The Agency’s Role in Data Management

MadMen

Twenty years after the first banner ad, the programmatic media era has firmly taken hold. The Holy Grail for marketers is a map to the “consumer journey,” a circuitous route filled with multiple addressable customer touchpoints. With consumers spending more of their time on mobile devices – and interacting with brands like never before through social channels, review sites, pricing comparison sites and apps – how can marketers influence customers everywhere they encounter a brand?

It’s a tough nut to crack, but starting to become an achievable reality to companies dedicated to collecting, understanding and activating their data. Marketers are starting to turn towards data management platforms (DMP), which help them connect people with their various devices, develop granular audience segments, gain valuable insights and integrate with various platforms where they can activate that data. In addition to technology, marketers also have to configure their entire enterprises to align with the new data-driven realities on the ground.

The question is: Where do marketers turn for help with this challenging, enterprise-level transition?

Many argue that agencies cannot support the type of deep domain expertise needed for the complicated integrations, data science and modeling that has become an everyday issue in modern marketing. But should data management software selection and integration be the sole province of the Accentures and IBMs of the world, or is there room for agencies to play?

For lots of software companies, having an agency in between an advertiser and their marketing platform sounds like a problem to overcome, rather than a solution. Many ad tech sellers out there have lamented the process of the dreaded agency “lunch and learn” to develop a software capability “point of view” for a big client.

Yet, there are highly compelling ways agencies add value to the software selection process. The best agencies insert themselves into the data conversation and use their media and creative expertise to influence what DMPs marketers choose, as well as their role within the managed stack.

From Digital To Enterprise

It makes perfect sense that agencies are involved with data management. The first intersection of data and media added the “targeting” column to the digital RFP. Agencies have started to evolve beyond the Excel-based media planning process to start their plans with an audience persona that is developed in conjunction with their clients. Today, plans begin with audience data applied to as many channels as are reachable. Audience data has moved beyond digital to become universal.

Agencies have also been at the tip of the spear, both from an audience research standpoint (understanding where the most relevant audiences can be found across channels) and an activation standpoint (applying huge media budgets to supply partners). Since they are on the front lines of where media dollars are expressed, they often get the first practical look at where data impacts consumer engagement. During and after campaigns conclude, the agency also owns the analytics piece. How did this channel, partner and creative perform? Why?

Having formerly limited agencies to doing campaign development and execution, marketers are now turning to the collected expertise of their agency media and analytics teams and asking them to embed the culture of audience data into their larger organization. When it’s time to select the DMP—the internal machine that will drive the people-based marketing enterprise—the agency is naturally called upon.

Data Management Is About Ownership

Although a small portion of innovative marketers have begun leveraging DMP technology and taken media execution “in-house,” the vast majority stills relies on agencies and ad tech platform partners to operate their stacks through a managed services approach. Whether a marketer should own the capability to manage its own ad technology stack is a matter of choice, but data ownership shouldn’t be. Brands may not want to own the process of applying audience data to cross-channel media, but they absolutely must own their data.

Where Agencies Play in Data Management

The Initial Approach: Most agencies have experience leveraging marketers’ first-party data through retargeting on display advertising. In an initial DMP engagement, marketers will rely on their agencies to build effective audience personas, map those to available attributes that exist within the marketer’s taxonomy and apply the segments to existing addressable channels. Marketers can and should rely on past campaign insights, attribution reports and other data insights from their agencies when test-driving DMPs.

Connect the Dots: For most marketers, agencies have been the de-facto connector of their diverse systems. Media teams operate display, video and mobile DSPs, ad serving platforms, and attribution tools. Helping a marketer and their DMP partner tie these execution platforms together, understand audience data, and the performance data generated from campaigns is a critical part of a successful DMP implementation.

Operator: Last, but not least, is the agency as operator of the DMP. Marketers want their data safely protected in their own DMP, with strong governance rules around how first-party data is shared. They also need a hub for utilizing third-party data and integrating it with various execution and analytics platforms. Marketers may not want to operate the DMP themselves, though. Agencies can win by helping marketers wring the most value from their platforms.

Marketers have strong expertise in their products, markets and customer base – and should focus on their core strengths to grow. Agencies are great at finding audiences, building compelling creative and applying marketing investment dollars across channels, but are not necessarily the right stewards of others’ data.

Future success for agencies will come from helping marketers implement their data management strategy, align their data with their existing technology stack and return insights that drive ongoing results.

[This post originally appeared in AdExchanger on 2.2.15]

[This

Advertisements

The Role of the Agency in Data Management

A Conversation with David Spitz of WPP Digital 

When it comes to the role of the agency in data-driven digital media, few holding companies have put their money where their mouth is to the extent that WPP Digital has. After setting the tone with a bold acquisition of 24/7 Real Media, the holding company has gone on to place strategic bets on a variety of sectors within the Kawaja map. The question for marketers is whether or not they should be relying upon their agencies when it comes to technology and data. Many argue that the agency model cannot support the type of deep domain expertise needed for the complicated integrations, data science, and modeling that has become an everyday issue in modern marketing. So, should data management be the sole province of the Adobes and IBMs of the world, or is there room for agencies to play? I recently reached out to EVP of Strategy and Corporate Development David Spitz to ask about how he sees agencies working with large brands to define their data strategy.

WPP is working with some of the world’s largest brands. I suspect that many have siloed pockets of valuable data across their enterprises. What are the data challenges and, more importantly, opportunities for global brands?

David Spitz (DS): You are right; there are many data challenges across large enterprises. They range from organizational issues (what group or department should even be running these programs?), to legal and commercial issues (do we have the right to the data we want to use?), to skill set gaps, to challenges posed by legacy technologies, to lack of data standards across channels, brands, regions, or even campaigns. In my experience, though, one thing is clear: it is rarely lack of data that is the problem.

The most common single question we hear from the world’s largest brands is “Where do I start?” It helps to have a clear understanding of the opportunities and choose one or two to focus on to build confidence and momentum while keeping in mind what could come next. “Think big, start small” is one of my favorite phrases when it comes to data programs. In terms of what those opportunities are, it really boils down to what I’ll call the 4 R’s – Reach, Relevance, Resonance and ROI.

Most companies that label themselves as “DMPs” are focused on Reach (e.g., targeting) or sometimes ROI (e.g., campaign evaluation, attribution), and mostly only in a digital sense. That might be a good place to start. However, I have also seen relevance (personalization) and resonance (social amplification) as the jumping off point for some brands. Either way, because these tools exist and can be deployed at relatively low cost, it is often best to start with digital-only applications before expanding the data program into multichannel territory.

Whether you are thinking digital or not, these four areas–Reach, Relevance, Resonance and ROI–probably represent 80% of the data opportunity for big brands, and between them you can usually identify at least one solid quick win.

When it comes to marketing, are these brands looking to their agencies for answers, or are they looking to the IBMs of the world? It seems like the agency’s ability to make an impact ends with the marketing team. Can you extend the agency’s value through to IT teams, and get everyone working together?

DS: When it comes to marketing, brands are absolutely looking to their agencies for answers. It is one thing to come up with an “enterprise architecture” and quite another to have it implemented. In many marketing functions, agencies are on the front lines of where the dollars get expressed, customer engagement happens, and [you are able to] understand what it takes to get data into a place where value can be realized.

Still, do agencies need to do a better job of partnering with CIO’s? Without a doubt. Various WPP companies have in place major partnerships with IBM, Adobe and Infosys to do just that, and at WPP Digital we recently invested in a company called Fabric and acquired a company called Acceleration, both of which specialize in marketing technology systems and, essentially, gap bridging between the CIO and the CMO.

You are working on putting many of WPP’s global data resources together (the “Data Alliance”). Tell us about the project. Is this a global data exchange? Are there unique types of data within the Alliance that are unavailable elsewhere?

DS: Data is at the heart of a lot of what WPP does. You have to realize, WPP is not only the world’s largest communications services group, but if you looked at some of its operating companies as standalone you’d find inside WPP the world’s largest media buying company (GroupM), the second largest market research company (Kantar), and, with $4.7b in revenues coming from digital, including the likes of 24/7 Media, OgilvyOne, Wunderman, AKQA, VML, and Possible, WPP is the seventh largest digital company in the world – behind Google and Apple, but ahead of Facebook right now. So you can imagine, WPP as a whole is dealing with a lot of data.

What we are trying to do with The Data Alliance is analogous to the airline industry, where independently operated carriers have come together to create these inter-company frequent flyer programs (as in the Star Alliance) and coordinated route maps. The whole idea is to provide a more seamless customer experience while at the same time providing efficiencies for the member organizations. Without going into too many details, The Data Alliance is focused on three things: Creating greater interoperability across its members’ platforms and data sets, streamlining how we as a group engage with third-party partners (to make it easier on an Acxiom or Exelate, for example, to work with us broadly), and creating a more seamless experience for clients who are working with us more than one discipline (e.g., media, market research, CRM, and digital).

How we do this will involve many different tactics over time, for example, pooling of certain technology development efforts and greater standardization around certain things like policies, data structures, commercial terms, and API’s. You can speculate about some of the new products and business models that would result out of a program like this, but right now the primary focus is simply on creating the best solutions we possibly can for the top 30 clients who are our “frequent fliers” if you will.

Unlike some other holding companies, WPP has taken an active role in investing in, and acquiring, digital media technology. The “stack” that you are assembling at 24/7 Media, and some of the social media technology investments you have made suggest a commitment to being more than just a typical agency. The Data Alliance initiative is also instructive. Tell us what you look for in differentiated technologies.

DS: WPP comes at it very much from a client-side perspective and has partnered with technologies like Omniture and Buddy Media that share that view. In the cases of those two businesses in particular, both of which WPP invested in, there was beyond the obvious criteria also a strong cultural fit with the management team and a good amount of overlap between WPP’s customer base and theirs, so it just made a lot of sense.

In the case of 24/7, while they were known as a publisher-side technology before WPP acquired them in 2007, the intent was always to leverage their audience reach and technical know-how to build what people would now call a DMP/DSP – the tools that now power Xaxis. There were not any established players doing this at the time, so the 24/7 acquisition enabled GroupM to build these capabilities much faster than they could have otherwise. The acquisition of iBehavior, which operates a DMP of a different sort (mostly offline transactions), is also consistent with this strategy and is similar in that it’s accelerating Wunderman’s route to market with several new initiatives.

To your broader point about being not just a typical agency, I don’t believe agencies need to control all of the underlying technologies, but I do think that the techniques involved in connecting and analyzing diverse data streams – and doing so in a scalable, efficient and privacy-safe way – are too important a skill set for a company like WPP to outsource entirely. When digital is the direction most marketing channels are headed, and the ability to measure everything and act on data is a large part of what makes digital so exciting, not having a data integration and data sciences function (granted, it may be called something else) inside an agency holding company in ten years will seem as unusual as not having a media group would today.

This interview, among many others, appears in EConsultancy’s recently published Best Practices in Data Management by Chris O’Hara. Chris is an ad technology executive, the author of Best Practices in Digital Display Media, a frequent contributor to a number of trade publications, and a blogger.

This post also appeared on the iMediaConnection blog on 12/18/12.

Agencies: Working Hard or Hardly Working?

A recent meeting with a large agency’s digital planning team left me wondering who is doing the real work these days: agencies or ad networks? I was there to talk about our solution for making sense of an increasingly crowded and complicated digital space. Today’s media planners and buyers have to be able to navigate through a 300,000 channel world for their clients — and be able to take advantage of dozens of new creative executions, placements, and targeting capabilities. Their clients trust them to find a receptive audience wherever they are on the web — and deliver enough scale and performance to make it effective and affordable.

One of the planners in the room was responsible for a seven-figure pharmaceutical budget. When I asked him how he was evaluating new traffic sources, he said, “I buy on two networks. They find me headache suffers and my client is satisfied, why would I want to risk it by moving money around?”

“I buy on two networks.” Surely he couldn’t be serious.

After I left the meeting, I continued to be astonished by the reply. Sure, buying on those networks was easy (and probably pretty effective) but what was the agency bringing to the table? Why wouldn’t the client simply place those two network buys themselves, and gain an extra 10% in performance by eliminating the agency’s fee?

Furthermore, what if the client’s CMO asked that planner where his ads were running? He couldn’t tell him with any certitude. It seemed to me like a pretty expensive and risky marketing strategy.

The agency is passing along their job along to a network, who is keeping all the data from the campaign. Even if the company sold a ton of migraine pill prescriptions, they still don’t know how they were successful—and who responded to their ads. Even worse, that network can now go and pitch all of the client’s competitors, who now stand to gain for the investment they made building an audience.

If I were the client, I would be justified in firing this agency.

The successful agency not only continually works to discover new pockets of high-performing traffic for their clients but they actively manage the campaign, and share performance results with them. If I want to reach migraine sufferers, the easiest thing in the world is to call WebMD and sponsor their migraine section; I am guaranteed a contextually-relevant placement in a high quality setting. Easy.

Same thing as buying a car. If I want a really reliable German automobile that seats 5 adults, with leather seats, all-wheel drive, and impeccable handling, I just go the Mercedes dealer and pick up a new S-Class.

The problem starts to arise when I get my monthly bill. Is $1,200 a month too much to pay when I can get to work in the same relative comfort in a $600 a month Audi, or a $350 a month Volkswagen?

Maybe, as a media planner, I can find five health sites that target migraine sufferers and string together the same audience for a lot less money. In addition, maybe there are premium opportunities I can get on smaller, more vertically focused sites that the leading site cannot or will not offer me?

Don’t get me wrong, WebMD is a great place to advertise. But that’s something even my mother knows. Do you really need to pay 15% to an agency for them to recommend that strategy?

So, how hard is your agency working for you, anyway? Every advertiser who uses the services of a media agency for their media planning and buying should ask themselves and their agency this question every single day. If they did, I think they would unfortunately find in many cases, the answer to be: not very hard.

How can an agency then justify the fees that they are collecting? They can do it by continually looking for better performing traffic. The only way to do that is to spread dollars around, find pockets of traffic either through other networks, or direct-to-publisher sites. They can do it by deploying smaller per-publisher budgets, while benefiting from smaller incremental risk.

Sure, it will take more work, but that’s what the client is paying for.

[This originally appeared in Adotas on 3/9/2010]