Ryder Cup of programmatic – my review of US vs Europe programmatic

First published in The Drum – click here

Back in 2010 when I started the European arm of VivaKi’s Audience On Demand, I had to turn to the US for everything. Half the companies I dealt with at the time had to turn to their data centres in the US just to make a bid, something that today would be impossible to imagine.

The US led the programmatic revolution, my own colleagues kicking things off in 2008. I was certainly wowed by the work going on in the US and the sophistication with which they approached this new and complex advertising technique.

Europeans often complain that Americans just don’t understand us. Having spent five months in the US last year, I realise that the reverse is also true. We just don’t understand the sheer scale and complexity of the US market either and because of that it creates more challenges for a single country than for Europe as a whole.

People would say without hesitation or doubt: ‘Oh so how is the UK, what are you, about two years’ behind us?’ Frustrating. So often the opinion was based on scale, not sophistication, and the two are fundamentally different in a market like the US. As I consider my time there and compare it with the UK, I would say there are three primary differences:

Scale vs campaign sophistication

There are advertisers in the US who at times spend more individually than two major European markets combined. Daunting as it is, this type of scale drives innovation and startups. It powers research and learnings because budgets are so large that testing new technology and funding research is that much easier than in smaller markets. But take a narrower view of the work, the strategy, and this is where Europe starts to come into its own.

While scale equates to innovation on a macro level, smaller budgets often lead to more rigorous optimisation on a campaign level.

Let’s take something like centralising retargeting. In the space of about a year the UK revolutionised the marketplace. It was a marketplace where an advertiser routinely had 10+ ad networks and publishers each with a pixel on the advertiser’s site. They would happily retarget their first-party data, creating incredible internal competition and price inflation on their audiences as well as data leakage. This is like letting multiple companies bid on brand search terms. It would never be allowed in search so why in display?

UK advertisers realised relatively quickly the problem needed fixing – and it was fixed. The US is still pondering the complexity.

Vendor management

Vast agency networks across multiple cities creates an opportunity for publishers and media sellers to find money in any number of cracks. Policing spend and agency-preferred partners in the US is incredibly difficult. Say no to a tech company in one city, and they will pitch to your counterpart in another.

Europe appears to have a much better grasp on that process. With relatively smaller teams, overarching strategies can be put into play and monitored effectively. This may not be to the liking of some media companies, but it needs to be done to ensure best-in-class partnerships.

Invented in the US, adopted in Europe, private marketplaces (PMPs) are another of Europe’s success stories. The speed with which the UK alone created PMPs surprised my US colleagues and competitors. Building bespoke PMPs is now the norm in Europe to drive programmatic business. In the US there are still DSP providers without PMP functionality, which I find incredible.

At a dinner I attended in New York, publishers were bemoaning the lack of buyer demand. In Europe we see the opposite – publishers and agencies are driving an ever higher proportion of spend via PMPs and there is massive innovation as well.

La Place Media in France is a prime example, and another more recent is theglobal launch of Pangaea, the publishing alliance led by The Guardian but including FT, CNN, The Economist and others. This is not happening in the US, as most players consider themselves too large to need that kind of collaboration. I think this is a mistake as Google, Facebook and others are only getting bigger and stronger.

Agility and innovation

Things just seem to move faster in European markets. Ideas are put into action very quickly. Geography helps. When AOD launched in the UK, I would walk down Charlotte Street in London, dealing with just a handful of leaders. The same approach in the US spans as many as six cities, 10 agencies and an army of people.

This is not a criticism, it is a fact.  Even when you have a well-developed idea, beta-testing is much quicker in a European market as you work with smaller teams who work next to each other.

Innovation is a hot topic and one that I think we lament when we look at the hotbed of Silicon Valley and the burgeoning New York scene.  However huge strides are being made in EMEA with hot new companies emerging from Israel to Amsterdam and Moscow.

One continent awe-inspiring in scale and opportunity. One continent agile and swift.  Operating in parallel? Formidable.

Premium publisher alliances and their benefits : My piece in Drum on Pangaea

Originally posted on The Drum click here.

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Exciting news from the new consortium called Pangaea. It has been a long time coming and represents another big step forward for the programmatic industry. Another step towards the word ‘programmatic’ being a thing of the past as the whole industry normalises as regards the use of tech for the targeting and delivery of ads.

I am still having conversations with advertisers who ask if we are dealing in long tail, unsold inventory. Initiatives like Pangaea add further evidence that the concept of not being able to buy premium, or build brands through programmatically traded media is a thing of the past.

This list of publishers sounds like a starting point and I am sure it will grow. It is exactly the collaboration that all publishers should be looking at.

Important to note however that although many advertisers do not want the long tail and want to avoid fraud we are still faced with a side by side comparison on lowest CPM wins driven by auditors. Pangaea will undoubtedly be at the more expensive end of the pricing spectrum in exchanges. Advertisers can’t have it both ways. We now need to make sure they are not priced out of the market by all the things the advertisers fear most but end up accepting for the sake of lower pricing.

The other plus point for Pangaea is that the advent of technology and data management platforms has changed the dynamics for advertisers. They can now play a more central role by controlling their audiences at the centre and then execute either globally or allow local markets to plug in. Either way, having the ability to partner with a single alliance to work with allows them to act at scale in premium inventory and access strong data to enhance their own.

Being global is essential. It is vital that publishers adapt to a marketplace where advertisers are doing deals with the Facebooks, Googles etc globally as a starting point in their media planning. Scale is becoming paramount.

The alliance will also allay fears from advertisers around brand safety and fraud, a critical issue right now. This group of companies can offer advertisers a vehicle to avoid many of those issues. The combined investment in tech from Rubicon, the publishers themselves and the nature of the sites means this should be a staple part of any global advertisers plans and safe in the knowledge it will bring quality, brand safe inventory.

CampaignLive US article on Advertisers missing the prize of programmatic

My piece in CampaignLive publication in the US – to see click here

How did it come to this? You can’t mention programmatic without talk about transparency, trading desks and advertisers taking it “in-house.” A part of me that would likely get fired says “Go on, then” because it will mean that advertisers spend considerable time understanding the space, in order to appreciate what is required to do this well. They will also be doing the right thing with their media — I don’t mean taking it in-house, but rather the likely improvement in execution and management of their media using the latest technology.

While in-house has been a hot topic this year, all we have right now is a lot of noise. Companies stirring up the ecosystem trying to make hay while the sun shines and consultants with minimal experience in this complex space suddenly getting the light of day. It is a real shame. I spend so much time talking fees and transparency with advertisers and so little on strategy that I truly believe they are missing the chance to make the most of this incredible opportunity.

Advertisers setting up their own programmatic operations is as sensible as Google deciding to set up an agency business and go direct to clients. “They do that,” I hear you cry! Not really. They chase revenue, and if they see that being taken by competitors they step in. Google also has tens of thousands of free sales people — they are called agencies. Clever businesses stick to what they do best. Even brands that have been working away at this for some years are still struggling to keep up.

I recently read that taking it in house was expensive upfront but you get payback over years. I have never read such incredibly ill-informed, ill-thought rhetoric in all my life. It infers that programmatic expertise in agencies after the first couple of years runs on nothing. The reality is people need paying; tech companies need paying; innovation needs to evolve. Nothing goes away after initial set up; it only grows. It is this kind of crazy talk that is distracting advertisers.

Let’s start with talent. Programmatic now commands some of the highest salaries and brightest brains. This creates multiple challenges for employers — motivation, retention and a lack of insights from outside the immediate business. Technology evaluation skill sets, data analytics and audience insights knowledge, data warehousing, contract negotiations, legal, creative, partner management – these all are essential for a successful programmatic business. Spare a thought for the team doing it in-house — two, perhaps three people. They will not be immune from the same standards agencies have. Brand safety is still brand safety. The CEO will be no less unhappy when the Wall Street Journal reports a fraud blow up and an in-house team has been managing it. The same effort needs to be applied in or out of the house and that costs money.

Why would an advertiser want to take that on? Because they are unhappy with transparency? Because tech fees are high and they want to find ways of saving? It is a false economy. “Buy cheap, buy twice” is a phrase I am a firm believer in.

The companies who have managed to do this well are few and often pure-play digital, online businesses with very specific KPIs that are easily tracked and measured and with a culture of digital innovation. Netflix is one example. Moneysupermarket in the U.K., another. Almost all, including the most famously quoted however, are relying on third parties to do the work. That is not taking it in-house, it’s just not using an agency. And they are right not to, but if a little less time was spent on the angst of transparency and fees (easily solved by talking with your agency operation) and more time on the strategy, then the fees will make sense. More time also needs to be spent talking about the amazing case studies of clients that have embraced this space and are turning their media investment around – there are many.

Advertisers who empower their agencies in the programmatic space and invest the time to really partner with them will dramatically change how they do business and the results they achieve.

As a final note on this, While hundreds of millions of advertiser dollars are spent on blind, low-CPM, long-tail ad networks that are taking 60 percent margin, I find it very difficult to believe that an advertiser is achieving the most they can from programmatic or indeed asking the right questions about their media investment, whether that is taking it in-house or not.

Marco Bertozzi is VivaKi’s President, North America Client Services and Audience on Demand EMEA.

Read more at http://www.campaignlive.com/article/programmatic-taking-in-house/1317802#Rwl3QzVofffQABqe.99

Wall Street Journal blog – In Defence of Trading Desks

This post was first published in the Wall Street Journal – to see it click here

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In Defence of Trading Desks

The World Federation of Advertisers report on programmatic trading, issued last week, has set the online ad industry abuzz. I am pleased to see clients taking a stand on transparency and some of the other issues surfaced in the report, despite being one of the purported programmatic culprits.

When Publicis launched Audience On Demand in 2008, we decided to create it as an alternative to the very murky services that were dominating the marketplace at the time, such as ad networks, that operated in the dark and sometimes pocketed triple digit profit margins in the process.

Six years later we are standing firm on our early decisions, and reports like the one issued last week suggest the market is moving in our favor.

But the fact is not all agency trading desks are created equal. And while the WFA report inaccurately tries to paint us all with one color, I encourage every marketer in the industry to take note of the questions in the report that relate to issues such as arbitrage and data. Don’t just ask these questions of your agency trading desk, however; Ask them of every programmatic provider you might be spending with today.

If a programmatic provider is working in a marketers’ best interest it should not be arbitraging inventory, it should be buying audiences and inventory transparently in real time. It should be protecting marketers’ data (it’s their data, and they should honor it as such, unless given permission to blend it). It should have a rigorous vetting process to evaluate all data and technology partners to be sure that protection extends across the ecosystem.

It should also be tireless in pursuit of viewability and quality, and it should show you how it is trying to protect your ads from fraud. I submit that an in-house option or managed service demand-side platform that buys on a marketer’s behalf will provide less brand safety than an agency trading desk. It simply costs too much to deliver extensive black and white lists, tech vetting and human vetting at a client level.

Finally programmatic providers should make it entirely clear what percentage of marketers’ ad dollars are actually spent on ad space, and it should be far, far greater than 40% as the WFA report suggested. That number is ridiculous. Candidly, a fair amount of the math cited in the WFA report is peculiar.

In general, the WFA report steers marketers toward setting up an in-house solution. It’s a viable, though difficult and limiting proposition to pursue. An in-house operation is not going to resolve all transparency issues. It might give marketers complete control, but it also results in limited visibility once the campaigns go out the door, and you are only as good as the technology you tie yourself to.

Meanwhile, if marketers outsource to an ad network, managed service DSP or non-disclosed trading desk, you have little control, less visibility and no ownership.

I hope I get a chance to meet the WFA. I would love to talk to authors of this report about their findings, where the insights were obtained and how the calculations were done. So much of the report is spot on in terms of what questions to ask, but the bias and inaccuracies need to be corrected.

Ladbrokes – Stop thief!

It has been a while since a company has demonstrated behaviours that have left me both gobsmacked and fuming. Ladbrokes has just demonstrated itself as one of those companies that we should highlight at every conference on data privacy, and I sure will from now on.

So I opened a Ladbrokes account at some point with a plan to lose some money on the Grand National. It will not surprise anyone to know that I did not read any of the terms and conditions, lets face who does? In the past that has never bothered me until now.

So first thing that happens is that Ladbrokes email me to say that my account has been inactive and they are going to charge me for the fact I am not betting but it is still open. The email goes like this:

‘We recently wrote to you about an Administrative Fee which would be applied to your Ladbrokes account.

The Fee has now been taken from your account and was calculated as either £2 (or currency equivalent) or 5% of the balance on the date at which your account became inactive, whichever is greater. When calculating the charge, we have included balances from all wallets (including poker, casino etc). The Fee itself has been taken from the Sportsbook wallet and this may result in a negative balance if funds were held elsewhere.

If your account retains a total positive balance a further Fee will become due on the 1st day of every subsequent month.’

The first thing is the account is at zero and they still took the fee, so that is breaking their terms and conditions. Of course the obvious reaction is annoyance about the fact they are charging me for not using the account, but let’s say they have costs to maintain the infrastructure and we accept that. So I decide that I would like to close the account, that after all is what they are pressing me to do right? 

I write to their support services and ask to close my account. The response is as follows:

Dear Mr Bertozzi,
 
‘Thank you for your self exclusion request.
 
I can confirm that you have now been self excluded for 6 months. As you did not state a specific exclusion length, we have excluded you for the minimum period
 
You can extend your exclusion by any length, up to a maximum of 5 years, at any time. Simply reply to this email stating the length of time for which you wish to be excluded. Please note that 5 years is the maximum period we offer and we are unable to offer an indefinite period of exclusion. Please keep us updated regarding any changes to your contact details so we can continue to enforce this exclusion.
 
By entering into this self exclusion, you hereby release all companies from within the Ladbrokes group of companies, their officers and employees from any liability or claims whatsoever in the event that you fail to comply with this voluntary self exclusion scheme, including circumstances where you attempt to open and/or actually open a new account notwithstanding your self-exclusion, whether or not you have notified Ladbrokes you are self excluded.’
 
You what? Self exclude myself? No there seems to be a misunderstanding, I want to close my account, I want my data removed thanks a lot. I send a note to that effect. The response back from Ladbrokes is as follows:
 
‘Dear Mr Bertozzi,
Thank you for your e-mail regarding permanent account closure.
 
Unfortunately we do not offer permanent self exclusion the maximum that we offer is 5 years.
 
You can extend your exclusion by any length, up to a maximum of 5 years, at any time. Simply reply to this email stating the length of time for which you wish to be excluded. Please note that 5 years is the maximum period we offer and we are unable to offer an indefinite period of exclusion. Please keep us updated regarding any changes to your contact details so we can continue to enforce this exclusion.’
 

???? What? Now I feel totally violated. I can’t delete my details, I can’t remove myself from your database? I am totally shocked by this, in this climate of data invasion the idea that a major company is refusing to delete my details seems totally incongruous, even NSA is having to be more open and transparent about what data it collects and keeps. To me this is totally unacceptable and is what gives the data and online industry a bad name and has to be stopped. We hear all the time about how gambling advertisers have a less than above board to approach how and where they target consumers, but clearly it does not stop there.

 
I am not an expert on data privacy at this level, would welcome feedback from any experts on this, and please retweet my blog to raise as much exposure as possible on this issue. But this can’t be right?
 
I want my data back Ladbrokes. 

CES : My review of the 2014 show – Just because you can, does not mean you should

 

 

This article was first published on The Drum link here

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The annual pilgramage to CES this year created quite an impression. The big themes were relentless connectivity and tracking, the concept of the Internet of Everything from Cisco, basically the intersection of humans, objects and technology and finally wearable technology.

These themes provided us with huge opportunity and some not inconsiderable challenges as humans, businesses and marketeers. This year felt a little like companies were connecting things just because they could; objects were transmitting data, even though they did not know what to do with it. As a marketeer you were left scratching your head, knowing that somewhere in all this incredible innovation there was opportunity, but just did not know where to start.

Even as a self proclaimed tech enthusiast I was still overwhelmed by the range of companies that want you to invest from both a money and time perspective in their ecosystems. Although the end result could sometimes be fantastic, such as the house you could entirely control from your phone, the lack of cross system interoperability leaves you wondering if we will be able to cope with the plethora of apps needed to manage all this and whether it will be safe, especially as regards the connected home.

So all that said, I wanted to have a look at some of those big themes and try to eek out the challenges and opportunities for us all whether as a connected consumer or a business trying to benefit from it.

Technology designed for simplicity, creating complexity
CES looks to the future, identifies innovation and on that basis we should embrace all it has to offer us. At the same time it leaves the head spinning, trying to understand how to manage the plethora of ecosystems. Even as things stand we are all coping with the battle of the operating systems, more and more we are being encouraged to package our lives into Apple,Android or Microsoft. Just looking at the art of watching TV we are provided endless choice on how and where to watch content. Roku, Netflix, smart TVs, Apple TV, Chromecast and on and on, but after a few days here you realise that there is more to come, a lot more.

The connected home has allowed companies such as LG, Samsung, ADT, DISH and others to offer the ability to hook up your whole house all the devices talking together. The problem is none of these systems are talking to each other, they are building closed systems. Yes it is incredibly clever but this has to work for us and has to have an element of open source wiring so we can consolidate different streams of data and functionality. Interestingly, companies such as Cisco and Intel may hold the key as they create smaller, faster chips that can go in multiple devices they may help us join the dots a little and perhaps find ways of at least consolidating data into a single dashboard. Apart from complexity of devices and systems there is also a cost perspective, how many different 200 pound devices and systems can we sustain?

Just because you can does not always mean you should. It feels at CES that the technology is coming first and the consumer second in some regards. Let’s take the amazing 4K televisions with this year’s big twist – the introduction of curved screens. People were left a little cold by curved sceens, an innovation that lacked a real consumer demand and required a change in our approach to viewing. The suggestion from excitable sales people was that even on an 80-inch TV you need to sit close to it to enjoy it. That fails on a number of levels – not least big TVs go in big rooms and you dont want to be crowded around a TV like you are warming yourself around a fire. Secondly, I don’t want my kids sat on top of a massive screen. The other relatively important area is that none of the broadcasters have any content that is delivered in 4k. Instead of enhancing, sometimes the viewing experience is diminished – even on good old HD we still don’t have all content delivered in this fashion, so pretty as they were, I would not rush out and buy one.

Similarly with features such as iBeacon from Apple – the idea that you can be fired messages from retailers and merchants as you browse stores sounds great but first you have to download an app from that retailer to be able to receive the messages. I for one do not want 50 Apps on my phone dedicated to retailers, as well as one for the Samsung fridge, cooker, the one for my BMW i3 outside and another for my ADT home security set up. Some how we need to link this together and make it user friendly and applicable.

We need guardians of our data
Data is a word that comes with a very wide remit, but one thing is for sure, we are creating it at a horrifying rate. Wearable technology, the smart home, the Internet of Everything, means this is both a positive and a negative for us all to consider. Imagine sensors on your body or clothes sending data to your health provider, your home consumption data being linked directly to retail stores, home utilities controlling themselves based on weather data, traffic data giving you immediate ways to avoid the latest gridlock. The opportunities are endless. Individuals become nodes on the internet transmitting data constantly to the internet. Much as we focus on the devices, let’s not forget we are being tracked. We will be tracked in every way possible and we have to make our peace with that.

The best example of this was ‘Mother’, an object that sits at home and comes with many small sensors called cookies. You place these cookies anywhere you want to understand what is happening around your home – how often and long are you brushing your teeth, footfall through the door, how much coffee are you drinking… the list is endless. Those cookies then relay all this data back to Mother for you to analyse it. As with many things at CES, there seems to be a lack of clarity on exactly how this will all help, tracking for tracking sake. But at the end what we are doing is passing incredible amounts of data to third party companies. This data is becoming ever more intimate and needs to be carefully controlled. The most important area is the ability to decide what happens to that data – many of the devices do not allow you the opportunity to influence what is happening with it as it gets passed to the company servers. One commentator at CES also pointed out the fact that even among family members or flatmates there should be the ability to have more ownership of your information and set it apart from that of others in the family or home, again something not possible right now.

As with all Wi-Fi data services the final consideration is the ability of hackers and tech thieves to access sensitive data from your life, or indeed in the case of the connected home, be able to easily hack into your ecosystem. These are all solvable issues and should in no way slow progress but as individuals we need to take control and encourage these companies we are entrusting our lives with to help us do that.

Marketing will become evermore native
As I toured the conference floor and we explored all these opportunities I was with a number of advertisers who were expressing their clear concern about how this was going to impact them. We already talk a lot about story telling and content. The proliferation of personal devices and tracking technologies means that each one of these companies – whether it is LG, BMW, Samsung – are all going to want to create their own ways of allowing advertisers to engage with people.

Native advertising is a hot topic but will become increasingly relevant, bringing complexity to marketing and advertising as they have to work across a multitude of different ecosystems and platforms. We already mentioned the iBeacon technology; how will BMW or Audi want to deliver messaging in car to their passengers? The upside for large advertisers is that the more forward thinking may have an opportunity to work directly with tech partners higher up the food chain and scope how they can be integrated closely into this development. But all that requires time, people, cost and the old methods of advertising will become evermore distant, increasing pressure on wholesale reinvention.

The tight rope they will need to walk will be avoiding too much disruption or even intrusion in the consumer’s experience. Tempting as it will be to use the incredible amounts of data available, people will be wary of that and given the intimacy of some of this data will expect it to be treated with respect.

CES is not about advertising but we are reaching a crossroads where marketing and technology will need to work closely together. It currently resides a firm second to technological advancement from a utilitarian perspective. It does however promise much for marketeers as long as they realise more than ever they will need to deliver value. Value can come in many guises, but if you want me to download your app then I need something for that because there will be significant competition.

Mobility technology reaches the car
The big standout this year was the rise of technology in the car. A flurry of launches at CES shows that this event is becoming very popular for car manufacturuers. There seems to be two directions manufacturers are moving in: the open platform based on Android or Apple where your car and phones are linked or proprietory technologies in the cars such as Audi that will turn your car into an intelligent hub. The car becomes the brain, it is able to make decisions based on commands and external data. As an example you could look up directions in the house and send them to the car, the car automatically plots that route using latest data and finds you an optimum route. Perhaps you are heading to a meeting and the car realises you are going to be late so it emails your meeting organiser with your current telemetry showing where you are and how far to go with an ETA.

Since your journey will now be forever linked to the wider net, showing you relevant ads, perhaps for the next coffee house, petrol station or relevant shops to you based on previous journeys will be common place. Cars will also become social – with linkages between you and your friends as we see with recommendations – if you travel to a new town for example your friends recommendations can be presented to you – or even their route for getting there. The opportunities are endless and we will see the car completing the triangle between you, your home and your car.

The final frontier is of course the self-driving car. All we have seen in this space has been the Google work but then up pops Audi and explains they have a self driving car up to 40mph, legal in Nevada. When did that happen? Well it has and even more than that it can find you a parking space, park it for you and if you want you can programme it to avoid red lights by adjusting its speed based on the traffic light data base that it has connected. As we mentioned earlier though that comes with limitations, not least you may find yourself driving very slowly as it seeks to avoid the next red light. I would suggest this is not for driving fans.

Some of this connectivity will be useful though as you can start your car from the comfort of your own home and in winter make sure the windows are defrosted and the seats nice and warm as well as wider beenfits, I can see that being a winner for sure and with some clear upsides for advertisers.

An incredible array of innovation, fantastic product explosion, and an inevitable and unstoppable march towards the Internet of Everything. As marketeers we will have to develop an incredibly open mind to reaching consumers. We will look to these companies to be guardians of our data using the highest level of integrity. As humans we are going to be linked inexoribly to the cloud and as Cisco say ‘be nodes’ of the Internet through our connected homes, cars and objects. There is so much to work out, but the future is exciting and we should embrace it.