Google Wants More Programmatic; Arbitrage Exposé

Here’s today’s AdExchanger.com news round-up… Want it by email? Sign-up here.

Missing Pieces

Speaking to The Drum at the Web Summit in Dublin late last week, Google Global CMO Lorraine Twohill said the company wants to spend 60% of its digital marketing budget programmatically. “There’s things in programmatic that aren’t quite there yet,” Twohill said. “I really care about ads where people can play and engage so skippable ads, mutable ads; programmatic doesn’t support that yet. I care about cost-per-click, programmatic doesn’t support that yet. I assume all this will come, I think it’s inevitable, but until all those things are there it’s hard for me to get to 60 per cent but we’re moving as fast as we can.” Twohill didn’t offer a definitive timeline, but did say she believes that all advertising will become programmatic eventually. Read on.

Dark Trading In Chinatown

Bloomberg shines a floodlight on arbitrage in ad exchanges, and taps two anonymous traders who work out of New York’s Chinatown and claim to generate margins as high as 60%, and tens of thousands in revenue daily. As exchanges become increasingly interconnected, it’s getting more difficult to detect discrepancies and inefficiencies in price, according to AppNexus’ marketing chief, Pat McCarthy. “It definitely still happens,” McCarthy said. “I don’t really know offhand how prevalent that is at this time.” Read it.

Kraft Cuts Agency Roster

Kraft is dropping some agencies, and consolidating its creative business with McGarryBowen, Leo Burnett, Taxi and CP&B, Crain’s Chicago Business reported. According to the company, the decision will “align our brands more strategically with the particular strengths of agencies on our roster.” More. Kraft, an early brand adopter of programmatic, may be slimming down to bolster automation – handled through Starcom. CMO Deanie Elsner articulated the company’s first-party data vision in a presentation at the ANA Masters of Marketing show. AdExchanger story. Kraft is cutting business ties with Droga5, VSA Partners, TBWA, The Martin Agency, Lopez Negrete Communications, Roberts & Langer and Wieden & Kennedy.

Made By Hulu

Unlike most of its competitors, Hulu isn’t hopping on the branded-content bandwagon. Instead, the digital streaming service is restructuring its brand-content division as its chief of brand content, Bryan Thoensen, heads for the exit. Rather than pitching brands and agencies on producing programs for distribution on Hulu, the company will purportedly focus on selling sponsorships for its original series. “Branded content almost lives in a purgatory between media, creatives and publishers,” 360i CEO Sarah Hofstetter told Ad Age. “It’s smart because it ties to content, but everybody and nobody owns it, which means everybody or nobody will buy it.” More.

Sapient’s Net Income Dips

Hot on the heels of Publicis’ pending $3.7 billion acquisition bid, Sapient reported a 15% fall in net income during 2014’s Q3. The digital agency issued a press release on Friday detailing its earnings, in lieu of hosting a call with investors. “While one quarter does not necessarily make for a long-term trend, coming as close as it does to the timing of the transaction, without any indication of the weaker quarterly results to come days later, is potentially alarming,” wrote Pivotal Research Group analyst Brian Wieser in a report on Sapient’s results, adding that the “growth of SapientNitro, whose activities are primarily digital, compares unfavorably this quarter with most of the other agency holding companies whose activities are not commonly viewed as such.” Despite the bleak profit, revenue in Q3 grew 9%. Read on via AdWeek.