Hill Holliday SVP Cahill Says Clients Are Cautiously Optimistic About Exchanges

Adam Cahill is SVP, Director of Digital Media at Hill Holliday, a full-service communications agency.

Adam Cahill of Hill HollidayWhat trends are you seeing from your digital media clients today?

Two of the more interesting trends are social media listening and rapid response marketing, and although clients have been asking for these independently, they’re actually closely related. Our clients want to use listening to generate insights that can impact marketing activities. At the same time, many of our clients have a need to be in market with relevant messages much more quickly than they have in the past.

As a result we’ve begun using listening in a very action-oriented way. We identify opportunities through social listening and then quickly deploy marketing programs.

Is Hill Holiday pursuing a demand-side buying platform strategy? Why or why not?

We are. From an operational point of view, being able to access multiple pools of inventory through one platform makes a lot of sense. And from a technology point of view, when you think about real-time bidding and the challenge of making decisions in milliseconds, appending third party data, etc. it’s hard to imagine how that could be done effectively without a demand-side platform.

What is your view on ad exchanges? And your clients’ view?

I’m a big believer in exchanges. My team actually makes fun of me because I talk about exchanges all the time. But when I look at some of the core characteristics of exchanges – the auction model, data overlays, and real-time bidding – it’s pretty clear that this represents an opportunity to deliver much stronger results for clients.

Separate from what exchanges have the ability to do, I look at the sheer size of the opportunity. I know you’ve written about the Think Equity research on this market. If you dig into some of the tables in their May 2009 report you see that they estimate that 90% of all ad impressions are non-premium, meaning, not sold directly by publisher sales forces. So exchanges represent a potential entry point into 90% of the marketplace (some day), which is a big reason I’m so focused on them.

In terms of how clients perceive exchanges, I think you could characterize their reaction as cautiously optimistic. The biggest issue on their minds is transparency. Without something approaching total transparency, clients will perceive exchanges as just some new spin on networks.

Does it make best sense for agencies to build, buy or license ad technology in-house? Why?

My view is that licensing, or even more generally, forming partnerships with key, trusted technology providers, is the way to go. There is just so much innovation going on, with different technology companies approaching problems in different ways. It’s important to have the flexibility to use the right solution for the right client problem.

How important is educating the client for digital media agencies today?

I think education is extremely valuable, both to clients and agencies. It’s so hard to find time in the day to day blur to talk about bigger trends and their implications, and setting aside time for monthly lunch and learns or similar programs gives you the forum to do that.

It gives agencies the opportunity to showcase their thought leadership skills, it helps clients get up to speed on important themes, and it’s also actually a great way to learn. When I’m on the hook to teach someone else about a topic, I often find that I end up learning a great deal in the preparation.

Are creative partners using interactive to its fullest potential? What needs to happen here?

I know there’s a lot of frustration with online creative, but I think it’s a complicated topic to tease out because online creative takes so many forms.

On the one hand you can point to really fun, noticeable work like the Apple takeovers on the NY Times. At the other end of the spectrum you have data and optimization-driven creative powered by the Tumri’s and Teracent’s of the world. In a completely different category you’d have a campaign that people might experience as text that in their Facebook feed. So how do you look at that kind of variation and say that online creative is good or bad?

I think what people really mean when they make those kinds of comments is that as a viewer online creative usually isn’t as immediately gratifying as a television commercial.

Two thoughts on what needs to happen:

  1. Henry Jenkins coined the term ‘Transmedia Storytelling’ a few years back in Convergence Culture. The gist of the idea is that there’s an opportunity to tell a story across multiple forms of media. Each of the media complement each other to tell the overall story, as opposed to a model where each piece of media is essentially telling the same story over and over. He was mainly talking about movies and games, but a lot of people (like Faris Yacob in particular) picked up on how this could work for brands as well. If we entered a campaign thinking about the entirety of the story the brand was trying to tell, and then thought about what parts of the story could best be told online and in what ways, I think that’s a powerful way to improve online creative. Because at that point you’re no longer trying to recreate a TV experience, you’re thinking about complementing it.
  2. The second bit is boring. It’s measurement. Today we don’t know nearly enough about the impact that online advertising has on real-world sales. Once we can know in something approaching real-time the offline impact of online advertising, we can say factually whether the creative is good or bad. At that point the judgment is no longer relative to TV but to outcomes.

What do you think of real-time bidding (RTB)? Hype or an important new feature?

I think it’s an important new feature. The exchange space as it exists today is often thought of as “display as search.” When you introduce impression-level bidding and have the ability to pinpoint-target your message and strip all waste from your program, I think the analogy changes. At that point I think the comparison is no longer just to search, but also to CRM.

What recommendations would you make to publishers? What would you like to see more of from publishers?

Total transparency is my answer to both of those questions.

It’s a recommendation because I really believe that publishers can make more money if their inventory is transparent in the exchange environment. If publishers are going to try to monetize the unsold inventory, it has to be transparent in order for it to have the highest value to the buyer.

The reason that I’d like to see this happen is something I mentioned earlier: I think the exchanges represent an exciting change for the industry, but I don’t believe they will ever take off without full transparency. I think transparency is what is going to determine whether exchanges ultimately represent an incremental or fundamental change for the industry.

How will the digital media buying agency model need to change to remain competitive in the future?

I read the Q&A you did with the Quantcast CEO and really liked the way he drew a distinction between property-based and audience-based planning. I think that’s right. On the agency side we need to be expert at both, and they’re quite different. Since the focus has historically been on property-based planning, it’s the audience-based skillset that needs to be developed.

I also think agencies will need to be much more nimble and responsive to the market. We have access to so much real-time information that can be acted upon, but as an industry we’re still guided by fixed-duration campaigns. I think we’ll have to break down silos and move toward a model where we have small, empowered, cross-functional teams making collaborative decisions and executing immediately.

In your estimation, what are key drivers in bringing brand awareness advertising budgets online?

Two things come immediately to mind.

The first is the wider availability of interruptive formats. This is starting to happen, and I think we’ll see more and more of this, the 15-second spot that a user can’t avoid. These units will give brand advertisers the kind of creative canvas they’re used to working with, and also be able to guarantee that X million people actually experienced the ad.

Secondly, I think brands need to continue to get comfortable with social environments. This is where people are spending much of their time, so if you want to build a brand you clearly need to invest in social. But the challenge is, how do you best build a brand in a social space?

It used to be that the big concern for advertisers was about losing control of the conversation or being adjacent to something inappropriate. At this point I think the challenge is more about building programs that have some level of predictable scale and impact, which is difficult when so much depends on what happens after people experience the campaign.

Follow Hill Holliday (@hillholliday) and AdExchanger.com (@adexchanger) on Twitter.

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1 Comment

  1. There’s been lots of recent talk about transparency, as the added information will allow smarter bidding in the exchanges. I agree 100%, but think that it’s a pipe dream in today’s environment.

    The math simply doesn’t work for publishers. The “transparency premium” today is approx 5-10X. Specifically, publishers sell their inventory for 5-10X the price they get through exchange-like channels. Sometimes the premium is significantly higher.

    In my experience, clients are rarely willing to pay 5-10X the price to ensure transparency. Similarly our models can rarely justify that premium based on the added info we can glean from a known site versus an anonymous ID.

    I think the real education process should be convincing advertisers:
    1) The premium for site-level transparency (often) isn’t worth it. Get comfortable that you’re getting a great discount in return for the lack of transparency.
    2) We’re putting your message in a safe environment and have controls in place to minimize brand risk.

    I’m not trying to discount the thinking above, which is great. But I don’t think we’ll all grow fast enough by waiting for the publishers to get comfortable with transparency.

    N.B. I commented before reading Joanna O’Connell’s post: Redefining Transparency. I think she’s spot on and bridging the gap in a way that’s educated by lots of “in the trenches” thinking at Razorfish. Worth a read!