VivaKi Nerve Center's Kurt Unkel On Google, Facebook Exchange And The ATD

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VivaKi Nerve CenterKurt Unkel, President of VivaKi Nerve Center, has been giving Phileas Fogg a run for his money lately as he travels the globe looking to ignite client solutions emanating from his Publicis-owned research and development unit.

Last week, he discussed a range of topics with AdExchanger including his group's agency trading desk solution, Audience on Demand, Facebook Exchange and more.

AdExchanger: Since you took over as President of VivaKi Nerve Center, what has been the biggest surprise?

KURT UNKEL: I don't know if there have been any big surprises, but the most intriguing piece is seeing it from a global perspective. Much of what we've built in the Nerve Center has taken off in different markets - we are set up and running in 15+ markets today. Interacting with folks in those [different] markets has been exciting as well as challenging - “challenging” in regards to the way we're rapidly scaling and changing solutions.

How do you qualify the change that you're trying to make through VivaKi Nerve Center?

We’re bringing forth new technology approaches. It’s substantive. There's a lot of desire and need for it - almost more so globally than the U.S. The U.S. is certainly a more complex, mature market with a lot more entities that play.

Globally, there are markets that are very much… “behind” is not the right word, but they're just coming into their own in terms of technology, digital spending and the impact that advertising on the Internet has for their local clients.

The U.S. is still by far the largest market for us as it relates to driving change like AOD (Audience On Demand) into the agencies. But, the idea around using automated tools, automated marketplaces - especially across Europe and APAC - resonates well.

Looking at AOD in particular today, can you talk a bit about headcount and how much you've grown recently?

AOD is around 150 today globally. It’s active in 15 markets with Singapore just coming online. Specifically in the US, the number is north of 105.  We literally had a “sea” of folks who are focused on social come “online” in New York in the past week. From a hiring and growth standpoint, it’s a very healthy trajectory.

That has a lot to do with the focus being around multiple channels. Not only are we going after display, we launched video last year and, more recently, social was started at the tail end of last year.

Let’s talk about Facebook and VivaKi’s relationship with Google. Has it inhibited the opportunity you have with programmatic buying and Facebook?  Specifically, I’m talking about the fact that you use Google’s Invite Media [as a demand-side platform]?

There's two ways of looking at this because you can buy programmatically with Facebook through two different doors which includes Facebook Exchange.

To be clear, we don’t have all of our clients on Invite Media. In fact, we are using Turn for one of our big clients. Certainly Invite not being able to plug-in to Facebook Exchange is a less than ideal situation at the moment. However, as I said, we do work across more than one DSP. And, we have a deep conversation going on on both fronts [at Facebook] such that, hopefully, we'll see an approach to an open marketplace that Facebook clearly values and Google is ultimately trying to get to as well.

But for us in the long term, it does look into, "Well, to what platforms do we want to go beyond, simply, just Invite?" Again, we've been actively testing on others and we'd love to see everyone's acceptance of all platforms so you're not getting into what I'll call "differences" among the large companies that would inhibit clients.

Certainly that's a frustrating piece, but at the same time we look at Facebook through what we're doing on the API side of the house. Recently, we received Preferred Marketing Developer status on the “Insights” API, and we're almost completed on the Ad API.

The IP that we're bringing to the table as it relates to how do we interpret the data that's flowing inside of Facebook into ways that are optimization and targeting triggers that we can deliver to our clients is scaling very well and something we’re focused on.

…Again… love to get Facebook Exchange into a spot where everybody is playing equally. As we said, we have active tests for clients on non‑Invite platforms. But, our focus is, right now, is a level of integration through the API tools that helps us differentiate and do some unique things with Facebook on our clients' behalf.

That's something I'm proud about what we've achieved - our relationship with Facebook and getting active with their product teams, their roadmaps.

Do you think that using Invite Media right now, and being blocked on a piece of inventory through Invite Media, speaks to a move down the road beyond a Google‑focused relationship for VivaKi and trying to work with more partners?

In general, we've had a pretty open approach. Obviously, we have a decent percentage of our business that we support on a platform and I draw a similar parallel to ad serving or search tools. As an organization, you want to highlight technology partners with whom you can iterate and put a lot of focused energy that brings something unique to light.

One of the challenges you see in a marketplace like this is that when access is restricted - what does that actually mean long term?  When you work with a number of partners and suddenly everyone starts playing favorites or limiting things for reasons that aren't entirely transparent to the broader marketplace, it's a disturbing place that it could go to.

We want to see providers of ad tech be treated separately from sellers of inventory so you can make that choice. Because at the end of the day, there's a lot of fascinating integrations that go on inside the broader DoubleClick stack.

When you can't connect all those dots together - where 80-90% of clients in the marketplace today build a lot of their ad serving on [the DoubleClick] stack - that can be frustrating.

At the same time, we're in an active environment of using other partners.  Can this potentially go to a place where an evaluation on leveraging an entire Google stack comes into play? That's not outside of reason. But, at the same time, our goal is to see as many stacks being openly supported by all the marketplaces as possible.

In the end, this is about a client's decision. If they have integrations with technology, they've made their bets. And [if] somehow that integration or usage of that platform inhibits them from buying media in a smart fashion - I don't think that's in the best interest of that media platform and it creates a level of complexity as it relates to getting client adoption and more focused spend in this market that's frustrating to see.

When you boil it down, it tends to be politics on some levels in certain organizations that you just would rather see solved through other means.

Talking about the client side, it seems like there is some push back out there on the client side right now [to agency trading desks]. Hypothetically, when you get in front of the client's procurement agent, what is the case you make for AOD? What is it that you try to say to them to convince them that “we are the right solution for you”?

Well, the first thing that comes out in this discussion when we have engagements through procurement departments and others is that, for us, this is about an expanded scope of services. We're providing not only a new approach to how we buy the media, but also the construct of how we build the services, technology, and integrations - it is very different than our typical agency engagement. For that reason, how do we go about pricing the solution? How do we go about spec‑ing it and discussing what is partnership-driven, what is in-house technology, and what is the service offering as it relates to scope of work and expectations around what we do, and how we work with the agencies?

All of that's a fascinating conversation that, for the most part, once everyone's understanding it, it makes sense. The value prop is clear and straightforward.

When you get into, "Well, how do I make a play for why am I better than other alternatives out there?" - that's where you can get into the conversations around the integration, who we have, by being a part of the agency organization at a higher level and the fact that we can bring a lot of connectivity into systems that would [otherwise] have a lot of extra cost in order to bring that together.

If I'm talking to a procurement department, that tends to be what they're zooming in on. So it's a big efficiency play versus integrating a series of third‑party organizations that all inherently bring their own scope of work, services, and layers of teams that are required to integrate it.

At the end of the day for us, this is about a set of integration services and the fact that no matter which partner you want to plug and play with, we have those hooks built in.  We can bring something to the table that's going to leverage the scale of VivaKi and deliver on efficient pricing as it relates to the aggregation of that talent and technology into something that's useful for clients.

Then, at that point it comes down to identifying the KPIs that a client's going to expect from us - or even alternatives. If it's going to be a “bake‑off” type of situation, we actively, and happily, welcome it.

How are you competing on the service layer with other solutions that are out there - the “startup” trading desk solutions - especially as it relates to incentives, stock options and so on? And, is there a difference with the incentive structure within VivaKi Nerve Center's trading desk solution and what is traditionally thought of as an agency incentive structure?

It might be a challenge from a recruitment standpoint to go out there and compete with startups or sell‑side people that offer a crazy bonus structure. They'll get a low base, but the potential to have a huge payoff from a bonus perspective is out there. In our context, we'll have agency, incentive-type programs in place that are in-line with or very similar to what the agency would have in place.

I don't know that [our incentives will] ever be as aggressive as what a sales organization is going to have, but that's the nature of what it means to be on our side - and truly be on the buy‑side .

There are other ways through which people find incentive to do a great job and see this through – [such as] the career development and having the opportunity to go on in the organization. But, do we have a sales incentive program, or something to that effect that is very different than the planner or buyer at the agency? The short answer is no.

In the past, you’ve noted that AOD buys a lot [of display] through Right Media - presumably Yahoo! Owned and operated. Is it still a major inventory pool for you?

Yes, the short answer is Right Media, and Yahoo, in particular, have always been solid performers. For the foreseeable future, we have a very active relationship with Yahoo! As well, and exploring access to more owned and operated inventory is a collective goal -helping work with them in a way where, not only are there ways that we plug into their inventory in a more automated fashion, but also outlets where we’re getting into their Genome product and data.

We’re asking - how do we take a lot of the tools they've developed and integrate that more closely to our tools so not only my team, but our agency teams have the ability to forecast and plan off of many more, robust data sets?

That has been and will always be a reason to continue to be a good partner with Yahoo.

Finally, a year from now, what are a couple of milestones that you would like to have accomplished?

We're actually knee‑deep in our 2013 strategy finding sessions right now. For me, there are three major buckets for us.

One is around the Nerve Center’s existing solutions, of which AOD is one. We have quite a few other things we do as well. So, how do we get every one of our client teams adopting and using those? That is a massive focus for us.

We have also been building out and focused on cross-channel optimization and insights so that we can get to a point where clients, who are looking at [spending] addressable dollars, say, "I'm going to let my dollar track wherever there is the greatest likelihood of driving success."

No longer is it entirely tied to a video dollar - and display comes from a different team. But, in fact, it is an addressable dollar. We let the platform and results dictate where the next dollar goes.

The past year we have had good traction as it relates to video versus display on that front. As it relates to AOD, major milestones would be getting that moved forward across social versus a dollar on display, versus a dollar on video - with a common metric.

So, adoption and getting people into a higher‑level of strategic thinking – that’s one bucket.

Number two then is, we've made some big bets that relate to how clients participate in this marketplace with their own Web properties and data. We want to help bring that to life.  Not only are they a buyer, but can they become a source?

The third bucket for us is from the global perspective - we have had a lot of good traction in the 15 markets we are in. But, what I want to see is a consistency and depth of scale everywhere, across the globe.

APAC, in particular, is a very big focus. We've got a start there, but to get APAC to a point where we are in Europe, that would be really exciting.  We've got some teams inside Dubai and Russia, too. My goal would be to see the U.S. and the U.K. learning a lot from other markets versus today where I'd say they're probably showing other markets more than they're receiving.

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