My 2010 review for Exchangewire on Exchange trading, an agency perspective

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End Of Year Review: Marco Bertozzi, Managing Director EMEA at Vivaki, Gives The Agency Perspective On 2010

Posted: December 9th, 2010 | Author: admin | Filed under: Online Advertising | Comments

Exchangewire story here

I first talked about ad exchanges in a pitch in 2008. The DoubleClick ad exchange was either recently launched or due to be. Either way it seemed like the answer everyone in the industry had been looking for: namely, the chance to only buy audience you wanted and move away from buying in the thousands. That principle stands true today and overall the ad exchange trading approach is a successful formula.

The market place has remained pretty static since the late nineties. The industry traded in the same way as every other media channel and it worked quite nicely. When ad exchange trading emerged and became a serious proposition it asked many questions of the roles of agencies, ad networks and brought to life the data practices that had become so prevalent in recent years. 2010 has been an amazing year. The companies and technology on the lips of the media industry now – Invite Media, Turn, BlueKai, DSPs – were not even on the radar here in Europe twelve months ago. It’s incredible how quickly our industry can adapt and I have enjoyed being in thick of it in 2010.

A year in developing an ad exchange proposition

One of the hardest parts of a role such as the development of a new way of trading is gaining trust and buy-in from agency teams. It is actually harder to get traction with a proprietary approach than introducing a third party – see how Group M has struggled with the purchase of 24/7. There has to be proof that something like Audience on Demand can work and beat the competition. Client teams are rightly very defensive of their clients.

In every group you also have of course different agencies with their own approaches and ethos to digital. My challenge with Audience on Demand was to create an offering that worked for each agency and one they felt they could make their own. You have to work with many different opinions but in the case of Vivaki we did that and through that due diligence has come a unified view on how Audience on Demand could look and one of the reasons we have made so much progress. It is great that we have Starcom Mediavest, Zenthoptimedia and Razorfish all involved through consensual means rather than command.

Unique in this arena is the level of attention that needs to be given to data ownership and making sure that we are not buying unsuitable inventory. It’s important that contracts reflect the new world we are living and trading in. Outside of that we need to manage some people’s concerns that ad trading will be the death of the buyer and lead to an automated buying environment. Those concerns are mainly unfounded. Of course as more media is traded in this way it will make agencies more efficient – but take a look at search where we still have teams of people bringing the strategies to life.

The challenges we face in an agency

In considering the challenges we face I have chosen to break up the ad exchange trading proposition into four core areas, people, technology, marketplace and data. Each area has had its own areas of positives and negatives.

People

The challenge with ad trading is that it sits in the display camp. But the execution needs to be with those who are more direct response or search focused – namely those people who enjoy numbers and optimisation. This is not a ‘display’ buy. At the end of the day someone needs to have the skills to make this work and finding those people will be the next battle ground in this market. I fear a repeat of the search market where we competed for talent to the extent that search planners were getting large pay rises after 6 months in the job. We need to avoid a repeat of that by spreading the skill set as much as we can rather than concentrate on a select group of people.

I think there will be a new breed of buyers in this space but they could work across different elements of the same principle – biddable media. Some agencies claim to be employing NASA trained graduates, who could unpick the meaning of life in an instant. I don’t believe this is not a viable strategy for all. Some middle ground is needed here. What skills will be required by agencies? There should be heavy data knowledge, and more analytical than perhaps in the past – but this new breed of buyer shouldn’t be a complete departure. After all, the ad networks have been doing this for years without recruiting from MIT.

Technology

That’s easy! Why do I say it’s easy, well because it is all the same. I can already hear the howls from the baying crowds of technology companies, but fundamentally it’s true. Let’s not hide behind technology. It’s hugely important and exceptionally scientific but unless you have the people to make it work, it’s effectively useless. We work with Invite in the main and they are the leading player in the space now with the backing of Google – and hopefully they will continue to drive innovation. That said we have not won a single piece of business on the back of our technology sell. It’s all about the people and strategy. The most important thing any agency can do is work on the overall integration of the data provided by these systems into the agency’s data warehousing infrastructure. That’s where the value is created not in the individual system itself – and that’s where NASA knowhow comes in!

Ciaran asked me about developments in this space. I think we have been seeing the morphing of companies with a technical core into DSP offerings. That for me is the biggest shift. Real-time-bidding capabilities have also driven this development. As we have seen from results, it really makes a difference to performance and the margins publishers are able to take.

As I mentioned earlier its fascinating watching all the new players come to market. Dataxu, Turn, Mediamath, Appnexus and many others all staking their claims in this space and that battle with continue unabated. On the back of that I hope we will see product improvements to benefit our clients, especially around video and mobile.

Marketplace

Is there inventory or not? There is a lot of exchange inventory that needs to be supplemented with more mainstream inventory, Yahoo already do this. Microsoft has just signed up with Appnexus and there is a ground swell of larger publishers that are starting to hear the whispers that they can make more revenue through exchanges than going to ad networks. Critical mass is key and it is coming fast.

If you were to ask me what has changed in this area I would say that publishers are now considering putting more inventory through exchanges and dipping their toe in the water. Many people talk about the threat to ad networks from agencies – in terms of replicating their model. I am more inclined to believe that publishers are less willing to forsake their remnant and unsold to ad networks, preferring to move inventory into open exchanges.

Scale to compete is another topic of intense debate. Anyone who has run an attribution model on one of their campaigns will see that a number of sites can feature heavily across a number of exposures on a campaign but the last click will often fall to a small list of companies that effectively buy up the web. These networks buy at huge scale and therefore often win the last click battle. That’s not strategy or skill – it is sheer bulk. But it works in our current basic last-click-wins approach to digital. It’s no surprise to find that the ad networks are the largest buyers off the exchanges!

Data

Come back to me next year. There’s been so much talk but little action over the past twelve months. The area of most interest is of course retargeted inventory – first party data rather than third. For the last few years agencies and advertisers have been giving it away to ad networks to make their own campaigns work better. Ad networks were thus able to create greater insights on competing brands. The battle is now on to retrieve that data usage from third parties and keep it between agency and client. One thing that is blatantly clear is the need for a huge shift in data contracts. Client contracts and media owner contracts are going to change as everyone wakes up to the reality of how data is being used.

As for third party data, we are not there yet in Europe. There is little to no decent data on the market. A couple of companies are starting to shape their offerings. Obviously there are those who will sell data but on the back of their media networks. I think we will see some developments in 2011 as US companies come to town but we have some way to go. The greatest challenge is managing the price and value. Up to this point data has been too expensive and has invariably underperformed – so we should see some big improvements next year.

European ad exchange trading

I think that the idea of a group offering across Europe is more than possible, but it remains very complex. I spend much of my time investigating the developments in European markets and trying to understand their individual nuances. Each country has different marketplaces – with some more ready than others. Germany is a particularly entrenched market with some very established publisher relationships and a low use of ad networks. There are big companies in the space such as Weborama, Adjug, Adscale all looking at establishing opportunities. The importance of working with local partners cannot be underestimated if you are to make a success in these different markets – a one-size-fits-all approach will not work.

Conclusions

It’s been a fascinating and exciting year. I have met with some extremely bright companies and people – and I believe that this ad exchange trading tide will change our business more than any other single development. As we move into 2011 – and we see the addition of video and mobile to the automated ad trading mix – the ad exchange space will become even more complete.

As I discussed it will ask questions of many company structures and approaches, people skills and data capabilities but that is the interesting area for me. It will make us all re-evaluate how we work and what our structures and people skill sets should be. I work with great teams in the VivaKi agencies and am fortunate to be able to push on an open door. This innovation requires some elements of trial and error, and we all need to learn together. I would also say we should encourage each other in this space. The more we work together, the better the traction from publishers and data companies, the more we will grow as an industry.

Interview in Cannes around technology and changing world

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I am one of a number of people interviewed in Cannes this summer around technology and the evolving world around us, I am featured around 4.35 and the last slot for those that care! Curt Hecht also of The Vivaki Nerve Center is also interviewed.

Marco Bertozzi discusses Vivaki/Google deal on exchangewire

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Marco Bertozzi Discusses The Renewal Of The Vivaki And Invite Partnership
Posted: November 17th, 2010 | Author: ExchangeWire | Filed under: Ad Exchange, Ad Trading, Agency, Demand Side Platform, Online Advertising, RTB | Comments
Vivaki recently announced it was renewing its partnership with Invite Media. Marco Bertozzi, Managing Director EMEA at Vivaki Nerve Center, spoke to ExchangeWire this week about the implications of the partnership and what we’re likely to see in terms of innovation from Vivaki over the coming months.

FULL ARTICLE ON EXCHANGEWIRE CLICK HERE

Vivaki announced that it is renewing its partnership with Google for another two years. Does this mean that Vivaki will just exclusively use Invite Media to trade inventory? Or is there more to the deal?

MB: As I mentioned in my blog, the best friendships / partnerships come with time. Google and Vivaki have been working together since 2008 and have a close working relationship at a product development level and not just at a media level. It was our collaboration that encouraged them to purchase Invite. On that basis we feel that working with one partner, who in our view is the leader in this space is going to deliver better results than working with a whole range of partners who all have different processes and approaches, we will learn together and they are more likely to work to our needs as we are a large customer of theirs.

All that said of course it is incumbent on us to make sure we have a view on the marketplace and understand different systems. On that basis we have trialled different DSPs so to that extent it is not exclusive. As an aside the deal as you call it, I prefer a partnership as that is closer to the truth, is a Google one, not just an Invite one. Invite are one important part of our discussions.

What effect will the deal have on the European arm of the Vivaki and the Publicis agencies here?

MB: The US has been market leading in many areas of digital and ad exchange trading is no different. They are a good 12 months ahead of the UK in terms of maturity, understanding of the marketplace and scale. Therefore in EMEA we have always benefitted from that forward thinking work from the US and deals like this just add to that and help us mature more quickly in the EMEA markets. I believe this will create for us some very good first mover advantage in the areas we are focusing on such as video and mobile in the exchange space.

In a recent blog post you spoke about how the partnership with Google will focus more on mobile and video. What opportunities does Vivaki see in those channels from the perspective of data-driven ad trading?

MB: We see the whole ecosystem as being display whether its mobile, video or traditional display. The growth in spend is in these areas, the interest from agencies and clients is in this space so for us will come the need to be able to deliver an efficient and targeting solution in the form of exchanges across these different channels. We will want to have data that crosses channels and helps us discover out audience regardless of screen and this partnership will help us get there in the quickest time but at scale. There will always be small PR led partnerships around mobile and video but they are not at scale and often a lot of hot air, our approach is to do it right and to do it at scale.

Will “The Pool” initiative be part of this video and mobile strategy?

MB: The Pool is a slightly different approach where we are identifying the optimum ad format with in the video space. In the UK, Spain, China and US we are well underway with all of that work and it’s exciting to see the results. Although we will not be directly linking these, of course when the video ad exchanges take shape, our Vivaki built ASq model will be part of the formats available on the exchanges. I think more broadly Vivaki and SMG have really owned the video innovation space and so we would see these two areas being complimentary.

What are the key objectives you would like to achieve in the next two years with your renewed partnership with Google? Is it more automation across display, mobile and video?

MB: I think it’s pretty straight forward, we want to work with the Vivaki brands to accelerate all ad exchange trading but most importantly in the space of video and mobile, this will be a key battle ground and we want to be leading the market in this space, our work with Google and Invite will be a big part of this. Let’s not lose sight of why we are looking at all of this though, it’s to target the right audiences, minimise wastage and deliver strong targeting solutions and strong commercial results for our clients.

What currently differentiates Vivaki’s exchange strategy from those of other European holding companies?

MB: We have a purist approach to ad exchange trading and are not looking to create an ad network or exchange right now. The most important development for us is fine tuning the best approach to trading on exchanges and delivering an expertise to our clients, if the focus was on creating a marketplace or network I think the ambition is too centred on margin management and not on the best solutions. On top of that, the sheer scale and experience we now have from the US and more latterly in the UK in particular means we can use that experience to the benefit of our clients. Practical experience over the last 18 months gives us a head start on the other agency groups, some of which are still grappling with technical or organisational issues.

Since joining Vivaki do you think the European exchange space has evolved? Or are we still in the early stages of development?

MB: It’s slow but steady. On the one hand it feels as though everyone is talking about it but then you realise that it’s still very much under radar, I think all the people connected with this industry know each and other and interact, some limited teams in the agencies are aware but generally it’s still nascent. That said I am having more conversations with publishers who are waking up to the possibility that exchanges are an opportunity rather than a threat and that can only be a good thing. We are also slowly seeing the migration of US companies into EMEA but that remains surprisingly slow, so all in all I think things are growing but we are not mainstream yet!

Google and Publicis/Vivaki renew partnership

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Oh yes there will be those who start to pick away and question this partnership, some ask what this partnership is about, but you need to start at the start. Maurice Levy set out a strategy for the Groupe to be the leading digital group in the marketplace. He has achieved that ambition, but how do you get a huge organisation to move in one direction? Well firstly you show them you mean business and invest. Look back at what he has done. Maurice bought up Phonevalley in mobile, Performics in search and SEO, the big one was Razorfish and others, this has created no doubt about his intentions. So what else would a digital organisation of this size do?

Well you should have some close friends that are themselves giants of the digital business. Enter Google partnership in 2008 and Microsoft a little later on, both significant relationships, both the first partnerships of their kind and both giving an insight and opportunity to the clients of Vivaki that noone else could offer. This approach make so much sense and cannot be open to criticism.

Now the thing with friendships, the longer they are the more fruitful they are, the partnership with Google is now into its second term and third year. The senior teams in the VNC and digital teams of the group have been working with product and commercial guys from Google in a more integrated and collaborative way for some time and it’s this that drives the value and the reason, you cant undo a long friendship.

The announcement today of the renewal is significant a) because it has been renewed! We have worked well together and we want that relationship to continue and b) our renewal comes at a time when others are just creating their first deals and they are basing them on very spend related terms rather than strategic and product led. These deals are designed to create opportunity for the clients, not deliver a low cpm. Its an exciting space and the VNC will be working closely with Google on creating some of the most advanced strategies around exchange technology in video and mobile so this can only be a good thing.

Read the announcement here

I look forward to working with Google over the next two years and can proudly say that Vivaki really does have a couple of great BFs.

One year since my first Bertozzi Bytesize blog.

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12 months since my first blog. Unbelievable change from that year to this. Although I learnt a lot of commercial and man management business skills at TMP it is a very different world I currently inhabit in the Vivaki Nerve Center.

I did not imagine that 12 months later I would have written over 70 entries, wired my self up on Twitter with 160+ followers, it’s been a hell of a learning curve, and frankly one I needed to go on, you can’t work in the heart of digital and not understand this world of Twitter and blogs. How the world has changed, once upon a time if you had some PR you hoped that Campaign or Mediaweek would cover a story, but now Twitter and online in general spreads the news like wild fire. Learning that ecosystem is important and I have and really enjoyed it. It’s like a guilty secret, most people I know, even those in digital scoff at the idea of a blog, but I think that’s shit, they don’t have to blog but niether should they scoff, if you don’t understand how this all works then you can’t truly advise clients who want their strategies to be based in this social world.

Well its right that one year later I am still banging on about things because that’s all I hoped for this blog, nothing too intellectual or deep, just a thought on, exactly as my blog is called, and nothing more.

The last and important point is that since writing that first blog, I have had my first child and that is the big news of the last 12 months, it does also mean time is even more precious so no matter how these blogs come out, I have to work hard to produce them!

The future holds loads of opportunity to write, Monaco Media Festival in November, Sky Media golf masters in Dubai! some exciting new deals being announced by Vivaki and more..keep following and let’s catch up in another 12 months.

Battle for the living room. Apple vs Windows vs Google.

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These three companies are battling it out in a number of arenas, phones, TV, PC/mobile operating systems and each time one of them launches something the others follow, they take turns. Well I was thinking about the launch of the new Windows phone 7 the other day and how it compares to the iPhone and the same thing came back to me..I am all in with Apple, so even if it’s brilliant I won’t get one.

It goes further too, at home I have 3 sets of speakers for Apple, I have Airport Express, an iPad and close to getting Apple TV so if Apple actually allowed me to seamlessly link this all up, which they don’t, then that’s my house completely apple-fied. I am talking hardware and systems I guess, the actual programs and sites they carry whether it be Facebook, Linkedin, Twitter etc should all be universally accessible but the systems that carry them? Some believe that eventually all these platforms will communicate, that consumer pressure will make it so, but I am not so sure. Apple has not bowed to pressure from it’s own customers to get its equipment talking to itself, so what chance getting it to talk with Android or windows. Further proof of this is the fact that Windows Live is aggregating FB feeds and messenger from Yahoo but point blank refuses to include Gtalk.

So actually these brands are not fighting for a phone marketplace, they want your home! Microsoft have the phone, PC and Xbox. The Xbox is basically a home entertainment centre with streaming movies, music, links back to the phone as well as catch up TV and Facebook messenger etc so they have a great foot hold. This all leaves Google without the physical foot hold on your room until that is Google TV. So in a few years I think you will need to choose who your team is, that way you will have a seamlessly linked home and mobile experience.

Question is, which team are you backing? I am in too deep with Apple now so that’s easy, but who knows, maybe Apple will let me pull up my itunes music on my Xbox? No chance!!