Annalect Marketplaces CEO Spiegel Reviews Omnicom Media Group's Agency Trading Desk Strategy

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AnnalectMatt Spiegel is CEO of Annalect Marketplaces, a unit of Omnicom Media Group, the media services division of Omnicom Group. He discussed the evolution of Omnicom Media Group's trading desk strategy with AdExchanger.com.

AdExchanger.com:  What are Accuen and Annalect?

MS: Accuen is the name for our trading desk. As the industry knows, we operated as “The Trading Desk” for a long time and decided it was time to have a brand for our business unit through the combination of the words “accurate” and “engagement,” which we think highlights a key piece of what we're all about.

Annalect is the digital analytics and data-driven network of Omnicom Media Group. It is really a combination of our assets in the digital space relating to data, analytics, and digital media

Within Annalect is Annalect Marketplaces, which includes Accuen and our search business, Resolution Media.

And, what is your title, and what are your responsibilities, within Annalect?

My title is CEO of Annalect Marketplaces. My responsibilities are running the two business units that exist within Annalect Marketplaces. One is Resolution Media, our search business, and the other is Accuen, our media trading business. Ultimately, my responsibility is running these two businesses with an eye towards creating more tradable marketplaces.  This includes determining at what point digitally-delivered television becomes feasible at scale.

Who is in Accuen’s competitive set?

There are two competitive sets starting with the other trading businesses within the holding companies, of course. The reality of the situation is that those aren't the companies that we compete with on a day‑to‑day basis because each of our holding companies is mostly focused on our existing clients.

On a daily basis, many of the companies Accuen partners with ‑‑ whether it’s the data aggregators or demand-side platforms, or the like can be competitors depending on the situation. The space remains a bit crowded and can be very confusing. We think that our focus on providing a holistic solution for tradable media provides a long-term differentiation that ultimately makes the most of the partners/competitors who become true partners in time.

Is there a mandate on the media agency side within Omnicom Group to use Accuen?

Listen, there's no mandate.  But, there's clearly a strategic push to invest in and build this trading business.

Accuen now has around 50 employees and we have plans to add more people to the team throughout 2011.  Certainly you don't make a big strategic investment as we have if you aren't interested in rolling out to clients. But, no one is required to use Accuen unless there is value to their clients. We’re certainly educating our agencies on how our solution is capable of replacing some of the solutions they've been used to buying. As many know, one key focus is the ad networks.

We're certainly of the mindset that our agency team should not be using ad networks. We think Accuen can replace ad networks’ value because we're able to aggregate media both from the open exchanges and leveraging our own trading-based publisher relationships through private marketplaces. And, we’re aggregating a deep set of targeting data.

Finally, we provide a ton more transparency into what you're actually buying, why you're buying and all the learnings that go underneath it –that’s key. Accuen is a media acquisition platform and our job is to aggregate the right media with the right data and the right technology to help our clients get more value out of their digital investments.

Historically, the people holding the purse strings on the ad network budget have been the junior, media planner/buyer. And, quite frankly, those people run around at a break neck pace and are just trying to get the job done.  Do you expect them to learn, understand and choose Accuen over competing ad networks which are plying them with their T&E and leveraging personal relationships?

We're still in the early days of evolving and in some ways revolutionizing the way that digital media is bought and sold. And so, there's education to be done up and down the food chain within agencies and within the clients. We have to continue to educate the clients, our senior level account folks, and then, yes, we have to make sure that the more junior team members, who may be managing some of the network dollars, understand that Accuen exists and is an alternative.

This is not a frictionless process. Anything that's new and requires the kind of change of behavior that this model does, is going to create some friction.

From my perspective, this is what the industry needs because if our industry is truly going to survive, it needs to drive a lot more scale then we are today.  Until we fix the way that the ecosystem is transacted, it won’t scale.

I believe you’ve said previously that by the end of this year, Omnicom Group media agencies will no longer use ad networks. Still believe that?

I do think that is possible.  And my point is that we wouldn’t use them on an IO by IO basis but rather only as strategic partners when there is a clear need and value.

Under what conditions would Accuen use ad networks?

If we use ad networks, it could be for a couple of reasons.

First, they would offer real‑time biddable inventory, which is to say maybe it's not truly differentiated inventory, but they're going to allow us to do real‑time bidding on it and we have transparency at the impression level. So an ad network may be an option to find inventory –at least until publishers get more comfortable with putting more of their inventory into an exchange environment.

Secondly, we would use true site representation firms. Site rep firms may not be treated differently than ad networks in the space today, but they really have differentiated inventory versus an ad network, which is just an aggregator whose inventory may be a combination of what everyone else has.

What’s Accuen’s experience with demand-side platforms (DSPs)? Can you share any details?

We work closely with a number of DSPs and we believe we’ll continue to work with multiple DSPs for some time.  Our focus is making sure to leverage DSPs for the part of the technology stack which we have no interest in replicating. This includes their UI, their bidders, and their overall infrastructure that connects their technology to that of the publishers.

We don’t however leverage DSPs for their entire stack.  We’ve created our own audience intelligence layer and our working aggressively to integrate our own data models and algorithms into each DSPs decisioning process.

Switching to data, how much third-party data is being used by Accuen today? Can you quantify it in some way?

There’s been increasing momentum in the use of third-party data. It's a critical element of our stack - to use the right third-party audience intelligence data both for targeting and sometimes more importantly for audience insights post impression delivery. I don't know the exact percentage, but I would say there are a significant percentage of our impressions that are bought with some form of third party data.

We are seeing a leveling off of the use of third party data for strictly performance campaigns.  Too often the current price of that data outweighs the lift, our hope is that we’ll be able to work with data providers to have the cost better match the value provided.

A year from now, what milestones would you like to have accomplished? Let’s begin with staffing. You're 50 people now, what do you expect to be a year from now?

I think we'll be somewhere in the neighborhood of 80 or 90 people. That'll be driven, of course, by how our business continues to grow.

Also a year from now, I think we will have some clients who use the stack under Accuen to help provide audience intelligence across everything they buy ‑‑ no matter where they buy it, meaning whether they buy it in a traditional, fixed place or through Accuen. I think that's a big market opportunity for us because I think that will be great for our clients to have that true, single‑source solution from an audience layer.

Next - attribution. I think that's a really important topic and I would like to see us work with at least a good handful of clients on creating attribution models –plural. It won't be a single solution, but how we help clients understand their best conversion path or their standard or most optimal conversion path. Having an audience intelligence layer is critically important and really helps clients understand where to put their money.

Also in the coming year, I think we will spend more heavily in the online video space. I think that space is still more complicated than people recognize, but I think there's a huge opportunity there to make some really great strides and do audience‑targeted video. I would like to see us have a leadership position in that space.

Finally, I think you'll just see us with a much deeper stack when it comes to how we can present data to our clients.

Follow Annalect (@annalect), Accuen (@accuen) and AdExchanger.com (@adexchanger) on Twitter.

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