Microsoft

Should advertisers care about Alphabet?

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This was first posted on Campaign – link here.

In the dead of night (UK time) one of the biggest news stories in advertising slipped out into the blogosphere.

‘G is for Google’ announced some pretty significant changes down at Google HQ. The creation of a new corporate structure called Aphabet, that now houses Google as just one of a number of businesses, has taken with it the founders of the behemoth that is Google as well as some other luminaries.

When you consider the heat that went with the appointment of a new Microsoft chief executive, and all the column inches associated with the departure of Steve Ballmer and the promotion of Satya Nadella, it is remarkable that Google just appointed a new chief executive for Google, a $450+ billion company, and announced it through a blog post.

This approach, and the very fact they have created this structure, shows that Google is desperate not to become Microsoft. There was already some commentary floating that Google was becoming a little too like Microsoft as it grew and grew and was slowing in terms of innovation and ability to make smart bets.

So, in part, the opening comment on Larry Page’s blog that says we “wrote in the original founders letter 11 years ago, Google is not a conventional company. We do not intend to become one” is a warning shot to announce their intention to continue evolving.

I would suggest that most of this is about corporate and financial motivations and has little impact on the advertising community. I do think however, that we can look forward to a more simplified mission with regards to Google.

When we talk about working with Google, it now clearly means search, video, maps and all things connected to their advertising business. The new chief executive, Sundar Pichai, can be singular in his ambitions to grow and innovate without distractions and this can only be a good thing for the business and for their largest advertisers. It is also reassuring that things will not go the way of Microsoft albeit it from a different angle; they gave up advertising for software.

With these changes it is clear that Google is not going to be distracted on its advertising offerings by saving the world or allowing us to email and drive simultaneously.

YouTube could have spun off into the Alphabet organisation such is its size, but I think they did well to keep that under Google. Video is now an integral part of the media landscape and needs to be intrinsically linked to all the other Google offerings.

The announcement earlier this week, that YouTube inventory will no longer be available on the open exchanges, re-enforces Google’s commitment to dominate the video space as it did with Search. It sent a strong message to all third party video companies that the doors are now closed for direct business only, a trend we are only going to see get stronger.

Both Sergey Brin and Larry Page are engineers. They like to build things and the creation of Alphabet is an affirmation of their desire to continue to do so. The new pared-down Google will come out of it stronger and more powerful. Watch this space.
Read more at http://www.campaignlive.co.uk/article/googles-alphabet-restructure-shows-its-desperate-not-become-microsoft/1359549#pcoO7ZdQJikIljKt.99

12 Months of Adtech reviewed

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In 12 months the Ad tech market place has gone totally crazy, impossible to keep track of it all and the money invested is off the scale, but below I highlighted a few stories and events in the last 11 months that I noted. I will have missed others for sure!

There has been some negativity around the space with transparency being a hot topic and whether advertisers want to take this all in house, but those headlines have distracted from some incredible market changing investments, purchases and alignments. Enjoy the reminisce!

January

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The Partridge in a Pear tree for Yahoo was Enrique Decastro, bringing him in on a huge salary and being presented as a saviour for the organisation, driving sales and value for the business. Unfortunately January saw that particular partridge being shot. Quick acting by Marissa to be fair to her, but an unlikely choice in the first place according to many. More recent news has seen Lisa Utzschneider fill that space, coming in from Amazon.

In other news Turn receive their belated Christmas present raising $80m as they march on as a leading DSP in the market and looking to expand beyond that descriptor and moving more towards a wider DMP, services model, some might call agency model.

Holy F*** February

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February was IPO crazy month with Pubmatic rumours, Rubicon filing, Rocketfuel all taking the plunge – some big valuations were banded around and it was the month everyone realised that the good times were back and the VCs were starting to spend all that cash they had been hoarding through the bad times – the bubble is inflating. Google buys another company, on the back of Deepmind in January, a London based machine learning company, called Vungle. We have seen the signs but Oracle buying Bluekai was a big flag being waved to show that the digital media business was being taken seriously by the cloud and consultancy companies. We also saw round one of TV disruption being won by the old school with Comcast getting Netflix to pay them for streaming services, the upstart being slapped into place.

But all the IPO business paled into insignificance when the world collectively went ‘what the f*** app’ as Facebook put down a multi billion dollar offer for the social messaging app. Cue the hand wringing about lack of revenue, too high a price from the digerati turned incredible commercial strategists. Facebook are clear on this, show us something growing fast and taking share and I will show you my cheque book (or should it be Visa Debit Card). Scale is everything in a world where data and the identification of people and what they are doing and where they are doing it becomes the most valuable asset. Or perhaps Mark is hoping to achieve the same status as Steve Jobs who was approved to appear on a US stamp that very same month.

Modernisation March

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March saw a number of moves for the future by different companies. Comcast bought Freewheel, a clear indication they are gearing up for a programmatic, data led future and could not resist the tide any longer. At the same time AOL One launched to much fanfare – the Game of Stacks now well underway with AOL taking a big step forward, We are but pawns in this incredible battle of supremacy between AOL, Facebook, Amazon, Twitter and Google and there is much more to go as we see this play out. The single view of the customer across screens is a vital offering and these teams are throwing everything at it, whilst Microsoft seems to be frozen to the spot at the moment. Perhaps they need to remove their whole sales team and start again? Oh..

Finally in modernisation March we saw Conde Nast take the stage and announce proudly, albeit a few years late that they had decided that yes programmatic was something to pay attention to and they would be getting involved. Thanks for that.

April Fools?

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The first signs of trouble for the IPOs of the previous months – the city falling out of love with a number of them, seeing prices fall significantly and some below opening day. There was some scepticism at IPO but recent press questioning whether these companies were right to value themselves on the hard work of bot traffic came into play. As the curtain lifts on the methods of many RTB companies this may be a theme for the future, perhaps even hitting the FT one day…oh it did.

RadiumOne saw some ‘Rocky’ waters as their CEO was eventually prosecuted for beating his wife up. It took some time and a fair amount of industry Twitter rejection to get him ousted but it happened and then everyone moved on as he set up Gravity8 three minutes later.

As if to demonstrate two different strategies Facebook and Google both made a play for the future with Facebook launching an…. Ad Network..meanwhile in other news Google bought a drone company – was it an April Fool? well after Nest in January and now a drone maker it appears not – Internet of Everything anyone?

Merger May, Maybe not

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Publicis and Omnicom call off merger. Must be something else they can buy sooner or later surely?

Millenial and Rocketfuel taking an absolute beating on the stock market as increased speculation on their businesses and whether or not they are complimentary or in conflict with agencies rage. Google and AOL keep buying companies to further enhance their operations, Google getting into attribution and AOL into cross channel allocation, interesting that both are now toe to toe on making the stack work. It was a month where everyone appeared to be tooling up with Axium buying and Liveramp to help with data onboarding.

Qriously June

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What is the worst brand name in Adtech? Qriously of course. Apparently that was not all bad and brought some pre Cannes exposure coupled with their expensive tablet card asking for a meeting. Memorable but expensive I would say, some might say a qrious decision.

June was the month GroupM announced a withdrawl from open exchanges and that it would be done by Christmas, big claim for sure. Could someone check for me? pretty sure they are still there but there is still time.  As with every year Cannes came around and the Adtech world took it by storm – the rose looked and tasted the same, the beaches were packed with hard working media folk but the names were different, everyone had upgraded this year and the place now resembled an Exchangewire event at scale. It was a good time to be in Cannes as the money continued to flow and pay for those expensive tents and lunches. Mediamath picked up a massive 170m dollars, Twitter bought Tap commerce for 100m, Facebook bought slingshot and WPP ploughed 25m into a DMP strategy.

Buy buy July

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Enough said, the boom continued and at pace. Facebook buys Liverail as its next move in Stack Wars, Yahoo buys Flurry to continue its successful push into mobile revenues, a battle it appears to be winning as we are seeing now as it overtakes Twitter in mobile revenues. Linkedin bought Bizo, a natural fit for both and makes us wonder if the sleeping giant is starting to wake up and join the fight.

Rocketfuel bought the very transparent X+1 as it starts the long road away from the darkness and into the incredibly difficult world of running a business transparently. In the spirit of transparency Turn took a turn in July and went on the offensive, taking aim at Tubemogul amongst others, it felt like an email you send late at night when slightly under the influence  – stand away from the send button. Oh no, you did again..in August.

August.

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Everyone went to the beach. Google bought some more companies.

Facebook me September!

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Millenial fights back and buys Nexage to grow out its programmatic credentials and build credibility in the data and RTB space. At the same time WPP drop their adserving business and buy into the DSP business, out with the old in with the new.

The Alibaba IPO put Yahoo into a very interesting position, as perhaps a buyer or maybe a seller? There is a strong belief that Yahoo and AOL are on a collision course and so having their P&L filled to the rafters with the Alibaba IPO cash will put them in a great position either way.

But really all everyone wanted to talk about was Atlas and the launch of their new adserving platform and soon to be launched DSP. Facebook had now made its biggest move in the Stack wars. Combining improved adserving tech with their data and soon to be launched DSP. With this move we see ever more clearly that there are likely to be some large islands of tech and everyone of those is ring fencing owned and operated inventory and how you access it. We have moved a long way from the utopia of one access point to the web and are now focused on how can we join these islands up with DMP and other technology.

Hotober

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Publicis buys RUN and invests in Matomy – something to expect as we progress and competition comes not just from other agency groups but also the very aggressive managed service offerings and RTB networks. Agency groups will need to tool up more and more and so I think we can expect more down the road. Mediamath go to prove the point and buy Upcast showing how they need to tool up as well and keep delivering new products and services cross channel and cross device. Meanwhile Videology launch a programmatic TV offering to follow Turn but go a step further in teaming up with major US TV partner.

Stack Wars is back in October with Yahoo buying Brightroll, a sensible move as you consider the purchase of Adapt by AOL and Facebook of Liverail a couple of months earlier. We now see them all with video offerings, display offerings, adserving and performance products and suites of data.  I think we are about at the right time to see them kick off. Atlas has hired a key guy in Damian Burns to lead their offering, once he has his feet under the table I think we will see some real movement.

Noooo!vember

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Headlines were:

Publics buys Sapient a huge acquisition and another one under the radar taking the advertising world by storm. An incredible team of people joining the Publicis.Sapient platform.

Channel 4 after years of resistance to programmatic have announced they are getting into the market place and will no doubt leave ITV where to go next. Either way it is clear the TV marketplace is hotting up and now we are seeing a hockey stick of activity and partnerships. Exciting times all around.

Rubicon buys two companies to help build out its direct deal automation tech..yawn. Yes you got it, we are going to take all those buys you used to do over the phone and now do it on a platform without any cherry picking or data insights. Just back to buying impressions. Back to the future.

I am sure I missed a number of big deals – list them below so we get the full picture of the comings and goings of Adtech and its sheer scale. Thanks

 

 

 

 

Advertisers need a competitive market : The return of Microsoft, AOL and Yahoo

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For those of you who have been living through the digital advertising era from the start can not help but notice a little resurgence of what used to be the only names that counted in digital media. In those early and exciting years AOL, Yahoo, Microsoft, Excite ruled the landscape until they started to come under fire from the upstarts, not least a start up called Google. The pursuing years saw these companies lose their place in life as more and more competition entered the marketplace. It is not to say of course that they have not always been major players, but without doubt lost their way in the face of Facebook, Youtube and others.

In the last couple of years we have seen a come back, it started with AOL. Launching Project Devil to stamp some brand credentials on what was mostly a DR product through Ad.com, the purchase of GoViral started their video offering and then more recently Huff Post, all adding up to create some powerful content. The final act though has been to embrace the programmatic era and to beef up video with the purchase of Adapt.tv, rounding off what is now a far more interesting offer for agencies and seemingly leading them to a return to the top.

Yahoo have seen a similar track, they had a head start with Right Media in programmatic but did not know what to do with it and in my opinion lost a few valuable years vs Google when they should have been ahead of the game. RM was neglected and allowed to become a down market solution, when it should have been the forerunner of private marketplaces. The much hyped arrival of Marissa has had many words written about it so I wont focus on that but it appears that a series of purchases in mobile is starting to bear fruit. Marissa has in fact bought 35+ companies since joining, the largest of course being Tumblr. The good news is that mobile traffic for Yahoo is on the up, in fact it is up 47% year on year. The approach towards native ads such as ‘Stream Ads’ and away from banner should also increase yields and encourage brand advertisers onto mobile. If you believe the press releases Yahoo plan to phase out all banner ads by the end of the year.

So that leaves Microsoft. Working with Microsoft over the years has been like watching a wildebeest bog down in sinking mud, struggling harder and harder but just getting into a worse and worse situation. Microsoft have always had the ingredients to make an incredible meal, but somehow the planning and then the execution always fell short. I have for many years looked to Microsoft to turn that corner, they have the four screens, an incredible offer in the Xbox and Kinect, turned a corner in mobile and yet stiching these things together always seemed elusive.

I remember for instance sitting in a presentation in Cannes where Microsoft was presenting the new Windows8. It looked great, but telling to me was little or no information about how advertising would work within it. The potential tiles as Ads in W8 was clearly an early example of a Native Ad – although luckily the term had not been coined yet! However these tile Ads would be perfect for programmatic – unique to Microsoft but definitively able to be automated. However no one had planned that far ahead, the company worked in silos. What a shame for them and us.

Programmatic as a whole also demonstrated a lack of future planning. When Google was buying companies and integrating them, Microsoft was desperately trying to protect its direct ad network business. Even today they are behind the curve, they started fast and then went backwards a little with limited targeting capabilities and a seemingly disconnected leadership who were not willing to move faster and embrace programmatic. The recent launch of Microsoft Video Network is both a step forward and a step sidewards versus competition. Microsoft are taking their valuable data and applying it across the video exchanges, where AOL are buying the tech outright rather than licensing. Where Google are buying Invite and Doubleclick, Microsoft bought 5% of Appnexus. Even the Crown Jewels of Xbox and Kinect have been under utilised, I am still yet to see an Ad pushing Xbox as anything more than a games console when in reality it is so much more, I think we will see that change over coming months as Google TV, Apple TV and others ramp up their efforts.

But is not lost because the big picture for Microsoft is changing. The new leadership for a start. Microsoft ended up choosing from within, disappointing for some but as Satya Nadella says himself ‘he is now looking at the business through fresh eyes.’ He is also super bright, passionate and has accelerated change in just a few short days. Recently there have been a couple of large events, the launch of Office 365 and most notably onto Apple devices and the Build 2014 conference. Both these events have revealed that Nadella has big plans and wants to shake things up. Microsoft had already started changing with One Microsoft where they tore down siloes and made sure that cross divisional work and idea sharing started to happen, so someone creating software for the phone was thinking about advertisers as well. The example I sight above about the tiles would probably not have happened today.

More importantly Nadella has pushed through changes inconceivable a few years back. What has changed. As Nadella describes it, we are now in an era of ubiquitous computing. Connected users, devices all relying on the cloud for delivery of ever more complex solutions. Not for today but importantly for Microsoft they see their customers as consumers and IT professionals, the corporate world and only Microsoft really has the range to answer to both of those – this should rediscover for them differentiation.On average the consumer is carrying/using four devices and Windows and Microsoft want to span all those devices seamlessly, they want the canvas for software, Apps and their developers and users to be as wide as possible. So what are they doing?

1. Windows is being introduced across all devices including Kinect for Windows. A huge step forward for users and developers a like. Design once for all devices is crucial in this connected world. Still Apple and Android want people to design for mobile and desktop/laptop. As a user the more seamless the App the better the experience across devices.

2. Use the power of Office – making it available cross all devices is huge, anyone who uses iPads know the big issues is with opening Powerpoint in particular, but to make it free is a massive step for Microsoft, putting it all in the cloud also makes it entirely portable and for developers they can use Office 365 log ins as an identifier

3. Welcome to the new world of Kinect. App developers can now design Apps once that include Kinect technology to make incredible user experiences, this will make that box in your room, even more interesting and put Microsoft right back in the game as far as Apps. Likely end result being even your PC being able to work through motion.

4. Smaller signs of change have been to provide solutions that allow people what they want on their desktop like the start button. Some describe it as retreating, I call it sensible. Microsoft is listening and that is the main thing that we all want and need.

There have been other innovations with Cortana the voice assistant, great that it has been introduced but not sure it stands out vs Siri and of course has arrived considerably later, but again an extra ingredient to create experiences for users.

Microsoft really wants to get into the Internet of Everything and with their very close partner Intel they can start to revolutionise the home and out of home with Windows being the glue to make it all happen.

Microsoft have realised that the world has changed and you need to pull users in with what is still a great set of products used by over a billion people. Microsoft have the opportunity to be a partner to your life in a way that no one else can, I say an opportunity. It is what they do with it that counts. Microsoft have a leading position in the home with Xbox, software and cloud computing has always been their strength, it is just application they must work on, phones and tablets need more work but by making life easier for developers and IT professionals they can solidify their position spanning consumers and corporate.

Overall Microsoft, more than anyone has the plumbing, the hardware and most importantly the software, and they are focused on a mobile world. They need to make room for the marketeer in all of this and bringing them to the table, we as advertisers are desperate to make sure that Microsoft is central in plans but they need to make this easier for us. As with AOL, Yahoo I hope that we see a strong resurgence from Microsoft and it seems that Satya Nadella has the right ideas and guts to push them through. Just don’t forget that the advertiser would like to be involved.

Business photography

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A few photos from the last few weeks on the road! Instead of my usual stuff I thought I would let the pictures tell the story!

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Damian Burns doing his usual top class client service, another Damian in the background being less professional.

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Mark Ronson at the Microsoft Party in Cannes – a very cool session

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Neal Mohan of Google setting the scene at the start of the Client Advisory Board Meeting in LA

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An amazing view of the beach at Dana Point, a beautiful jog first thing

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Tracey Scheppach of SMGx and VNC fame on the water in Chicago with HQ just behind

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Beatriz and Sara from Spain and Italy talking RTB (Not)

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AOL may have had it right all along!

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Does anyone remember the sitcom from the US called ‘Soap’? It was about a mad bunch of individuals who were pretty dysfunctional. At the start of each episode there would be an introduction recapping the previous episodes. That summation was invariably confusing and left you having no idea what was going on. The image below may jog your memories for those of you over 37 I am guessing.

The Soap cast

Confusion reigned.

Why am I writing about that? Well recently through a combination of my own experiences and reading the press I have been thinking that in the world of tech, social and mobile we are experiencing something similar. To recap;

– Google and Apple were good friends, admirers even until Google started to like phones..and music..and books, now Apple does not like Google so much and is not keen on using their search tool on their phones.
– Twitter and Google liked playing together as Big brother Google helped the new boy get a bit of traffic, now the new boy has grown up he has decided he does not need Big brother anymore so cut the rope.
– Facebook and Google were colleagues and admired each other until Google started to like this social media thing and Facebook got the hump with that, they too have decided they want to keep their people to themselves.
– Twitter and Facebook enjoyed each others company for a while until Facebook liked the look of the Twitter approach and changed their updates accordingly, this has meant of course that they will not share anymore and never the twain shall meet
– Lets not forget some other long distant cousins! Yahoo and Facebook have not crossed swords too much in the playground until Yahoo decided Facebook had copied a lot of their IP and are now contemplating suing so that will be the end of that friendship
– Samsung and Apple have just had an all out fight all over the globe and frankly not seen eye to eye for some time!
– Even the lovely and friendly Amazon has had to get dragged into the cat fight with its entry into the tablet market which annoyed Apple who promptly stopped their Kindle App from being e-commerce enabled – surely no one falls out with cuddly Amazon?

All of this squabbling leads me to see a future where we have one of the most siloed ecosystems we have ever known. Years after we criticised AOL for its wall garden approach to media we find ourselves with more walled gardens than we know what to do with and as consumers that is the honest truth.

We are edging towards a world where Facebook, Apple, Amazon, Google, Twitter and beyond will all be managing their own ecosystems and not allowing us as advertisers or consumers to mix and match and join up all of the platforms. It is a frustrating development as a consumer as it would be nice if Facebook and Twitter could find a way of working together. It would also be a better Google search experience if we could find results from not just G+ but also the other social media players.

As I have written about before it gets worse when you move to looking at the tech marketplace with our homes being divided into either an Android home, Apple home, Microsoft home or Samsung home, we have to make a decision and stick too it as we can’t get all our toys to play nicely together.

I am not sure how this will play out, but it is messy and not particular user / consumer friendly in my view and probably going to get worse as these Big 5 getter bigger and stronger.

Inspired by the Big 5 in Palo Alto

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Inspired by the big 5 – A week in San Francisco.

There is something genuinely special about San Francisco and Palo Alto. A place that if you are into digital you can’t help but feel excited about when you go there. First time you go it’s about going to the offices – Google HQ, Facebook, Apple etc and the famous locations attached like Mountain View or Cupertino. I have talked in previous blogs about the offices, they are a little disappointing, they are often deathly quiet and in the case of a Google a little battered and worn out, no it’s not what they are like inside.

The thing that strikes you is the scale, huge complexes, small towns in the case of Google, the meccas of those now famous names that come with such financial status and dominance and yet still have their young founders somewhere in those buildings. You can’t help marvel at that scale after so few years of history. In that mix though you feel a sense of tension between hanging onto that founder spirit and the relentless burden of financial success and expectation, something Facebook will start feeling acutely post IPO.

Palo Alto itself comes with this air of amazing entrepreneurship. Much was mentioned of Sandhill Road, where all the VCs are based, I had not considered that even VCs like to cluster, I guess I thought they would be isolated, each one trying to find the golden nugget but I suppose they are like everyone else and like to chew the fat on whether x company or y company is of interest. Fascinating I thought that at every one of the meetings we had this week, Pinterest was mentioned, it is crazy how that company has come from nowhere to being on the end of every sentence and judging by my Twitter feed, tweet, I would imagine that those investors are all eyeing that company up with much interest.

Dreams are made in this place and you can’t help admire it and be mesmerised at the immense foot print of these companies. As we walked into Apple you remind yourself you are walking into the most valuable company in the world, staggering what has happened there, or Facebook with its 100b price tag on its head and yet Facebook is still very lean, 3000 employees in US vs a Microsoft of 70,000, that paints a picture and it’s one of Facebook needing to recruit fast to cop with the demand for its products and insights.

The reason for the trip was to bring the VivaKi Nerve Center to the wider Publicis group and let them come together and meet with these amazing digital beacons. A fascinating few days as the Saatchi’s and Leo Burnetts came together to discuss and learn how we can all work together more effectively with these leading digital companies of the world. This new world of social by design has revolutionised the media and creative approach from a ‘bowling ball’ approach where a carefully aimed ball was fired at the consumers and hope to hit a few of them to the ‘pinball effect’ where you send the content into the mix and watch it get fired around.

There were some revealing debates about social and where it fits creatively and who is driving those conversations, we have as clients some very sophisticated marketeers and those who are more tentative but all of them are becoming more global, more scaled and more digital and it is the role of The Nerve Center to help our group capitalise on our amazing partnerships to be able to respond to those trends in a material way.

So as a marketeer who do you care about? Google, Facebook, what about Amazon? Apple and Microsoft will all lay claim to be the companies you need to work with, there are others of course but after a week here you start to consider exactly who are you missing if you work with these companies? The issue comes with knitting these companies together, in the last few years the rivalry has been intense with various fissures opening up between the companies and that’s where organisations like Publicis and The Nerve Center come in. When you sit opposite a Google or an Apple, they often hold many of the cards and yet all of them want to see the whole picture and the agencies hold those cards and they want to learn from us, so it’s a hugely valuable position to be in and one we must exploit on behalf of our clients if we are to get the most from an Apple or Facebook.

Based on this trip and my time at CES I can’t help feel this sense of a more and more closed world vs Open. Facebook’s mission statement is all about connectivity and openness which felt strangely at odds with their restrictions on how we as companies can track anything or the fact that their content can’t be found on Google search. Apple seemed very happy to sit and not want any sort of cross fertilisation, they felt that their billion devices is a big enough footprint for anyone. Everywhere you turn we are organising into silos, TV platforms with Samsung, Apple etc, social platforms controlling their data tightly, not an issue for consumers, harder for advertisers.

That said, when you see the power of YouTube, Facebook’s scale and social by design capabilities, Google from search to display to G+ combined with Microsoft and Xbox/Kinect or Apple’s incredible footprint through hardware it’s hard sometimes to imagine that a global client needs to go much further a field to reach and engage with their audiences. These companies are uniquely global, consistent and so as a global brand you can work on the same platform across multiple markets which will be an important offering of the future.

The days of media schedules with 40 sites on them have to be dwindling or dead, the specialism of tech press or context led site lists can not be totally recreated but you can go a long way towards that same effect through audience buying, targeted Facebook work, Search and so on. These companies and platforms could be the media plan, if only the advertisers themselves could organise in the same global fashion. They don’t right now, but they will and they will want agencies who understand and have very grown up deep relations with these companies and that is the aim of our Partnerships team at VivaKi and VivaKi Ventures which aims to keep us wired to the new start ups as well.

This week was about that, it was about saying lets work out how we can work together and not on the premise of spend and price but intellectually and strategically work to create the media and technical solutions of the future. My last meeting was at Mountain View with Google and what they are working on is mind boggling and makes you realise that although there are many companies out there with great marketing decks and some very bright people, they are dwarfed by what’s going on in this company.

And above all as I sat delayed by 4 hours I thought what an incredible part of the world this is and how inspirational these companies are both person ally and professionally. I also thought that I am working for the most forward thinking organisation in the advertising and media industry and one which is full of very smart people all looking at this business through different eyes and that is fantastic. VivaKi Nerve Center.

Balancing short term demands with long term strategy

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As the digital landscape evolves so the companies within it have to adapt as well, but actually we all live in a short term world. Both publishers and agencies have their work cut out for different reasons but all too often good strategic decisions are being strangled by short term demands. This challenge has never been more obvious than right now.

I have been talking daily to organisations both in our group and externally about how we plan and adapt for the future, we can all see the major digital portals for instance having to sit and scratch their heads a little about dealing with the here and now but planning for the future. Take a Yahoo or a Microsoft, they have both embraced the new world of exchanges and yet somehow want or need to protect their network offerings, the two don’t sit easily in reality. As strategies they should be rewarded in their approach of embracing the exchange world, but instead they are under pressure to deliver their targets based on a 2010 estimation, when the world was entirely different. Was it that different? Were we not all talking about exchanges etc back then? Well yes we were but the spend was not backing up the rhetoric, 2011 is a different story. Audience On Demand, as the biggest exchange trader in the UK has accelerated incredibly, and that growth is having an impact. Look at Specific Media who but a year ago was recruiting staff and buying Myspace and a few short months later is making redundancies, that’s how quickly things move.

We are though at a juncture, and it’s for that reason we need some patience from the bean counters. 2010 did not properly represent the Exchange growth, 2011 is closer to the truth but 2012 will be big. As the long tail of Ad Nets is absorbed into the more focused addressable media hubs and digital consolidation continues, the likes of the Yahoo or Microsofts will begin to see the benefits of the exchange infrastructure and will be able to let go of the old DR network approach. They will start to reap the spends that once went to the Ad Nets, but this time via exchanges.

It is refreshing to see the strategy Yahoo are playing out in the us. There was an article today in fact on this in Adage – click here. They are going to take a hit in the US with their strategy of blocking the Ad Nets, Criteos and others from buying their inventory. Yes short term that is going to hurt them, longer term its a great move and will pay back undoubtedly. We are seeing a significant adjustment in the digital ecosystem.

Agencies are evaluating just as fast, less from a revenue perspective, more from a structural perspective. If you designed an agency today, would you do it the same? I doubt it and yet the upheaval required sometimes makes people think twice and come up with a number of reasons why they should not do something even though in the longer run it makes perfect sense. This requirement to change however on agencies and publishers comes from a number of key trends;

consolidation of digital, we have all seen the stats that show the big digital companies control a huge percentage of the total spend and audience, even within the exchange space you are dealing with a few big partners. I believe that clients are starting to see a new digital landscape that is not 40 sites on a plan. They are realising that actually they can achieve almost all they need with API buying, Audience On Demand and Search, its a shift, everyone is looking for scale and efficiencies.

Globalisation of media and advertising. Most pitches are becoming global, not all, the recent in for ZenithOptimedia of RBS proves that, but many are. As such as the clients think more globally then they look to the agencies to do the same, and the more you think like that the more the scale partners of Yahoo, Google, Microsoft, Facebook etc become important to them and us.

Commoditisation drives value. This is an interesting development for me. Years of being told by Microsoft and Yahoo etc that their inventory is ‘premium’ has rarely been backed up by any real insight except their own research. Now we have commoditisated huge swathes of inventory through DSPs and exchanges we are being able to see what value inventory has and what performs. We see the volumes of money we spend with these companies through the DSPs and what eCPM we pay for them, none of this is determined by a person or a power point slide or negotiation. Tech has decided, results have decided and demand has decided and the patterns are very interesting indeed. After millions of pounds of spend through Audience On Demand we now see the true value of inventory and yet it has never been more commoditised.

Technology is in fashion. Of course tech has always been in fashion but never more so than now. It has been developed for agencies in a meaniful way. Demand Side Platforms for exchange trading, Bid optimisation platforms for search and API buying, these things have been designed to help us drive efficiencies and improve performance and we really see the opportunity now. It’s brutally competitive though and VivaKi have decided to work with the best partners and then develop tech that links all those partners up providing an interface to work with, this we see as the great opportunity, if you then add that to new streamlined teams and workflow, you have a heady mix that can deliver fantastic performance and service.

So where does that leave us? It leaves us with a lot to do and we need more people to take up the challenge and either drive the change through their organisations or give the people who have to do it a break so they can work through this transition. The end result though is the ship has sailed, the change is underway and we need to embrace it or become a dinosaur.