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“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.

Programmatic Direct is not about Bidding

Tuesday, April 30th, 2013

bid-nobid-article

A version of this article riginally appearded in the EConsultancy blog.

“A market is never saturated with a good product, but it is quickly saturated with a bad one” – Henry Ford

When it comes to digital publishing sales, it seems like many publishers are questioning whether the product they have—the standard banner ad—is what they should be selling. Last month, I wrote that 2013 would be the year of programmatic direct, where LUMA map companies who make their living in real time bidding turn towards the guaranteed space, where 80% of digital marketing dollars are being spent. My recent experience at Digiday Exchange Summit convinced me that this meme continues—with an important distinction: programmatic direct (also described as “programmatic premium”) is not about bidding on  quality inventory through exchanges. Rather, it is about using technology to enable premium guaranteed buys at scale. Here is what I heard:

The Era of the Transactional RFP is Over

Forbes’ Meredith Levien currently gets 10% of her display revenue from programmatic buying, up from 2% in 2011. The rest of her revenue is comprised of 45% premium programs , and 45% from what she calls the “transactional RFP” business. The latter is the type that comes from continually responding to agency RFPs for standard IAB banner programs, with little customization. Levien questioned whether that type of transactional business was completely on its way to becoming driven exclusively by technology.

Are publishers really going to be able to abandon the  relentless RFP treadmill where countless hours are spent reacting to agency RFPs—many of which are sent to over 100 publishers, despite the fact that an average of 5 find themselves on the campaign? In order for that to happen, Levien said, the very language we are using must change. The language of the transactional RFP (“GRP,” “CPM,” “Impressions”) must change to the language of premium (“Social Shares,” “Influence,” and “Engagement”). Ultimately, Levien sees a world where there are fewer people managing  RFP response and more multi-disciplinary teams that create super premium tentpole programs for large brands. Forbes’ teams feature copywriters, developers, and creatives who don’t talk about the “buy details” of a campaign, but more about the social and cultural implications a great advertising program can create.

To paraphrase Federated’s CEO Deanna Brown, publishers “really have to question whether sending 100 e-mails to win a $50,000 RFP is worth it.”

Create Scarcity

Gannett’s Steve Ahlberg was even more forceful in his rejection of programmatic buying, and the transactional nature of guaranteed buying. After living in a world of their own creation (pages festooned Nascar-like with low-CPM banners) USAToday.com took the draconian move of removing all below-the-fold ads from its site, stripped every network and exchange tag from its pages, and decided to have one large ad placement per page. The experiment—revenue neutral in the 4th quarter of 2012—has thus far proven that publishers can get off “set it and forget it” SSP revenue by creating the type of scarcity that drives up both rates and demand. According to Ahlberg, the publication is talking to quality brand clients that were not on the radar just months before.

Part of the equation is getting away from standardized IAB units and trying to create a “television-like” experience for brand advertisers. Like Forbes, that means getting RFP response teams away from transactional duties, and leveraging cross-disciplinary teams that think like wealth managers, rather than salespeople. Instead of asking about reach and frequency, USAToday.com asks brands what they want to accomplish, and works with them to craft campaigns that work towards a different set of KPIs.

“If the Premium Publishers’ Product is the Banner Ad, then they are in Trouble”

For Walker Jacobs, who oversees Turner’s digital ad sales, the recent leaps and bounds in programmatic technology has done nothing but “accelerate the bifurcation of the ecosystem” which is divided been the good inventory and the bad. Like Gannett, Turner takes a jaundiced view of the programmatic ad economy.  “Our RTB strategy is ‘no’,” as Jacobs concisely put it.

Going further, Jacobs suggested that “there is no such thing as programmatic premium” in a world saturated with banner ad units, many of which go unseen. Standard banners, therefore, are a “flawed currency.”  It is hard to argue with Jacobs in a world that sees 5 trillion impressions every month.

It is clear that, despite the massive strides being made in programmatic buying technology, there is a very large gap between publishers who control super premium inventory, and those that do not. Publishers in the former want to find more streamlined and efficient ways to respond to RFPs, and ultimately turn more of their efforts into selling creative, multi-tiered, tentpole solutions to major brands. It doesn’t sound like many premium publishers are implementing private exchanges either, despite all of the hype in 2012. As Dan Mosher of Brightroll Exchange remarked, a private exchange “is just a blocklist feature of a larger platform.”

In 2013, it seems like premium publishers are not embracing private exchanges, not because of the technology, but rather because they are rejecting the notion of commoditization of their inventory in general.  For most premium publishers, there are the types of sales: Super-premium programs, that will continue to be handled primarily by their direct sales force; “transactional RFP” business for standard IAB display units, which most see being streamlined by “systemic” reserved platform technologies; and programmatic RTB sales of lower class inventory.

So, is 2013 the year of “programmatic direct?” Yes—but only if that means that publishers embrace technologies that help them streamline the way they hand-sell their top-tier inventory.

 

On the Road to Programmatic Direct

Tuesday, April 23rd, 2013

PremiumWin

A version of this post originally appeared in ClickZ .

As the bloated Display LUMAscape shifts, more and more companies focused on real time bidding are turning their venture-funded ships in the direction of programmatic direct and trying to pivot towards an area where nearly 80% of display media budgets are spent. This has been called the “Sutton Pivot,” referring to the notion of robbing banks, because “that’s where the money is.”

The fact that that 80%—over $6 billion—is largely transacted using e-mail, Microsoft Excel, and fax machines is staggering in a world in which Facebook is becoming passé. a lor of people have been calling the move to create efficiency in guaranteed display buying “programmatic premium,” but it’s not 100% about inventory quality.  The larger question is whether or not publishers are going to enable truly premium inventory to be purchased in a way that lessens their control. At a recent industry conference, publishers including Gannett and Turner completely rejected RTB and “programmatic” notions. In a world of ever growing inventory, the premium stuff is ever shrinking as a percentage—and that means scarcity, which is the publisher’s best friend. Selling less of a higher margin product is business 101.

As I wrote recently, at the same conference, Forbes’ Meredith Levien laid out the three principle chunks of inventory a super-premium publisher controls, and I want to examine the programmatic direct notion against each of these:

  • Super Premium: Big publishers love big “tent pole” branding campaigns, and are busy building mini-agencies within their sales groups, which bring together custom sponsorship packages that go beyond IAB standard banners. A big tent pole effort might involve a homepage takeover, custom rich media units, a dedicated video player, and branded social elements within a site. While some of the display elements within such a campaign can be purchased through a buying platform, this type of complex sale will never scale with technology, and is the very antithesis of “programmatic.” For many publishers, this type of sale may comprise up to 50% of their revenue. Today’s existing buying and selling platforms will be hard pressed to bring “programmatic” efficiencies here.
  • Transactional: Many super-premium (and most premium) publishers spend a lot of their time in the RFP mill, churning out 10 proposals and winning 2   or 3 of them. This “transactional RFP” business is begging for reform, and great companies like AdSlotiSocketOperative, and ShinyAds are starting to offer ways to make selling premium inventory such as this as programmatic as possible. Companies such as CentroFacilitateMediaOcean, and NextMark (disclosure: my company) are starting to offer ways to make discovering and buying premium inventory such as this as programmatic as possible. Much of the RFP process is driven by advertisers looking for information that doesn’t need to be offered by a human being: How much inventory do you have, when do you have it, and how much does it cost? This information is being increasingly found within platforms—which also enable, via tight pub-side ad server integrations, the ability to “buy it now.” 100% of this business will eventually happen programmatically. Whether or not today’s big RTB players can pivot their demand- and supply-side technologies to handle this distinct type of transaction (not very “real time” and not very “bidded”) remains to be seen.
  • Programmatic RTB: There will always be a place for programmatic buying in display—and there has to be, with the sheer amount of inventory available. Let’s face it: the reason the LUMAscape is so crowded is that it takes a LOT of technology to find the “premium” needle in a haystack that consists of over 5 trillion impressions per month. If the super-premium inventory publishers have to sell is spoken for, and the “transactional” premium inventory publishers sell is increasingly going to other (non-RTB) platforms, then it follows that there is very little “premium” inventory available to be bought in the programmatic channel.

The middle layer—deals that are currently being done via the RFP process, is where programmatic direct  is going to take place. In this type of buy, a demand-side platform will create efficiencies that eliminate the cutting and pasting of Excel and faxing and e-mailing of document-based orders, and a supply-side platform will help publishers expose their premium inventory to buyers with pricing and availability details. That sort of system sounds more like a “systematic guaranteed” platform for premium inventory.

 

RFP and proposal management just got easier with Planner 2.0

Thursday, April 18th, 2013

Proposal-Manager-Screen-Shot

NextMark today announced an upgrade to its digital media planning software, which adds key functionality for handling RFPs and media proposals.

The Request for Proposal or RFP process 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.

NextMark streamlines the RFP process with the latest upgrade to its Digital Media Planner system. Version 2.0 of Planner extends the platform’s functionality by enabling media planners to directly interact with publishers to request and manage media proposals. Now, instead of using spreadsheets and e-mail to negotiate pricing and placements, Planner’s Proposal Manager module enables you to:

  • Quickly and easily request proposals from any publisher
  • Automatically track the status of all RFP requests
  • Source additional proposals through Media Magnet
  • Receive proposals online with all documents automatically organized
  • Collaboratively review and negotiate proposals online
  • Accept proposals directly into your media plan with a button click

Unlike prior efforts to solve the RFP mess, NextMark has invested heavily into the design of the user experience for both buyers and sellers. Unlike other solutions, NextMark employs two modes of sourcing proposals: The typical RFP method and a new patent-pending Request for Consideration (or RFC) method. That latter enables qualified publishers to request consideration for plan-appropriate media, giving planners a wider array of choices when they construct their media plans.

“NextMark has been listening to its customers, and is building the right tools for digital media planning,” said Sean Cotton of True Media, an early Planner pilot user. “Adding RFP functionality to the planning tool really extends the functionality, and puts more of the workflow in a centralized place. Agencies have to start leveraging web-based tools to get smarter and more efficient about the way they plan and buy media—and get their planners to focus on more high value tasks that drive their clients’ success.”

Since its initial release only four months ago, Planner has already been upgraded four times based on new ideas from customers.

“This upgrade is another giant leap forward in delivering on the promise of programmatic direct buying,” remarked Joe Pych, NextMark’s President. “We’ve been getting fantastic advice from our development partner agencies, listening closely, and working diligently to realize this amazing vision. As a company, connecting media buyers and sellers is what we have been doing for 13 years, and I am glad we are starting to bring that same efficiency to digital.”

Planner 2.0 is available today. Free training is available to all registered users. To request more information or access to Planner, go to http://www.NextMark.com/planner.

How you Pay Your Agency Matters

Tuesday, April 16th, 2013

Paintbrush digging up a one hundred dollar bill

This post originally appeared in The CMO Site, a United Business Media publication.

I have been working for a company that makes software solutions for buying digital media, and I have worked for a number of ad technology companies in the past. In a world where digital banner ads are still purchased through e-mail and fax, and media plans are mostly created using Microsoft Excel—technology dating from 1985—the ad technology industry sees an opportunity to create efficiencies in the way media is bought and sold. As an industry, one of the odd dynamics we have encountered in bringing our product to market is how independent agencies are more apt to embrace new efficiencies than the “big four” owned agencies who lead the space in terms of media spend.

Logically, you would think that gigantic media agencies, managing hundreds of media planners and buying on thousands on digital media channels, would grasp at the chance to do more planning with fewer personnel, migrating towards web-based tools that offer efficiency and centralization. The evidence has shown otherwise. On the surface, it may seem as though the biggest difference between independent agencies and the majors is size. The majors have Ford, and the independents have the Ford dealers. They both work very hard to identify digital audiences, perform against marketers’ aggressive KPI goals, while trying to understand how they got there through detailed analytics. At the core, the difference between what media teams within holding company shops and a smaller agency does is minimal. So what accounts for the reluctance of bigger shops to innovate with technology tools?

One reason may be the way they get paid.

The biggest shops consistently rely upon cost-plus pricing, which pays them based on hours worked, plus an additional, negotiated margin. The typical $500,000 digital media plan takes an alarming 42 steps and nearly 500 man hours to complete, which can cost up to $50,000—and that doesn’t even include developing the creative. If you are paying your agency on a cost-plus basis, your agency doesn’t have a lot of incentive to create your plan faster, or with less labor. In fact, this type of pricing scheme creates an incentive for inefficiency, or what economists call a “perverse incentive.” Unfortunately, every cent you pay towards the labor of creating a media plan subtracts from the amount that can be dedicated to the media itself.

So, what to do? The most obvious choice for those working with a large agency under such a scheme is to try and change the payment terms. Pay-for-performance is optimal, but a careful analysis may show that paying on a percentage-of-spend model yields more reach, when you are not paying for the labor of building a media plan. Some marketers are choosing instead to build small, efficient in-house teams to leverage the demand side technologies that their agency won’t to discover and buy digital media. Other marketers choose to work with multiple smaller, independent agencies that have specific expertise in different digital verticals. Those shops usually offer flexible fee structures, and you are far more likely to work with the team that pitched you after you hire them.

As they say in finance, “it isn’t what you make, it’s what you keep.” In digital media, moving away from cost-plus pricing relationships and towards new technologies for media buying means keeping more of your money for reach, and spending less on labor that doesn’t help you move the sales needle.

 

NextMark nominated for ASPY award for “Best New Technology”

Monday, April 15th, 2013

nextmark aspy award nomination

I’m extremely happy to announce that NextMark has just been nominated for an ASPY award in the category of “Best New Technology” for our new Digital Media Planner tool. This award is given to “The company that has created the most impactful new technology platform specific to media, ad operations, social media, or mobile marketing. Nominees must include products specific to the advancement of media and advertising.”

It’s a tremendous honor to get this nomination because it comes from people who really know the business: highly respected industry veterans in the iMedia community who’ve seen just about everything and are experts in running digital advertising agencies. For them to select NextMark out of the hundreds of new technologies recently developed is a huge validation of the products we’ve been building to streamline digital media planning workflow. It’s also a huge validation of the fantastic advice we’ve been getting from our development partner agencies!

The winner will be announced on May 7th at the iMedia Agency Summit in Austin, Texas.

If it’s not Programmatic Premium, then what is it?

Tuesday, April 9th, 2013
CountryAndWestern

We got both kinds…programmatic RTB and programmatic direct!

This article originally appeared in ClickZ.

I recently returned from an exciting IAB Annual Leadership Meeting in Phoenix, where a packed Arizona Biltmore resort was host to over 800 digital media luminaries. On the tip of many tongues over a two day session was “programmatic premium,” the term our industry is using to describe the buying of digital media in a more automated way.

One particular “Town Hall” type meeting was particularly spirited, as leaders sparred over what “programmatic” meant, whether or not publishers should be using it, and how agencies were leveraging it. Here is what I heard:

We are calling it the wrong thing. Like it or not, the term “programmatic” is tied to the concept of real time bidding. This is natural, given the fact that the last 5 years in ad tech have largely revolved around DSPs, SSPs, and cookie-level data. This creates a problem because, when you add the word “premium” into the mix, you have a really big disconnect. Most folks don’t really consider the large majority of exchange inventory “premium.” Doug Weaver said we should just call it “process reform,” since we are really talking about removing the friction from an old school sales process that still involves the fax machine. Maybe the term should be “systematic reserved” for deals that happen when guaranteed buying platforms (like NextMark, Centro, and MediaOcean) plug into sell-side systems (like iSocket, AdSlot, and ShinyAds) to enable a frictionless, tagless, IO-less buy. It is early days, but I suspect this may be what people are talking about when they utter the term “programmatic premium.”

Private Exchanges Seem like a Fad. For programmatic premium to take off inside of RTB systems, something like having “Deal ID” and “private exchanges” need to be implemented at scale. Yet, for all of the conversation around programmatic premium, I heard very little about private exchanges, Deal ID, and the like. I really think this is because of publishers enjoy having RTB as a channel for selling lower classes of inventory. They are getting better average CPMs from SSPs than they were getting in the network era, and they can experiment with who gets to look at their various inventory and play with floor pricing—a much higher level of power and control then they recently enjoyed. But do they want to sell the good stuff like this? The answer is no. They do, however, want to find ways to get out of the RFP mill that makes the transactional RFP business they manage so cumbersome and people-heavy. Again, that seems to be in the domain of workflow management tools, rather than existing supply-side platforms. If any of the many publishers at the conference were leveraging private exchanges to sell double-digit CPM inventory to a select group of customers via RTB, we didn’t hear a lot about it.

Agencies Love Programmatic. We heard programmatic perspectives from many major agencies throughout the conference, mostly in bite-sized chunks in networking sessions. When asked whether large agencies had less of an incentive to create efficiency in media planning and buying (since they get paid on a cost-plus basis), some agency practitioners admitted this was true but offered that “times were changing quickly.” Clients, having access to many highly efficient self-service buying platforms for search and display (and some, like Kellogg Company, having their own trading desks) there is a lot less tolerance for large billable hours related to media planning. It makes sense; the easier it is to plan a campaign, the cheaper it should be. Marketers would like a bigger chunk of their money going to the media itself. That said, we also heard that agencies are being pushed hard on meeting KPIs—and that even goes for brand marketers. Meeting those KPIs is easier to manage in a programmatic world, and that means pressure to buy through DSPs, rather than emphasizing guaranteed buys. That means lower prices for publishers, and probably necessitates plugging higher and higher tiers of inventory into RTB systems.

We Got Both Kinds

Like the honkytonk saloon in the Blues Brothers that offers “both kinds of music—country and western,” we have to accept two types of “programmatic premium” right now. The first is the notion of buying real premium inventory inside of today’s RTB systems through private exchanges. The second is the notion of buying reserved inventory in a more systematic way. Both approaches are valid ways in which to create more efficiency, transparency, and pricing control in a market that needs it. We just have to figure out what it’s eventually going to be called.

 

RFP Template for Digital Advertising

Friday, April 5th, 2013

request-for-proposal

After speaking with dozens of digital media publishers and planners, I’ve come realize that two things need to happen in order for more digital media proposals to be accepted:

1) The digital media planner (buyer) must communicate the campaign objectives, acceptance criteria, and detailed requirements in a manner that leaves no room for error or misunderstanding.

2) The digital media publisher (seller) must respond with a relevant proposal that includes all of the requested information. Take a look at the top 5 things you’ll find in digital media proposals that win.

The good news is that digital media spending continues to increase, and you can expect to see an even greater lift in demand for premium guaranteed inventory when interactive media buyers and sellers are effectively matched, consistently concise, and clearly understood.

Based on input from digital media buyers who have expressed their needs, I developed an EASY-RFP template using the desktop application most frequently used in 2012 by digital media planners; that’s right — Microsoft Excel!

I would like to thank Ali Hockenberry (IMM), Ed Frack (Klunk & Millan Advertising), Joel Nierman (Critical Mass), and Michelle Burnham (Burnham Marketing) for their insights and RFP template suggestions.

Click here to download your free RFP template for digital advertising. Feel free to use, modify, or incorporate this for your own RFP template. Your feedback is welcome!

You can use the Easy RFP template in conjunction with NextMark’s Digital Media Planner application. Planner eliminates the hassles associated with sending RFPs, managing proposals, and accepting proposals into your media plan.  Best part? It’s free. Request your access to NextMark Planner here.

When Cost-Plus is a Minus

Thursday, April 4th, 2013

images

[This post originally appeared in ClickZ.

It’s funny how people deride Microsoft for not being successful in advertising technology when 80% of digital media dollars are transacted using their media planning software. Despite the fact that we live in a world where computers can evaluate hundreds of individual bid requests on a single impression and render an ad serving  decision in under 50 milliseconds, the overwhelming majority of display inventory is bought using e-mail and fax machines. Those media plans are manually created in Excel.

Terence Kawaja of the famous  LUMAscape maps, which depict the 300-plus companies who enable the 20% of display buying that happens programmatically, once said that “inertia is the agency’s best friend” when asked why holding companies were not doing more to bring innovation to advertising. I imagine that part of what he meant was that their common business model (billable hours plus a negotiated margin) does not create an incentive for efficiency. On the contrary, complexity in media planning means more billable hours—as well as a built-in need for agencies’ existence. After all, if media buying were easy, then marketers would do it themselves.

A result of this inertia is the fact that Microsoft’s business products (Outlook, PowerPoint, and Excel) power the majority of digital media buying today. After research is done in platforms like Comscore and Nielsen, media planners output a spreadsheet, create an RFP, and begin the long process of gathering other spreadsheets from publishers. After a few weeks and $40,000 in hours spent cutting and pasting, a media plan is born. This grueling process has the average media planner spending more time on manual, repetitive processes than on strategy and high-value, client-facing activities. You would imagine that agencies would work quickly to adopt technologies that make the transactional nature of media planning more streamlined.

It seems like agencies don’t care, as long as they are getting paid for their work, but there are real problems with the Excel model. Here are a few to consider:

  • Employee Happiness: One of the biggest problems facing agencies is the constant turnover in media planning departments. Agencies hire junior planners directly out of college in many cases, and work them long hours where they perform many of the manual processes that go into digital media plan execution. After a while, they take their training and insights and ascend the ladder into the next position, or take their newfound expertise to the next agency, where they can expect more of the same for a slight raise. Wouldn’t it be better to deploy technology that takes out the grunt work of campaign planning, and enables planners to focus on more high value activities, such as strategy? The costs of employee turnover are high, as are the hidden costs of employee dissatisfaction.
  • More Bandwidth Equals More Clients:  Although agencies get paid for their hours, there is a point at which an agency can only take on so many clients. After all, adding employees (even low cost ones) means adding more desk space, furniture, computers, and financial overhead in general. Eventually, an agency starts to need increases in productivity at the employee level in order to scale, and add more clients (and revenue) without overly expanding its physical footprint. Leveraging technology that streamlines the manual part of media planning means being able to do more planning with less planners, enabling shops to scale their market share without adding as many junior personnel.
  • You Don’t Get Paid for Pitching: Digital media shops don’t always get paid for all of their hours. Pitching new clients means creating sample plans and putting company resources to work on speculative business, which is all the more reason to find efficiencies in media planning technology.
  • Spreadsheets Don’t Learn: One of the biggest problems with digital media planning using manual, spreadsheet-driven processes is that it becomes hard to maintain a centralized knowledge base. Planners leave, plans get stored on disparate hard drives, information on pricing and vendors is fragmented, and it is hard to measure performance over time. Despite the fact that they are getting remunerated for their work, agencies must consider whether the method of using man hours to perform repetitive tasks could be more expensive in the long run. As David Kenny once remarked, “If you are using people to do the work of machines, you are already irrelevant.”

At the macro level, the cost-plus pricing model’s principle disadvantage is that it creates what economists call a perverse incentive or, put more simply, an incentive for inefficiency. When it that cost model is applied to digital media planning—already fraught with inefficiency—you have an environment ripe for disruption. The advent of new, platform-driven media planning and buying technologies is spawning a new era of “systematic guaranteed” buying which promises to streamline and centralize the way banner ads are bought today. Agencies will be able to dedicate more hours to client facing tasks and strategy, and publishers will be able to manage their transactional RFP business more seamlessly, and be able to focus their sales teams on super premium, high CPM sales.

By eliminating much of the human cost of media planning and buying, technology can help add more value to the media itself—the real “plus” that we have been looking for.