Nathan Woodman of Havas Digital’s Adnetik on The Future of The Media Agency
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April 13, 2009 – 8:35 am
Nathan Woodman is the Managing Director of Adnetik, Havas' Digital Trading Network.
AdExchanger.com: Adnetik was described in a MediaPost article recently as "a trading system which is shifting the power of online audience aggregation back to advertisers and agencies from third-party intermediaries like online advertising networks, and exchanges." Care to add anything?
NW: I don’t like phrasing the movement as a shift of power, rather a shift of control. Adnetik and Havas Digital will continue to buy both media and data from many ad networks. However, we would like to see pricing and optimization driven by the advertiser rather than the yield of the publisher. We also honestly feel that this approach will benefit both the advertiser and the publisher. It will result in both higher ROI for the advertiser and in turn higher eCPMs for the publisher.
So, is Adnetik trying to become its own ad exchange or network?
We are trying to become expert buyers on ad exchanges and from networks.
Adnetik seems advertiser-focused where as an ad exchange levels the playing field with advertisers and publishers each maximizing value.
Where does the publisher fit in with the Adnetik strategy?
You are right. Adnetik is advertiser focused. It is the core of being born out of the agency where the primary responsibility of the agency is to be an agent of the advertiser. So you are right we are focused on representing the advertiser in exchange/network type transactions.
It is our view that a transaction only occurs when all parties receive benefit. Those parties include the advertiser, the publisher, the intermediary, the end consumer and the data provider.
For example, if the system is driven by end user data and the end user is unwilling to share their data and opts-out of data transparency then the known information at the time of the transaction is less perfect and therefore the advertiser pays less and the publisher makes less and eventually the end user has to see more ads or consume inferior content.
If ad exchanges and ad networks only place value on the audience and therefore bid the same price for a user on Joe’s blog as they would on premium publisher X then they are not valuing the brand equity of the premium publisher and the premium publisher will pull out of the transaction.
It is our position to make sure that each party receives fair value for completing the transaction and that includes compensating premium publisher for the fair value of their brand.
Is Adnetik currently in operation and, if so, can you give us examples of clients currently using the new system? Or, provide us metrics that show adoption of the new platform?
I can tell you that Adnetik is in operation in APAC, Europe and LATAM and it is in design in North America.
What is the opportunity provided by the advertising exchange model for ad agencies?
The opportunity is addressable buying. If we don’t learn how to do this we will not be in business in 10 years.
What do ad agencies need to change within themselves to adapt to the increasing use of technology, data and ad exchanges?
Advertising technology has largely been driven by the entrepreneurial company. A start-up provides dedicated capital and focused management. In order for larger agencies to succeed they need to allocate dedicated stand alone capital and attract dedicated stand along management to deliver the task at hand.
Agencies cannot expect the current agency management to oversee entrepreneurial technology development projects for the simple reason that they will get distracted by current agency and current advertiser demands. By definition current management is not 100% dedicated to a new project.
In order for the projects to succeed they will need to be run by skunkworks type operations that combine the benefits of autonomy with the benefits of an installed client base.
Who gets disintermediated in the next 5 years - ad networks, agencies, both, someone else, or neither? Why?
None. Ad networks and agencies both become transaction experts.
Just like in investment banking you have intermediaries with buy side and intermediaries with sell side expertise. Many of the experts exist within the same company and each trader competes with other traders for the benefit of the entity that provides the principle capital.
The current ad networks represent the sell side and the agencies represent the buy side. They each compete with information to extract higher value out of each transaction on behalf of the entity they represent.
I see many ad agencies and ad networks combining expertise in the future and becoming a new type of market maker and trading house.
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April 13, 2009 – 8:35 am
One Response to “Nathan Woodman of Havas Digital’s Adnetik on The Future of The Media Agency”
Well said Nathan, and congratulations to you, Anthony and Havas for having the vision to make this happen within your group structure. I agree with most of what you say here, and particularly on your point around existing agency structures not being the best place for entrepreneurial innovation. That was one of the main driving forces behind our decision to start Infectious Media. Better to be agile, efficient and 100% focused on the task in hand, than hindered by legacy infrastructures. As for your response to the final question on disintermediation, you hit the nail on the head. This is an opportunity for all involved to prosper through evolution of skill-sets and business models... and that's exciting.
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By Andy Cocker on Apr 14, 2009