programmatic buying

2016 will be the year of breakups in programmatic

/ Author / Leave a comment

images

First published in Campaign – link here

In the programmatic space, 2014 can be summed up as a year of snap decisions and bad relationships. There was a considerable amount of hot air and publishers, agencies and advertisers, to varying degrees, reacted to it in the heat of the moment. But 18 months later, I believe we will see a number of these relationships start to unravel.

Today I am so pleased to see that almost all major clients are embracing programmatic with a cool hand, understanding the pros and cons and planning for a future where data and tech are front and centre. The heat has come out of the programmatic kitchen and been replaced with good old fashioned brain power.

But that is not what I am writing about today — although related — I want to return to 2014. At an ANA event in New York last year, I joined a panel on the programmatic revolution, which followed the usual headline-grabbing presentation of whoever had run a survey that day. The air was full of fear and suspicion over transparency and media agencies were in the dock as usual. At that conference I called 2014 “the lost year” of programmatic in regard to advertisers and how they approached it. This was because the entire year had been a series of meetings, conferences and emails concerned with transparency and agency trading desks and all the good stuff we have come to know and love. Very few of those meetings were about the strategic direction advertisers should be taking in the programmatic space.

What happened last year was not just the headlines and the deafening ring of the cash till, as the myriad of consultants counted their earnings on the back of the fear and suspicion. It was worse: some big decisions were taken under those conditions. Major partnerships were signed, deals done and monies committed with an eye on outsmarting whatever the danger was — and that varied. Perhaps it was an advertiser that wanted its own tech deal to go around the agency or publishers wanting to out gun Google and Facebook. Perhaps it was procurement or the CEO asking questions of the brand manager and making them act. Whatever the catalyst was, decisions were made that are already starting to become irrelevant or just plain bad.

Next year will see the unraveling of these relationships; It will be the year that those deals and partnerships formed under intense strain will come apart. Publishers, advertisers and agencies all made decisions — some more than others — but with a new calm descending on the programmatic landscape, and the strong wind of transparency, clarity and understanding blowing through, we will see some of these deals undone. This will likely cause serious financial difficulties for some ad tech companies who sold the dream only to discover that waking up next to a partner who has already checked out of the relationship is a lot harder than they thought.

Anyone who tried to sell a service built around the notion that this topic was simple and easily solved will get called out this year. The market has moved so much in the past 12 months. Whether you are a publisher, agency or client, making a big decision last year was brave because the landscape today looks very different. We can only wonder who the jaded lovers are and who is thinking about how to break up the rather heat of the moment relationship.
Read more at http://www.campaignlive.com/article/why-2016-will-year-breakups-programmatic/1373982#z2CbdEY2Q3jC5yxj.99

CampaignLive US article on Advertisers missing the prize of programmatic

/ Author / Leave a comment

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

Do we do enough to change our advertiser’s business?

/ Author / Leave a comment

Image

Since the dawn of advertising and media our business has been evolving and adapting to the changing consumer landscape. Rishad Tobaccowala, our own Chief Strategy Officer described agencies as cockroaches for their ability to survive against the odds. It is not just agencies though, publishers, tech firms, Ad Nets have all pivoted to some extent or another, it is in our DNA.

We have been focused on our own internals and what the consumer has been up to but the advertisers we work with have more or less stayed the same. Yes they have embraced new ways of reaching their target audiences and moved at varying paces to use digital and so on, but give or take they have the same or similar teams, structures and demands.

It strikes me that we as agencies don’t do enough to challenge that, we are happy making sure our own businesses are future proofed but how much time do we spend telling the clients that they need to change fundamentally? Why are we restructuring, creating new businesses, skills sets and yet we don’t spend much time explaining to the client that they should be future proofing. Would we suggest a new structure to their media team, propose that they need new skill sets or a new unit? I am not sure we do and it is not our fault in many cases. Everyone has heard of the jumping flee story, if you keep putting the lid on eventually they stop jumping and I think we are all a little like that at times, we have ambition to change things with our advertisers but often it is rejected as too difficult or their incentives are not aligned.

In this new world of RTB, programmatic buying and data where all our businesses have evolved to a greater or lesser extent, in some cases creating new businesses and structures, what are we telling our clients? Are we suggesting they carry on the same or should we be telling them to think differently? Do they need a centre of excellence in this space, how can we get established and sometimes entrenched brand managers to adopt these new philosophies quicker? 

If we are all future proofing – what are we asking our advertisers to do other than buy media differently? We need to think bigger and challenge our very important customers to do the same.