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‘Don’t be afraid to cannibalise yourself’: Captify’s global CEO on business survival
During his recent visit to Australia, Captify's global chief executive officer, Mike Welch, sat down with Mumbrella's Lauren McNamara to explain how he's successfully stayed at the forefront of adtech over the past 30 years.
Captify’s New-York based global chief executive officer, Mike Welch, has been at the forefront of technology for over 30 years, and throughout his career he has faced numerous challenges – some so big, many would call it quits.
Few can say they’ve survived a case against the US Department of Justice, or that they led the growth of what became Microsoft’s Xandr, or were one of the first to adopt new technologies as they came, but he sure can.
While some would buckle under the pressure Welch has faced over the course of his career, he has stuck it out, and has done so with his head held high – deservedly so.
He spent 25 years with AT&T — one of America’s leading telecommunications businesses — the first half of which were in the “traditional” telco business, and the second half in the advertising business, including s stint with the Yellow Pages, or as he calls it, the “original search engine”.
But four months after he got to the Yellow Pages, the iPhone launched. And boom. The “original search engine” was dead.
“Google didn’t kill the Yellow Pages, but mobile Google did,” he says. “The iPhone launched, and we just completely declined.”
So, in 2012, AT&T sold the Yellow Pages, and while Welch thought he too would be gone, he ended up staying with AT&T to run a fledgling new offering, Adworks.
A combination of TV advertising and a mobile and online ad network, Adworks was based on the concept of AT&T data and powering delivering more targeted ad impressions – and thus begun Welch’s thirst for adtech.
“That’s where I got my first entry into what’s now programmatic or digital,” he tells Mumbrella. “And that was in 2012, before we knew how significant that space truly was.”
Shortly after, in 2015, AT&T bought DirecTV – an American cable television provider – which bolstered Adworks’ offering significantly. It gave the business access to household addressable television targeting, which at the time, was a fast-growing area.
Adworks continued to grow, still under his strategic leadership, when it completed its acquisition of Time Warner, another mass media and entertainment conglomerate, which came with even more advertising inventory.
“And that’s when we put together a strategy that said, if you had AT&T data, and you had scale, of owned and operated ad impressions, if you had ad technology, then you could build a marketplace that allowed others to contribute their inventory and access the power of AT&T’s data,” Welch explains.
“So we had the data, we had the inventory, but we didn’t yet have the ad technology.”
So, to solve the problem and find the technology, AT&T went out and studied a number of adtech companies, before eventually buying AppNexus – and shortly after, rebranding it to Xandr.
“That become our platform and marketplace,” he says.
Throughout all this, no matter how positive it may sound, Welch faced his fair share of difficulties and set backs, including a gruelling case against the US Department of Justice.
When AT&T had made its acquisition of Time Warner, the US DoJ sued, to try and block the deal.
“I’ve got stacks of testimony to the Department of Justice for over 20 hours, that share the merits of the business thesis behind advertising,” Welch reflects. “The DoJ was interested in why we felt we had to own Time Warner in order to execute on our strategy of creating Xandr essentially.”
AT&T ultimately prevailed, and to Welch, that was the moment that meant “game on” – Xandr could actually be a thing.
“We believed in the thesis, we believed in the merger, and we really fought for it,” he explains. “And more than anything, what an experience like that teaches you is that if you do believe in what you’re doing, and you know it’s a worthy cause, then go forth and try to accomplish it, even in the face of something as stringent as a lawsuit by the US Department of Justice.
“It was triumphant, we were going to see our vision after this long, drawn out, highly public fight. That was a huge standout moment in my career.”
AT&T’s advertising business was booming, according to Welch, it was all “fine and good”, until AT&T decided to sell its media business, including Xandr.
It was then, that Welch became the chief executive officer of Xandr – where he recalls his day job was to keep the business running, and his night job, so to speak, was to sell it. And he did just that, selling the business to Microsoft at the end of 2021.
“Being CEO of Xandr, through the sale especially, I knew of Captify. And I knew that Microsoft was going to integrate the business [Xandr] and didn’t need a CEO anymore, so that’s when I made the jump,” he says.
Through the trials and tribulations, Welch kept reminding himself of one thing. A piece of advice he received early in his career, that he carries with him to this day – the secret to his success.
“I learnt you can’t be afraid to cannibalise yourself,” he begins. “It was one of the first things I learnt at AT&T.”
It can make or break a business, an individual, or an industry, Welch argues, because if one does not accept cannibalising itself, it will fall behind.
Reminiscing on his early AT&T days, he says long before mobile was the primary driver of the business, the CEO at the time declared it is a “mobile company”, so the business intentionally moved away from landlines.
“And that was scary, but that was okay,” he says. “Because we grew and we didn’t hold on to the past.
“Mobiles proliferated, and now hardly anyone has a landline.”
That same CEO also moved senior executives around to AT&T’s different businesses, ones the executives had no familiarity with, because “he wanted his leaders to have scar tissue”.
Welch explains: “ He said, ‘I want to know that you’ve been through the trenches, you’ve been through the wars, and no matter what situation I put you in, you’ll figure it out. You’re not going to be scared. You’re going to just get in there’.”
Over the years, Welch doubled down on this idea of moving on with the times, with new technologies, and he says the biggest thing it taught him was not to work in fear.
“Even at risk of cannibalising your core business, you just have to keep innovating or you’re going to die,” he stresses. “That’s probably the business lesson, or the sort of overall life lesson.”
This philosophy is also what helped him take those first steps into the advertising space when heading up Adworks.
“I didn’t know anything about digital media or programmatic media, but I did have the scar tissue.”
And it’s also what helped him when taking the helm at Captify 18 months ago.
“It’s been really refreshing to go from what is a huge bureaucracy of 300,000 people, to a much more fast moving, startup feeling culture,” he explains. “Look, I had a great experience at AT&T, and I loved it. And it taught me to be the business person I am today, but it was so different.”
One of the most notable culture shocks of joining Captify, Welch notes, was that startup feel and how it impacted employees. Even something many would find insignificant, was a huge change for him.
Welch with some of the Captify Australia team
“At AT&T, my email address was ‘MW2657’, I was employee ‘MW2657’, whereas here, I’m just Mike Welch.”
The philosophy is also what will help Welch lead Captify’s next phase of growth – especially in Australia.
The business appointed Jaclyn Hadida as its new local managing director mid-last year, and Welch says its no coincidence that Australia quickly became its fasting growing region – so much so, it grew 13% year-on-year in the fourth quarter.
There is value in telling clients and agency partners that your business is global, but has the local touch, as it adds a certain level of legitimacy and credibility according to Welch, so having “feet on the ground”, like Hadida, has been “huge”.
And we can expect more growth here, Welch teases, including Captify’s media measurement offering for other sellers, not just itself.
“Something we’ve learnt in the US and UK is that search uplift measurement can be a standalone product in and of itself, to measure media that other people sell,” he says. “We’ve been selling standalone measurements in those other markets for the last six to nine months, and that’s something we’re going to bring to the Australian market soon.”
Editor’s note: Mumbrella has changed the way it deals with company names. House style is now to use standard proper noun capitalisation on all names regardless of brand typography. Brand typography may be retained in direct quotes from releases.
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