Vodafone likes to "walk the talk", Sara Martins de Oliveira says, which is why the telecom giant has kept quiet for nearly a year about its pioneering move to bring digital media buying in-house. Now Oliveira, the global director of brand and media, wants to talk because she says Vodafone can show that in-sourcing search, social and programmatic is going well – contrary to some recent industry chatter.
Portuguese-born Oliveira got the green light from Vodafone’s board to bring biddable media in-house from WPP’s Wavemaker in May 2018 and quickly set up teams in 11 markets, including the UK, Germany, the Czech Republic, Romania, Egypt and South Africa.
They have run 12 "100% in-sourced" ad campaigns and Oliveira has compared key performance indicators such as click-through rate and viewing duration with previous campaigns. "The KPIs are overwhelmingly good – really, really good on every aspect," she tells Campaign at Vodafone’s Paddington office.
Vodafone has forecast that in-sourced biddable media will be between 10% and 15% "more effective" in the first year. "If we manage that, which the first indication is we will, that is a very positive result," Oliveira says. About 70% of the improvement comes from media efficiencies and 30% from savings.
The telecom company spends an estimated £600m a year on advertising and is thought to invest about a quarter, perhaps £150m, in biddable media. Improving effectiveness by 15% could save tens of millions of pounds. Each local market decides whether to save the cash or re-invest in more media.
Oliveira won’t discuss financials but says: "This is really about business efficiencies, it is really not a savings exercise."
Her biggest issue has been training talent and "keeping them up to date" but there have been no "huge" challenges, according to Oliveira. "In-sourcing doesn’t become this monster everybody thinks it is."
A business rationale beyond marketing
Vodafone’s move is part of a trend. US companies Sprint and T-Mobile have in-housed media as the telecom sector grapples with low growth and seeks to use data better. The ad industry is watching because Vodafone has international scale and has talked about a business rationale that goes beyond marketing.
The company told shareholders that in-sourcing digital media is "a critical skill for the future" that will improve the customer experience, drive the digital transformation of the business and ensure its adspend is "well invested".
Oliveira says the company began to take more control of its digital advertising and drew up a "white list" of trusted websites about two years ago – just as the YouTube brand safety row exploded. Several factors drove Vodafone’s thinking:
- Technology changed what marketers could do themselves, instead of relying on agencies. Oliveira calls it the "democratisation" of technology as data management platforms, planning and buying tools and ad verification became "available for advertisers". Previously, most of these services were "agency black boxes – 100% managed by them", she says. Vodafone was able to develop a tech stack by licensing software from Adobe, Adform and DoubleVerify, rather than building its own. She likens the stack to a Martini glass with paid media and owned assets such as its websites and apps at the top, drawing on a DMP in the middle, which sucks up data from the base.
- "Data-rich" Vodafone invested in organising its data better and recruited a lot of data scientists. GDPR, the privacy regulation that came into force last year, meant Vodafone’s first-party data became "much more important" while third-party data, which the agencies had, declined in value.
- Vodafone made digital "customer experience excellence" a strategic priority as it saw consumers’ behaviour was changing. "They want everything, they want it now, and they don’t want to wait for it," Oliveira explains.
For all those reasons, "the stars aligned" and in-housing made sense, she says. Indeed, Oliveira could not see any reason not to in-source media: "I wouldn’t even know how to justify that. Why would we not do it?"
Recruiting an in-house team
Oliveira says the doubters who told her "it’s not possible to hire this talent – it’s a rare talent" were wide of the mark. Vodafone has not encountered "difficulty", even though there is a lot of competition, and it has hired about 80% of the 150 employees required. That’s a good effort in nine months, Oliveira reckons.
The employees are a mix of new hires from agencies and digital and ecommerce businesses, and some "re-purposed" internal talent.
She says staff can see "a different opportunity" at Vodafone compared with an agency because they are "very close to the marketing teams" and "that really thrills them".
Oliveira adds the media work is "varied" and "each campaign is like working for a new brand because it’s so different" in terms of products and objectives. When staff optimise the media and carry out A/B testing, they are always thinking about the impact on the business and "they get results straight away", Oliveira explains. "They feel very motivated."
And as the in-house teams have bedded in, they are demanding "better creative", she says, because they can potentially serve thousands, even millions, of personalised ads.
The need for agile, dynamic creative at scale
"My biggest frustration right now is the creative", Oliveira confesses. "If you think of our ultimate objective, ‘I want to target the right person, with the right message, at the right time’, I can target the right person with appropriate data, at the right time through all of our analytics, but what about the right message? Where is my really digital creative, optimised, at scale, done in an agile, very fast way? I don’t have an answer yet from an agency."
Vodafone has a broad relationship with WPP, including Wavemaker for non-biddable media such as TV, radio and newspapers and Ogilvy for UK creative, and Oliveira is talking to them about dynamic content. But she has turned to digital start-ups for some of the in-sourced campaigns that have already run.
Vodafone teamed up with video agency Vidsy on Future Job Finder, which featured Sony Pictures’ Spider-Man and ran largely on Facebook to encourage young consumers to use Vodafone’s job-hunting tool. Another agency, Spirable, created thousands of executions based on weather, location and gender for a performance campaign for Vodafone-branded smartphones.
Future Job Finder, in particular, "outperformed". The "quick turnaround, very
low cost, very agile" campaign cut cost per click and drove a 50% increase in click-through and a 66% jump in session duration compared with a prior campaign.
Oliveira says media and creative must work more closely because "if you don’t have the right message, it’s not great media" but she is not convinced the two disciplines need to be co-located: "They just have to be plugged together."
Traditional agency model is under scrutiny
Oliveira praises Wavemaker for being a "key collaborator" but its scope has been reduced. It has moved from "running" biddable media to "supporting" the client, as she puts it, and that requires a change of "mindset" at the agency. "Not 100% of their individuals locally have dealt well with it, I imagine," Oliveira suggests.
"Of course, there is a fee reduction," she continues, adding that Vodafone is also saving money by not paying other fees – "black box, programmatic, tech and all of that".
Oliveira says agencies must "shift" and she has urged Wavemaker to "use us as your pilot". She sees opportunities for agencies: consultancy, thought leadership, simplifying the fragmented media ecosystem, producing personalised creative and, importantly, brand strategy. Agencies are "masters" of "the big ideas", she says.
Vodafone used WPP for its global brand repositioning, "The future is exciting. Ready?", in 2017. She thinks that "optimistic" invitation to consumers is relevant when it comes to in-housing and delivering the right message at the right time: "It’s not just media money. It’s about respect. I need to respect your time. I need to respect you with the quality of the message I show you."
Observers warn it’s too soon to know whether Vodafone’s in-sourcing has worked because it takes years to see if talent will stay and to measure long-term brand metrics. Some industry folk are yet to be convinced. They maintain Vodafone was never likely to say its move was "anything other than a success".
There could be more change as Vodafone is expected to hold a media agency review this year, although Oliveira won’t comment.
"Within five years, I think most of media will be biddable," she predicts. What does that mean? "It means there is no need for middle people. You can do it yourself if you’re data-rich."