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Horizon Media, Largest US Indie Agency, Hits Reset Button On Programmatic

horizon-donnie-adamHorizon Media, the largest standalone media agency in the US with some $4.5 billion in ad spend across 100 clients, has not been a major participant in the programmatic trend. But that may be changing.

Horizon is rolling out a programmatic division, dubbed HX, to handle its machine-driven ad buys for clients. The initiative, supported through relationships with four demand-side platforms (DSPs), expands on a two-year foray into programmatic that initially supported However that effort failed to produce the desired scale, as clients resisted trafficking ads on unknown sites.

"We were contending with the same challenges that certain pockets of the marketplace have today. There's still network buying and perhaps limited visibility. You don't necessarily understand where impressions are," said Donnie Williams, chief digital officer. "It felt like we were another network, talking about the value all these tools brought to properties that in and of themselves were not valuable. It was a tough hole to climb out of."

But climb Horizon did. Partly because of the challenges Williams describes, transparency is the rule at HX. The unit charges a flat markup on working media and discloses that margin to clients.

"There is no arbitrage or resold media," according to Adam Heimlich, SVP Programmatic at HX.

HX has formal agreements with Turn, The Trade Desk, for video inventory and Adelphic for mobile and cross-device. Heimlich and Williams say the agency will integrate additional technologies as required by clients.

Despite Horizon's scale, its version of the trading desk has more in common with a small agency solution than it does with the large centralized hubs popularized (or not, as the case may be) by holding companies such as Omnicom Group and Publicis Groupe. HX employs just eight employees, with plans to increase that number to 20 this year. It has recruited from the likes of Maxus, Accordant and Publicis-operated VivaKi Audience On Demand. That's tiny by comparison to the hundreds working for WPP Group's Xaxis and AOD, for instance – and a drop in the bucket of Horizon's nearly 1,000 employees.


Agency VC Still Going Strong, Says KBS+ Ventures

VC-curiosityLike the rarely seen zedonk (half zebra, half donkey), agency-led VC is an odd little hybrid — a sometimes-awkward marriage of investing and marketing services. But the genre has staying power. Investing arms within WPP Group, Publicis Groupe (VivaKi Ventures), Interpublic Group, and MDC Partners are all notable players that have been researching and making investments in the digital ad ecosystem for years. And some have had major payouts, such as when IPG sold part of a position in Facebook and earned $133 million — a more than 20x return on its original $5 million stake.

One small but influential agency VC entity is kbs+ Ventures, a division of MDC Partners' agency kirshenbaum bond senecal + partners. KBS+ Ventures last week parted ways with its single full-time employee, Taylor Davidson. Davidson, who was assisted in the role by two part-type analysts, is pursuing new unspecified opportunities.

So, what gives? Is kbs+ Ventures pulling back? Far from it, according to Josh Engroff, managing partner of kbs+ Ventures and chief digital media officer at sister agency The Media Kitchen.

"We expect to increase our investment activity this year and next beyond what we did in the previous two years," said Engroff, who stated kbs+ Ventures will replace Davidson's position and grow the VC team in other ways. "Our deal review pipeline is very full and very active."


Merkle’s Acquisition Spree Now Includes RKG

merkle rkg

Updated 7/2/14, 3:22 p.m.

For the second time in less than a year, CRM and database marketing agency Merkle is on the acquisition prowl. This time, it gobbled up RKG, an agency that provides paid search, social marketing and comparison shopping engine services.

With the RKG acquisition, Merkle CEO David Williams said the agency is looking to up the ante on “addressability at scale.” In other words, to tap into the audience milling about the usual digital platforms, including Facebook, Google and Twitter.

Addressable media is a big focus area for Merkle. In speaking to AdExchanger several months ago about its April acquisition of Chicago-based digital and direct agency New Control, Merkle’s EVP and digital agency lead, Craig Dempster, said “creating integrated marketing communications in addressable is attractive to us.”

RKG’s role in Merkle’s addressable agenda will be to expand the latter’s retail offerings and relationships. RKG will give Merkle access to the agency’s existing client roster of retail companies such as Express, Herman Miller and Urban Outfitters.


Publicis Groupe Acquires Crown To Enhance Razorfish's Ecommerce Chops

pcFrench holding company Publicis Groupe acquired software and consulting firm Crown Partners on Tuesday and intends to align it with digital agency Razorfish.

The purchase is a play to power up Razorfish's ecommerce capabilities, especially as businesses that haven’t traditionally had strong online presences seek to remedy that situation.

"Everyone wants to have an ecommerce capability today, even traditional companies that aren’t direct selling," said Razorfish’s North American CEO, Shannon Denton. "The marketplace is demanding more expertise. In the last 12-15 months, retail and commerce have become even more important for us."

The driver for this? Consumers’ omnichannel buying habits.

Razorfish Global CEO Pete Stein told AdExchanger during the Cannes Lions Festival that as commerce occurs through more devices and networks – thanks largely to the Internet of Things phenomenon – companies will need to make it easier to purchase through previously unconnected devices like headphones and refrigerators.


Agencies Brace For Change As Brands Lean In To Programmatic

swimming-inhouseWhen they write the history of programmatic advertising, June 2014 will go down as the month when you needed two hands to count the number of big advertisers running their machine-driven media buys in-house.

Procter & Gamble, American Express and Mondelez all recently joined the small club of brands embracing exchange-traded media (existing members include Kellogg's, Kimberly-Clark, Unilever, Netflix, 1-800-Flowers and Allstate Insurance). And not only have they joined; they are making large commitments.

P&G reportedly aims to migrate 70% of its digital media investment to programmatic channels this year, per Advertising Age. That pledge will hit the marketplace "like a ton of bricks," said Josh Jacobs, CEO of Omnicom Group's Accuen programmatic buying unit.

And others agree.

"Whatever Procter does, eventually everybody else does too," said Matt Seiler, CEO of Interpublic Group's Mediabrands. "I think it's really exciting. I love that we're getting to a point where we can strip away the inefficiencies."

For agencies, the long-term impact of marketers becoming fully awake to the programmatic toolset remains to be seen, but the overall trend is clear. Clients will increasingly drive the discussion, rather than acceding to agency recommendations as they often have in recent years.


Digital Agency Isobar On The Tech Underpinnings Of Business Transformation

isobarDentsu Aegis Network-owned Isobar is a full-service digital agency, a descriptor with less and less meaning as digital infuses all media  or something close to all media.

It’s a branding issue about which Jeff Maling, co-CEO of Isobar US, is well aware.

“If we’re known for anything in the confusing digital landscape vs. AKQA, R/GA or Huge, I’d say we’re much deeper in enterprise disruptive technology stuff and the business process change.”

Isobar – whose clients include HBO, Fiat, Lego, Royal Caribbean International and Adidas – builds technologies designed to help companies evolve their business practice. For Royal Caribbean, for instance, Isobar constructed a system that allowed the cruise line’s customers to manage their schedules on their smartphones. The result, which seems like simplicity itself, belies some complicated underpinnings: Caribbean has numerous back-end systems onshore and on each ship.

“They basically uncouple the ship and it runs on its own,” Maling said. “We designed and built a system that completely changes how you cruise. You can configure the whole vacation on your couch and can manage that whole vacation with a giant calendar that automatically adjusts. If you try to book a dinner that conflicts with a previously scheduled spa appointment, the calendar will flag the conflict.”

This addition came at a time when Caribbean launched what it called “quantum dining.” Cruise ships traditionally have cavernous, ornate dining rooms where everyone congregates at the same time for meals. Caribbean blew up that model and built a ship with 18 different restaurants. “To handle the logistics and anxiety of that, you need an application that seamlessly does [the scheduling],” Maling said.

Maling and Abel Reis, Isobar’s CEO for Latin America, sat down with AdExchanger to explain how the influx of data has changed the creative process, and how Isobar’s media-buying practices differ from country to country.


Wunderman CEO Daniel Morel: “Not Enough Ad Dollars To Support Everything Out There.”

daniel morel wundermanA financial injustice plagues the marketing world.

“Media outlets have proliferated over the past 10 years,” said Daniel Morel, chairman and CEO of WPP-owned digital agency Wunderman. “But somehow, the purse size of the CMO hasn’t changed that much. If you measure the size of the growth of media outlets and the money available for communication, maybe that growth is 5% a year? Measure 5% growth over the past 10 years compared to the size of media growth and you’ll find there’s a huge gap.”

That gap, Morel said, must inevitably close. This is both good news and bad news. Good, because marketers will smarten up and begin investing in marketing channels that truly matter. Bad, because of supply and demand: There’s more content with ad inventory than there are ad dollars to support it all.

“I see this as a big danger looming on the horizon,” Morel told AdExchanger. “People are all excited right now, but I’ve been in the business for 37 years, so I have a slightly different perspective.”


IPG Mediabrands CEO Matt Seiler: Automation Trend Will Force New Agency Pay Models

matt-seiler-ipg-mediabrandsMatt Seiler is remarkably on-message.

For the past five years, the CEO of Interpublic Group's media investment arm, Mediabrands, has banged the drum about the need for performance-based compensation for agencies. More recently he also took up the banner of automation, proposing to automate 50% of all media investment by the end of 2015.

Interestingly, the automation rallying cry seems to be taking hold faster than the one about linking agency pay to business outcomes. But Seiler says the one necessitates the other.

And he believes the accelerated programmatic investment of major brands like Procter & Gamble, American Express and Mondelez will accelerate this future.

In a conversation with AdExchanger at the Cannes Lions festival, he explained why:

"[Programmatic and pay for performance] will actually move forward together. My thought always was, if you're paid always based on your client's business outcome, then how many bodies it takes to achieve that is irrelevant. How much money it takes to achieve that is irrelevant. And the two compensation models are around how much money you spend or how many bodies it takes to do that. Neither is in a client's best interest. If you push for automation you've got to find a different way to be compensated. Because if it means you stripping out a bunch of bodies, we're not all just going to make less money. We need to make money based on something that is more important than spend or body count.


IPG Mediabrands Programmatic Boss Michael Brunick Exits

brunickThe steward of Interpublic Group's trading desk strategy has left the holding company, AdExchanger has learned.

Michael Brunick, SVP for programmatic within IPG Mediabrands' Magna Global media investment unit, will join Unbound, a consulting firm focused on helping publishers and advertisers seize the programmatic opportunity.

"One of the biggest trends since middle of last year is marketers wanting to get more involved in their activity programmatically," Brunick said. "They want to do strategic and long-term deals with media owners they've wanted to work with."

Unbound was founded by two former Mediabrands executives, Brendan Moorcroft and Quentin George. The three men developed Mediabrands' Cadreon trading desk together, so "the gang is all back together," Moorcroft said in a note to AdExchanger.

Mediabrands confirmed Brunick's departure and said a search is underway for his replacement. He leaves after a 14-year stretch with the company, an almost unheard of tenure in agency circles. His first job out of college was with an IPG agency, Universal McCann.

The timing of Brunick's exit is awkward for Mediabrands, coming in the wake of two other high-profile departures and losses of key clients Microsoft and Johnson & Johnson.


Harmelin Media Builds Agency Trading Desk To Be ‘Better Stewards’ Of Client Business

TradeDeskIndependent media agency Harmelin Media, whose clients include BET and Blue Diamond Almonds, is constructing its own in-house trading desk. Working with TubeMogul, Harmelin, which used to work with a dozen vendors, will commit programmatic video buys to a single platform.

Harmelin is doing this so it can be a better steward of client campaigns. “Harmelin was out in front of the trend by 12-18 months, but I think we’ll see more traction from independent agencies in building their own desks,” said Keith Eadie, CMO of TubeMogul.

Tech and automation enable standalone agencies to usher more efficiency into the buying process while simultaneously leveling the playing field with larger holding company equivalents.

Brad Bernard, Harmelin’s VP of online media and analytics, spoke with AdExchanger about the initiative.

AdExchanger: What’s Harmelin Media?

BRAD BERNARD: Harmelin Media is an independent agency that has about [$500 million] in media billings. About 20% of that is in digital. The digital team consists of about 40 people of the 200 at Harmelin Media in total. We have a robust TV buying, digital activation team, and when it comes to video, we also have a virtual team that is centered on convergence and video is at the center of that.