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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.


RAPP-ing Up The Customer Experience With Data, Media And Technology

rappWhen one thinks about media planning, one does not think of Omnicom-owned agency RAPP.

This is understandable. RAPP built its reputation as a creative, CRM and digital agency. But the confluence of advertising and marketing means that the media planning and buying disciplines are increasingly areas RAPP hopes to build out.

AdExchanger spoke about this, as well as the growing overlap between agencies, tech vendors and consultancies, with RAPP Chief Strategy Officer Jessie Kernan and its director of strategy and analytics, Vignesh Clingam.

AdExchanger: What digital media capabilities does RAPP have?

JESSIE KERNAN: The paid media landscape is a very mature industry. It’s not the industry we started out in. You can’t just decide you’re going to be a media agency one day.

Our approach to integrating media planning into our offering is to start with a point of differentiation and create something that’s different, which is data- and insight-driven media planning. Most media agencies have the media operations game down and are adding the analytical layer. Our approach has been to start from our understanding of analytics to inform media in a different way.

That said, it’s a relatively infant offering at RAPP. Our core media client in the US is AAA. The UK has quite a robust media-planning practice, and we’re beginning to integrate a lot of what they do into what we do. But we’re just now expanding our stake in that game.


How Agency-Vendor Ventures Add Real-Time To Media Buys

TVmileageAgencies and vendors are teaming up to tackle the tech and organizational challenges associated with aligning real-time media with trending topics.

Publicis-owned agency DigitasLBI, for example, during its digital NewFront rolled out a series of publisher and vendor relationships to improve its real-time offerings.

The agency developed a Brand Content Index in conjunction with the content measurement and distribution vendor SimpleReach to measure client campaign performance against SimpleReach’s anonymized publisher metrics.

Although the tool is exclusive to Digitas and its clients at present, the content index will be opened up for wider release later this year following the in-house beta.

Likewise, independent media agency Horizon Media along with Butler, Shine, Stern & Partners invested some $3.5 million in predictive social intelligence tool BlabPredicts to get more predictive about media-buying based on trending social and broadcast content.

“We know we’re not a technology company at our core, but what we do have is over 100 brands in our portfolio, relationships with thousands of publishers online and offline and independent clout in the marketplace, so we do move quickly in different ways,” said Taylor Valentine, SVP of social media strategy at Horizon Media.

What's happening at Horizon is growing across the agency space. Havas Media Labs, for instance, was created to foster such data, tech and content partnerships.


Primacy In Mapping The Customer Journey

primacyFull-service digital agency Primacy began in 1994 as Acsys Interactive. In 2012, it rebranded to emphasize its presence in digital. Also, prospects weren't always clear how to pronounce Acsys. (It was "Access", for the record.)

The agency, still independently owned by President Stan Valencis, has traditionally gotten traction via word of mouth.

“We get a small project with a client, we’d do a good job and they’d ask us to do a little more work and a little more,” said Craig Kallin, the agency’s SVP of business development and marketing.

Kallin described Primacy as a full-service agency (“Which I’m sure you hear a lot”), meaning it develops marketing strategies, insight through research, creative development and technical implementations for everything from websites to building applications that tie into back-end systems.

Primacy focuses on five key verticals, each with a practice lead: financial services, health care, consumer packaged goods, higher education and manufacturing. Its clients include EmblemHealth, The Hartford and Tufts Medical Center.

Kallin spoke with AdExchanger.

AdExchanger: What is the biggest misconception brands have around activating data?

CRAIG KALLIN: A lot of our customers purchase a digital marketing system (DMS) and think it’s just going to happen. [Ed: A DMS combines a content management system with the ability to syndicate content across multiple channels.] But there’s a lot of prework that’s needed in order for the system to do its job. You need to have that profile data and understand the attributes and map that content and special messaging to consumer profiles. You need to define the taxonomies and tag the content appropriately. That’s a lot of up-front work.


The Fading Divide Between Data Services And Digital Agencies

worlds collideJust a few years ago, brands needed to be educated around the messaging and measurement technologies available in the digital age. That imperative has since shifted as marketing departments try to figure out how they take that technology and maximize results.

As a side effect, the line between data and marketing services providers like Experian Marketing Services and Epsilon and digital agencies has begun to blur. Consultancies also are pushing into the marketing services arena.

“Clearly there are many companies that have a lot of expertise in data, customer engagement and outsourced professional services tied to their proprietary platforms,” said Shannon Denton, agency Razorfish’s CEO for North America. “As the digital spend continues to grow, I am not surprised they are pushing more into the digital agency world – I have been expecting it.”

Traditionally, marketing services providers like Experian and Epsilon help companies construct strategies and set goals – building out systems that determine, for instance, how media is purchased, how data is managed and how all of that information is siphoned to and activated through communication channels.