Do Digital Media Agencies Have a Plan?

dude-wheres-my-carDigital agencies used to get paid for unpacking an incredibly complicated digital landscape for marketers. Faced with all kinds of new marketing opportunities, advertisers turned to savvy digital agencies to figure out where to spend their money, and how much of it to dedicate to display, mobile and social channels.

The dingy little secret was that the agencies didn’t really plan much of anything. The way it worked was that agency planners would make an Excel template, create an RFP document, instruct the media owners to send back all kinds of creative ideas and fill out the media plan template. RFPs sent publisher teams spinning into action, churning out exciting-looking PowerPoints with screenshots and suggested spending levels.

Not much of this was scientific. Publishers often promised more inventory than could be delivered, knowing they would never get the full budget allocation. Agencies asked for various “budget levels,” knowing they would allocate only $50,000 per publisher – but asking to see $200,000 plans to get a better sense of where CPMs might be negotiated. At the end of the day, the agencies would pick the winners and losers, usually the five publishers on the last plan, plus a few “challengers” or new ideas to impress the client with “innovation.” Once the plan went live, publishers could count on a quick cancellation or massive change to the contracted plan. Nothing ever seemed written in stone once the first impression was served.

Sounds pretty lame, right? Sadly, a lot of media is still planned this way. But, thanks to all kinds of programmatic innovation, times are rapidly changing and digital agencies are going to have to find out how to change with it.
In the old paradigm, agencies largely provided value by dealing with the intricacies of negotiating with vendors, moving data from plans to ad servers and billing systems and keeping clients in the loop on how their digital media “investments” were performing. Optimization was largely defined as cancelling a bad deal and re-allocating budget into a better one.
Today’s ad technology has given marketers and their agencies a lot more knobs and buttons to push. We are rapidly seeing a shift away from manual, Excel-based processes to nimble, web-based planning technology, driven by centralized data.
There are no spreadsheets inside of MediaMath or AppNexus. Publishers don’t offer PowerPoints in iSocket or AdSlot. And agencies are pushing legacy media-buying systems like MediaOcean and Strata to adapt to a digital world without spreadsheets and fax machines. A host of new, web-based planning and buying systems (like Bionic!) are also starting to disrupt the status quo, as agencies try and reconcile the old ways of buying media with a world in which billions of ad impressions are available through interfaces and big clients like P&G say they are going to buy up to 70% of ads programmatically.

Recently, a big European group of publishers introduced an RFP to have their entire digital inventory catalogued and made available through “programmatic direct” technology. Publishers want to give advertisers the efficiency and access they crave but have complete control over pricing and availability. That’s where the world is heading.
So what happens to an agency whose sole digital expertise consists of sending out Excel templates for publishers to fill out with pricing and avails? Sounds like the value they have been providing – lots of manual horsepower to help with complicated workflow – is going to become completely irrelevant. You can buy all the social media you want through easy-to-use interfaces.

It’s easy to hire a few smart “traders” and give them access to a DSP and gain access to the universe of inventory available in programmatic RTB. And now it’s increasingly easy to negotiate premium inventory deals inside programmatic platforms and secure those guaranteed impressions. A number of big marketers have decided it’s so easy that they are starting to do it themselves by bringing digital marketing in-house.
Digital media agencies’ legacy business models are expiring faster than a Madison Avenue parking meter. What should innovative agencies be doing to change and continue to provide real value to their clients?

  • Planning: “Planning” is not planning anymore. It’s investment management. Even though there are new ways to procure the media, your clients still need to know how it’s performing and moving the needle for their business. Figure out how to measure beyond clicks and common CPA metrics and try to get inside your clients’ real budget numbers. Are you gaining access to the client’s P&L and first-party data so you can help them measure by more important metrics, such as net new customers?
  • Teaching: Just because desktop display and social ads are commoditized doesn’t mean clients don’t need to understand the latest ways to rise above the noise. Are you schooling your clients on nascent native mobile opportunities or the latest ways to leverage RTB video to enable branding at scale? These are ideas that come with the help of vendors and publishers, but agencies need to stop collating others’ ideas and start helping vendors translate their opportunities into the framework of the client’s business. That is where the right digital agency can provide value.
  • Doing: The manual, spreadsheet-driven world of “22-year-old media planners” where labor, rather than strategy, was at a premium are over. But, in a programmatic world, execution – the “doing” – is more important than ever. Reallocating budgets to match performance cannot be totally algorithm-driven when spending is across multiple channels in systems that do not speak to each other. Agencies are perfectly positioned to be in the middle of dozens of systems, reconciling spending and performance against both long- and short-term client goals. That’s a job that can only be done by people.

The irony of today is that lot of systems are starting to make digital media planning less complicated from a transactional and workflow standpoint but the overall digital landscape is more complicated to navigate than ever. The digital media agencies that survive must change the way they plan, teach their clients and execute in order to survive and thrive.

[This post originally appeared in AdExchanger on 7.25.14]


The Top Data Trends in Marketing

Everything seems to be generating data nowadays: mobile devices, e-commerce transactions, Web browsing.

Savvy marketers use data mining, data visualization, text analytics, and forecasting to make more effective decisions and reach customers. But the savviest among them are innovating with fresh types of data—and attracting new business as a result.

Sensing Opportunity for an Upsell
“The data that devices collect are going to add all kinds of context to advertising,” says Chris O’Hara, cofounder of Bionic Advertising Systems, a digital advertising service. Marketers can know exactly where potential consumers are, the current time and temperature, and which of the consumer’s friends are nearby.

When might such factors come into play? O’Hara gives the example of sensors in grocery stores that can detect the items shoppers take off the shelves. That data, run through huge databases, enable marketers to instantly suggest—via tech such as smartphones or electronic shelf displays—other products for shoppers to add to their carts.

Adding Location
More and more, geography will help marketers zero in on demographics, says Kevin Lee, CEO of online advertising and marketing firm Didit. “Geotargeting is a great way to market not only at the hyper-local business level but also for national marketers looking to target specific demographic and psychographic groups,” he says.

Marketers have experimented for years with mobile geolocation-centered campaigns, primarily using couponing. However, since research shows that a whopping 72% of consumers say they’ll respond to sales calls-to-action within sight of the retailer, there are plenty more location-based opportunities that encourage customer loyalty, such as special gifts, alerts to flash sales and early access.

Cooking a Data Stew
With the evolution in data analytics, marketers can now mix different types of data to glean new insights. David L. Smith, CEO of media agency Mediasmith, sees this as the coming of age of the data management platform: tools that integrate data from several sources, including customer information, website data and digital advertising input. All of it serves to improve messaging.

“Messages that come from ad campaigns, direct mail and other communications to the consumer can be coordinated,” Smith says, “so that the consumer is always getting relevant information—not just standard communications.”

SASCollecting Data—While Respecting Customer Privacy and Security
All these data-driven trends can bring benefits to the consumer and improve marketing efficiency. But they also raise privacy and security issues—to which marketers are giving serious attention. “Privacy is going to remain a constant fear in the consumer’s heart,” says Michael Hardin, dean at the University of Alabama’s Culverhouse College of Commerce. “A lot of companies are going to be struggling mightily to deal with that.”

Smart marketers will learn how to walk this fine line and mine significant value from relatively little personal information, says O’Hara. One company strikes this balance with one of its products, an activity-tracker wristband: With just a little personal data input from its user, the wristband gives them athletic performance feedback.

These new technologies are changing the world of marketing—especially given the speed at which data are arriving, says Hardin. Shrewd marketers are contemplating how best to react in a way that benefits their companies.

[This post originally appeared on 6/16 in WSJ]