62. John Nardone – Flashtalking about Modem Media and [x+1]

John is President at Mediaocean and former CEO of Flashtalking, which Mediaocean acquired in 2021 for a reported $500 million. He led [x+1] into Rocket Fuel and MMA before that — and his real #PaleoAdTech cred was acquired during his time at legendary Modem Media in the mid-1990s, when he was involved with the very first paid ad campaign on the internet.

As John tells Marty in this raconteurial episode, his collegiate dreams of being a psychiatrist were derailed by a frat brother’s father who happened to be Bill Tragos (the T in TBWA), who delivered a rousing talk at Duke to a susceptible young Nardone. John joined Ogilvy in 1988 after business school and was there less than a year before Martin Sorrell staged a hostile takeover, freeing hundreds of employees and losing American Express as an account, feeing hundreds hundreds more. It was a crash course in the bipolarity of the ad business.

John landed at P&G as a brand manager, and then Pepsi, handling the Stoli Vodka account, before being recruited to join Modem Media by its charismatic founder, G. M. O’Connell. Then a 12-person shop in an unfashionable part of Connecticut, Modem can claim to be the first digital agency, building multi-media, CD-ROM and then internet-focused campaigns for clients such as General Electric and Coors.

It was Coors’ clear Zima beverage brand that brought John into the internet age, when they were one of 12 sponsors for the first-ever paid campaign on Wired magazine’s Hotwired.com. (For more on this epochal campaign, check out our Steven Comfort episode.) The cost was $15,000 for the three-month beta trial, which John says “seemed outrageous.”

The AT&T ad that was also part of the campaign gained at 25% click-through-rate (likely an all-time industry high) due to its novelty, and John tells Marty the mind-numbing way these ads were measured: log files were printed out and individual “gifs” were counted, manually. The world awaited its first ad server, which was forthcoming (see our chat with Kevin O’Connor).

Did those banner ads on Hotwired.com seem revolutionary or just a gimmick? “It did [seem major],” recalls John. “G.M. was an evangelical character. After he sold Modem he went off to live in Patagonia for ten years and sort of disappeared from the industry, so people forget how incredibly charismatic and passionate he was that digital technology was going to change advertising forever.”

After a stint at MMA, an analytics company, John found himself a first-time CEO at [x+1], the latest incarnation of Poindexter Systems, founded by Joe Zawadzki, who later founded Mediamath. It was 2008, and John inherited a difficult situation at a difficult time; shortly after raising money, the market turned and he was left with a single client (Delta Air Lines) and nothing to do but try to “turn lemons into lemonade,” in the words of his CTO.

So the team rebuilt the tech stack and delivered a proto-DMP, capable of developing targeting insights based on first-party databases (such as Delta’s SkyMiles accounts) and using those insights for website personalization, landing-page personalization and then ad targeting. [x+1] was ready to be part of Google’s first RTB experiments in 2010. The company was acquired by Rocket Fuel in 2014 for an estimated $230 million.

#PaleoAdTech has long been interested in probing the mysterious inner-space that is Rocket Fuel’s history but has so far been frustrated; and so it proved this time, as John would only say “It’s probably a story for another day. [Rocket Fuel] was not our intended destination. We had a different suitor that we thought we were selling the company to and at the last moment, quite unexpectedly, that suitor dropped out. Rocket Fuel was the only one left, and so they won the bid.”

Ultimately, Rocket Fuel became part of Sizmek in 2017, and Sizmek itself filed for bankruptcy two years later.

John’s next stop was Flashtalking, a dynamic-creative technology provider. Challenged by Adobe’s deprecation of the Flash format, he was forced to diversify into measurement and analytics — acquiring Encore from our friend Steve Latham in 2018 — and rich media.

And as we have seen, Flashtalking became part of the Mediaocean family in 2021.