s brand to trick customers into clicking links and giving out password information related to that brand.
Marketers need to worry about their brands being hijacked to do harm to their customers. In the words of Neo, “I know you’re out there. I can feel you now…”
MediaPost: Do you miss being in the agency business? And what would you do differently if you were back running one again?Fay: I don’t miss being in the agency business, simply because I love what I’m doing now.
I stay in touch with many CEOs and executives at agencies who I respect and admire, and I don’t presume to know better, as they wake up every day with clients and their own teams to serve. But if I were in their shoes, I would be thinking a lot about the disruption of existing business processes, and I would be focusing on new data technologies and strategies.
Technology disruption in the advertising space is not new, but it is moving at a much faster pace, and is creating more distance from the status quo.
It may not be enough to be a fast follower anymore.