An interview with Beet.tv on the different nature of premium publisher adoption of programmatic across EMEA and US. Click on photo.
My piece on Digiday outlining the threat of Ad tech disintermediation. First posted here.
I remember sitting with a founder of a well-known demand-side platform a few years back (feels like a lifetime), and he was warning me how the evil Google would disintermediate us all and destroy the agency trading desk business if we were not careful.
The irony now is that the worst culprits of all are the new, up-and-coming tech vendors who are chasing the direct-to-advertiser relationship at any cost.
As an agency, allowing a DSP or real-time bidding ad network to control all the programmatic spend may seem the same as giving an insertion order to an ad network, but it is far from that. The rules have changed with the rise of ad tech. Our whole business is based more and more on data. We need to manage, explore, test and learn with data, and the data needs to be held at the hands of the agency running the wider business, or remain in the advertiser’s hands should they choose to take the process in-house.
To release tens of millions of dollars to a managed service DSP is to release all of your intellectual capital to an external company where the same rules expected of an agency may or may not apply. We see clear benefits when we are able to apply the agency learnings to all the programmatic opportunities. Whether we are looking at cross-channel attribution, econometric modeling or online and offline synchronization of media spend, we can make activity work so much harder in that context — and tie it back to the advertiser’s own data whether on or offline. A third party, or siloed business, simply cannot do the same.
Agencies take heed: This is no longer just a question of outsourcing some digital buying but rather the outsourcing of your agency role and intellect to a third party. You may not recognize the danger, given the modest level of programmatic spend relative to massive TV budgets. But when this spend drifts away, a little bit of control goes with it. Not a good situation given the projected growth of programmatic.
Take a lesson from search. Two things happened in search that made it one of the biggest battle grounds of the agency world through the mid-2000s. The first was that the agencies ignored it when it launched, and the second was they fought tooth and nail to get it pulled back into the agency when it had grown into the mammoth beast that it is today. Today’s DSPs are yesterdays search villains.
An agency digital lead should fight to keep the programmatic business close. Yes, I am biased toward a relationship with an agency trading desk — not just because data-driven, programmatic buying will be the lifeblood of the future media agencies but also because the right agency/trading desk relationship is better for clients.
An advertiser might be attracted to cheaper options. A siloed, third-party provider might “feel” unbiased. But what happens when the market moves (which is does every day), and that marketer is tied to a single provider. They move at the the speed of the provider. Or they pay the significant switching cost. Yes, DSP technology evolves. But their lack of access to the ideal marketplaces may leave an advertiser handicapped. And how will the marketer know? It’s hard to measure performance without any comparison or opportunity to swap (short of making an extensive investment).
The agency relationship should give clients cross-platform, open access to all opportunities — and objectivity. Trading desks should deliver the benefits of relationships, learnings and experience with all of the best DSPs, plus perpetual evaluations of new and evolving partners. They must be able to provide the brand safety, starting with basics like full disclosure on where ads are appearing and how much of your budget was spent on media. It is fascinating to me that Rocketfuel discloses 60 percent margins and there are no concerned glances from advertisers. Really? 60 percent?
I have been warned all my life that Google is the bad guy, but it is becoming clear that as the story unfolds, we are seeing a very different picture. The VC-fueled pressure cooker we are in at the moment is creating disintermediation on a grand scale or at least the potential of it. And agencies and advertisers should both see that there is a major role for their partners in helping them steer through this time so that we don’t walk blindly into a repeat of 2001-2008, an era that both agencies and advertisers regretted longer term.
Discussion of some big issues of the day around video. The role of auditors, advertisers and agencies in Ad fraud / quality issues, how programmatic video can now be a creative way to continue dialogue through re-marketing and publishers ultimately will benefit from the fact tech is starting to reveal how poor many Ad network sells are to clients.
A video that outlines Audience On Demand and programmatic buying more generally.
My ten minute presentation designed to trigger some discussion in Turkey about RTB and programmatic.
The latest Adweek Europe – Rubicon 2nd Annual Trading Desk panel was preceded by a questionaire covering growth, strategy and the odd personal question! The panel showed again that there is no slowing in the programmatic business although everyone is approaching it slightly differently. The most extreme being Xaxis who have moved away from being an ATD and becoming more an Ad Network.
SEARS: What flavor ice cream best describes your management style?
BERTOZZI: Cookies and cream – you have to take the crunchy and the smooth.
SEARS: On average in the EMEA market — out of each $1.00 spent on media (all media, not just digital) by one of your advertisers, how much today is spent on automated or programmatic channels?
BERTOZZI: $0.04. Definitions of programmatic vary wildly so making comparisons between organizations can be difficult.
SEARS: What will this number be in 2015?
SEARS: Describe how most media (all media, digital + non-digital, non-programmatic media) is bought and sold today.
BERTOZZI: Planning and buying is still largely a non-automated business in the context of digital exchange trading. All channels use technology to facilitate processes — DDS in TV as an example. The true interaction of buyer and seller through a tech platform is limited to Search, API work across Facebook, Twitter and LinkedIn, etc. and exchange trading.
Planning is still being driven by offline systems that set the picture to be interpreted online. The shift to programmatic means advertisers are creating portraits in real data that we can immediately execute across the digital ecosystem. The Data advertisers own online and CRM data, combined with publisher data and the tech to join them up will drive the next stage of data planning.
SEARS: Tell us the about the EMEA operations of VivaKi:
BERTOZZI: VivaKi is the global leader in digital advertising solutions working with Publicis Groupe agencies to help them and their clients navigate the evolving and chaotic media landscape. We focus on the three areas of Addressability, Dynamic Interaction and Data. Our EMEA operations span 17 markets and are delivered through a combination of people on the ground locally, supported by a central Activation Centre based in Amsterdam and regional leaders of our Platform and channels.
SEARS: Please tell us:
SEARS: Percentage increase, managed budget (media spend) 2013 vs. expected 2014 for EMEA:
o BERTOZZI: 70%
SEARS: How many employees are there in EMEA?
o BERTOZZI: We have a total of 90 people working across 17 markets in EMEA
SEARS: What countries are you entering in 2014?
o BERTOZZI: We realized very aggressive growth plans for 2013 launching two regional Activation Centers — firstly in Amsterdam to scale AOD across EMEA with the launch of an Activation Center in Singapore towards the end of 2013 to drive growth of AOD across Asia Pacific.
We have seen significant growth through the Activation Centers and have a number of further market launches lined up this year. In addition we are also planning to expand the number of markets across UAE through our Activation Center in Dubai.
SEARS: What are VivaKi AOD’s three biggest initiatives in EMEA for 2014?
1. 2013 saw us implement aggressive global growth plans with rapid expansion across a number of markets and 2014 will see continued investment in developing these markets into programmatic leaders. Every market from London to Moscow is on a curve of programmatic sophistication and so we are running at different speeds across each of them. Education of agencies, publishers and shared knowledge through the AOD Platform helps everyone accelerate.
2. We are launching a major development of VivaKi Verified, our proprietary process that rigorously reviews all media, data and technology partners across client critical needs to ensure the highest level of brand safety, consumer privacy and client data protection. We will create our own Quality index across every one of our URLs and as an example will combine leading data suppliers in the area of viewability. This will continue to provide reassurance for advertisers as well as a whole new way of targeting campaigns day-to- day.
3. SkyScraper is our Groupe data warehousing proposition — a single data store with 95% of Publicis Groupe spend data, adserving data, DSP data and third party data. This is an infrastructure we have been working on for a number of years and will become very much front and centre of operations in 2014 as we continue to grow out data sophistication.
SEARS: By 2015, what percentage of total media spend in the EMEA region across your holding company will be programmatic?
BERTOZZI: We estimated at around $0.08.
SEARS: To reach a higher adoption of direct order automation and use of the programmatic channel, what are the major impediments to overcome?
BERTOZZI: I believe that there are many companies who are pushing for direct deals / programmatic premium or whatever the latest buzz word is. I actually don’t think things have moved forward much in 12 months. The idea of private market places has moved forward very fast and is a large part of what we do in AOD, but the idea of a single IO line item being delivered to a single media owner at a set CPM is less prevalent.
There still needs to be tech development and alignment. For example there have been a couple of occasions where AOD wanted to push a large block of spend across some premium publishers and we could not get the money away as the publishers were not ready to accept it. Part tech issues, part inventory.
SEARS: How are RFPs used between your operating agency clients and your trading desk? What does a “Programmatic IO” or a “Programmatic RFP” look like?
BERTOZZI: I think we are in danger of building this unique process and infrastructure around programmatic. We need to remember this is still planning and buying and ultimately starts with an advertiser and a brief. Initially briefs are focused on our clients’ challenge and it is our job to build out a strategy that answers that. The tools and techniques we use vary, real-time data instead of offline static data etc. but the goal is the same.
As we work with advertisers we work on deeper and deeper strategies that move away from a line item to a platform for their digital advertising. The sooner we do that, the better the results.
SEARS: What should top comScore publisher CROs do to build their direct order automation and programmatic selling with your trading desk and operating agencies?
BERTOZZI: First of all every publisher needs to break down their own siloes. It is vital that they set up their internal adservers to manage the sale of inventory to the best bidder, not carve off inventory to direct sales and then pump the rest out. We as buyers in programmatic should compete with their internal teams for the best of the best.
Publishers need to align inventory and creative product development with the programmatic space from the outset. Start to shape the business around it early in the planning cycle so the company slowly evolves over time.
Publishers need to know their data intimately; they need to value it so they can have discussions with a real stance on how they think they stack up versus the market and where possible have evidence to back it up.
Employ the right talent to be able to do all of this. There are still too many companies with the wrong balance of people calling the shots. Agency trading desks, independent trading desks and others are all tooling up in this space so if publishers don’t they will be at a disadvantage.
SEARS: Why is direct order automation so important? Is it important?
BERTOZZI: Being able to combine a Publisher’s first party data, with advertiser data across premium inventory is going to be very important for this business to evolve. Managing where and how spend is delivered has always been important to advertisers but I believe there is still a lot of hype in this space and mainly generated by those with the most to gain.
SEARS: What countries in the EMEA region are the leaders and laggards in programmatic?
BERTOZZI: There are no laggards; there are countries that live with different pressures to others and those that have a particular client base. We have seen the UK and France expand rapidly. This time last year we were all bemoaning Germany but we have seen considerable expansion there as well now.
We are expanding with new markets, all hungry to be part of the revolution which is very exciting, but in every market we have to take our time and move as fast as market conditions allow, all the time educating and demonstrating benefits.
Tell us a bit more about you:
SEARS: If you could choose a movie star to be the global head of your trading desk, who would you choose and why?
BERTOZZI: That’s easy. It would need to be a superhero. Let’s keep it simple and call it Superman. They have to fly around a lot, be able to resist the slings and arrows of the industry but never tire and want to change the world for the better! The X-ray vision would come in useful to see through the bullshit.
SEARS: If you could travel for pleasure anywhere in the world, to a place you have never been, where would you go?
BERTOZZI: There are too many places, but somewhere remote, with sea and mountains, and ideally somewhere without a connection so I can for once switch off from the emails!
SEARS: If you were trapped alone on a desert island and needed to choose one ad holding company CEO to accompany you ( other than your own holding company CEO), which CEO would you pick and why?
BERTOZZI: That would have to be John Wren, for rather obvious reasons!
SEARS: What is your favorite restaurant in the world?
BERTOZZI: It has to be the crazy, authentic restaurant in my home town of Cesena that I have been eating at all my life.
I wrote my first blog. I had no idea what I was getting into and where it would lead. It appears that four years later I have written 196 posts, most of them home grown content, I could never have imagined that four years ago I would start writing an average of one a week for four years, but I have loved it. Anyone who blogs regularly knows that it is slightly addictive and becomes a vehicle for venting. The Ad tech space has been a perfect muse and there are so many baddies to talk about!
I think I am perhaps best known for venting although I try and keep it constructive. I have had at least three CEOs complain to my bosses, I have had my bosses complain to me a few times too with an exasperated Head of Comms Europe in Claire Ballard and Global Cheri Carpenter asking me politely to ‘let them know when I intend to publish something contraversial.’ I have had good supporters in Adexchanger, Digiday, Mediatel, Mediaweek, The Drum and others in republishing content. I have also had guest posts from Simon Birkenhead (now famous script writer for Hollywood), Paul SIlver, Danny Hopwood, our new recruits and others.
I have had people in 121 countries read my blogs, every continent and even places I did not know existed, amazing the power of digital and the web to be able to have that kind of reach. After four years, my top charting blog remains – ‘Trading Desks are in for the long haul, not just the sale’ if you want to read it click here. A time when the Ad tech space seemed so much simpler but there was a lot of tension created by the shift in balance of power between Ad Nets, agencies and new tech companies. It was an exciting time.
Anyway, thanks for the readers and support and comments and sharing etc it has been a lot of fun and I hope to continue for many more years.
Not one of the highest quality videos! This is like Jeopardy – I give the answer, you guess the question! We had 80 people from all of the top Italian publishers to cover issues around RTB and private marketplaces. The market is cautious but definitely progressing well.
I am Just back from meetings in Seattle and San Fran with the Big 4. Big 4 you ask? Well in todays world of data connectivity, mobile innovation and growth as well as digital commerce the big 4 has changed. Facebook, Twitter, Google, Amazon are now gunpowder and bullet. The others more and more the barrel.
The message that is coming out loud and clear is that these players in their own varied ways are out to maximise the insights they have on their users and customers through a single themed approach of ‘Persistent Identity.’ I heard it a few times over the time I was out there, I have seen it mentioned in the odd article. But when you get to spend three days with all these market leading companies it becomes loud and clear that the data they hold on consumers is the key to their future and the single most valuable asset.
Persistent Identity is a fancy way of saying ‘we know who you are, we know where you are and we know what device you are on, the holy grail of data. The kind of data and insights advertisers are crying out for. What strikes me about this data is how much more powerful it is than third party data sold by any number of companies, data which is slightly worn out, like an old apple at the bottom of a bag, still edible but just not as fresh and juicy as when it was picked.
The ability to recognise you, add insights to your iD, serve ads depending on which device you are on, understand you through your behaviour by device, friends, clicks and links is so powerful, so powerful in fact you can see the likes of Facebook being the defacto judge of what is good or accurate data instead of the traditional players. That has already started of course but I think will gather momentum. Watch out panel data.
When you take a step back and realise what data they have you can understand why they are reticent to share it or risk it being stolen, putting up walls of protection around it. Amazon with their marketplace, Facebook only allowing access through API, Twitter pulling info from Google, these are the actions of companies with hidden treasure. These businesses dont need all the old methods of tracking whether it is panels of adserved cookies, they know their people, signed in, registered people at scale.
Persistent identiity is powerful and logical, the only problem is that you have to stack up on these solutions. Like having a car and pulling up at the fuel station and putting 3 or 4 different petrols in to be able to get the car going. I want to recognise everyone through the ability of joining up these players – I would love to spot a FB user who has been updating a status about an iPod, browsing on Amazon and nail them with a promoted Tweet or video Ad to close the deal. I know it is too much to ask to have all these companies reveal their secret source but targeting would be fun..
Either way, data businesses will need to work hard and fast to justify their models in the face of the biggest digital players in the world starting to pull up their sleeves and flex their guns, because be under no illusion they are big guns.