Blog

The Great Time Suck

Tuesday, September 24th, 2013
Graph

Nearly 70% of the $9 billion display media market still occurs in the “transactional RFP” channel. Source: Arkose Consulting

This post originally appeared in AdExchanger 

Why Publishers Hate the Transactional RFP Business 

I have been thinking about, and trying to solve, agency digital workflow problems since 2008.

Given the complexity of digital media, the variety of creative sizes, millions of ad-supported sites, and dozens of ad servers, analytics platforms, order management and billing tools, it goes without saying that the digital marketing stack has been hard for any agency to put together.

Recent research has tracked the immense level of complexity involved in digital media planning (more than 40 steps) and the tremendous expense involved in creating the actual plan (up to 12% of the media spend). It all adds up to a lot of manual work for which agencies are not willing to pay top dollar, along with frustrated agency employees, overbilled clients and a sea of technology “solution providers” that only seem to add to the complexity.

Media planning on the agency side is a big time suck. Yet some agencies are still getting paid for it, so it’s a problem that is going to get solved when the pressure from agency clients increases to the point of action, which I think we’re just now hitting in 2013.

But who is thinking about the publishers? Despite dozens of amazing supply-side technologies for optimizing programmatic RTB yield, there are only a few providers focused on optimizing the 70% of media dollars that flow through publishers’ transactional RFP channels.

DigiDay and programmatic direct software provider AdSlot and recently studied the transactional costs of RFPs. The sheer numbers stunned me. Here’s what one person can spend on a single RFP:

  • 5.3 hours on pre-planning
  • 4.2 hours on campaign planning
  • 4.0 hours on flighting
  • 5.3 hours on maintenance
  • 3.3 hours post-campaign 

That’s more than 22 hours – half a business week – spent creating a single proposal and starting a campaign, which, according to the study, has a less than 35% chance of getting bought and a staggering 25% chance of getting canceled for performance reasons after the campaign begins. The result is a 25% net average win rate. That’s a lot of work, especially when you consider how easy it is for agencies to lob RFP requests over the transom at publishers. On average, publishers spend 18% of revenue just responding to RFPs, which translates to 1,600 man-hours per month, according to the study.

So, we have a situation in which agencies, which are firmly in control of the inventory procurement process, are not only wasting their own time planning media, they are also sustaining a system in which their vendors are wasting numerous hours comporting with it. In short, agencies spray RFPs everywhere, and hungry publishers respond to most. The same six publishers make the plan every year, and a lot of publishers’ emails go unanswered. What a nightmare.

A Less-Than-Perfect Solution

To combat this absurdity, many publishers have placed large swaths of their mid-premium inventory in exchanges where they realize 10% of their value but avoid paying for 1,600 hours of work. The math isn’t hard if you know how agencies value your inventory. Publishers aren’t stupid. Inventory is their business, and most work very hard creating content to create those impressions. These days, every eyeball has a value. Biddable media has made price discovery somewhat transparent for most inventories. Programmatic RTB is great, but not all publisher inventories are created equal. A small, but highly valuable percentage will never find its way into an SSP.

Publishers will always want to control their premium inventories as long as they receive a greater margin after transactional RFP labor costs. Publishers who actually have strong category positioning, contextual relevance, high-value audience segments and a brand strong enough to offer advertisers a “halo” have to manage their transactional business so they can maintain control over who advertises and what they pay. This looks the year that demand- and supply-side software solutions may finally come together to solve the problem of “transactional RFP” workflow.

A couple of new developments:

  • Demand-Side Procurement Systems Are Evolving: Facing significant pushback from clients and seeing new and accessible self-service media buying platforms gain share, agencies are looking hard at tools to gain efficiency. Incumbent software systems like Strata and MediaOcean are modernizing, while new, Web-based tools are gaining adoption among the middle market. Suddenly workflow efficiency is all the rage and agencies that spend 70% of their money in the transactional RFP space want a 100% solution.
  •  Supply-Side Direct Sales Systems Are Available: A few years ago, there were lots of networks and marketplaces for publishers to put inventory before going directly into exchanges. Many were more generous than today’s exchanges, but still offered low-digit CPMs and not much control over inventory. Now there are a variety of systems that plug directly into DFP and enable publisher sales teams to have real programmatic control over premium inventory. AdSlot, ShinyAds and iSocket are rapidly gaining adoption from publishers that want another premium channel to leverage, without giving up pricing control. To succeed, these publishers’ systems must be connected to the platforms that manage demand.
  •  Who Put Peanut Butter Into My Chocolate? What is slowly happening, and will continue in a huge way in 2014, is that demand- and supply-side workflow solutions will come together. What does that mean from a practical standpoint? Planning systems will be able to communicate with ad servers, eliminating double entry work; ad servers will be able to communicate with order management and billing systems, eliminating even more duplicative work; and the entire demand side system will be able to communicate orders directly into the publisher workflow systems and ad server.

Simply put: Agencies will be able to create a line item in a media plan, electronically transmit an order to a publisher, which the publisher will electronically accept, and the placement data will be transmitted into the publisher’s ad server. A line item will be planned, and it will begin running on the start date. Wow.

That’s what we are starting to call programmatic direct. It’s a world with a lot less Excel and email, with thousands of hours that won’t get wasted on transactional RFP workflow for agencies and publishers.

What kinds of amazing things can do with all that extra time?

The Hourglass Funnel Changes Everything

Thursday, September 19th, 2013

hourglass_branding_funnel

Lately, I’ve been thinking a lot about the hourglass funnel. Most funnels stop at the thin bottom, when a customer “drops” out, having made the journey through awareness, interest, desire and action. After the “action,” or purchase, the customer gets put into a CRM to be included in more traditional marketing outreach efforts, such as calls, e-mails, and catalogue mailings. In the past, marketers often thought about how to turn customers into advocates, but couldn’t figure out how to do it at scale. Companies that were really good at multi-level marketing, like Amway, didn’t have easy-to-replicate business models.

Today, the situation has changed. Social-media platforms give marketers tools to engage customers in their CRMs and bring them back through the bottom of the funnel, turning them into brand advocates — and maybe even salespeople. This is why Salesforce has been snatching up social-media companies like Radian6 and Buddy Media, while Oracle bought Vitrue and Involver. These platforms can help get people talking about your brand– and, in turn, you get to listen to what they have to say. These platforms also can help you understand what it takes to get your customers to move from liking your page to actively sharing your content and to actually recommending your products and even selling them as an affiliate.

The ad-tech revolution of the last several years has supercharged our ability to drive people through this hourglass-shaped funnel. But instead of enabling this movement, we have instead – for the most part — focused  on wringing efficiency out of reaching the customers we’re already very close to getting. For example, programmatic RTB makes it easy to bid on people in the “interest” layer, who behave like existing customers. Additionally, it’s a no-brainer to retarget those customers who have already expressed “desire” by visiting a product page or your website. And technology also makes it increasingly easy to invite customers already in your CRM to “like” your Instagram page, or to offer them incentives to “recommend” products through social sharing tools.

But what about the very top of the funnel (awareness) and the very bottom (advocacy)? Those are the two most critical parts of the marketing hourglass funnel, but the two least served by technology today. While we have tools to drive people through the marketing process more quickly or cheaply, technology doesn’t create brands or turn social-media fans into brand advocates.

However, the right strategy for both ends of this funnel can still boost awareness and advocacy by creating a branding vortex that is a virtuous circle. Let me explain:

Awareness

You can’t start a customer down the sales funnel without making he or she aware of your product or service. Despite all of the programmatic promise in display, technology mainly emphasizes reaching our known audience most efficiently. It simply hasn’t yet proven that it can create new customers at scale. That’s why TV still gets the lion’s share of brand dollars. Cost-effective reach, pairedwith a brand-safe, viewable environment, is what TV supplies.

In my opinion, the digital answer for raising awareness is starting to look less and less like programmatic RTB and more like video and “native” formats, which are more engaging and contextually relevant. Also, new programmatic direct technologies are starting to make the process of buying guaranteed, premium inventory more measurable, efficient and scalable.

Programmatic RTB advocates will argue that you can build plenty of awareness across exchanges, but it’s hard to create emotion with three IAB standard units, and there still isn’t enough truly premium inventory available in exchanges today to generate a contextual halo for your ads. New “native” display opportunities, video and tablet advertising are where branding has the biggest impact. Adding those opportunities to social tools, such as Twitter and Instagram, would help you leverage your existing brand advocates and amplify your message.

Advocacy

Great digital branding at the “awareness” level of the funnel not only helps drive potential new customers deeper into the sales funnel, but also can help engage existing customers. This amplification effect is extremely powerful. Old-school marketers such as David Sarnoff understood that folks make buying decisions through their friends and neighbors. He also understood that, when you’re trying to sell the next big thing (like radio), you have to leverage existing media (print). Applied to digital marketing, this simply means leveraging awareness media — TV, video and “native” advertising — to stimulate word-of-mouth advertising, which is still the most powerful type. By using Facebook and other social sharing tools, the effect of any campaign can grow exponentially in a very short period of time. This virtuous circle of awareness media influencing brand advocates, who then create more awareness among their own social circles, is something that many marketers miss when they lead their campaigns with data rather than with emotion.

Everything In Between

I’m not saying that marketers can simply feed the top of the funnel with great branding and ignore the rest. That’s not true at all; the middle of the funnel is important too. I think it’s relatively easy, nowadays, to build a stack that also helps support all the hard work that brands are doing to create awareness. Most large marketers reinforce brand efforts with “always on” programmatic RTB that targets based on behavior, and all brands employ as much retargeting that they can buy. Once customers are in the CRM, it’s not hard to maintain a rewards/loyalty program, and messaging to an existing social fan base also is relatively simple.

But marketers are making a mistake if they think that this kind of programmatic marketing can replace great branding. With so many different things competing for customers’ attention, capturing it for more than a second is extremely difficult, and the challenge is only going to get harder.

The Datalogix Effect

So what does all this mean for for ad technology? The best way to think about this is to look at theDatalogix-Facebook partnership. Datalogix’s trove of customer offline purchase data essentially enables brands to measure whether or not  all their social-ad spending resulted in more online sales. A few studies have pretty much proven that media selling soap suds on Facebook created more suds sales at the local Piggly Wiggly. In fact, ROI turns out to be easy to calculate, as well as positive.

This type of attribution seems simple, but I don’t think you can overstate its impact. It’s the way we finally move from clicks and views to profit-optimization metrics such as those offered by MakeBuzz. And this method of tying online activity with offline sales is already having a vast impact on the ecosystem. It shows, beyond doubt, that branding sells product.

Getting the attribution right, though, means that brands are going to have to care about creative and content more than ever. It means big wins for video, “native” ad approaches, and big tentpole marketing campaigns. If quality premium sites can be bought programmatically at scale, then it may also mean big wins for large, traditional publishers.

It also likely means that many retargeters, programmatic RTB technologies and exchanges could end up losing in the long run. Don’t get me wrong: These technologies are needed to drive the “always on” machine that powers the middle of the funnel. But just how many DSPs and exchanges does the industry need to manage its commoditized display channel?

As marketers realize that they are spending money to capture customers that were going to convert anyway, they’re likely to focus less on audience targeting and more on initiatives to create new customers — and turn existing customers into advocates.

[This post originally appeared in AdExchanger]

NextMark Now Enables Private Deals for Direct Ad Buys

Friday, August 23rd, 2013

Top-Secret

NextMark today unveiled new features in its Digital Media Planner tool that enable media planners to record and utilize private advertising deals when creating their media plans.

Keeping track of special advertising deals is a challenge for advertising agencies and for their media planning teams. In the past, media planners had to rely on their own memory and files to recall the special deals they’ve made with publishers. And it was difficult to know if others at your agency had already established a deal with a given publisher. With these issues combined with time pressure and the high turnover in those positions, special deals deals are often overlooked and negotiating leverage is lost. Ultimately, advertisers’ working media dollars are wasted every time a deal is missed.

NextMark Planner solves this problem by enabling you to enter your private deals directly onto the publisher’s data card adjacent to their standard placements and prices. With Planner, you can now set your own prices and create your own custom placements. You can see if others at your agency already have a special deal in place. Your special deals are stored securely and only available to authorized planners at your agency.

These special deals come in handy when you’re creating your media plans. Planner automatically displays all your agency’s custom placements and automatically defaults to your special rates. You’ll never again be embarrassed by missing out on a deal.

Along with the previously released private marketplace features, these new features give you a powerful tool to create and maintain your own directory of preferred vendors, contacts, and deals.

You can request your free trial of Planner here: http://www.nextmark.com/planner.

The Elephant in the Room: Agency Compensation

Friday, June 28th, 2013

elephant-in-the-room

This article originally appeared in The Makegood.

Earlier this month, during the Agency-Only Day at the iMedia Agency Summit, I gave a presentation on agency automation and streamlining the media planning process. It’s a complicated and expensive process still done manually at most agencies. It’s a process that’s clearly ripe for automation and the seventy media executives in the room were all in vigorous agreement that modern media planning tools can bring huge productivity benefits. So, I was feeling great about my presentation because it clearly resonated with this group of experts.

However, at the end of my presentation, one digital media veteran who will remain anonymous raised his hand and said, “There’s an elephant in this room. I’m going to ask the question that everyone is thinking but is afraid to ask: do we really want to be more productive? After all, we get paid for our time and the slower we work the more we get paid.”

He was talking about the standard practice of “cost plus” billing: charging your client your team’s all-in labor costs plus a modest profit margin. Despite scoring lowest on the Grossman Grid of agency compensation alternatives, the 4A’s reports that time-based “cost plus” is the leading media agency pricing method today; 91% of proposals are priced this way.

In days past, media agencies got paid a fixed commission on the media they purchased on behalf of their clients. However, the commission model broke down with the advent of digital media because of its extra responsibilities and complexities: optimization, reporting, reconciliations, etc. The typical commission did not cover the cost of digital buying and was unprofitable for the agency.

Instead of fixing the root cause by streamlining operations, many agencies treated the symptoms by switching from commissions to cost plus pricing. Now these agencies are addicted to charging for their time and have a negative incentive to invest in automation to streamline their operations.

My on the spot answer to the Elephant in the Room Question was that by eliminating the “grunt work” these same resources can be re-deployed to higher value activities. Instead of copying and pasting 600 placements from Microsoft Excel into an ad server, your employees can spend time on media strategy, negotiations, and client consulting. The agency could bill higher rates for these high-value activities.

Everybody would be happy, right? Employees would be happier with more meaningful work. Agencies would increase profitability. Clients would get better results.

Later that day at the cocktail hour, I met up with the person who asked the Elephant in the Room Question. He said my answer is a nice bedtime story, but the reality is that automation is scary because it threatens revenue streams and people’s jobs.

Guess what? That is completely true.

If you work at an agency and spend more than 50% of your time doing things that are really boring (copying and pasting to create multiple spreadsheets), or really repetitive (typing fields from a spreadsheet into fields in an ad server’s UI), or really pedantic (pulling out monthly delivery numbers from a plan, so you can reconcile billing for a client), then your job is in danger. However, if you are really good at working with clients or doing media strategy and analysis, then your job is not only safe but you’re in a great position for a promotion when your grunt work is automated.

David Kenny once remarked that “if you are using people to do the work of machines, you are already irrelevant.” He was comparing what is was like running Akamai, which had a lot of computers and relatively few people , to an ad agency, whose “inventory goes down the elevator every night,” as another David (Ogilvy) once said. In the end, computers always win the low-value, repetitive tasks, whether it’s welding bolts onto a car—or trafficking ad tags.

The question agencies have to ask themselves is, “will my clients continue to pay me to do this kind of work?” That’s the real Elephant in the Room.

NextMark Now Enables Private Marketplaces for Direct Ad Buys

Thursday, June 27th, 2013

private-marketplace

The latest release (version 2.2) of NextMark’s Digital Media Planner enables you to create your own private marketplaces of digital advertising programs. With tens of thousands of choices available, it’s a living nightmare to navigate to your ideal media plan. With NextMark’s Planner, you and your colleagues can now “endorse” preferred media programs and make them part of your private marketplace. Once endorsed, those programs get special priority in media plan formulation.

NextMark’s private marketplace is an antidote for the infamous clutter of the Display Lumascape. Now, media planning teams at advertising agencies can easily create and share a preferred vendor list.Instead of sifting through thousands of unqualified options, only those that are approved by your agency rise to the top of the heap.

For publishers, earning an agency endorsement gives you a huge advantage in winning the next media plan. Your work in building the relationship will be recognized in a concrete endorsement. And your endorsement will pay off every day by earning top placement in searches and recommendations.

NextMark is the first media planning tool to enable the creation of private marketplaces. It was created in response to frustrations expressed by both media planners and ad sales teams. This new feature is available immediately and free trials are available at www.NextMark.com/planner.

Let’s End the Human Trafficking in Digital Media

Thursday, June 6th, 2013

digital-switchboard-operators

This article originally appeared in The Makegood.

In the envisioned world of “programmatic direct,” computers buy all digital media automatically with astonishing efficiency and without human intervention. Contrast that with today’s reality: an army of DSOs – Digital Switchboard Operators – carrying out digital media plans using a manual 42-step process. On the buy side, this process typically requires 482 hours in media agency labor per campaign. On the sell side, anecdotal evidence indicates even more time is spent among the publishers.

One of the most time consuming, error prone, and soul crushing parts of the process is ad trafficking. Trafficking is the sub-process of setting up ad servers for a given campaign. Those not familiar with the digital media “sausage factory” might think this process is entirely automated and done with the click of a button. Nothing could be further from the truth. With directly sold ads, trafficking is done manually by humans employing a great deal of effort.

Here’s how it works today.

The trafficking process starts when media planning process ends. The advertising agency’s media planner hands the ad ops team the completed media plan, typically in an Excel spreadsheet format. This plan then gets handed to a typically junior-level ad trafficker. Assuming he has all the creative assets (humor me here, that’s a topic for another article!), the trafficker then logs into the agency ad server, creates a new campaign, and manually creates a placement for each line on the media plan. In Google’s popular DFA ad server, each placement requires filling out a complicated form with 33 fields. Now consider a 100 line media plan – that’s 33×100 = 3,300 fields to enter for a single campaign! He also has to upload and match all the creative assets. It’s virtually impossible to avoid making at least one mistake.

Once the agency’s trafficker completes his task, he generates a trafficking sheet from the ad server that contains all the ad serving tags for the campaign. Then he emails separate tag files to each publisher on the media plan.

Upon receipt, each publisher hands their trafficking sheet to their ad ops department. After verifying it matches the insertion order, the trafficking sheet is handed to a typically junior-level trafficker (sometimes called a tech specialist). Now he logs into the publisher’s ad server, creates a campaign, and manually creates a placement for each line on the trafficking sheet. Assuming no problems (another bad assumption), he notifies the agency trafficker it’s been completed.

Whew… That is a lot of work! And it’s all grunt work.

Consider an alternative future reality. Upon completion of the media plan, the agency media planner presses the “go” button on their media plan (note: this is definitely not in Excel). The campaign is automatically set up on the advertiser ad server, tags are generated and electronically send to the publisher ad server, the publisher ad server verifies against the insertion order then automatically creates all the placements and sends acknowledgement back to the agency planning system. This all happens in a matter of seconds without human intervention. It’s basically the same process as with the DSOs, except that it happens automatically in real-time and eliminates hours of soul-crushing work, delays, and mistakes.

Digital advertising just celebrated its 18th birthday. Don’t you think it’s time we finally ended human trafficking in digital media? Automating this process is not only the humane thing to do, but is necessary if we ever want to realize the promise of programmatic direct.

Tech for Direct: The Renaissance of Premium – NYC June 5th

Friday, May 31st, 2013

Tech for Direct: The Renaissance of Premium

Real-time bidding changed everything about how remnant inventory is bought and sold, and was responsible for dramatic efficiency gains for both advertisers and publishers. But we haven’t had the same level of a technological shift for the biggest piece of the pie for premium publishers: direct sales. There’s nothing efficient or advanced about sending spreadsheets back and forth, but until recently there wasn’t another option. With the rise of programmatic direct there’s finally technology that’s making direct sales sexy again, but is the industry ready for it?

Find out next Wednesday, June 5th in New York City at an event NextMark is co-hosting with Maxifier and iSocket called “Tech for Direct: The Renaissance of Premium.”  For more information and to request you invitation, go to the event website: http://techfordirect.com/

Are Publisher Trading Desks Next?

Tuesday, May 14th, 2013

tradingDeskThis post originally appeared in AdExchanger.

A long time ago, I was selling highly premium banner ad inventory to major advertisers. Part of a larger media organization, our site had great consumer electronics content tailored to successful professional and amateur product enthusiasts. The thing we loved most was sponsorships and advertorials. We practically had a micro-agency inside our shop, and we produced amazing custom websites, contests, and branded content sections for our best clients. They loved our creative approach, subject matter expertise, and association with our amazing brand. They still capture this revenue today.

The next thing we loved was our homepage and index page banner inventory. We sold all of our premium inventory—mostly 728×90 and 300×250 banners—by hand, and realized very nice CPMs. Back then, we were getting CPMs upwards of $50, since we had an audience of high-spending B2B readers. I imagine that today, the same site is running lots of premium video and rich media, and getting CPMs in the high teens for their above-the fold inventory and pre-roll in their video player. I was on the site recently, and saw most of the same major advertisers running strong throughout the popular parts of the site. Today, a lot of this “transactional RFP” activity is being handled by programmatic direct technologies that include companies like NextMark, Centro, iSocket, and AdSlot, not to mention MediaOcean.

What about remnant? We really didn’t think about it much. Actually, realizing how worthless most of that below-the-fold and deep-paged inventory was, we ran house ads, or bundled lots of “value added ROS” impression together for our good customers. Those were simple days, when monetization was focused on having salespeople sell more—and pushing your editorial team to produce more content worthy of high CPM banner placements.

Come to think of it, it seems like not much has changed over the last 10 years, with the notable exception of publishers’ approach to remnant inventory. About five years ago, they found some ad tech folks to take 100% of it off their hands. Even though they didn’t get a lot of money for it, they figured it was okay, since they could focus on their premium inventory and sales relationships. In doing some of those early network deals, I wondered who the hell would want millions of below-the-fold banners and 468x90s, anyway? Boy, was I stupid. Close your eyes for a year or two, and a whole “Kawaja map” pops up.

Anyhow, we all know what happened next. Networks used data and technology to make the crap they were buying more relevant to advertisers (“audience targeting”), and the demand side—seeing CPMs drop from $17 to $7, played right along. Advertisers LOVE programmatic RTB buying. It puts them in the driver’s seat, lets them determine pricing, and also (thanks to “agency trading desks”) lets them enhance their shrinking margins with a media vigorish. Unfortunately, for publishers, it meant that a rising sea of audience targeting capability only lifted the agency and ad tech boats. Publishers were seeing CPMs decline, networks eat into overall ad spending, DSPs further devaluing inventory, and self-service platforms like Facebook siphon off more of the pie.

How do publishers get control back of their remnant inventory—and start to take their rightful ownership of audience targeting?

That has now become simple (well, it’s simple after some painful tech implementation). Data Management Platforms are the key for publishers looking to segment, target, and expand their audiences via lookalike modeling. They can leverage their clients’ first party data and their own to drive powerful audience-targeted campaigns right within their own domains, and start capturing real CPMs for their inventory rather than handing networks and SSPs the lion’s share of the advertising dollar. That is step number one, and any publisher with a significant amount of under-monetized inventory would be foolish to do otherwise. Why did Lotame switch from network to DMP years ago? Because they saw this coming. Now they help publishers power their own inventory and get back control. Understanding your audience—and having powerful insights to help your advertisers understand it—is the key to success. Right now, there are about a dozen DMPs that are highly effective for audience activation.

What is even more interesting to me is what a publisher can do after they start to understand audiences better. The really cool thing about DMPs is that they can enable a publisher to have their own type of “trading desk.” Before we go wild and start taking about “PTDs” or PTSDs or whatever, let me explain.

If I am BigSportsSite, for example, and I am the world’s foremost expert in sports content, ranking #1 or #2 in Comscore for my category, and consistently selling my inventory at a premium, what happens when I only have $800,000 in “basketball enthusiasts” in a month and my advertiser needs $1,000,000 worth? What happens today is that the agency buys up every last scrap of premium inventory he can find on my site and others, and then plunks the rest of her budget down on an agency trading desk, who uses MediaMath to find “basketball intenders” and other likely males across a wide range of exchange inventory.

But doesn’t BigSportsSite know more about this particular audience than anyone else? Aren’t they the ones with historical campaign data, access to tons of first-party site data, and access to their clients’ first party data as well? Aren’t they the ones with the content expertise which enables them to see what types of pages and context perform well for various types of creative? Also, doesn’t BigSportsSite license content to a larger network of pre-qualified, premium sites that also have access to a similar audience? If the answer to all of the above is yes, why doesn’t BigSportsSite run a trading desk, and do reach extension on their advertisers’ behalf?

I think the answer is that they haven’t had access to the right set of tools so far—and, more so, the notion of “audience discovery” has somehow been put in the hands of the demand side. I think that’s a huge mistake. If I’m a publisher who frequently runs out of category-specific inventory like “sports lovers,” I am immediately going to install a DMP and hire a very smart guy to help me when I can’t monetize the last $200,000 of an RFP. Advertisers trust BigSportsSite to be the authority in their audience, and (as importantly) the arbiter of what constitutes high quality category content.

Why let the demand side have all of the fun? Publishers who understand their audience can find them on their own site, their clients’ sites, across an affiliated network of partner sites, and in the long tail through exchanges. These multi-tiered audience packages can be delivered through one trusted partner, and aligned with their concurrent sponsorship and transactional premium direct advertising.

Maybe we shouldn’t call them Publisher Trading Desks, but every good publisher should have one.

“Air Traffic Control” for Media RFP Proposal Management

Friday, May 10th, 2013

NextMark Planner RFP Manager Visualization

Last night, NextMark’s Digital Media Planning system was upgraded to give you a new tool for automatically keeping track of your Requests for Proposals (RFPs) and the proposals that come in response.

RFP management in digital advertising is well-known to be a frustrating mess. Despite recently celebrating the eighteenth anniversary of the banner ad, sending RFP requests and handling proposal responses is still a highly manual effort involving emails, Excel spreadsheets, shared file folders, phone calls, sticky notes, and plenty of manual labor. Despite its many failings and costing agencies more than $3,000 per campaign in labor, nobody has yet developed a widely adopted alternative to this time consuming and expensive process.

Fresh on the heels of version 2.0, NextMark Planner v2.1, released May 9, 2013, brings much needed automation to RFP management:

  • Send RFPs from your media plan – with contacts pre-filled for you (no more tracking down contact info)!
  • Automatically keeps track of who has viewed your RFP and who has responded with a proposal
  • Makes it easy to send reminders to those that have not responded
  • Automatically organizes all your proposals and documents (screen shots, media kits, etc.) all in one place
  • One-click access to proposal details
  • One-click accept or reject of proposals
  • Automatically tracks the status of every proposal – pending, accepted, or rejected
  • All this and more in a clean and super easy-to-use interface

This new set of features is now available to you if you’re using NextMark Planner. If you don’t yet have access, you can request it here: www.NextMark.com/planner.

2013 Will be the Year of Programmatic Direct

Tuesday, May 7th, 2013

guaranteed_stamp

A version of this post originally appeared in ClickZ.

Fairfax Cone, the founder of Foote, Cone, and Belding once famously remarked that the problem with the agency business was that “the inventory goes down the elevator at night.” He was talking about the people themselves. For digital media agencies, who rely on 23 year-old media planners to work long hours grinding on Excel spreadsheets and managing vendors, that might be a problem.

For all of the hype and investment behind real-time bidding, the fact is that “programmatically bought” media (RTB) will only account for roughly $2B of the anticipated $15B in digital display spending this year, or a little over 13% depending on who you believe. Even if that number were to double, the lion’s share of digital display still happens the old fashioned way: Publishers hand-sell premium guaranteed inventory to agencies.

Kawaja map companies, founded to apply data and technology to the problem of audience buying, have gotten the most ink, most venture funding, and most share of voice over the past 5 years. The amount of innovation and real technology that has been brought to bear on audience targeting and optimization has been huge, and highly valuable. Today, platforms like The Rubicon Project process over a trillion ad bids and over 100B ad transactions every month. Companies like AppNexus have paid down technology pipes that bring the power of extensible platform technology to large and small digital advertising businesses alike. And inventory? There are over 5 trillion impressions a month ready to be purchased, most of which sit in exchanges powered by just such technology.

All of that bring said, the market continues to put the majority of its money into premium guaranteed. They are, in effect, saying, “I know I can buy the ‘sports lovers’ segment through my DSP, and I will—but what I really want is to reach sports lovers where they love to go: ESPN.com.”

So, while RTB and related ad technologies will grow, they will not grow fast enough to support all of the many companies in the ecosystem that need a slice of 2013’s $2B RTB pie to survive. NextMark founder and CEO, Joseph Pych, whose company focuses on guaranteed reserved software, has been calling this the great “Sutton Pivot,” referring to the famous remark of criminal Willie Sutton , who robbed banks “because that’s where the money is.”

In order to better inderstand why this is happening, I have identified several problems with RTB that are driving companies focused on RTB to need to pivot:

  • There’s a Natural Cap on RTB Growth: I think today’s RTB technology is the best place to buy remnant inventory. As long as there are low-value impressions to buy, and as long as publishers continue to festoon their pages with IAB-standard banners, there will need to be a technology solution to navigate through the sea of available inventory, and apply data (and algorithms) to choose the right combination of inventory and creative to reach defined performance goals. While the impressions may grow, the real cap on RTB growth will be the most important KPI of them all: Share of time spent. Marketers spend money where people spend their time, whether it’s on television, Twitter, radio, or Facebook. When people spend less time on the inventory represented within exchanges, then the growth trend will reverse itself. (Already we are seeing a significant shift in budget allocation from “traditional” exchanges to FBX).
  • The Pool is Still Dirty: It goes without saying, but the biggest problem in terms of RTB growth is brand safety. The type of inventory available in exchanges that sells, on average, for less than a dollar is probably worth just that. When you buy an $850 suit from Joseph A. Bank—and receive two free suits, two shirts, and two ties—you feel good. But it doesn’t take much figuring to understand that you just bought 3 $200 suits, two $75 shirts, and two $50 ties. Can you get $15 CPM premium homepage inventory for $3 CPM? No…and you never will be able to, but that type of inventory is just what the world’s largest marketers want. They would also like URL-level transparency into where their ads appeared, a limit on the number of ads on a page (share of voice), and some assurance that their ads are being seen (viewability).  Inventory will continually grow, but good, premium inventory will grow more slowly.
  • It’s Not about Private Exchanges: Look, there’s nothing wrong with giving certain advertisers a “first look” at your premium inventory if you are a publisher.  Auto sites have been pursuing this concept forever. Big auto sites guarantee Ford, for example, all of the banner inventory associated with searches for Ford-branded vehicles over the course of a year. This ensures the marketer gets to his prospect when deep in the consideration set. Big auto sites may create programmatic functionality around enabling this type of transaction, but private exchange functionality isn’t going to be the savior of RTB, just necessary functionality. Big marketers want control of share of voice, placement, and flexibility in rates and programs that extend beyond the functionality currently available in DSPs. As long as they are spending the money, they will get—and demand—service.

What does all of this mean? RTB-enables ad technology is not going away, but some of the companies that require real time bidding to grow at breakneck speed to survive are going to pivot towards the money, developing technologies that enable more efficient buying of premium guaranteed inventory—where the other 85% of media budgets happen.  I predict that 2013 will be the year of “programmatic direct” which will be the label that people apply to any technology that enables agencies and marketers to access reserved inventory more efficiently. If we can apply some of the amazing technology we have built to making buying (and selling) great inventory easier, more efficient, and better performing, it will be an amazing year.