Tag Archives: technology

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.

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Advertiser RTB Desks – Not as easy as it looks

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I cant 100% explain the tone or actual words, but it translates along the lines of ‘watch out boys, ALL the advertisers are going to do this RTB thing themselves.’ I hear the message a lot, usually from people in companies that feel they will benefit either way, agency relationship or not. Trouble is there is rarely any proper definition of this phenomena and that leads to falsehoods and scare mongering.

Facts first, an advertiser employing a Mediamath or an Audience Science is not ‘going it alone’ they are merely changing the people they pay to make the work happen, that is going direct, different to going it alone. I would love to write an article about how misguided the rationale is but will save that for another day. Fact is we need to be clear on what we are describing first and foremost because any advertiser who employs a managed service has changed nothing other than the party they are employing, sure, the industry may then be broadening out but thats not a big deal, has happened all through the last couple of decades and big players came and went.

So what does that leave us with? The advertiser who truly does this themselves, I mean employs people who sit in a room? Well first of all, lets look at what needs to happen to deliver a decent offering. At Audience On Demand central to our approach is VivaKi Verified, a team of people who evaluate Tech, Data and Inventory at scale and that is all they do. They are experts, they have expert processes and support the whole operation. When you meet these guys you know they are serious and without them, you have a shaky offering.

But back to the ‘going it alone’ advertisers.

1. The first and most important thing is to hire people to do the work, so you are looking for people interested and experienced in this space. They have to be experienced as your advertiser organisation on the whole would not have people to train them up and mentor them. Those people then need to be inspired, developed, they need to grow as employees, they want to be in an exciting dynamic operation, we know these people, they are demanding. Working in one business, with no peers and little scope for growth will not inspire the best to come and work so you need to find a solution there. If you are lucky enough to hire quality you then have to retain them because if they leave, you wont have a large team to retain knowledge. Final piece in that jigsaw is getting headcount signed off, not easy, what is the rationale exactly as you wont be ‘saving’ money, you will be a cost.

2. OK so let’s say you found the industry RTB expert who wants to come and join, next they need to choose the tech partner, partners. So they do a ‘review’. What does that entail exactly? A few presentations, a load of words on a slide with no way of knowing if they are true or not. Your tech decision is based on a very lightweight approach and has no benchmarks. Even worse you end up choosing lots of different ones and testing and testing. Likelihood is you end up working with one partner. In my day job I am asked a lot about the importance of remaining agnostic, fleet of foot, go where the best tech is. Advertisers want to know we are doing that, but is that practical on a stretched team without expertise? I would challenge it and without scale you cant run different verticals, brands etc to see how DSPs respond so you end up leaning on one partner.

3. OK, so we have a person and some technology. So you start running some campaigns. Feels good to be doing all this in house. One day though you get an email from the boss saying he saw your ad on an unsavoury site. How did that happen, I used all the right tick boxes? Suddenly the pressure descends on how on earth you are going to make sure that does not happen again. Vetting urls needs to occur, ideally upfront, creating white lists and verticals, it has to be ongoing. You need to have that up to date, the tech provider you use cant be trusted to do that. Some DSPs have in their T&Cs that it is simply not their responsibility, so it is now yours. Verification is time consuming, and needs resource to be done well. If you are using multiple partners out their that are not transparent you will have to fix that ASAP because the liability is with you, and you wont be able to demand money back. So best thing to do is do a review of verification providers in the space, there are a lot and they all promise a lot, it is down to you to decide. You could ask a partner for their view perhaps?

4. Now we are in a good place, you have a person, tech x 3, verification process that is ongoing. You now need to develop your inventory outside of standard exchange inventory and into private exchanges, you need to develop partnerships with large players. I would suggest that to be done properly you need a dedicated FTE, you don’t have that to hand so you will need to find some quick wins, otherwise known as average solutions, par with market. As well as inventory we have data that needs verifying – you need to trust the data, source of data, how it is collected etc, that is what we would expect in AOD – beyond that, a strategy around first party data combined with 2nd and 3rd party data to really maximise what you are doing. Ideally would be good to see how a certain data compares based on vertical or business type, KPI type etc, harder for a single advertiser desk. I guess you could ask your partners to fill you in?

5. Campaigns are live. Results are OK, not sure how they compare, but they are OK, you need to optimise though and that takes time, would be good to have some other people to run strategies by though, maybe discuss optimisation strategy, even learn from other countries. Vital to have cross fertilisation in this new space as there are very few experts. Doing a good job takes time. Understanding why something is not working as planned is where things get tougher, you could ask a partner to help?

6. Did you know that DSPs don’t design individual dashboards for you, or cut the data just how you want it to report to the board. They don’t always give you the insights you need so ideally create a solution that you can pull that data into that gives you flexibility – you can licence some software, learn all about it and use that.  Maybe the DSP has something it can sell you – is it the best one though? Perhaps worth a review of the market to come to some conclusions. Ideally would be good to talk to some people who have had experience of multiple solutions and look under the bonnet. You could ask a partner to help on that I guess?

This is the tip of the iceberg, running and creating a genuinely Grade A trade desk is not about logging in and pressing go, it is about scale, it is about cross pollination, you need to have support and strength in depth. We have an incredible team in AOD that is able to provide a fantastic proposition to advertisers that is technology agnostic, founded on deep expertise and importantly a team of people focused on results not their VC pressure to extent the number of partners and revenues before sell date or IPO. I am a passionate advocate for what we do and to be honest the wider groups as well, as long as they are showing transparency and not flogging their own tech.

Advertisers may well do this themselves and some do, but what I have seen so far are advertisers who say they do it themselves but really then lean on third parties, no different to using a Trade desk. Perhaps that is the future, that’s not my debate today, its about those who are saying they do it themselves. In my opinion they will end up creating a less good proposition for their business, with less experienced people who even if they stay, fall behind the market place because they are too siloed and lack inspiration from different people. I am proud of what we do and how we do it, I hope that advertisers continue to realise the benefits of that, but watch with interest the ‘DIY’ strategies play out of course. Either way, I reckon there is space in the business for everyone to play in.

The article today from Adage here is talking about how tech companies are going direct to advertisers and agencies need to shape up if they are going to stop that trend. For all the reasons above, I dont see this as a genuine trend. Its a just another chapter, we dont know how it will end, I can tell you though that most of these tech companies are not geared for this and niether are the advertisers. All the benefits above should soon reveal themselves to any advertiser trying to go it alone pretty quickly.  Anyway does anyone care – isn’t Google going to take over the world? No probably not, they don’t want the terrible business models we have to endure and niether will all the others.

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Persistent Identity – holy grail available to some..

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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.

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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.

Our latest recruits – Their views, one month in at Audience On Demand

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I thought I would ask our three latest recruits, all graduates to give me their view of our industry just one month in. The message is clear, we are big and complex and we love TLAs but that is what makes it fascinating. Backgrounds of economics, maths and marketing show that regardless of diverse backgrounds, all roads lead to RTB! Sorry Real Time Bidding! I am always excited when we have new people joining and so let’s hear from them..

Trisha Halai @trisha_halai

Having done a maths degree I never thought I would see myself taking on a career in the digital advertising industry. After being approached by a recruitment agency and being told about the role and company – I can say I will never look back. My first month has been very much a learning curve and a very interesting one. Understanding the technical aspect of the role in terms of getting to grips with the platform and the systems has been one thing and understanding the hundreds of jargon used in advertising is another. Initially, I was completely thrown back in my first week when I heard acronyms such as DSP, SSP, DFA, DFP, DBM, MPU and PMP to name a few. However, as time has gone on and the more I have heard these terms, they have become second nature to me and now not using them would be slightly absurd.

Coming from a maths background, I developed many transferable skills and I can say I am proud to have the opportunity to apply these analytical, problem solving and logical thinking skills into my current role.   Working in a dynamic and creative industry, one that is so measureable and trackable in every aspect is exciting. It is great to be exposed to the industry at a point where it is constantly changing and advancing. Communicating and building relationships with highly respected technology and data providers and some of the big publishing names as well as agencies is what makes the day-to-day role so varied.

Being part of the AOD team at Vivaki has been an insight in many ways. It is very exciting working in a team that helps brands to deliver strong, highly targeted messages to very niche audiences across many channels such as display, video, mobile and social media. Working in a team that takes great pride in what it does and is passionate about its day-to-day management of campaigns is inspirational.

I look forward to learning new skills and developing a deeper understanding of my current role and I look forward to any challenges I may be faced with in AOD.

Claire Hobson @claireHobs

My first month as a member of the AOD team at VivaKi has been both exciting and eventful. I’ve had the opportunity to meet so many new people and have learnt a great deal about the dynamic industry of digital media in such a short time.

As a Marketing MA graduate, I had developed an interest in digital marketing and was keen to get into this area as a first step in my career. However, I had never come across agency trading desks or real-time bidding and as a result I found the complexity of the real-time bidding ecosystem quite overwhelming when I first started. RTB, DSPs, Ad exchanges, ad networks, ad servers, SSPs, PMPs… it was all like a foreign language to me, particularly with the frequent use of (appropriately named) TLAs.

Four weeks on, what seemed complex to me back then is now much clearer, having benefitted from being amongst the hugely knowledgeable AOD team and from meeting the various external teams that represent the other vital pieces of the RTB puzzle. I have noticed the difference in levels of understanding and views of RTB across these different teams, whether it be media planner/ buyers, publishers, data providers or technology platforms. This has been useful for me to gain a more holistic understanding of how RTB is viewed in the wider media industry and has helped me in developing my own opinions.

Part of the reason why I wanted to work in digital after graduating is that it is an industry that is growing and constantly changing, making for an exciting and fast-paced environment to work in – my first month at VivaKi has definitely confirmed this. However, it has also highlighted that there are often challenges, difficulties and problems to solve around these changes, something that I did not previously fully appreciate but have come to see how this is key to the development of such a dynamic industry.

A good way to sum up my first month is perhaps not to reflect but to look at how it has given me both an eagerness to learn more and a strong desire to be a part of the future of RTB, whether it be in display, mobile, video or even connected TVs. I look forward to my second month at VivaKi in the exciting world of digital media and RTB.

Nick Brown @NickPhBrown

PMP, IO, SSP, DSP, KCT, vCPM, KPI, ABC1, GRP, MPU, RTB are just a bunch of letters… However, I have come in to contact with them such remarkable regularity that I find myself thinking what a laborious task it would be to have a conversation using full, un-acronym-ed words. Since, I started work at VivaKi, the AOD team has performed massive brand blasts, won over some great clients, tested cutting edge industry inventory, even achieved a world first! The list goes on… We work closely with companies like Doubleclick, VisualDNA and large pubs like eBay and Amazon, all to our own varied ends.

Point being, there’s so much to Real Time Bidding; too much to ever come close to having a shrink wrap solution to it. On top of that, it is constantly morphing and progressing. Not only are Mobile and Video making leaps and bounds forwards, but the platforms we work with on a daily basis bring in a whole host of new features almost weekly. It’s a crazy trade to be in and my first month has overwhelmed me with a phenomenal amount of information. I would love to write all about the diverse, highly affable team I’m working in, and on how much fun I’ve had in the many social events that have already taken place but if I tried to it would fill pages and pages. Suffice to say that my first month has been a whirlwind tour of the immense and fascinating world that AOD is right in the centre of: RTB.

 

Data Driven – Reality Based Media Panel at Monaco Media Forum

A panel moderated by Brian from Digiday talking about data driven display market and the role of programmatic trading from an advertiser, agency and human perspective. We covered privacy, a cookieless world and how the media agency has and will have to change in the future. A very enjoyable panel overall.

Panel consisted of VivaKi, Adobe, Taykey and Nugg.ad

Venture capital – are you a write off?

Over the last few months I have been spending more time talking with Venture Capital firms as we start to launch VivaKi Ventures in EMEA and I have to say it has been fascinating. On top of that I have been talking with individuals who have working in multiple start ups. If I am honest I am struck by the combination of instinct, nous, luck, crowd mentality and incredible returns and losses the VCs work off.

Information is extremely varied and disparate but overall it appears that the funds do a number of things, they are looking to make sure they have some ‘skin in the game’ in different sectors – we must be in mobile, we must be in video etc, sometimes buying into companies that from the outside appears misguided – Groupon to the punter on the street just appeared crazy but that did not stop anyone investing. Then we have this emotional crowd mentality where people in the investment community get excited and invests illogically based on sentiment, not dissimilar to the city swings we see on share prices.

In times of financial ups and downs investment firms are then trying to recoup the best returns, again, perhaps not always thinking straight in IPO situations, one of the views on Facebook was that the institutional investment firms had cash, it was making no returns through any conventional financial methods whether the stock market or banks and so the money was burning a hole in their pocket. An IPO like Facebook and others was a great opportunity to hit those return goals.

After all that there is the general rule of thumb that anywhere between 30 and 50% of companies will be complete write offs. I got thinking about that, and in discussions on that subject it struck me how blase they were about it. It is not working, cut it. You may be an owner, founder, an employee in these companies working hard and caring very much whilst backing you is a company that may one day wake up and say – lets pull the plug. It feels like that is an easy thing for them to do, when they are balancing that decision with high returns of 30x somewhere else. It is very matter of fact and shows just how hard it is to be a successful start up, especially in such difficult times.

I know for sure that there are good VC firms and less good in terms of caring for their investments but they all for sure know that they can walk away from companies easily as it is all built into the maths.  Good luck to everyone who starts their own business or joins a start up. It is a brave world.

Agencies and publishers are polarising structures based on the perfect storm

Technology killed the admin star.

One of just many debates raging around the new world of programmatic buying and exchanges. Are we seeing the death of the buyer? The death of the seller? Has the world of computers stripped advertising of all its creativity? Lots of big questions and debates but over the last six months, one common thread has become apparent; there is no value in execution in the long term.

Two or three big themes have converged in the last year, they have been around for longer of course but they have been lit up by the tech debate. The first is that in my view too many businesses sold their value on execution and delivery. These are necessities and you can’t not have them but is that where the value is? Is that what you charge more for? I don’t think so, the agency world in particular suffers from focusing a lot on service and delivery and execution over real value add strategy and quality creative thinking.

In itself that is not the end of the world, many advertisers want perfect execution of course, but what it ends up being then is an easily quantifiable, discountable service that becomes very commoditised – tell me the difference between two media agency TV departments? Secondly lets combine that with the fact that the world of Paid, Earned and Owned means that clients are now not only trying to squeeze costs and fees they are starting to see these new approaches as a gateway to spending less. I have just finished doing preliminary judging and of about 40 entrants at least 37 boasted / moaned (not in so many words) that they had little or no budget to make their campaign work.

So we have smaller budgets based on the social buzz doing the heavy lifting for us and we have fees for service and execution being cut – that leaves us with only one alternative – start to charge for ideas and creativity, for strategic guidance so that the execution is less crucial to the revenues. This works more now than ever as to make the social buzz work for you, good ideas and strategy are needed to do it..it is no coincidence that the non traditional media planning and buying teams in agencies are the fastest growing divisions. Big sponsorships, events, social strategy, performance strategy, content, these are where the future lies backed up with technically led brilliant basics.

To gain traction strategically you need to invest in good people. You also need more of them. Investment  in the current climate is not straight forward so you need to rebalance the organisation. The investment in time and people from a strategic perspective needs to increase and at the same time you need to make execution more efficient allowing you to free up people and resources to focus on intellectual capital. So Enter the third factor  – programmatic buying.

Ask a customer if they want to pay for a load of people bogged down in admin, or people actively thinking about how best to run their business and make it a success, the answer will invariably be the latter, but that’s what we all do in the main at the moment. Clients pay for people and hours spent on too much Admin and not enough thought, this situation needs to change. Technology and programmatic buying/selling is now allowing all companies to achieve efficiencies. Whether it is publishers like the Guardian or agencies through trading desks technology is freeing resource to focus on value rather admin.

Publishers are moving fast now, after a stuttering start, they are moving rapidly, trying to find ways to move more and more into programmatic sales, now with words like premium and brand being attached. They are opening parts of the site, previously sacrosanct such as home pages to the evils of tech. Trading and execution is taking a back seat as Partnerships, strategy, event type words come to the fore – BIG ticket sales are now the focus.

Some recent people decisions are a reflection on that with people like Vevo choosing Partnerships people over sales people and Yahoo re-evaluating structures and there are many more. I am sure The Guardian will be looking to Tim Gentry to help them achieve better margins and a more efficient approach to the market, the signs are there..

So for me the message is clear – we all need to find a way to make money from clients and customers who want to pay less for service and execution and spend less on advertising. Armies of people pushing excel around is not going to be the answer.

Balancing short term demands with long term strategy

As the digital landscape evolves so the companies within it have to adapt as well, but actually we all live in a short term world. Both publishers and agencies have their work cut out for different reasons but all too often good strategic decisions are being strangled by short term demands. This challenge has never been more obvious than right now.

I have been talking daily to organisations both in our group and externally about how we plan and adapt for the future, we can all see the major digital portals for instance having to sit and scratch their heads a little about dealing with the here and now but planning for the future. Take a Yahoo or a Microsoft, they have both embraced the new world of exchanges and yet somehow want or need to protect their network offerings, the two don’t sit easily in reality. As strategies they should be rewarded in their approach of embracing the exchange world, but instead they are under pressure to deliver their targets based on a 2010 estimation, when the world was entirely different. Was it that different? Were we not all talking about exchanges etc back then? Well yes we were but the spend was not backing up the rhetoric, 2011 is a different story. Audience On Demand, as the biggest exchange trader in the UK has accelerated incredibly, and that growth is having an impact. Look at Specific Media who but a year ago was recruiting staff and buying Myspace and a few short months later is making redundancies, that’s how quickly things move.

We are though at a juncture, and it’s for that reason we need some patience from the bean counters. 2010 did not properly represent the Exchange growth, 2011 is closer to the truth but 2012 will be big. As the long tail of Ad Nets is absorbed into the more focused addressable media hubs and digital consolidation continues, the likes of the Yahoo or Microsofts will begin to see the benefits of the exchange infrastructure and will be able to let go of the old DR network approach. They will start to reap the spends that once went to the Ad Nets, but this time via exchanges.

It is refreshing to see the strategy Yahoo are playing out in the us. There was an article today in fact on this in Adage – click here. They are going to take a hit in the US with their strategy of blocking the Ad Nets, Criteos and others from buying their inventory. Yes short term that is going to hurt them, longer term its a great move and will pay back undoubtedly. We are seeing a significant adjustment in the digital ecosystem.

Agencies are evaluating just as fast, less from a revenue perspective, more from a structural perspective. If you designed an agency today, would you do it the same? I doubt it and yet the upheaval required sometimes makes people think twice and come up with a number of reasons why they should not do something even though in the longer run it makes perfect sense. This requirement to change however on agencies and publishers comes from a number of key trends;

consolidation of digital, we have all seen the stats that show the big digital companies control a huge percentage of the total spend and audience, even within the exchange space you are dealing with a few big partners. I believe that clients are starting to see a new digital landscape that is not 40 sites on a plan. They are realising that actually they can achieve almost all they need with API buying, Audience On Demand and Search, its a shift, everyone is looking for scale and efficiencies.

Globalisation of media and advertising. Most pitches are becoming global, not all, the recent in for ZenithOptimedia of RBS proves that, but many are. As such as the clients think more globally then they look to the agencies to do the same, and the more you think like that the more the scale partners of Yahoo, Google, Microsoft, Facebook etc become important to them and us.

Commoditisation drives value. This is an interesting development for me. Years of being told by Microsoft and Yahoo etc that their inventory is ‘premium’ has rarely been backed up by any real insight except their own research. Now we have commoditisated huge swathes of inventory through DSPs and exchanges we are being able to see what value inventory has and what performs. We see the volumes of money we spend with these companies through the DSPs and what eCPM we pay for them, none of this is determined by a person or a power point slide or negotiation. Tech has decided, results have decided and demand has decided and the patterns are very interesting indeed. After millions of pounds of spend through Audience On Demand we now see the true value of inventory and yet it has never been more commoditised.

Technology is in fashion. Of course tech has always been in fashion but never more so than now. It has been developed for agencies in a meaniful way. Demand Side Platforms for exchange trading, Bid optimisation platforms for search and API buying, these things have been designed to help us drive efficiencies and improve performance and we really see the opportunity now. It’s brutally competitive though and VivaKi have decided to work with the best partners and then develop tech that links all those partners up providing an interface to work with, this we see as the great opportunity, if you then add that to new streamlined teams and workflow, you have a heady mix that can deliver fantastic performance and service.

So where does that leave us? It leaves us with a lot to do and we need more people to take up the challenge and either drive the change through their organisations or give the people who have to do it a break so they can work through this transition. The end result though is the ship has sailed, the change is underway and we need to embrace it or become a dinosaur.

Trading Desks are in for the long haul, not the sale.

I cant decide where to start on this post, there has been so much going on in the hectic world of ad exchanges in the last few weeks. Top of the bill was an excitable debate between an Audience on Demand employee and a disgruntled DSP. The key issues raised around conflict of interest included agencies being forced to put spend through their trading desks, lack of impartiality etc etc.

Interwoven with this debate was the fact that so many companies are approaching us at the moment, DSPs, Data targeting companies etc all with interesting premises I suppose but all with one thing in common, they all need to make as much money as possible, as fast as possible. Lets talk about conflict of interest..I use the DSP marketplace including Triggit which was involved in the above debate. How many shall we say there are, that are currently aiming for Trading Desk revenues – 4? 5?. Everyone is coming to town, everyone wants a piece of the action, but when they get into town they realise that a couple of those 4/5 have been busy for a few months / years and pretty much wrapped up the business. Its not to say thatagency groups will not test and learn, we do in the US and there is definatley room for more than one or two but for some, the market’s not big enough. What happens then? They need to fight for revenues, they need to say why they are better than each other and especially better than Invite to try and find the big ticket, except I am not sure there is a big ticket at the moment. So then they resort to the last option which is to try and undermine the credibility of a trading desk to try and open up some cracks of opportunity.

The conflict of interest for those guys is they have to make money to keep the VCs happy. The agency group trading desk model is not in the same boat. Audience on Demand’s sole purpose in life is to navigate on behalf of its clients a very complex market place and deliver great results. They are in it for the long haul, they have much more to lose. AOD messes up on a client it can jeopardise the whole business. Yes there is pressure to deliver..but its to deliver results not revenue first and foremost. In a competitive marketplace as the agency landscape is, the more things you do well and right, the more chance you have of retaining the client.

So whats better then? An organisation like Audience on Demand that has a remit to make sure it is working with the best, understanding strengths and weaknesses – and believe me all these tech companies have them – or a heavily invested tech company struggling to make ends meet. Who is actually going to have the interests of the client? I can tell you, it’s us. Anyone who thinks that agencies and clients are naive enough to accept sub standard strategy and results just because its in house is a) clearly lacking in understanding of how an agency works and b) underestimating the clients and Account people. If a client asks about our impartiality we can show them the full vetting we do of all DSPs, I can show them the data compliance methods we have in detail for every supplier, I can show them the results in detail where an acceptable flat cpa or cpc is not acceptable as it encourages the supplier to focus on growing their margin rather than delivering the lowest metric. I will show you 100’s of people who live and breath this space and understand it better than any individual tech company thats trying to undermine it.

Conflict of interest is doing what you have to do to stay afloat in one of the most competitive eras of all digital times vs doing what’s best for our clients. Finally it is always worth analysing who is throwing the mud, its often one of those people who came in to town too late and cant find anywhere to hang their hat.