The 6th Rubicon Project Trading Desk Panel at Liberty Theatre, NY. Covered many of the usual topics around the programmatic space including a clip from the Cannes Rubicon Panel to kick things off. CLICK picture for video
This post was first published in the Wall Street Journal – to see it click here
In Defence of Trading Desks
The World Federation of Advertisers report on programmatic trading, issued last week, has set the online ad industry abuzz. I am pleased to see clients taking a stand on transparency and some of the other issues surfaced in the report, despite being one of the purported programmatic culprits.
When Publicis launched Audience On Demand in 2008, we decided to create it as an alternative to the very murky services that were dominating the marketplace at the time, such as ad networks, that operated in the dark and sometimes pocketed triple digit profit margins in the process.
Six years later we are standing firm on our early decisions, and reports like the one issued last week suggest the market is moving in our favor.
But the fact is not all agency trading desks are created equal. And while the WFA report inaccurately tries to paint us all with one color, I encourage every marketer in the industry to take note of the questions in the report that relate to issues such as arbitrage and data. Don’t just ask these questions of your agency trading desk, however; Ask them of every programmatic provider you might be spending with today.
If a programmatic provider is working in a marketers’ best interest it should not be arbitraging inventory, it should be buying audiences and inventory transparently in real time. It should be protecting marketers’ data (it’s their data, and they should honor it as such, unless given permission to blend it). It should have a rigorous vetting process to evaluate all data and technology partners to be sure that protection extends across the ecosystem.
It should also be tireless in pursuit of viewability and quality, and it should show you how it is trying to protect your ads from fraud. I submit that an in-house option or managed service demand-side platform that buys on a marketer’s behalf will provide less brand safety than an agency trading desk. It simply costs too much to deliver extensive black and white lists, tech vetting and human vetting at a client level.
Finally programmatic providers should make it entirely clear what percentage of marketers’ ad dollars are actually spent on ad space, and it should be far, far greater than 40% as the WFA report suggested. That number is ridiculous. Candidly, a fair amount of the math cited in the WFA report is peculiar.
In general, the WFA report steers marketers toward setting up an in-house solution. It’s a viable, though difficult and limiting proposition to pursue. An in-house operation is not going to resolve all transparency issues. It might give marketers complete control, but it also results in limited visibility once the campaigns go out the door, and you are only as good as the technology you tie yourself to.
Meanwhile, if marketers outsource to an ad network, managed service DSP or non-disclosed trading desk, you have little control, less visibility and no ownership.
I hope I get a chance to meet the WFA. I would love to talk to authors of this report about their findings, where the insights were obtained and how the calculations were done. So much of the report is spot on in terms of what questions to ask, but the bias and inaccuracies need to be corrected.
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.
With every year that goes by the advertising community continues to look for more and more opportunity to drive down pricing and increase value from agencies. No one can blame them, a whole auditing and procurement business needs to exist and why should good work or good people get in the way of the procurement officer hitting their bonus?
There is some irony that the companies advertisers use to drive efficiency also create more and more work for agencies through a pitch process to also justify their role. Meeting after meeting, tests, projects, hands on sessions, formal pitch meetings, digital focus, more forms and oh some pricing at the end. It means that agencies continually come under the strain of having to find new opportunities to earn or save money. Their only their options.
In the camp of saving, we talk a lot about making things more efficient. The whole Trading Desk model has been put under that camp, but you know, perhaps we should look to our media channels that have come with the most history. I find myself wondering why we need different TV buying departments in today’s world. We have teams of people in agencies that all do the same thing, give or take, their roles are clearly defined, they all work on the same systems, there could be no finer example of an opportunity to streamline a business. This is not just about my group but all of them. Do we need multiple buying departments by agency?
I think that if we are to keep up with the relentlessness of procurement and pitching we should do a couple of things. First lets re shape the businesses so that there are some key trading people in London but consolidate the buying into single group operations, based somewhere cheaper, where you train people to come and do a 9-5 job, they get paid, they go home having worked bloody hard.(God forbid you even employ people without degrees?) Would advertisers be happy with that? Could they stomach the fact that agencies do as media owners do and have multiple conflicts and teams all working together across agency silos? Well that I guess is the core of the issue, if they are fine, all well and good, if they are not then they should pay more for making the agency groups run in a less than efficient way.
Second, lets start challenging the advertisers to change their business for the better rather than be lap dogs and respond to whatever they want. ‘I can be whatever you want me to be?’ We should try more along the lines of ‘your business is structured really badly, you want some good advice?’ Consultancy comes cheap in advertising and media, the advertisers should take more advice, it is designed to help on reflecting the changing landscape. I had a refreshing meeting where an advertiser asked me to challenge him more on how he should structure his business for the new world of RTB and Data. How nice it was to have a decent debate on that, and imagine the possibilities. If only there was more of that.
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?
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.
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?
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.