Scale is suddenly out of fashion

What a weekend of news. An incredible, history making moment when you realise you are part of an incredible piece of business. These two incredible men have done the impossible. They have created the largest Ad group in the world by some way and with no-one finding out! Hands up who wants to work in a stagnant, stale business that does not evolve or change? Not me. That is why I joined VivaKi and it has been a roller coaster ever since. Now this. Publicis Omnicom Group. It was one of those announcements where the descriptor WOW worked.

I think the coverage has been intriguing, some sensible, most negative but to be expected I guess as this merger touches so many, some utterly small minded, ludicrous and opportunistic.  

As regards the coverage the one thing I have seen time and time is the discussion on scale and how many commentators comment ‘ advertisers will not benefit from this increased scale.’ I find this fascinating for a couple of reasons. The first is that advertisers, media auditors, pitch consultants and every agency pitch document starts with how big they are, at least if you are in the top 10. It has always been so and will be for some time but all of a sudden we have everyone saying scale does not matter. I just don’t buy it and most advertisers don’t either. Scale as I have written in a previous post is not just about buying, it is about resource, depth of pockets, it can be many things, but lets stick with media buying, it will count. Anyone saying otherwise has an angle.

Connected to this is the fact I have grown up by an industry telling me about Group M scale. Media owners, my own agencies in other markets, middle men, pitch consultants – ‘Group M scale counts and is a big deal’ year after year this has been the message, so I am intrigued that suddenly I read that this is not the case and there will be little to gain from this merger in that sense. You can’t have it both ways – either it does count or it does not, because that is not the message we have been giving or receiving for the last 20 years.

I am hugely excited about this merger, we are a small part of history and whatever the future holds, I love being in it rather than looking in on it.

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I only recruit from NASA – you?

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Well I say that, in actual fact I have recruited two people into the Head of Product roles from within our agency group, NASA did not really come into it, although I am sure some people would claim it! It is something I am asked all the time – where do you recruit from? What type of people should we hire? Will my Head of adserving do? 

One thing I am sure about is that I fear the return to the days of when search took off and they became a hugely overpaid, under experienced, high churn group of individuals, around 2005 it was a merry-go-round of people in the search teams with each agency ignoring their best search strategies and allowing us all to  bid up the price endlessly. It was partly this factor that led to search teams not being as efficient as they could have been since staff costs got out of hand. There is a danger of us returning to those days within the exchange space, but at the same time I believe we have more choice, on the basis you are a little more open minded.

As I said at the top a common question is what type of people do you employ, I struggle to answer that. Looking round the team we have people from adserving, mobile DSPs, agency, Data, and so on, so yes of course they all have some common DNA but that is not the key. Curiosity is the key, the desire to want to learn, to want to look under the bonnet and see what is happening and to do it all the time not once a month. Everyone in the team has that, and in my opinion that makes them different from the majority. Too many digital planner buyers have become a little too process driven and not inquisitive enough. They are not questioning the numbers, they are not trying to work out a different way, or challenge a target, too much is paper pushing and and that is why the new generation of people, as much tech as media are different BUT because you work with tech does not make you an immediate candidate.

When I interview I want to see passion and interest, I want to see a history of someone who likes the ecosystem and has been reading about it before they even got the job, I want them to know all about the space, without really knowing all about it because the one thing they lack is working experience. Come in and challenge us, come in and want to understand more. We don’t mind what your background is, just show us that you don’t just want a job in this new space because you think you should.

I have seen some really good candidates, often those who are actually working in competing trading desks, we have never employed one. Too many of them looked like they fell into it rather than wanted it.  So for those starting to recruit the interview recipe to grow a team is curiosity plus desire sprinkled with a big dollop of instinct (perhaps the key ingredient at the end of it all).

Audience One Demand is always happy to receive CVs and always on the look out if you want to fire them over.

Data: The new Wild West

I have invited Paul Silver – Head of Product, AOD UK to comment on the world of data – here is his first post and the first guest post on my blog. Enjoy.

By the one and only: @thepaulsilver

The 3rd party data space right now reminds me to some degree of The Wild West. As a result of that mad gold rush era, the legacies created were: hastily erected housing, mob rule, vigilante justice, hyper inflated prices….sound famililar?

There has for sometime now been a lot of discussion around 3rd party data for audience targeting. ExchangeWire hosted the first EMEA Data Economy Event in March 2011. The hype seems to be lessening, but the appetite is as strong as ever.

The recent announcement of Xaxis developing a global audience profiling database reaffirms my belief about the synergy between the current data space and The Wild West. Agency Groups, Ad Networks, Data Exchanges, Aggregators – everyone is trying to get a piece of audience data, acquire it if you will (directly or indirectly) to fuel more precisely targeted audience based campaigns. And like the Wild West, I fear this rush for data is creating more confusion, execution of some bad practices whilst fundamentally the core foundations remain sub standard at best.

The upside of this ‘demand rush’ means publishers have more distribution points than ever, that can only be a good thing right? Or does it mean in fact that the more points that data is sold to, the more commoditized it becomes? Is that inevitable?

Some publishers that I have spoken to do not know where to begin when it comes to data monetisation. There is also so much data kicking around that advertisers do not know what to do with it, what to buy in terms of un-deduplicated reach and access, or even begin to understand the complexity around different taxonomies for what could essentially be the same user in the same type of segment. There is also the case of advertisers (and publishers for that matter) not knowing the difference between the types of data: inferred or explicit, lifestyle, interest, intent, social graphs(?), lookalike. The lack of standards and transparency exasperates the problem.

Like the mob rule affect created by the Gold Rush, publishers are increasingly becoming vulnerable too. Large agency groups are starting to wield certain influence in trying to bake data into trading deals. On one hand, publishing groups with limited scale are never really going to make a fortune from selling their data, but its the principle of how that proprietary data exits their businesses that should raise concerns. There is also the case of publishing groups still unaware of what data is being collected on their users from third parties. It is still very common practice for ad networks and certain agency groups to cookie from a creative. It might be pretty high level data in some cases but it’s still data being used to build out data repositories, leveraged for campaign targeting elsewhere.

Co-mingling of client data is an old argument; some of which believe to be mythical (one network told me it was not technically possible) whilst some believe it’s still an operational practice today. Either way it’s a practice that carries many sensitivities. An example is outlined below. I recently applied for an AMEX BA Card. I have since been served ads for BT following some recent site visitation. Nothing wrong with that. However what I found odd was the cookie information, that is being directly or indirectly leveraged, includes details of the Amex transaction. I may be wide of the mark of here and as the technology is based on exclusion and inclusion pixelling, maybe it ‘needs’ to know I am an AMEX customer so the rules can be defined to say “dont serve AMEX to this user, serve another ad from the pool”. Or it could be simply using the data they have on me to enrich the targeting parameters of the BT campaign?

As far as the publishers are concerned, yes there are companies such as Krux who exist to protect the publisher’s data, but there’s a cost to everything. The cost to protect your data could outweigh the amount it will sell on in an open market – a difficult business case to make.

But how are advertisers being remunerated? More importantly, being protected? Data networks are built by certain businesses off the back of advertiser funded campaigns / creatives. Publishers may well be remunerated for this, but are the actual advertisers? Their ads are running across ad networks and are the principle facilitator of data collection. Surely they deserve some of this rev share?

Lastly, but by no means least, why is there not more discussion and focus on how to better measure and evaluate the use of audience data? Without this, the rush for data is simply a race to the bottom – either data becomes less qualified (to make it more scalable) and therefore less expensive to deliver against a CPA or the data investment remains minimal because a scaled use of it does not cost in against a KPI.* We should be nailing this first and foremost.

All in all, there are some murky practices still happening with regards to 3rd party data. I think industry needs to clean up the data space somewhat before anyone starts cashing in on the latest Gold Rush…

*(Fortunately for our partners, we are developing a solution within VivaKi that aims to address this challenge, identify the real value of data and reward partners appropriately. We believe there is certainly value to delivering against your target audience and we hope to be able to scientifically measure this value).

Follow Paul @thepaulsilver

The new model agency

Marco Bertozzi:11.11.09
Its starting, the momentum is gathering towards the true ‘new model agency’. First we had media agencies that were all in silos by department with TV being the dominate in most. Over time that has merged into cross media departments with TV, Press etc buyers all working together, makes me think of ZULU the film, closing ranks to protect themselves from the onslaught. Are we seeing the end of the buyer as we know it?

Digital has thrown everything up in the air and then on top of that technology has thrown digital up in the air and everyone is trying to cope, the one thing that is true though is that more and more technology will do the best job of ‘buying audiences’ as its becoming known. I have just come from an agency that was very commercially aware that low value, high volume accounts and the people who worked on them are not needed in central London, stick them somewhere cheaper was their idea. With agency margins being squeezed this can make a genuine difference.

Buying has that feeling about it, do media agencies really need 40-50 buyers, buying media that has already either been agreed in an overarching deal or is being supported by technology. The arrival of ad exchanges from Google, Right media and many others will change everything. You need to buy impression by impression, audience by audience and in real time, ‘paying’ the right price by impression millions of times an hour – no media buyer will do that.

The planning of TV, Press, digital or outdoor is all possible through technology so I suspect in five years time we are looking at media agencies that focus on strategy, some key trading heads to do the deals and a lorry load of computers. Agencies will be paid for adding value not buying media.

I will be interested to see which agency is brave enough to embrace this new model ahead of the pack and decide that things really can be done differently..lets see.