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My Q & A with Exchangewire on Ad Exchanges / Agency models

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Marco Bertozzi is the Managing Director, EMEA, VivaKi Nerve Center. Vivaki is a strategic unit within Publicis Groupe that helps agencies leverage the scale of the group’s media and digital operations to improve campaign performance for its clients. Marco took time this week to speak to ExchangeWire about the Vivaki operation in more detail, the industry’s move to automated audience-buying, and the evolution of the agency model.

There’s much confusion about what Vivaki does? Is it buying platform? Is it a crack exchange trading unit? Can you explain the Vivaki proposition in more detail?

MB: Vivaki is the strategic entity created by Publicis Groupe to leverage the combined scale of its media and digital operations, which represent nearly $60 billion dollars in global ad spend and influence. VivaKi aggregates the marketplace influence of five autonomous brands, including: two global media agencies, Starcom MediaVest Group and ZenithOptimedia; two leading digital marketing agencies, Digitas and Razorfish; and a premiere futures practice, Denuo.

On behalf of its agency brands and their clients, VivaKi faces the market to help identify and build technology, message distribution, audience aggregation and content solutions for the future. VivaKi also includes a “Talent & Transformation Practice”, which leverages the scale of the VivaKi brands to develop and deliver tools and approaches designed to attract, develop, train, motivate and reward the world’s best people.

Sitting at the core of VivaKi is the VivaKi Nerve Center, which serves as a think tank, R&D centre and testing ground to activate new pathways for clients to connect with consumers in an increasingly digital world.

The key objective of the VivaKi Nerve Center is to help deliver better solutions for our clients as the marketing landscape continues to evolve and accelerate at a fast pace, collaboration within the VivaKi family, and across the Groupe, is essential.

To succeed in our mission, the Nerve Center will focus on some key areas to empower our VivaKi agency teams and clients:

Global Platforms & Products: Developing global platforms and proprietary products that help our agencies differentiate and compete in the marketplace. Products will be supported by an advanced underlying technology and data infrastructure that delivers speed and scale.
Industry-Leading Partnerships: Creating strategic global partnerships that provide tangible value for our clients and partners, while differentiating against the competition.

Innovation & Thought Leadership: Investing in innovation and next generation emerging opportunities, like The Pool, which will validate our leadership position in the marketplace.

Our ad exchange solution is called Audience on Demand and is therefore a key strand in the global platforms and products category above and indeed innovation. It’s one of the most exciting areas to touch all agency groups in recent years and needs to have a defined and aggressive focus put upon it. Vivaki Nerve Center has worked very collaboratively with the brands in delivering the Audience on Demand platform to their clients. We are live with Audience on Demand and really excited by the performance of the solution.

Can you elaborate a little more on your role within Vivaki?

MB: My role in is Managing Director of The Vivaki Nerve Center in the EMEA. I report into the Global President of the VNC, Curt Hecht. The VNC has made significant progress in the US and my role is to work closely with the brand management and digital teams to establish how the VNC can help them in delivering the future-facing digital solutions that our clients are asking for everyday. Ad exchange trading through Audience on Demand is a significant area of work for me.

What’s your perspective on automated trading and audience buying through exchanges and other demand sources?

MB: I have been blown away by it. I may be biased and perhaps my background lends itself to making this exciting to me but when you see the potential of automated buying you can’t help but be impressed. It’s worth saying that automated buying is a little misleading. It requires clever optimisation strategies and insights that the agencies need to lead through talented people. I would not want people to think that you a press a button and it’s all done. Anyone who thought search bidding would be automated would testify that is not the case – it is search bidding times ten so definitely not just automated.

The trading platform allows you to target exactly the individuals you want at the price you want. You are buying one impression at a time which makes a CPM approach look outdated although it is not the death of the CPM buy just yet, not least because media auditors would not know what to judge us on! I believe it will ask questions of every agency trading model to some extent or another. It will also challenge auditors to stop judging agencies on an arbitrary discount off a pool metrics, and force everyone to consider more performance related contracts. I think for now it lends itself more easily towards the performance models but down the line I can see far more being traded through this method.

Do you think that large European holding companies like Publicis are now seeing ad exchanges as an efficient channel to buy ad inventory?

MB: I think the large network groups get a hard time for not changing enough and being slow to react. In some ways that may be true but agencies today are very different to those of 15 years ago. They have completely transformed: agencies realise change is inherent in what they must deliver year in year out.

Ad exchanges are just another media / trading / targeting opportunity that have come along, and agencies will embrace it and make the most out of it on behalf of their clients. My experience so far is that all the groups see the benefits of it but that will vary by group as some are more advanced than others. You will see who believes in it the most by how quickly they grow their ad exchange spend because once you start to see the results, clients and agencies alike will want to move their budgets into new the model.

Do you think that trading on ad exchanges makes it easier to leverage agency and client data to deliver better campaign performance?

MB: Trading on ad exchanges will allow data to become more important but actually it’s not the exchanges where the benefit lies but with the use of DSPs like Audience on Demand. It is this technology that allows us to best use data to enhance the performance of campaigns and target only those users that are most likely to deliver a beneficial response for our clients.

The combination of our clients being able to retarget their visitors but on a much larger scale with the introduction of third party data means we can turbo-charge our schedules to deliver at the right cost and at the right level of volume. Those third party vendors need to move quickly over here. We already have demand and they are a little slow to get going. I was pleased to see Phil moving from Yahoo to Quantcast, perhaps a sign of things to come.

Does Publicis have an exchange strategy for Europe, and if so will this be headed up by Vivaki? Are there plans to devote more resource to developing this area of the business?

MB: This is not a UK or US only market place. It will become important across all major markets so of course we will grow our business in those countries. Many of our major European markets are already testing different models and gaining from the insights. Vivaki Nerve Center will take the route that drives the consistency and ability to learn as a group and not at a country/agency level. We are in the very formative stages of this area so it’s important we all learn from each other.

Resources will evolve over time. Some people will re-skill into this area, some will be recruited. But we have time yet to get into that. Rest assured though that the number of people working in this area will grow substantially!

What do you think are the key difficulties in moving an agency toward automated media buying? Is it the lack of technology and data skills that exist within the agencies? Or is it a lack of technology?

MB: It’s not a technology issue. We have the technology and it works. I am sure all of our competitors have their technology too. Some will work better than others perhaps, but generally I don’t see that as an issue. Technology should not be the differentiator for agencies, it’s the people behind it and what it delivers that counts. Clients do not want pitches where we all get our technology out and wave it about; they want to see insights and results.

In Vivaki there are pools of people who understand this new area and those that know less about it but is that not always the way? Over time we will train people and recruit people so that we have the right level of understanding and evangelism in the business. Look how agencies changed around search. We had the same discussions back then and we now have these amazing skill sets around search in the agencies, so I don’t really see too many issues. If you think the opportunity is a good one, you can make things happen.

Do you think the arrival of DSPs into the European market will help agencies bridge this technology and skills gap?

MB: DSPs will allow agencies to build campaigns across multiple ad exchanges, create data pools, and control frequency etc across the whole playing field rather than at a site or network level. They will also provide us with the largest search area when we are trying to find the elusive consumers who have visited our client sites previously. DSPs are enablers so of course it’s a great innovation in the marketplace globally.

I would say that I believe a true DSP is one that’s only interest is in providing technology to do all the above. It should not to try to resell inventory or have morphed from an ad network. There are many blaggers out there and it’s important that people choose carefully in who they work with as you may discover that the systems they provide are not as future-facing as you thought. The market place is very grey around the edges!

What’s your view on real-time bidding? Is it a game changer for the display market? Or are there still fundamental problems that need to be worked through (such as the computational costs) before we see the benefits?

MB: It works. Our campaigns are delivering great results on the RTB strands of the campaigns. I think RTB will be affected by many different elements not least volume of competition, which will only increase. But this is where the clever use of data helps you in RTB: only you know what is deemed a valuable cookie. Hence you will be bidding on it, not the rest of the world. This is different to search where everyone knows that if you bid on home insurance you will sell insurance. This is a huge benefit for ad trading – the agency knows who is valuable not the publisher telling us what is valuable.

Overall I believe that RTB will be a game changer. Suddenly impressions are valuable again in the volume game. Interestingly though, they are valuable from a data perspective and not so much from a context /channel perspective. The rules have changed. What’s premium now?

How do you see the European exchange space developing over the next twelve months?

MB: I think you will see many of the major players in the US getting people on the ground here to push into big European markets. The ecosystem is developing rapidly in Europe, and it will not be any different than the US. There are already companies up and running in Europe, providing ad serving and other services, and they will try to steal a march in these markets. The DSP pure players will soon be driving a more objective approach across Europe. I also think we will see the likes of Google really ramping up in the markets here, which in itself will drive liquidity.

Thanks to Google Zeitgeist

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I just wanted to post an official Thanks to Google for their world beating Google Zeitgeist conference. The level of delivery, the speakers, venues and thinking really put almost all other events to shame.

Just take a look at the schedule for the two days click here

The quality of content was fabulous and the discussions expectantly lively at times, I particularly liked the ‘Zappos’ vs Alcatel debate, it was ready to kick off I thought, good fun though! That said after all of those illustrious people, who came out on top? Boris Johnson, amazing orator, funny, informative and I know that everyone to a man thought he stole the show, even the Google founders could not deliver that level of interaction with the audience. See all the vidoes here:

These events are fascinating, there are some very aggressive networkers. People talk about ad exchange technology delivering Ads in a second, at these events, people can look at your badge and decide if they want to talk to you even quicker! I am no good at it, too obvious, I think I need glasses although Google were kind enough to make the names pretty big! A lot of cards were exchanged, polite coffees and drinks consumed and many different languages spoken, that’s the beauty of these events. Normally Google do not showcase any of their own wares but due to popular demand they walked us through Google Squared, Search, Youtube Disco, Mobile, Maps and Gmail and I think everyone was taken back by how much stuff they have up their sleeve but don’t talk about excessively. After what I saw yesterday I think they should strut their stuff a little more, because its good…take a look at Youtube Disco here just add an artist.

I think this sort of event is one others can only aspire to, but I hope they catch on, especially the handing out Nexus Ones at the end! My over-riding image though was leaving at the end and walking to the exit to see what can only be described as an army of men in black suits next to fleets of Mercedes and BMWs, clearly not many people like to drive themselves anymore!

Anyway thanks to Damian and the team, much appreciated!

Politics needs a brand makeover

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Marco Bertozzi: 10.05.2010

Outdoor advertising during the elections has always been a little flippant. Although amusing at times, I feel more and more like my dad is trying to come up with jokes to be down with the kids or worse me making up jokes to be down with the kids. These Ads also give me the feeling that they think we don’t understand anything complicated. I can hear them now back at M&C ‘keep it simple lads, those white van men wont understand anything more than a picture and a one liner.’

They might be right but I feel like the Parties desperately need a brand beyond a logo and a strapline. With all the Parties doing tit for tat Ads and even using each others art work I had no idea who was behind which Ad. I think they need to stand for something but I also think there needs to be some visual triggers, some brand guidelines, do some targeting! The rest of the advertising community aim different Ads at different demographics, they target by media and channel, they make DR Ads different to their brand Ads but all in all they try to retain some key brand identities. It’s this I think has been missing.

Who can remember an Ad – if you were asked to describe one now, what would you say, you may remember Life on Mars but which party? That’s the challenge, I think the Party that could be remembered in the mind of the voter through their advertising may have the advantage – brand recall anyone, recency studies? These could all teach the parties something, it feels like it all gets thrown out during the campaign.

As well as differentiation between Parties being confused there is also the consistency within one party. A myriad of different leaflets, posters in different styles, no guidelines, it comes across disorganised, scrappy and in most cases pretty bland. I believe that more consistency in the advertising styles would make a Party stand out and be more memorable. Its fine for O2 with bubbles or Orange with orange but they have invested tens of millions over many years, they can afford to stray a little and try new things but these political parties have a short while and they need their advertising to stack up, right from the first leaflet to the largest 96+ sheet.

Lets face it their advertising does not work as we have ended up with a hung Parliament..next time act like a brand and see where you get to.

(H)i-Level, Low-Level, its been a good debate, over too soon IMO

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Marco Bertozzi 05:05:10
We all know things change, look back at all the agencies that have come and gone over the last 15 years. Some died, some morphed, some have held steady but in some shape or form change has been the one constant in this fluid advertising world. That said it somehow seems too early for the demise of i-Level. They reached an amazing high, perhaps too high and too difficult to sustain. I wish all the employees the best of luck in the future, I hope it pans out for them, I am sure there will be no shortage of takers.

Click here for latest

Back to the agency, they were the success story, the guys who fought off all the networks to win pretty much every major single digital account going. The likes of Ed Ling, Chris and Faith were key to their success, anyone out there who has worked in digital media in a big agency has pitched against them a million times, they were not a thorn in your side, rather a stake in your side. i-Level were good, but anyone who dealt with them found them to believe in their own hype a little too much. Some characters in particular driving that sentiment and that saw a fair few good people pass through the gates and out the other side when they found the boys club a little hard to deal with.

The real issues came when the digital specialist was no longer dish of the day. i-Level constantly niggled at network agencies for their approach, moaned about their lack of specialism, PR’d every time they made a cup of tea, they isolated themselves when I feel they should have been more inclusive. They became more and more digital when the rest of the world was becoming integrated, including their clients. Perhaps on some issues they were right but one thing the mainstream agencies are good at is adapting albeit slowly sometimes. The big four groups were slow off the mark in digital but soon steam rollered their way into major and experienced players but I think then realised the importance of being more integrated quicker than i-Level.

Mainstream agencies went on the counter, making clients realise that having digital spend isolated from an overall marketing strategy was madness. i-Level on the other hand did not see any benefit in taking on some off line skills thus forcing the hand of many clients. An interesting comparison can be drawn with agencies like Glue, Dare and others in the creative fields who at the same time started to pitch for the full creative accounts rather than be isolated into just digital. Perhaps with a more broad approach i-Level may have held onto some of those key accounts.

Overall it is never pleasant when companies hit hard times, there is always a human cost, I am sure a selection of people have done very well out of i-Level but many will be out of a job. I think there should have been room for an i-Level in our marketplace but perhaps a slightly differently focused management team would have achieved different results. I wish all those left good luck and you never know perhaps the name will live on. I think it has been one of the best debates of the last few years, the endless i-Level PR machine vs the main agencies, I think those who have been around from the start will miss it.

Nexus One UK release – don’t bother and wait for the 4G iPhone

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Marco Bertozzi 26.04.10
This Friday the Nexus One is available to the wider UK marketplace. I am not sure how big a deal this is to the wider market, feels like the world has moved on in some ways, the iPhone 4G has come along and I think it looks better and acts better from the very little I have seen and read.

I have had the Nexus One for a couple of months and I have to say, other than the fact its quick compared to a 3G (maybe not a 3Gs) it fails on so many other levels! If you are thinking of buying, consider these:

1. Everyone talked about the fact the casing of the phone was tougher and better than the iPhone – i have dropped mine and it has gouged out a corner of the metal casing, in many ways its more obvious than normal scratches and bangs

2. The keyboard is shit. No other way to put it. It’s less intuitive, it does not feel as tactile as the iPhone and it creates gibberish! As an example I could be walking across Sainsbury car park at 2am, worse for wear, pitch dark and I could be writing an email or text that I would probably regret the next day and the spelling would be perfect on the iPhone. It’s like the phone guessed what I wanted to say based on all the other rubbish I had typed before..Nexus One does not even have a guess at it – it will write nit over not for instance. The law of averages says not is a more likely word to go for over nit?!

3. The cardinal sin – the Apps are of a very low quality, they crash regularly, they are not as good and the range is very small, for me a complete fail.

4. This is just me, but having had an iPhone for so long, I have accessories all over the place and not to mention all the music and apps I have built up, none of it can be replicated, not peculiar to the Nexus but still irritates!

There are others but these are pretty fundamental. I just don’t think it is good enough, I have tried but I am back to 4G. Even the Microsoft series 7 phone looks better, so ebay here I come – anyone want mine?

Hearst to buy iCrossing. Good for Hearst, bad for icrossing (apart from managers)

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Marco Bertozzi 20.04.10
I understand why they would. What a great short cut to getting loads of digital knowledge into a business that has been slow to embrace digital, like all media companies they resisted moving from their traditional and core ad models until they could wait no longer. Magazines have been particularly bad at this in the main and have always been playing catch up to some extent.

Read the PR coverage here

Now as the agency world starts to move into Ad exchanges, putting the decision as to what is valuable inventory or not back in their hands and social media and search becomes more and more complicated Hearst has decided that they should buy a big digital independent agency, nice work. It’s a good move for them and it’s an even better move for those who have substantial shares in iCrossing but for the rest of the people there I am not sure what it means for them.

The history of media companies buying agencies is not great and rarely ends well for the people in the agencies, you become second class citizens to the brands you serve. How independent are you exactly? Will iCrossing start to be a digital department of the media group with regular schedule lines being Hearst properties? What about if you just become an internal department of the company, like an IT help desk to answer questions, solve ongoing problems the brands have in digitising. I am sure they will do a great SEO job on Hearst and perhaps provide a search strategy, Hearst still needs to create decent sites with decent content.

I am not sure I like the sound of it, I am possibly not seeing all the facts but if Hearst spends 375m on the agency, they are not going to let it live happily, bumbling along on its own, there will be some significant impact on the staff there.

Valencia Festival of Media – will the presenters re-write the rule book?

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5 Days away from the start of the Valencia Media Festival. It’s a big affair, I have not been for a couple of years, last time was the Venice Media Festival so I am interested to see the presentations. I blogged previously about how Twitter and social communications have changed the feel of presentations at these events and this should be the best example as the whole theme is around changing the rules.

Here is the challenge to the presenters:

a) Prepare something for the conference, not something you made earlier!
b) Make it interesting which means being brave on content and comment, stick your neck out
c) Tell us something new, please
d) Aim the content at knowledgeable people, not the lowest common denominator

If all that happens it will be a great conference as the line up and agenda looks fantastic, see it here www.festivalofmedia.com/agenda I am going to Twitter for the first time at a conference both the content and some of the goings on around the presentations and some of the evening events..although not in too much detail!

Follow me @bertie1972

This is the most exciting time in digital media since search

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Marco Bertozzi 13.04.2010

Today I had three meetings on the trot and each of them came from different fields – Media owner (portal), Media network / technology company and Search. Each of them had a different angle but the one thing they and indeed we had in common was that we all felt the world was changing and noone had the complete answer.

It’s exciting and anyone you talk to seems to be thinking the same, the display market does not know which way to turn, media network, DSP, Ad exchange, media agency, search company? It’s all up for grabs, so much so I think that specialist companies in the ad exchange market may have become too specific as they could invent themselves over and over and may need to.

All of this leads to an enormous amount of bullshit. Unbelievable amount of hot air, duplication of technical services, who does data best, its a minefield and unless you really get around a bit and ask a lot of questions you could be caught out by some dodgy companies and people. Spend time looking into those who approach you claiming to be experienced, specialists etc there is still more hot air than delivery in the market.

It is a great place to be right now but beware, while there is limited regulation and everyone proposing new and exciting business models you could get caught out..a lot of sensible advise and analysis can be found at www.exchangewire.com and www.adexchanger.com

How has Tweeting changed the face of conferences?

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Marco Bertozzi:29.03.10

I read today a post by Mel Carson that he tweeted out there about someone at a conference commenting on the clothing ‘suits’ and words they used at the conference ‘actionable’. He seemed quite upset that he had been described as a suit, you can see his defence at here and the fact a member of the audience had questioned certain words used.

That got me thinking about how the conference has changed, the old days you turned up perhaps a little hungover and under prepared, or absolutely word perfect, either way you did not really know how you were performing. The advent of tweeting at conferences and the fact presenters are actually reading them has meant you need to think very carefully about whether or not you want to tweet what’s on the tip of your tongue. The person Mel talks about has obviously caught the wrath of the conference speaker/attendee but will that always be the case? What are the rules?

It is easy to be bothered by peoples comments but at the same time you have put yourself in that situation and therefore should you not be prepared to take some criticism? I think yes, as a rule, thats not to say it is right that people hide behind electronic communication to make their points but equally if everytime someone is tackled up for their comments you will kill what has been the most interesting part of most conferences so I suggest caution. Although this was not the source of this post it did also get me thinking about the quality of ones presentations at conferences. Basically if you don’t want to get negative comments then prepare well and make the content interesting. It amazes me the amount of presentations that are re drafts, they are cut, chopped and diced to fit the subject of the day and often presented with no prep. In this age of live digital critiquing I think we all need to be prepared to take some grief if we have not put enough effort in.

In reality you will never please everyone, one man’s ‘suit’ is another man’s ‘professional’, who cares if you wear a suit? I think that the rule is if you don’t like what you read or hear, dont get up on stage.

Loving the Heineken Inter vs Milan event

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Earlier in my blog I highlighted the great ‘concerts in a banner’ work, well here is another extremely clever and engaging piece of work which brings together media, PR, viral and stunts all into one idea. Take a look, it is genuinely impressive.

Most praise has to go the wives and girlfriends that managed to get them to the event!