Ad technology makes its mark at Cannes

Programmatic trading enables tailored content to reach consumers at the right place, at the right time, using data and technology for real-time targeting. Ad tech is transforming advertising and the business models of media owners, but some industry members suggest that a deeper understanding of the technology is still needed

Ad technology makes its mark at Cannes

Clockwise from bottom right: Philip Smith head of content solutions and studio, Campaign; Brent Poer, president, LiquidThread; Nada Stirratt, chief revenue officer, Acxiom; Caspar Schlickum, chief executive, EMEA, Xaxis; Rick Welch, head of sales, Catalyst Desk, Condé Nast; Rob Jonas, global chief revenue officer, PubMatic; Scott Ferris, global general manager, Microsoft Advertising; Erin Matts, chief marketing officer, Annalect; Maureen Little, senior vice-president, data strategy, Turn; Doug Kofoid, executive vice-president, global solutions, VivaKi; Ben Phillips, global head of mobile, MediaCom;
Jason Mawer, digital director, Northern & Shell (not pictured)

Creativity is the talk of Cannes, but the growing presence of ad tech for publishers, agencies and brands at the festival this year could not be missed. And for good reason: according to the Internet Advertising Bureau, programmatic is forecast to account for nearly half (47 per cent) of the UK’s digital display ads in 2014.

Programmatic advertising (the automation of trading systems) is one way to enable efficiency and effectiveness (and even creativity) to flourish. For media owners, this new technology requires a change in business models to open up new opportunities and allow automation to help them and their advertisers reach bigger and better audiences. Yet many brands don’t understand what it means or how it can help deliver more efficient and effective campaigns.

At the Cannes Carlton hotel, guests at a Campaign roundtable, hosted in association with PubMatic, discussed the context, constraints and benefits of the new era of programmatic advertising.

Programmatic and the human element

Rick Welch, head of sales, Catalyst Desk, Condé Nast We define it as automation in general,so it can be a workflow efficiency. It doesn’t necessarily have to be a race to the bottom, it’s not a fire-sale conversation for us. It’s about creating that one-to-one relationship with the brand and the agency, and saying that this is not necessarily leftover inventory or crap inventory; it’s still the same high-quality content, it’s just a workflow automation. So you can rededicate those individuals who were shuffling paper.

Scott Ferris, global general manager, Microsoft Advertising So is that code in the agency world for reducing headcount?

Welch I don’t believe the concept of automation and programmatic will get rid of the human element.

Caspar Schlickum, chief executive, EMEA, Xaxis I completely agree that programmatic is much more than real-time bidding, and it’s still incredibly frustrating to me how many people still associate the two with each other when, really, the opposite of programmatic isn’t premium – the opposite is a fax machine. The opportunities of programmatic are immense.

Programmatic direct and conversations at scale

Ben Phillips, global head of mobile, MediaCom So what we find now is, when we’re working with brands, we call publishers to look at the creative execution and understand the data a little better, so it’s not publishers just desperately trying to monetise impressions but wanting to have a succinct conversation with their audience, and we invite a brand to do a more tightly aligned creative execution in that environment.

The changes I’m starting to see that I’m particularly pleased about is the programmatic direct model where we’re seeing these conversations scale. So we’re talking to not one but maybe 30 different publishers with one brand to build these private marketplaces and have these conversations. So mobile is a particularly exciting place and this is being driven by the brand as well.

Jason Mawer, digital director, Northern & Shell We didn’t exist digitally 20 months ago, so we’ve gone full-out programmatic. We don’t have a legacy business that we need to look after and worry that we lose because it didn’t exist. So we’ve been able to achieve surprising results by going from zero to significant revenues, but with a headcount of a quarter – if not a fifth – of what we needed because of programmatic.

Welch Well, obviously, we do have a legacy business, and we do have that traditionally booked digital business. I will say, in general, we’re recognising more workflow efficiencies both in programmatic direct and auction-based, so we want to play in both – but, at the end of the day, we really just want to give our buyers more options, more flexibility. We’re moving into the native space but we want it to be a natural fit, so we’re dedicating more resources to the native conversation and the strategic conversation. Kind of getting back to our roots about what advertising is in the first place. For us, programmatic direct is an offering that we want to make available to our buying community because we understand the challenges they face in terms of fragmentation across the universe and, obviously, they want to leverage data they have with what we have, so we’re very co-operative in that regard.

Doug Kofoid, executive vice-president, global solutions, VivaKi I do think advertisers need to be able to tell this holistic story throughout the customer journey. We do need to get much better at tailoring that message and that is their responsibility. I see the publishers’ responsibility as opening up more to RTB but, if you think about moving all of the inventory to RTB, you have much better control over reaching that audience at the right time, at the right place, with the right ad and using the more valuable real estate.

Brent Poer, president, LiquidThread Let’s also be clear, though. Let’s be real: advertorials in the old world were called advertorials because the content was bad. You didn’t want it to reflect poorly on the publisher’s brand. So, in this space, people have to work hard with the brands to tell the right story and it has to be an even partnership.

Blurring the structures of agency and publisher

Maureen Little, senior vice-president, data strategy, Turn I’m sure there are a lot of people thinking: "I used to love the world where I had a brief and I created one beautiful piece of art that spoke to this thing I had to do." Now, in a mobile world, you have to think of multiple facets and multiple engagements, and I think that the cost structure is probably not being felt, meaning: are you being paid for the change? If you’re going to do the sequencing that we keep talking about – the "ahhh" moment – then your team’s job has changed, and it goes from one solid piece of work that may live for a long time to a concept, a story that is being told, a visual concept and then the different formats.

I don’t think there’s enough credit given to agencies for coping with what a massive shift that was and no wonder there was some fighting and some discomfort when it came to automation or different ad units. I’m sure every single time an ad unit comes over, you guys are sitting there, like: "You’re killing me, you guys. How do I change this?"

Poer We talked about staffing. I think that, on the publisher side, they are going to have to change the way they approach it – they are going to have to build almost in-house creative teams. And agencies have to change our structure internally also. We’re changing some of our people to think more creatively.

Media agencies being able to be creative, it’s kind of amazing, but a large part of this is saying: "Look, we built this ten years ago, and now’s the time that this is all coming to fruition."

Mawer We’re doing more and more creative work now.

Welch There’s little turnaround time, but we’re happy to do it. How do we hack the system to fit our in-house teams’ needs so that they can use that stuff to become more efficient, faster, cheaper but still have that creative angle, as opposed to having an ad ops person use that system? How do we put a creative person behind the wheel?

Ferris Why are they asking you to do that?

Mawer Because the agencies don’t want to do it themselves. Or they don’t have the scope to do it. One example: a huge agency with a massive retail client, booking a mobile campaign. The creative brief came back, and it would have cost them 20 per cent more to create all of the different creatives than it would to buy the media.

Phillips Part of the reason why we talk quite openly about resource and how we manage it is that we like to work with partners and they have asked us to scale these creatives. So, for a number of publishers we work with, it enables me to create it once, then control it as a media agency, because within that creative is all of the tracking and the optimisation analytics that I need to make that work. If I hand that back to the publisher, I’ve lost control of that. That means I can’t demonstrate ROI. So I think it’s about standardisation. This is why native worries me a little bit. It’s like we’re going a little bit too niche and that doesn’t scale and that means the investment doesn’t go back into my world.

Nada Stirratt, chief revenue officer, Acxiom In the 80s, the agency owned creative and media. We did all the same calculations as now.

Erin Matts, chief marketing officer, Annalect I agree with Nada that there are a lot of the same conversations that we’ve been having for a long time, and it’s just a change in skillset. I applaud anything that becomes more programmatic in the broadest sense, because I grew up in a media agency where I did a lot of little-value, non-strategic work and the degree to which we can eliminate that is all for the better.

I think it also comes down to how we frame up compensation models with our clients and our publisher partners. Because we should get paid for the interesting, creative work and the insights that we bring.

Stirratt It’s never going to change from when David Ogilvy said: "Right message, right people, at the right time." It’s an age-old problem and we’re overcomplicating it because we have so much data now.

Rob Jonas, global chief revenue officer, PubMatic What’s interesting to me hearing all this discussion around complexity is who is actually doing things that are solving some of these problems. It’s very interesting to hear about the blurring lines between agencies and publishers. The other big thorny issues that have come out during this discussion – mobile is always a big one, then there’s the cost of creative development versus the cost of media spend… everything is more complex. We’re trying to solve complexity via technology.

Oversharing and mobile as the marriage-guidance counsellor

Ferris The big trend we’ve seen in the past 12 months is the ability for consumers to have control of their entertainment, information and experiences, and the movement towards being able to tailor and qualify your experience through social networks and mobile. We are spending a lot of time trying to understand the consumer’s digital experiences across multiple devices. Some of the research we have: it’s incredible what everybody is doing and how many times they are checking their e-mail – within 12 minutes of waking up – and how, 13 times a day, they are on Facebook for an average of two minutes and 20 seconds.

Kofoid We’ve seen the convergence of screens, but it’s about following consumers along the entire journey. Especially over the past year, we’ve seen a momentous amount of data come in but, now we’re overlaying this disparate data with data from their mobile, we can tell if they are at home or they are jogging through the park or sitting in their office, what’s the weather like and how that impacts on how a consumer is thinking about our brand at that moment. We need to be thinking more holistically about the story we’re telling the consumer.

Phillips Having spent 12 years in the mobile industry, we view the device as the marriage-guidance counsellor for all other media. We talk about oversharing and the digital shadow; now we can use mobile as a device to deliver very tailored content at the right moment.

The value exchange

Little For brands advertising to me, it’s insulting if you try to get me to play a game to get my data. I’m not stupid. It has to be authentic.

Schlickum Realistically, what we haven’t done is taken the consumer on the right journey to demonstrate to them the proposition of more targeted advertising and better tailored content. That’s causing issues for us in the privacy space, because consumers understand the value propositional trade-off of advertising versus free content, but they don’t yet understand the value proposition or the trade-off between targeting and the use of their data and free content. Linking those two together is something we’ve done a lousy job of so far.

Jonas So, for the past ten years, we’ve been talking about how the end user should be comfortable with
targeted advertising because it’s a value exchange… and now targeting is becoming more and more sophisticated, there’s more and more we can do. Have we managed to convince consumers they do want to receive highly targeted messages, or are we still convincing ourselves that’s what they really want? I think that shift is happening.

Poer Maureen has an important point about authenticity. There are brands that are struggling with voice: what is their voice, what is their tone? Not just what is their offer, what is their relevancy, what is the value exchange – but also they have to tell a story about why they get into someone’s life. I think everyone wants their life to be easier. And what we tend to do all the time is miss the insights. We go after the big idea and it is far more simple than we ever expected: they just want it to be easy.

Ferris One thing that’s missing in the conversation is: how does content fit in with programmatic? That is a big question because I think there’s an expectation and a consumer mindset about how I want advertising to be in context to my experience and to my content. How do you accomplish that given the trend in programmatic?

Collaboration is key

Phillips What’s stopping us making the most of the opportunity? The overcomplication of terminology. There’s talk of a "probabalistic model" – that would strike fear into most hearts.

Schlickum Actually, the fundamental problem of marketing hasn’t changed since the day it was invented – companies want to sell stuff to their customers and, in the process, build a brand so it makes it easier for them to do so. That has never changed and probably never will. What has changed is the tools and where we’re doing a lousy job is in explaining to brands why this makes a difference. Why is it even relevant that we’re buying programmatically because, on the one hand, it’s just plumbing at our end and it doesn’t even make a difference. When a bank changes its system, it doesn’t call me to tell me it is changing its software, because I don’t care. What I care about is the ultimate result. So, if we’re only changing the software and the processes around which we work, then, frankly, why are we spending so much time trying to explain that to clients?

On the other hand, if it really does fundamentally change the way we work, which it has the potential to do with media, taking a much more user-centric approach, needing to integrate our data with their data – those are conversations we need to have with clients. But if we don’t start with "why", then it is never going to happen.

Welch It’s about consistency of terminology and education.

Matts There’s a role for an industry platform to have a PR campaign for the industry and consumers so that my grandma gets it as well.

Poer We’ve got to quit the internal and external fighting and build partnerships on both sides.

Ferris Collaborative education is crucial. We need to de-complexify. Most importantly, we need the proof points. If Procter & Gamble can proof it out, the floodgates will open and things will change.

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