agency trading desks

Annual interview with Beet.tv in Cannes – entering good times in programmatic

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Every year at Cannes before the Rubicon Panel we discuss with Andy at Beet.tv where things stand in the programmatic industry and this year we discussed a brighter future. 2014 was the lost year to the topic of transparency but I sense we are over that now and have moved on to programmatic strategy and all the possibilities.

This year also marks a big step for us as we see the completion of the move of campaign planners and buyers into the agencies out of VivaKi and I hope will be the start of a new age in the agencies.

Programmatic in Cannes

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

Jay Sears interview in advance of Adweek New York Panel

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photo for blog

Your Name: Marco Bertozzi

Your Company: VivaKi

Your Title: President EMEA and US Client Services

SEARS: Where do you read your daily news [not just industry news, but all news]? Do you still read a newspaper? Listen to the radio? Use social media?

BERTOZZI: Twitter is usually where I start the discovery. Where I end up reading the news varies. I also use the Guardian News app as an anchor. Occasionally I will grab a newspaper but safe to say most of my news consumption is online.

SEARS: What’s your favorite commercial of all time?

BERTOZZI: My favorite commercial of all-time is an ad for Blackcurrant Tango.

SEARS: Today on average in the United States — out of each $1.00 spent on media (all media, not just digital) by one of your advertisers — how much is spent on automated or programmatic channels?

BERTOZZI: We’re seeing $0.08 of every $1.00 spent on programmatic channels in 2014, and I think we’re still in the early stages of adoption — even in the U.S. — but it’s starting to rise. We’re going to see a sharp increase as education continues across agencies and clients.

SEARS: What was this number in 2012?

BERTOZZI: $0.06

SEARS: What will this number be in 2016?

BERTOZZI: $0.14

SEARS: What is the mission statement of VivaKi AOD?

BERTOZZI: Audience On Demand® (AOD) was built exclusively for Publicis Groupe agencies and their clients. Created in 2008, our sole purpose has been to help our agency partners and their clients control their brands and messaging in a fragmented, digital ecosystem. We work as an extension of the agency team our clients trust to steward their advertising spend and marketing activity.

SEARS: Please tell us:

SEARS: Overall United States managed budget (media spend) for your trading desk, expected in 2014:

BERTOZZI: A lot

SEARS: Percentage increase, United States managed budget (media spend) 2013 vs. expected 2014:

BERTOZZI: It’s a healthy increase

SEARS: How many employees are there in your United States organization [headcount number]?

BERTOZZI:
Total across USA: 261
Total in:
New York: 80
Boston: 8
Chicago: 123
Detroit: 23
San Francisco: 2
Los Angeles: N/A
Dallas: N/A
Other: 25 employees in Seattle

SEARS: What are VivaKi AOD’s three biggest U.S. initiatives in 2014?

BERTOZZI:

Quality and viewability. We launched Quality Index — a proprietary evaluation process that vets all ad placements through AOD. Built on performance metrics and data provided by comScore, Integral Ad Science (IAS), Proximic and various DSPs, as well as ad server performance data, Quality Index also sources inventory according to various metrics that assess viewability, page content quality and historical performance.

This year, we also invested in the building out of the VivaKi OS, combining the AOD Platform and DMP, supported by our established channel solutions (display, mobile, video and social) and our VivaKi Verified teams.

We introduced AOD Brand into the US market. Focused on large-scale formats, it gives advertisers impactful creative in the right locations. It’s the best of RTB with premium inventory, utilizing private marketplaces and giving brand advertisers a vehicle to deliver programmatically against brand objectives. It’s an approach already heavily used in Europe but now formulated for the US.

SEARS: By 2016, what percentage of your holding company’s U.S. media spend will be automated or programmatic?

BERTOZZI: As above

SEARS: Can linear TV be automated, yes or no?

BERTOZZI: Yes! The real question, however, is whether large broadcasters are willing to invest in adapting to new and efficient ways of trading or do they prefer to hold on to “how it has always been done.” Media automation is an inevitability and those that move fastest will benefit the most.

SEARS: Does VivaKi AOD plan to automate linear TV in 2014? 2015?

BERTOZZI: No, but we intend to work with all available and accessible inventory and that includes connected TV inventory which will increase substantially over the coming months and years. The shift from TV to multiple screens will power the increase in inventory and as audiences across devices move away from just traditional TV the opportunities will only increase.

SEARS: Once linear TV is automated, will it be bought by TV buyers or digital buyers?

BERTOZZI: As we are already witnessing, there is a massive blurring of roles within agencies. By the time linear TV is automated I would suggest that roles and in fact most agencies including those in our group will be well under way with planning and buying being very much across screens and channels.

SEARS: On the subject of business models, the best way to describe your company is:

a) Product organization – i.e. you curate a media product for your agencies and advertisers
b) Service organization – i.e. you recommend and manage best practices and best of breed products for your agencies and advertisers
c) Combination of both
d) Other

BERTOZZI: Other. We see our role as threefold. First, we build technology that powers AOD in order to join up the complex programmatic ecosystem. Second, we evaluate and consult with advertisers on technology and data providers that best address their particular campaign needs and goals. Third, we provide marketing expertise and services for agencies and advertisers on campaigns including human oversight, strategic direction, context and advice that a machine simply cannot [offer].

SEARS: On the subject of advertiser clients and transparent vs. non-transparent models:

a) We have a transparent model — clients know media and other costs (i.e. costs are unbundled)
b) We have a non-transparent model — clients do not know media and other costs (i.e. costs are bundled)
c) Combination of both
d) Other

BERTOZZI: A. We make sure that our clients know how much spend is going against working media. I strongly believe this should be an absolute given for any business that aligns its objectives with its clients’ objectives. We also do not arbitrage media, as we believe this is counter to the principles and efficiencies offered by programmatic media-buying and takes us further away from the spirit of collaboration and true partnership with our clients.

SEARS: What percentage of your agency or advertiser’s site direct budget (direct orders) has been automated?

a) Less than 10% (of site direct dollars)
b) 11-20%
c) 21-50%
d) Over 50%

BERTOZZI: A. All of our buys are auction-based and therefore we do not allocate budget for direct-buys.

SEARS: Which of the following will accelerate the automation of site direct (direct orders) budget? Pick all that apply:

a) Dynamic access to all publisher inventory [vs. just “remnant” or “auction”]
b) Ability to leverage publisher first party data
c) Ability to leverage advertiser first party data [against all publisher inventory, especially premium]
d) Availability of rich media, expandable units and larger IAB Rising Star formats
e) Ability to more easily curate audiences for specific advertisers across the premium content of multiple publishers
f) All of the above

BERTOZZI: While all of the above are valid considerations, I believe the biggest factors that will help accelerate the automation of direct orders are actually tech development and greater alignment on inventory. As I’ve previously mentioned, there have been occasions where we wanted to push significant spend across premium publishers but the publishers were not ready to accept it.

SEARS: Tell us a bit more about you.

SEARS: Who was one of your first mentors as a child?

BERTOZZI: My brother. Five years older than I, he was (and is) someone I looked up to and not just because he defended me when I got into scrapes. It was his sound advice that ultimately led me into media agency life — so I should thank him for that!

SEARS: Money is not a concern. You no longer work in advertising or technology. What would you choose to do for work?

BERTOZZI: Having always loved animals, I would choose to work on an African game reserve. The solitude and connection to nature attracts me as does working with the most incredible animals on the planet. I would however probably still look for a connection to data, no matter how slow!

– See more at: http://www.mediabizbloggers.com/rubicon-project/276847701.html#.VCVuSnKwSgI.twitter

Advertisers need to press the reset button on digital

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Agency Trading Desks. Independent trading desks. RTB Networks. Data networks. Managed service Desks. We have significantly added to the ecosystem in the last few years and on balance for the better I think. Of course there are concerns about transparency and who is doing what and the advertiser is being taken for a ride so on, but in totality we now see a more sophisticated digital ecosystem than three years ago which is a good thing.

However with that comes a need for everyone to refocus. There is a whole auditing, pitch consultant business, advertiser organisation business that is focused on Agency Trading Desks. I think part of the issue around Agency Trading Desks is that they are all different. Some are an extension of the agency, some are more akin to a department within an agency, some are out there in the extreme like Xaxis that has changed so significantly that it really no longer sits in the bracket at all and everything in between.

So when it comes to pitches, auditors, advertiser evaluations of the space they obsess with agency trading desks but not the wider market. My business and that of a company like Rocketfuel or Criteo or Quantcast are the same, we do the same. Plenty of people will argue the good and bad of both including me but for now put that aside, fundamentally we are the same, we cook with the same ingredients – the end plate of food looks and tastes different but we do the same. For that reason we compete with these companies, spend that we could argue should go to us goes to those companies and independent trade desks. So for me, we should all be judged the same by advertisers. The same rules should apply, if those rules are based on genuine concerns of an advertiser about their media investments then why would they not?

So why don’t we start with what is asked of us? What do the agencies and advertisers want of us? Lets run through a few:

  • They want to see results line by line with associated cpms, cpc etc
  • They want brand safety – clear controls as to what we are buying
  • They want to know what tech we use and why – and how much does it cost?
  • They don’t want us to create large margins behind set cpas and cpcs etc
  • They want auditing rights on activity
  • They want private marketplaces and innovation with partners
  • They want detailed costs breakdowns

Those are just a selection. Articles in the past have commented on how the ATD is not held accountable but that is a falsehood. The pitch process would argue differently as well as regular reviews with advertisers that question in detail all of these areas, we are constantly evaluated on one level or another including our toughest challengers, the agencies we work with, and rightly so.

Trouble is on any plan spend is going not just to us, but to many of those companies mentioned above and many more in display, video and mobile. These companies are not held to the same standards and I think this should be investigated further. If a guidance paper for instance gets released to advertisers on ATDs, I can guarantee it will ask all those questions above (and more) but why just to ATDs? Any such guidance and evaluations now have to be extended to a wider group of companies and end the double standards.

I sat with a large group of advertisers and time and time again the issue of brand safety was raised. One of the core tenants of AOD is protection, and that is for a good reason, we are advertiser / agency focused, we know what they expect. So why would an advertiser invest in a company that provided no transparency at all? An ad appearing next to inappropriate content is still inappropriate regardless of how it got there. Blind buys should not be acceptable to any major advertiser. Why if you are concerned about how much money AOD makes do you not care about the 50-60% margins being reported in the company accounts of some of the other companies? I could go on but my point is that we cannot attach the ATD to the agency, but rather attach the RTB/programmatic industry to the standards of the agencies and ATDs, at least those like AOD. So I hope to see from the various trade bodies and the like a stance that widens the net of companies that it recommends should be evaluated in this new exciting programmatic world we live in, and avoid people having too much cake and eating it.