ad networks

CampaignLive US article on Advertisers missing the prize of programmatic

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

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

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

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

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

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

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

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

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

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

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

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

Ad Fraud: Advertisers and Auditors have only themselves to blame

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Its Official! There is fraud in the Ad network business and it is big. The New York Times has written about it, see article here and so now at last it must be real. Why has it taken so long for people to take notice on the subject? VivaKi have been pushing this agenda for so long now and it is not being grasped or maybe more importantly valued by many. I will come back to what we are doing in this space, but lets get back to the ad fraud.

The media industry has always been pressured by constantly reducing pricing, every contract, every agency, every buy cheaper than the next. The advertiser is looking to reduce the costs and the ‘pitch consultants’ or rather auditors have done nothing to help that situation by creating a vicious circle of ever decreasing cpms, one agency bidding against the next. On and on it has gone, with those consultants taking their nice fees while the agencies get squeezed and squeezed. So where does this all take us? Well lets put aside agency fees and just focus on buying cpms and hope the agency gets to charge for it’s value in other ways.

The buying cpm is being reduced year on year on year and so agencies are turning to networks and other avenues to be able to hit the cpms that advertisers want. To be able to do that the only option at a certain point is to buy low cpm network inventory that is blind and very very long tail, all wrapped up in a glossy $35m marketing budget by the Ad network.  And with a nudge and wink everyone rolls over, the agency, the advertiser turn a blind eye. Years later, surprise surprise when the relevant technology becomes available and we discover that there is a lot of unsavoury, poor quality inventory being bought, there is uproar. Well come on – how did you think these companies made money?

I have no sympathy with the wailing and thrashing of bare backs about the state of the inventory because those same advertisers and auditors are the same that would not accept that if you take appropriate brand safety metrics including proper verification of inventory, whitelists, viewability tech and tracking to make sure the buy is quality and safe that there came a cost and a higher cpm. VivaKi Verified, the protection part of the Audience On Demand offering have been focused on all of these areas working with Adtricity and many others as well as having our own in house team that determine the best, safest inventory, but often times the cpm is deemed too high. Well there is a reason for that, because we are not buying click fraud, long tail, non viewed ads. 

So part of me wants to throw my arms up when an advertiser questions the well worn path of Agency Trading Desk transparency – we have the safest most robust approaches to brand safety and ability to show where every one of our ads appears – for that we have to invest. So for all the wailers out there currently, here are my final thoughts.

  • When considering the media purchase, when the glossy Ad Net is offering you a rock bottom price – you might want to ask how they get it? 
  • If you care about brand safety and every advertiser says they do – you cant accept a blind buy, I say it again – if they don’t tell you where every ad appears – you are fuelling the business that NY Times has picked up on. 
  • A challenge to auditors; seek value not price, it is in all your brochures, live it out and have the strength to tell a client they should pay more for better inventory, change your own business model away from ‘savings’ 

These headlines will become louder and let us see what happens, I will tell you, CPMs are going to rise, they have to because all those that have not been playing fair, who have been playing fast and lose with your brand, will have to improve because technology is going to find them out. When they are found out and they have to act more appropriately, their cpm will rise and then advertisers and auditors will have a dilemma – accept higher cpms for quality or continue to bury their heads in the sand and hope all this goes away.

Either way this is a good omen for those who have been banging this drum for some time and of course for genuinely premium inventory providers and for the rest I hope they suffer a lingering demise.

 

Have Publishers learnt from the past?

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I was recently prompted to think about the sales policies of publishers when Criteo approached us to buy their inventory through a Criteo network. On the face of it one could argue it would be a good buy for us, potentially unique inventory, sourced through publisher deals that by many peoples opinion is good quality and high up the adserving priorities of the publisher. Obviously after about 1.5 secs I decided I was unlikely to contribute to the clever business model of Criteo by filling their coffers so they can then go pitch direct to our clients and move the business. That is not what this post is about but it set in motion some ideas that I think publishers should consider.

Companies like Criteo, have created a good business and are doing well in their niche but they got there through persuading publishers that they should sell to them quality impressions, in some instances first look, even above direct and brand channels at a low cpm vs those direct channels but high vs the RTB market. They deliver good business for them and everyone is happy.

Problem is that they buy a lot of it and need to get rid of it and so they want other people to buy it from them ie trading desks and potentially Ad networks / Managed DSPs. The demand in the exchanges has increased significantly since many of those deals were done and so cpms for quality inventory like this will likely create a higher cpm than they bought from the publishers. So that means then that trading desks are buying good inventory from Criteo rather than direct from the publisher? Is that what the publisher had in mind when they sold or agreed to the positioning of the sale?

I think it raises questions that publishers yet again have to face, is it better to sell at a flat cpm or find other channels to monetise. A lot of big names are doing this and for me makes no sense, if you want your inventory to be monetised, come see us rather than put us, your direct buyers second to someone who is re selling it to us? It is time to ditch the flat cpm and embrace the auctions and private market places.

We can also offer transparency to the publishers as to how well their inventory is performing and we can partner to create improvements for them and us. The alternative is sell and see no insights. In my view that era has ended. Publishers, come talk to us we can help you with that.

Digital Trading Standards Group (DTSG) – heard of it?

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I attended a seminar this morning called something like ‘Is your brand safe online’ A number of parties were there, all worried about their brands, namely trade bodies, Ad nets, Agencies and global digital media companies. The one group severely lacking was the advertisers! It is notoriously difficult to get clients to turn up to events and this was obviously not an event that they thought important. Why would they? Don’t they have their agencies to do this stuff?

It is a similar story with ePrivacy, although almost all the onus falls on the advertiser to make sure their site is compliant and that their advertising is as compliant as one can be in this area, there has been limited discussion on the topics since ‘the date’ came and went. How come? Maybe everyone thought that someone else was worrying about it?

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The group is focused on getting self regulation principles about where Ads appear to be taken up by media vendors. They want to suffocate the advertising revenue streams for unsavoury or illegal sites by making sure that all the major suppliers of inventory agree not to use them.

So today’s agenda showed that again we have a topic that appears an important one and yet again we have the merry go round of whose responsibility it is to make sure we are compliant. Well today we heard it loud and clear, The Police and Fact think that it is the advertiser who has to take responsibility for making sure that their Ads do not appear on illegal or inappropriate content. We were given an example of the client EasyJet that the guy from Fact kept repeating has not been able to be reached. He was very annoyed by that..I asked if he had contacted their agency to be told that it was not his job to spend time looking for who Easyjet agency was – umm maybe ask your IPA friends? No it was better to keep sending letters to Easyjet when the agency would have had those Ads down in about 15secs.

So bearing in mind that the Police think the advertiser should take responsibility, the advertiser thinks the agency should, the agency thinks the Trading Desk should and the Trading Desk things the suppliers of inventory should we have a beautiful example of sequential liability (without all the legal jumbo jumbo!) – I took a decision. I decided that the suppliers of inventory should be taking responsibility for where my agencies, advertisers’ adverts are being placed and I wrote them all a nice letter asking them to abide by the Principles of the DTSG.

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I just did it. It was easy to do to be honest. I wrote to them and said ‘ please can you confirm that you won’t put Ads on porn sites, children sites, illegal sites (the special police list), Torrent sites and basically anything else unsavoury because our agency’s advertisers will not want it.’ And why was it easy? Because it is so bloody basic and common sense that I am trying to work out why everyone has not done it, apparently some are reticent at this stage to do it. Well for me I am all for it because it is straight forward and I don’t want another ePrivacy debacle involving 10 different bodies and loads of political bull. I just want to buy ads in nice places.

Our whole VivaKi Verified approach means we are already vetting, categorising, white listing inventory so this is a no brainer for me, I appeal to everyone else to get on with it as well. It will be one less committee meeting to go to and will mean everyone can get back to dealing with the nightmare that is ePrivacy, I would hate for another topic to come along and hijack every media conference panel debate!

After this cause is put to bed I am starting out on Ads appearing alongside prostitute cards in phone boxes – now who is responsible for making sure that does not happen?

Why Ad networks can’t become agencies but the reverse is not true.

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The latest debate in the display space is whether or not ad networks are going to have to become agencies and go direct to clients to sustain their business. It’s a fair assumption, the likes of Specific and others will hire agency people, create better strategies and approach clients. The latest article can be found here on exchangewire.

It’s a believable concept but one that is out of sync with the way the industry is heading. Although there is a lot of hype around ad exchanges and targeting / data opportunities, within an agency, exchange trading remains a line on a schedule, albeit a complicated one. The exchange space asks many questions of agencies but that is around change and adapting, once its all settled down, it will revert to being an important channel like search and crucially will be integrated into all the other channels.

Over the last few years clients have been on a journey where in the main they have consolidated channels, first digital overall and then they have dragged search in where specialists have held on for some time. It’s not only channels but they are integrating their media agencies both within countries and between countries with more and more international pitches. Anyone in a major agency will have lived that in the last few years. So after all of this integration I think it is unlikely they will want to start farming individual channels out again, especially when it may be big news in the exchange world but within agencies, it’s just another new channel. Time and time again through research, better coordination and integration has shown better results for the advertiser so there is no reason to split out exchange trading.

There is also some realistic areas to take into account. Clients spend 80% of their budgets on offline, 60% of their digital budgets on search, the rest is split all over. So its fine for an adnetwork to go direct but they will never fill the roll of an agency. The agency roll is more than buying and is across all media channels, its events, experiential, etc etc, it’s also highly people heavy and Ad networks have been used to high margins, low headcount.

So direct is fine but will struggle in the UK marketplace, however I think with time the agencies could start to deliver an ad network experience and product within the context of their huge global corporations. Of course there is middle ground, some chameleon organisations that act as an agency or a network, but their offer only goes so far to be a real threat.

I dont think we need to start a war between agency groups and ad networks, I am sure we will all find a way, but I know what side I would want to be on.