Are ad tech fees still shrinking?
“Without a doubt,” Erica Schmidt says in the latest episode of AdExchanger Talks.
A 15-year veteran of search and digital advertising, Schmidt is the North American managing director at Cadreon, Interpublic Group’s programmatic arm. For an agency person, you might think falling technology costs would be taken as entirely good news, but you’d be wrong.
“I didn’t expect the commoditization we saw in ad serving and search to hit us in programmatic as quickly as it has,” she said. “There’s a danger to that. What we’ve seen in both those spaces is when it becomes commoditized, you see the number of players condense.”
That means there’s not enough healthy competition in the marketplace, Schmidt continued.
“There are a couple of players trying to dominate,” she said. “That puts more pressure on all of us because the innovation goes away, and that’s really risky when we’re still in the early days of programmatic.”
What’s needed is a determined effort on the part of all buyers to embrace more diversity in the media buy.
Check out the whole half-hour discussion, in which Schmidt touches on a range of themes affecting agencies, CMOs and the tech middle layer. We’ve excerpted a few of her comments below.
On CMOs taking a front seat…
“A lot of CMOs are early in the process. How do they make sure they have their collective house in order? That’s a really cumbersome process for a big company that has history and legacy around data perhaps sitting outside the marketing organization’s hands.”
On the evolution of Cadreon…
“We’re no longer focusing on cheaper or more efficient buying. Moving upstream to the strategic and consultancy piece is the future.
‘DMP’ is the thing every CMO is talking about. How big is your DMP? How important? What are you doing about it? We get a lot of traction with clients on our consultancy arm around data and DMPs.
We’ve had traction helping clients go through that process, from building the business and the use cases for a DMP, to the RFP and evaluation stages, to the onboarding and activation.”
On the evolution of TV…
“When we go to market and have an upfront negotiation, we’ve made clear in every single upfront negotiation that data-enabled, automated television is core to our construct.”
“We work very closely with the Martin Agency, specifically in the advanced TV category. Talking to them about how we unlock storytelling. … All of them are leaning in really hard to say they want to make this happen.”