Ed (00:04):

I am Ed Cowan, and this is Scaling Up.

Bruce (00:14):

We talk about our DNA internally as “Build a DNA”, and if you want to make a difference to the world you’re in, you get up every day in a very different motivation. We move at pace and therefore learning at pace is important and therefore you’ve got to accept failure. And failure is the greatest unlock of learning velocity you can get.

Auto (00:33):

This podcast aims to educate and inspire by telling the stories of great growth companies as told by their CEOs and Founders. TDM is an Australian-based investment firm that invests globally in fast growing public and private companies. For more insights, visit our website: tdmgrowthpartners.com.

Ed (00:55):

We last sat down with Bruce Buchanan in late 2019. At the time, Rokt was in hypergrowth mode having just raced through the US hundred million dollars revenue mark and the business was laser focused on the transaction moment, unlocking its potential for merchants, advertisers, and consumers alike. In the six years since, Rokt’s revenue has grown more than eightfold, the company is now strongly profitable and has been built on its original insight: the power of relevancy. Bruce and his team have transitioned the business to now be a full suite of AI-powered products. Each new capability has deepened e-commerce partner stickiness, expanded both sides of the network and delivered greater returns for merchants and advertisers. This episode dives into Rokt’s next chapter of growth and the role it is playing as a neutral, trusted intermediary for first-party data. How the business is positioned to become an intelligence layer for e-commerce in a world that is seeing real time technological change with the rise in capability of AI agents. Just as importantly, we’ll discuss what the last six years have revealed about Rokt’s culture and how Bruce has leaned into the hard decisions needed to scale the business for the long term. Without doubt, this period has cemented Bruce as one of Australia’s great entrepreneurs and leaders, and yet the story is still being written. Here is my latest conversation with Bruce Buchanan, Co-Founder and CEO of Rokt.

(02:28):

Bruce, welcome back to Scaling Up. I’m very excited for part two of what was a great conversation almost six years ago, it’s crazy to think. We covered some ground in that previous conversation from the founding story, to the mission of Rokt, the insight from your time leading Jetstar about the opportunity about merchants and advertisers at the transaction moment. That was late 2019, I remember it vividly; mainly because soon after that the world changed dramatically, and this may feel somewhat irrelevant to a listener sitting here in 2025, but I bring it up because to me it showcases so much about Rokt as an example of the culture and the leadership of the business. You can imagine for a business that had a large part of its revenue derived from live ticketing or travel, that disappeared overnight with lockdown. So in my mind it was a moment of existential threat, but you managed to emerge the other side resilient and in fact, dominant. It’s easy obviously talking about it in hindsight, it was a terrible time for many, but I do think it’s worth getting a glimpse as to your own psychology at the time that enabled you to emerge so strongly.

Bruce (03:36):

Yeah, well thanks, Ed. It’s great to be back and reflecting on the last six years, it’s been a journey and a half. I think in 2019 we were just getting close to a hundred million dollars in revenue and we were vertically, as you said, heavily concentrating a few early verticals that we’d done quite well in, in entertainment, travel, and we’d recently – at the start of 2019 – acquired a business called OfferLogic and gone into B2B and started to expand in retail off the back of that. And so, we had some early shoots in retail, and then I remember we had our global kickoff, which we always do in January and overseas, and we got back at the end of January and literally a couple months later the world completely changed. I remember looking at one of the charts, we were looking at the vertical based transaction growth and one of our biggest verticals was down 97% over about ten days.

(04:37):

And I just thought, “how can you ever plan for- what’s the contingency plan as you think through going, ‘oh, this whole industry is going to collapse by 97% in the space of a week’”. And that’s what happened. It was kind of scary, frightening, surreal. And I think what was tough at the time was just the fact there were so many unknowns. The fact that we were all isolated, you didn’t actually have the human contact that, you realise post COVID, is so important. I think what the team did really well is we rallied around what was working well and we just doubled down and said, “we’re going to fight for the stuff that’s important for us. We’re going to fight for the growth in the segments that we can do something about and we’re not going to stress about the things we can’t control.” We can’t control the fact that no one’s going to go to concerts and no one’s travelling.

(05:31):

They’re uncontrollables. And I also remember having a chat to our Board and in particular, having a chat to Tom Cowan at the time and just saying, “how should we think about the investment horizon? How should we think about the ability for us to be contrarian, or should we be pulling back like everyone else is pulling back?” And at the time our Board and in particular Tom, I remember very vividly, said, “look, these are the moments when businesses emerge so much stronger, the ones that lean in, these things that will come back and the things that are not inherent weaknesses in the business but are outside your control, you should just forget about”. And we really doubled down in terms of our investment in talent and people through that time and we got some of our best hires and we got some of our best clients through that time in retail.

(06:23):

Our retail business just sprung up. And if I look at the business, we went through this year where I think in Q2 the results fell 60%, some crazy amount from Q1, and by the time we got to the end of Q3 or back up to level performance and we finished the year largely flat, the next year we made up all of the growth again from what we’d lost that year. And so that we just continued on with our compound growth of 40% and there’s just this one year where it’s missing, but we caught it up the next year. But that year when you look at it a quarterly basis, or monthly basis, actually reveals a very different story. It reveals this very big U-shape where you had a big decline and the business really got together and the team said, “okay, let’s take this challenge and let’s go make sure we get through this stronger than we went into it and let’s do the things that are going to get us stronger on the other side”. And that was such a powerful thing to do because we came out of 2020 in a very, very strong shape.

Ed (07:23):

And it really set the platform for this dominant position, that as you just described, emerged to really give you a permission now that – once travel and live entertainment of course did come back, and you had this now huge retail business and offering as well, in my mind gave you permission to build upon that singular transaction moment that the business had been built upon. And if we fast forward six years now, you really have five moments around the transaction instead of one, you’ve built a full suite of AI-powered products. And so, if you look around that transaction moment from the moment a consumer’s making a selection for a good and service, to the ability to cross-sell or upsell both first-party and third-party inventory, choosing a payment provider – there are so many of them these days to give the best option to the consumer. So, I’d really love to hear the breakdown of the strategy, you know, almost walking through the customer experience to give them their next best action in real time as you’ve embarked from what the lay person would probably think about as a product to platform transition.

Bruce (08:30):

Yeah, great question, and I think maybe stepping up a bit and then I’ll take you through the product strategy. Let me go through a little bit of the business evolution, which I think will be interesting because I think at any point on these evolutions you always get people that tend to doubt that you can get to the next level. And I think at each point when you get to the next level, there’s always another step in that journey. For a business that has a track record of, you know, every time you got a barrier and there’s been ten or fifteen big steps we’ve made over the last thirteen years, people think the next one is going to be the one you can’t crack. And I think the real interesting learning for me is I think teams that are executing on really tough missions and visions, that have a track record of being successful, generally are going to continue to be successful.

(09:17):

And to me, I think the real insight there is the team and people, more so than the individual business or the individual challenge that comes up; talking about COVID, you get lots of things that come up that are unpredictable. How you respond to that, I think, is all around the team and the people because even the best laid plans in the world wouldn’t have predicted a 97% decline in a particular vertical over a space of a week or two. And so that comes down to team and people responding to the challenges that are in front of them. But if I step back up and say, look, the original mission by which Rokt was founded to solve was very much around: how do we unlock the full potential of this transaction moment? And it was rooted in this core truth around the paradox of choice and relevancy and this real understanding that having struggled with this for many years at Jetstar, it was a very tough problem to solve because you need to bridge the gap between these different businesses that come together in the transaction moment to really be able to unlock customer relevancy.

(10:20):

And that was always the mission from day one. How do we unlock this moment that matters most by solving this relevancy challenge that will enable our businesses and partners to do what they otherwise couldn’t do. And we had to start somewhere because that’s an enormous mission, if you want to sort of change the way e-commerce works in totality, going into someone when you’re a small startup in Australia and going, “let us take over your full e-commerce channel and we’ll see, we can turn that around” is a hard thing to do. And so you’ve got to build track, record, and credibility and trust over time to be able to do that. And so, we started in Australia, quickly realised that we need to crack the US market, I think I remember everyone telling me at the time, very few Australian businesses crack the US market, your success rate’s 10%, you know.

(11:11):

They gave me all the statistics and I was like, “it doesn’t matter; that’s our mission. So we either do it or we fail on our mission” and we’re builders so we’re passionate about achieving that broader objective. And so we just buckled up, I travelled two weeks every month for two years, got to the point where my wife said we had to move, and we moved to the US. And it was the same, I remember people saying at this time, “you’re too concentrated, then, in a vertical” once we got the US. So you’ve proven yourself in travel and experiences, but you’re not really going to be a serious business until you’ve cracked retail, or financial services, or food delivery, or QSR, or whatever it might be. And then we slowly cracked each of those new verticals and then they said, “okay, you’ve got too much concentration risk in your big partners unless you can crack reducing your concentration risk, you’re a business that’s not going to continue to succeed”.

(12:07):

Then we did that and then they said, “well, you don’t have a business that appeals to broader segments of customers” and now we serve forty thousand clients across every single vertical. And then I remember them saying, “well now you’re too concentrated in the US”, and then we end up cracking Europe and Japan. And so, at each point in the journey you get feedback of “you’re too ‘X’”, but generally if you stay true to the mission, you understand the building blocks of how you’re getting there, you can continue to lay the success down piece by piece. And the product piece is the most important, and there’s two aspects of that – setting aside what we’ve talked about already on the client geography segment, they’re all important for network growth, but the product piece has ultimately achieved the mission. And there’s two aspects to that: one of which is how do you orchestrate all the different things that happen across the transaction moment, and how do you build an ML AI brain that’s going to be able to continually drive better and better outcomes?

(13:06):

They’re the two key components of our value proposition, and both of them are hard to do. On the brain, it’s about how do you build deep expertise in a highly sought after talent? How do you make it easy for clients to integrate? How do you make it easy to get access to data that would be very hard to surface? How do you invest the large amount of dollars required to operate a real-time system that powers seven and a half billion e-commerce transactions every year? That’s a tough ask, globally, to do as well. So there’s that side of it and then there’s a product piece of the puzzle like, how do you solve the payment page? How do you solve the thanks page? How do you solve the after sell page, the review page, the selection page, and then it’s the actual content in the network. So first of all, it’s ads, and then it’s first-party engagement campaigns, then it’s the products and services that people also want to sell.

(14:00):

And then it’s the cool thing is you actually start to jumble some of these together and you truly innovate, like you build things like Shoppable Ads, you build little mini checkouts, these things we call dynamic product ads. We’ve created a bunch of really new, interesting areas that allow you to actually go into completely new environments to solve new interesting problems. But, the truth of it is you get a great team around a core mission and vision, you stay true to that, you just continue to execute. And then thirteen years on, everyone goes, “yeah, of course that was going to work and we never doubted it”, but for the thirteen years before, everyone’s telling you the reason why you’re going to fail.

Ed (14:37):

Everyone’s a genius in hindsight. I think people just got a sense of why they wouldn’t want to back against you in terms of unlocking what the future growth vectors are. You touched a lot on what we’ll probably walk through over the next half an hour or so, but what I heard is ultimately – whether it’s new verticals, new markets, which I know partners have taken you to, greater network utility through an amazing product roadmap – is ultimately just providing a greater return for merchants and advertisers. With the former, it grows their transaction values, simply, helping them maximise their economics, and for advertisers, there’s a huge ROI given the relevancy in conversion, so what people would describe as network utility, and of course with greater network utility, it drives deeper stickiness of customers as you’ve driven into this transaction moment, customers just don’t leave the platform. Seen an amazing stat of gross logo retention above 95%, which is incredible for a transaction business. We’re not talking about SAS here, and so you must be providing an, increasingly so, greater network utility. And so when I think about network utility, you’re running a two-sided network here and it’s driven a really powerful model. So, this hasn’t happened by chance and you’ve kind of laid down some blocks here already, but I’d love to hear how you thought about developing the depth of the network, and each side of the network, and with it of course the network strength.

Bruce (16:06):

So let me touch on a couple points there. Firstly, every piece of value in the Rokt business comes from solving a customer relevancy problem. And so a big piece of that is what you don’t see in a transaction just as much as what each individual customer does see. So a lot of it’s about removing clutter, getting rid of things that are irrelevant, because in a moment when a consumer is highly engaged and about to transact, the worst thing you can do for the economics of e-commerce is put something that is completely irrelevant to them in front of them. You’ve got a highly engaged consumer, you’ve got a core economic outcome you can drive that’s just transformational for the business. You put an irrelevant thing in front of them, you just switch it off. And every single piece of value in our business comes from the customer, which I mean the end shopper, the benefit flows to advertisers and brands that distribute product in our e-commerce partners.

(16:58):

But it’s important to note that all of our values stem originally from the end customer and what we do for them. When we think every day about the problem we’re trying to solve, we start with the end customer. How do we make this e-commerce transaction moment better for end customers? How do we remove the clutter? How do we drive engagement rate? What’s going to transform the experience of what it’s like for them when they’re shopping on x, y, z? Because we start with that mindset, we think about the world very differently than an advertising business or a distributed commerce business or e-commerce business. What we think about every day is what’s the truth about the consumer behaviour and what’s going to make this consumer experience better? How do you remove friction? How do you reinvest more of the advertising dollars that would traditionally be spent acquiring new customers back in customers?

(17:46):

We approach those problems very much from the customer mindset. So that’s the first thing to note. I think that’s one of the key ingredients, if you want to build something very sustainable, don’t get too distracted by the intermediary things that aren’t the critical drivers of where the value comes from. The second thing for us is most people look at our business and think you’ve got a two-sided network, but as you can see from what I just said on the relevancy side, we really think about a business, as a four-sided network. We think about our business as the end consumer, the advertisers and brands that are wanting to distribute content and unlock the e-commerce ecosystem, and our e-commerce partners that are trying to drive the economics and customer experience that are important for their core success. And then our role in terms of being the trusted intermediary and the decision maker, and providing the connectivity, and the network and all of those sorts of things.

(18:38):

And we consciously think about that because it drives a different sort of mindset than the way people tend to think about a two-sided network. And so the analogies and the businesses that are most like Rokt are more like a visa card than a traditional two-sided network, where you’re actually working with the biggest competitors in an industry just like Visa card would work the two of the biggest banks, and together they create a better proposition for the end consumer, which means it works better for the banks as well. Our proposition is very much like that. We work with the biggest players in every vertical, but we help them bridge over other verticals to solve really hard problems for them to solve, with customers. And by doing that, we bring the network to bear, which enables them to tap into all of those different products, and the data, and the connectivity, but ultimately, it’s done by solving that core problem at the front end with the consumer.

Ed (19:32):

You talked about this paradox of choice, and it’s still rings true for sure, consumers are easily overwhelmed and the winners are those who can create simple, emotionally resonant, and most importantly, relevant offers at the right time. But this has really created a powerful flywheel for you. It has become very self-perpetuating that, ultimately, attracts more advertisers to the network.

Bruce (19:57):

It is. And look, the way we think about that is, what is a consumer doing, and what’s the best way for us to help them achieve what they want to do? And so, the concept of an ad or a product sale, or an e-commerce transaction, for us is a very blurry concept because the difference between an ad and a product sale is really whether you transact in this checkout or the next. And as that evolution of technology changes with things like digital wallets, and things like Apple Pay that we’re used to using with two clicks, the concept of one checkout and the next can be very easily collapsed and you can make consumer experiences very unique and frictionless. And so, what is an ad and what is a product sale become very blurry, so most people will look at it at the checkout arrangement, we tend to look at it more about the customer and the data, is a much more interesting lens for us because we think about it from the merchant’s perspective.

(20:54):

Are they selling a product through someone else’s storefront or are they actually building a direct relationship with that customer that they can continue to build an ongoing direct relationship with that customer? And that’s for us where we tend to separate the economics of advertising versus the economics of distributor commerce. We build lots of tool sets that help businesses blur that boundary and solve problems, ultimately, in a way also that gives a lot more value to the consumer. Most people will think about advertising as either performance or brand, or they think about offer and media costs, and because they tend to get themselves caught in one dimension of that, they lose the side of the bigger picture which is what’s going to drive the best performance. Ultimately, brands are an exercise in trust, and therefore investment in brand often drives better performance, and investment in offer – and giving the consumer – often also tends to lower the trust barriers, and therefore as you start to think about all the different parameters of the levers you can pull, you can get very different outcomes for the advertiser

(22:01):

That can be way better in terms of the customers that are driving the LTV, the incrementality, the long-term performance of their media dollars or their distribution dollars in terms of driving the right outcomes. But it requires you constantly step back and once again, just like relevancy, go to the core truth of what businesses are trying to do, what are they trying to do when they advertise? It’s not like I’m trying to spend media dollars, I’m trying to grow my business and if I’m trying to grow my business, what’s the right customer I want to get access to? How do I build a long-term relationship? How do I keep churn down? How do I drive adoption and trial? How do I penetrate new markets? Whatever it might be, it’s actually understanding the core truth, I think is really important. Just to

Ed (22:43):

Round out this theme of relevancy in my mind, the greater the relevancy, the greater the revenue per transaction for the partner so you get more partners, it increases the network, it attracts more advertisers, increases data and insights to improve relevancy and the flywheel continues. Something you touched on is around first-party data and Rokt being a trusted neutral intermediary of that. And of course, since the last time we spoke, e-privacy has changed dramatically. Globally, there’s been a deprecation of cookies, and you’ve been able to strategically capitalise on this given the growing importance of first-party data, I’d be really keen to maybe just give a quick market overlay as a starting point, but ultimately I’m really keen to understand the importance of Rokt sitting as this trusted neutral intermediary.

Bruce (23:34):

Let’s start with the market dynamics. You’re right in terms of it’s gotten a lot harder for marketers and e-commerce companies and advertisers, and this started back a few years ago, you saw Apple and Meta start to flex their muscle in terms of what was going to be allowed, not allowed, in the broader advertising ecosystem. You also saw some regulatory changes coming out of some markets that caused some additional changes to the practises that were going on. And generally, I would say most of those have been fairly positive. They’re about transparency to the consumer and they’re about making sure the consumer knows that what’s happening with their information is done for their benefit, but prior to that it was a little bit of the wild west and there was a lot of people playing in a very shadowy ecosystem where data would be bought and sold, and information would flow about people without them knowing about it.

(24:28):

And I think what’s happened now is there’s been a real shift towards radical transparency and in making sure that you’ve got consent, and the consumer really knows what’s going on. So I think that’s been the evolution of the data side of the equation. I will also say I think the most important thing in a world where we’re moving towards AI, rapid evolution, and relevancy, at a mass one-to-one scale is the technology’s actually becoming the easier piece of the puzzle. Data is becoming the harder piece of the puzzle, and so I think both in how you bring that data to bear, how you can access the right data for that decisioning, how you can use it in real time, they all sound like really easy problems in today’s day and age, but because of what we talked about previously – but also because of the very nature of an e-commerce transaction, which is real time and involves partnership – it’s typically very hard both technically to surface data in real time, and then also to surface multiple pieces of data in real time from two different companies for joint decisioning.

(25:32):

I’ll talk about that in a minute in terms of what that means, but that’s, I think, the harder problem to solve. We started our business early on with a knowledge that if we wanted to solve this problem – I knew from my previous Jetstar days, that as I was trying to sell hotel rooms in Tokyo, and I represent 0.1% of the market, and trying to work with booking.com or Expedia, I needed to actually have access to the data to sell the right hotel rooms to the right consumer when I was selling a ticket to Tokyo, because I was tiny part of the market and so it was clearly self-evident at a very early day that getting the data was going to be critical to unlocking the relevancy; doesn’t take a genius to work out: you can think about that across every part of the transaction flow to go: that’s applicable, whether it’s payments, or it’s upsells, or it’s advertising, or it’s first-party messaging, or it’s search or selection – data is the key fuel that feeds the relevancy and feeds the technology that delivers relevancy.

(26:31):

So we knew that upfront and we knew that it was going to be multi-party. Think about PayPal trying to make a transaction on Ticketmaster. The concept of getting that right involves you understanding a fundamental truth that that person is a customer of both PayPal and Ticketmaster, and therefore how do you leverage the information from both businesses to get the right outcome for the customer? Now generally, what people would say is any one of these businesses could just build that knowledge base up and solve all those problems, but it’s very hard for a business as they move through an e-commerce transaction to become an expert and have the data on every single one of those touch points, how do they become an expert on fraud, and data, and upsells, and hotels, and rental cars, and insurance, and whatever it might be that’s important for their particular customers that leads you down the path of partnership and it leads you down the path of these distributed ecosystem, which fundamentally are how e-commerce works.

(27:28):

Then you go, how do you bring the data to bear? Now when we thought about that, we realised we had to bring first-party data together, but we had to do it in a way that was highly controlled because we want to be trusted by the way these brands could collaborate, where their data would only be used for their purposes. And so we built the ability for them to use their data in whatever way they wanted, whatever data element they wanted to use, but in a very safe way in a closed ecosystem just for their purposes, and in the middle what we’ve built up is what we call interaction data, which is a crossover of the billions and billions of e-commerce transactions we see, in understanding when consumers do different things across these different brands, what data elements actually matter when making that decision and that feeds our deep learning models.

(28:13):

You can think about that like the underlying model weights in a large language model and every customer has to bring their own first-party data to unlock that, but when they do, they get the power of the tens of billions of e-commerce transactions that have fed those model weights and that real smarts in the Rokt brain, it’s given as the best of both worlds: everyone can safely use their own first-party data, they only use it for their purposes. It means they don’t have to get into this surreptitious world of using consumer data in an untrusted or third-party way, but they can also get the benefit of Rokt’s model weights and smarts, and the Rokt brain that understands the full extent of what consumers do on a right round every e-commerce purchase.

Ed (28:54):

To those listening, there’s some secret sauce in this process power: processing in real time is uniquely hard, let alone this year I think you’ll process seven and a half billion transactions, the motor around these unique identities training on these transactions over eleven billion over time has created a real process power within the business.

Bruce (29:20):

And look, the seventeen, eighteen markets we operate in, I think we touch 80 or 90% of all actual shoppers in those markets and it’s close to a billion customers we interact with annually, which is kind of amazing when you think about that. Just in terms of the markets we’re in and the reach we’ve got. I would say one of other secret sauces of our business, which tends to get glossed over but is super important to feed the user experience, is most people when they build advertising or distributed commerce, businesses are pre-developing the creatives. So if you think about when you go onto Instagram and you look at an ad, or you go onto YouTube and you see that fifteen second clip, that’s been pre-produced, it’s standalone content, it can easily be inserted into that thing. It’s not really native to the experience, it’s done in advance.

(30:13):

A display ad would be the same. Any of those typical pieces of content are done like that. The way we’ve had to do it, because we want to remove content off the page and we want to solve the experience in the transaction moment, is we have to generate all content in real time to make sure it’s native for each individual consumer and then we have to put it through the AI brain to be able to work out what to actually show. The combination of those two things is actually really hard to do because you’re bringing the ‘how’ and the ‘what you’re going to show someone’ together to create candidates in real time and then putting them through an AI brain to actually make the right decision on each individual consumer on what to show.

Auto (30:55):

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Ed (31:07):

I think listeners are getting the sense that you’ve been at the forefront of AI and what was called “machine learning” since the founding of this business, but the landscape is changing rapidly, there’s a transformative wave of technology that the consumer is now well aware of and invariably this will change the future of e-commerce. I’m sure a lot of listeners have started to hear the word ‘Agentic Commerce’ where AI agents act on behalf of you, the consumer, to research, compare, even complete purchases, so shifting the decision making from the shopper to the software. So, I’m keen to get a sense, given that you are at the forefront of this, what the future holds in your mind, but also I’m really keen to understand how Rokt thinks about this more broadly and potentially turning a threat of being dismediated to an opportunity.

Bruce (32:02):

I think first and foremost as a builder, I get so excited when you get rapid disruption and transformation because those of us that are more mission-driven are passionate about making the world a better place and when you can do that at speed and pace, that’s a very exciting time. So I definitely think this is an age of builders and we’re going to see rapid disruption, and so the way I approach that is I think both internally and externally, in a period of rapid disruption, I think the most important thing is ‘can you move at speed?’ because you can predict a lot of things, but there’s a whole bunch of things you can’t predict. And if I go back a hundred years and think about automobile, and there’s a lot of stuff that was obvious at the time – okay, we’re not going to have people riding around on horses, so I don’t need people looking after horses, and stables, and feeding horses, and all that sort of stuff,

(32:48):

And yes, I’m going to need service station and mechanics for cars – but some of the things are much harder to understand and predict like: oh wow, people are going to change the way they live and work because of the automobile. We’re going to have suburbs, and we’re going to have strip malls, and we’re going to have highways. And that sort of thing is much harder to predict in terms of the second order and third order effects, which are often more powerful than the first order effects. So in that world I think speed is most important because you want to be nimble and adaptive. So twelve months ago I started on this journey with my internal team and said, one of the things we have to do is be able to move five times faster than we are today, and we have to get ourselves ready because our clients are going to go through a massive amount of disruption and change, and we want to be ahead of the curve.

(33:33):

And so we started on this journey of how do we get everyone ready for that? How do we get the organisation change talent philosophy, change strategies, give everyone the tooling where they can actually get familiar with this, increase talent velocity through the business, create much greater autonomy alignment, and create a much greater culture around comfort with moving faster and understanding that we’ll make more mistakes, but we can learn at pace. And so internally its been a radical transformation for us with AI over the last twelve months and that’s super exciting. On the external front, there’s a whole raft of ways that AI is affecting our product already. We’ve had the largest increase this year in our Rokt brain’s relevancy performance that we’ve had in the last thirteen and we’re not unique to this. You can see this in the Google results and the Meta results and businesses like App Loving, but that means that our business, which is a network business that makes its economics out of driving these outcomes is accelerating even faster because of AI and that’s super exciting as well because you’re getting much faster delivery of improvements in relevancy, which is a core thing that we built the business to solve for e-commerce partners and that flows through economics.

(34:45):

So things like creative generation, things like getting much smarter on the way to advise clients how to run end-to-end campaigns and what sort of things need to go on different pages. That stuff is just moving so much faster and has gotten so much smarter, so super exciting about that. You do see some disruptions as part of that. So you see, we’re noticing products that we built that were more narrow in nature: like we built a product a few years ago called Adaptive Content Engine, which built off AI, we’re finding now that broader-based solutions to that product are actually producing better outcomes, because it can look not just at the creative, it can provide much richer advice in terms of how to optimise marketing and advertising campaigns. So we are seeing that, but that’s fantastic in terms of helping our clients achieve success and driving faster growth to our business.

(35:39):

The way we think about Agentic AI more broadly in terms of what it’s going to do to consumer behaviour is, look, a lot of things aren’t known, but there’s some things that we can see happening already, we’re seeing the research phase of most people’s shopping journeys are changing rapidly. You can see this happening already in the way that people approach buying anything. All those pain points that used to maybe take X amount of time and now you’re able to do them in one tenth of the time. And so we’re seeing very fast disruption to aggregation players, we’re seeing very fast disruption to the research phase of e-commerce. What that’s doing, the first order effects, which are kind of interesting, is driving a lot more offline transactions online. So those things are a little bit more complicated to do, you tended to be stuck in an offline world and what we’re seeing is a lot more of those are coming online, find my local plumber, research this, do that.

(36:35):

You might’ve rung up ten people before, but now it’s much easier to do that with Agentic AI. Still, it’s worth noting that I think there’s still only about 20% of the total activity in our world happens online. And so as you start to get more of that switching, that’s going to drive a huge amount of tower wind in terms of more online activity for us to work out how to make relevant to consumers. Then what we’re seeing is a couple of different things evolve. We’re seeing people in the Agentic AI and the LLM world trying to start to make platforms. So you would’ve seen this OpenAI announced just the other day that they’re building an ecosystem where people can put apps in there. They tried a few years ago, but I think the latest iteration is much more like an iOS type approach where they’re trying to build an app store.

(37:22):

I think that makes a lot of sense and we’re already seeing clients start to think about how they build to those channels and how do they support them, but importantly how do they do that while preserving the economics, which means – just like with mobile, just like with voice, just like with Mweb, just like with every other channel to verge – they’re now going to have to go deep in how do I actually optimise this as a new channel? And so we we’re really working deeply there. We’re also working with the AI companies to go: “how do we help bridge the divide on the data and partnership side?”, which is our secret sauce, to actually make this work more effectively on both sides. And on the other side, I think the partnership aspect is going to get really interesting as well. I think we’re going to see deep partnerships emerge where a brand that might have a lot of data on a particular type of vertical or transaction I think will want to do partnerships with AI companies to actually expose better consumer experience.

(38:17):

And that could happen in lots of different ways, but when partnerships happen and data bridging is involved to drive interactive commerce outcomes, that’s really Rokt’s sweet spot, and to me people go, “what’s that going to look like?” And I go, it could look like twenty different things, but I said the best analogy I can give you is, when e-commerce started to come about, everyone was like, Visa and MasterCard are dead and they’re going to be replaced by digital payments. And what was true was once Visa and MasterCard realised the importance of e-commerce, they became one of the biggest tailwinds ever because the core truth of providing a trusted way to facilitate payments became ever more important in an online world. And so that’s the core truth we look at in our business. The fourth thing I’d say is there’s going to be some Agentic AI actually replacing e-commerce transactions.

(39:07):

We think it’s more likely going to be like four to one in terms of more transactions going online versus those getting replaced, but that mix could change a little bit. I think the core consumer truth also around, consumers like to transact with a brand, there’s a real endorphin hit when they do buy something. The transaction moments at the end, you think about booking an Uber or buying something on Amazon or whatever it might be, it’s actually a fairly efficient process today and there’s a high trust and the UX is fairly optimised for that experience. So I think you’re going to see disruption in other parts first, but I think there’ll be lots of opportunity here for businesses that want to lean forward and create the economic models that enable these businesses to still succeed in those channels and allow the consumer to still get the relevant experience they want in these new channels.

Ed (39:55):

That’s a fascinating view. One thing on my mind as a consumer is the importance of trust and that’s never going to go away. I need to be confident and trusting that my payment’s secure, that my personal data’s safe, that the product is going to be delivered and in fact turn up, and it does feel that Rokt can play a role in that as a trusted intermediary.

Bruce (40:20):

I would also say, Ed, I don’t think we’ve ever seen this sort of transformation happen, and the pace of change is like nothing I’ve ever seen and I think that’s exciting times. We’re going to see a lot of opportunity ahead.

Ed (40:33):

Something that won’t change is the importance of people and culture. I’ve loved your views previously and you’ve woven them already through this conversation. Since the last time we spoke you mentioned that you’ve done some small tuck-in strategic acquisitions and often where there’s moments of cultural integration, it gives the benefit of clarifying what the culture is actually and importantly what it isn’t. And so I’d love to hear what’s the archetype of person that has succeeded at Rokt in the last six years given the scaling journey that it’s been on?

Bruce (41:09):

So we talk about our DNA internally as ‘Builder DNA’: there’s really these four key things that tend to be really important. One of them is ‘Autonomy and Alignment’. Second one is ‘Win or Learn’, which is really about speed and comfortable iterating high tenacity, resilience, so you get through failure and move ahead from it. ‘Trust, Transparency, and Fairness’ is important when you’re moving at pace, and ‘Talent Velocity’, they’re the sort of four things, because you can’t grow a business any faster than you grow your people. And so those four tenants of things you’ll find threaded through everything we do, and they’re all built around how do we move fast? We’ve built this business to go, “okay, how do we make a difference to the world we’re in?” And if you want to make a difference to the world you’re in, you get up every day in a very different motivation than I think a lot of people that are doing different sorts of things in different fields, but we get up every day going, “how do we make a difference?”

(42:08):

And that means speed is important and growth is important. So we’re a very rapid growth business. We grow at 40 to 45% every year for the last thirteen years, which is kind of amazing if you think about that from a compound perspective. And as you get bigger the numbers get bigger and the people numbers get bigger and that gets harder to do every year. And so the type of person that succeeds really well at Rokt are those that love the personal challenge and the personal growth that comes from taking on those audacious sort of problems that we try to take on.

(42:41):

We want the people that really want to work hard, change the world, and generally the type of people that do really well in our business are the people that want to put in the time to make a difference. They tend to be more missionary led, they’re very comfortable with change and they’ve typically got very high AQ, which is what we call Adversity Quotient. So, tenacity, resilience, drive, because they know that they’re going to, when you’re building something that’s never been built before, you’re going to fail ten times before you get it all worked out, and therefore learning at pace is important and therefore you’ve got to accept failure. And failure is the greatest unlock of learning velocity you can get. So we have a couple sayings in our business: win or learn, or, we fear irrelevance more than we fear failure.

(43:23):

We’re very missionary led as well. So we believe in unlocking the potential of our clients but also unlocking the potential of people in our business and the communities we work in as we put a lot of time and effort into that. And so if some people are drawn to that dimension, what I would say is for a young person starting their career, spending two, three, four years at a business like Rokt is like twenty years in a normal corporate, you’ll accelerate your career faster than you could ever imagine and that will set you up for tremendous success. But it is hard, getting up every day to solve really tough problems that no one’s sold before involves putting in time and effort that is not for everyone. If you want that, that’s going to be one of the best jobs you could ever hope for.

Ed (44:10):

It does remind me of people seeing sports people walk onto the ground and the adulation at the end of a day. What they don’t see is everything that’s happened before that, the graft in the background, and it’s bloody hard work but always worth it. In 2019, you stressed that most problems that you have as a leader are people problems, they’re not technical problems and that the transparency in leadership is really vital. And in the last six years, revenue’s grown over eightfold and so as you say, the people problems have probably got larger and there are different people for different stages of the journey. I’d love to kind of unpick quickly what you learned from making hard decisions or trade-offs since 2019 as it relates to people and culture. There are a few key moments of maybe moving people back into the office from remote, moving executives to New York, reorganising various segments of the business from a people point of view. Any reflections on those hard decisions and trade-offs?

Bruce (45:08):

They were hard. The people decisions are the hardest decisions because, I said, the business won’t continue to grow if you don’t get the people right. So the first thing that typically happens, you notice when you’ve got a structural or a people problem, you’ll wind up with part of the business that’s stagnating or stuck. And so there’s lots of signals for an entrepreneur to see when something’s wrong on the people side, the challenge is do you want to lean in and have that hard conversation and solve that problem? And that typically is an uncomfortable thing for a lot of us, because it involves having that uncomfortable conversation. What we typically do is reframe that; what does the success of the team look like? What happens if you’re on a football team and you knew a part of the team weren’t performing and it was dragging down the team, what would you do?

(45:55):

Would you want to continue to just not win the games and not go to the next league, or would you actually lean in and address it? Generally, I think there’s a couple aspects I think that are important on the people dimension as well. I mean, I think having frank, transparent, clear feedback and addressing problems head on is important, means you say whatever needs to be said and make sure you shine a light on the problems that are holding the team back. But I think another thing that is really important is, there’s a natural human condition where we want to be good at everything, and generally, modern performance management spends a lot of time pointing out everyone’s weaknesses and wanting to focus on fixing everything – so they’re like unicorns or superstars – I mean, my general observation is the stuff that we’re not good at takes us ten or twenty times longer to get moderately ok at, and our superpowers, if we lean into them, can become much, much stronger and deliver much better outcomes.

(46:50):

And so a common saying I have for the team is ‘let’s play to our strengths’. It’s a team sport, I don’t think you have to be good at everything. There’s someone who’s good at cracking really hard problems and someone’s good at the emotional terms and connecting with clients. There’s someone else here good at project management, someone else here really good at drive and making sure that when we get in a tough situation, they keep the team on track. That’s what actually makes teams really succeed. It’s not just having a team of everyone plays the same position. It’s understanding to win as a team you have people that play a lot of different positions on the field, and if you put people where they’re playing to their strengths, the team will actually really, really shine. That involves two really interesting observations, one of which is a functional designed organisational chart typically is not well suited to that because when you need functional outcomes it means you need to be good at everything.

(47:42):

The other problem in a rapid growth business is the problems you solve are different every day. So you have to have a much more fluid ability to approach problems and team structures. Now if you can crack those problems, you can get massive unlocks in team, and capacity, and culture, but it requires you to have a very interesting culture that can address the challenges head-on and for people to understand that they’re not going to be wedded to the title, or they’re not going to be wedded to a particular outcome, they’re going to be wedded to the outcomes they achieve over a period of time, the development and the team success, which ultimately creates the best outcomes for them.

Ed (48:16):

It’s a fascinating view that mirrors my own thoughts: do what you are uniquely good at and if everyone focuses on that, rather than papering over the cracks of their weaknesses. Last question. I know you are someone who, when you’re thoughtfully presented with data, can change your mind. Is there anything that you’ve changed your mind on, I guess since 2019? a lot of the things I’ve heard today are accelerating views around previously established thoughts. Has anything been presented to you by the team or the Board that your views have changed significantly on?

Bruce (48:49):

Yeah, I mean you see it every day. You’ve got to have the antennas up constantly going. Sometimes it’s course correcting a little bit. Sometimes it’s like, “oh wow, I didn’t think that would work as well”. There’s lots of examples. We had an interesting debate not too long ago on the Board about acquiring some real estate in New York and I thought, “wow, wouldn’t it be cool for us to be master for our own destiny”? Imagine the economic gain when you own the building because then you develop it and you see this big unlock, and had this really interesting debate around, just like, people focusing on their strengths, businesses focusing on their strengths and that was an interesting wake up call to go, “look, you don’t have to be good at everything”, and it’s really focus and prioritisation is super important. And so it was a good reminder.

(49:35):

Had another one recently also in our product organisation, our Chief Product Officer has been very passionate about building this new concept called Shoppable Ads. And I was somewhat sceptical around the consumer experience of what that would mean. And wow, when I saw the data was I wrong. The performance of this new product is just insanely impressive. And so you see those sorts of things and you’ve just got to lean in and have a good debate. I think what’s important with teams, you create the licence to have those experiments. We have a process internally where we have switched a lot of our planning cycles, particularly on our RPDs, into what we call Betting and Shaping cycles. It comes from a concept called Shape Up and we will Shape a cycle and Better a cycle, and we call it Betting because we want the concept of knowing, really to create this understanding of the win and learn concept, which is not every bet’s going to work, but we should be comfortable making bets that can have big payoffs, big payoffs both in terms of business results but also in terms of learning.

(50:38):

And that creates a very different mindset just in terms of a person’s willingness to take risks. If you’ve got something like an OKR, I’ll tell you the behaviour, like, I’m going to tell you, “Hey Ed, your target next quarter is to deliver 10% improvement on that”. And you go, “I think I can get eight”. And you see they have argy-bargy, and then you might have this big breakthrough in week two and you get to 12%. You’re like, well, I don’t want to actually continue to achieve more because next quarter then they’re going to set me up with this 20% improvement. And that creates this really weird dynamic where people actually want to just hit an expectation, and it doesn’t encourage this real breakthrough innovative thinking where you’re actually trying to challenge the status quo where the real breakthroughs that happen are. So moving to something like Betting is being one of those concepts being really, really powerful in unlocking that behavioural aspect of, look, it doesn’t really matter if 60% of the bets don’t work, but what does matter is that we’re willing to take the risk that 40% will work. And that’s the mindset I think is really important in creating that breakthrough. And just like me on Shoppable Ads, every day, we find interesting insights that we didn’t expect and we all learn because of that.

Ed (51:48):

Bruce, it’s been a pleasure. Hopefully I can lock you down in another six years to recap the tremendous growth of the business. Appreciate your time. An hour with me is an hour that you are not building, so there’s a big trade off there and appreciate that. That was fantastic.

Bruce (52:04):

Thanks Ed. Great to talk to you.