Interpublic Group’s (IPG) integrated agency Hill Holliday has launched its own programmatic unit, headed up by EVP and Chief Media Officer Cindy Stockwell. Faithful followers of the agency will recall this isn’t the first time Hill Holliday has offered programmatic-type services.
But changing client demands spurred the agency’s decision two months ago to move away from a managed service model, Stockwell told AdExchanger.
The issue with managed services? Lack of transparency. While Stockwell insists Hill Holliday has “always been transparent,” she claimed it’s a problem that afflicts the industry in general. When her team began poking around, it was initially difficult to figure out what exactly clients paid for in a managed services model.
“We had to lift that veil,” she recalled. “When we did and saw the pricing going on, we felt the services the DSPs [demand-side platforms] were providing was something we could provide as well, if not better, by having staff on site.”
Hill Holliday has twelve employees in its programmatic unit and will hire more as its clients shift dollars into the space, said Katie Thompson, the agency’s VP and associate media director. Funds clients save by not having to pay managed services fees can then go back into buying more media, Stockwell added.
Currently, Hill Holliday has moved four of its biggest clients into the programmatic unit, where clients allocate anywhere between 5% and 15% of their advertising budgets. The agency will bring in more brands in January 2015 and by Q2 2015, it hopes to manage programmatic buying for all of its 39 clients.
As part of this initiative, Hill Holliday is working closely with three strategic DSPs, with Turn as its biggest partner to date. The agency is not, however, using Turn’s data-management platform (DMP) because many of its clients, especially the larger companies with lots of first-party data, already have a preferred solution.
Hill Holliday preferred to partner instead of acquire or build its own technology. “We don’t want to be hamstrung by building the technology in-house and constantly having to update it,” Thompson said. “We can work with whoever is being most innovative in this space. It’s very likely a new DSP might come into this space next year and change the game.”
See-Through
Transparency – which generally means showing the price and placements of media buys – has been a rallying cry among brands. Ad networks like Rocket Fuel have felt the heat. And holding companies, in the ultimate exercise of pots insulting kettles, gleefully toss around accusations of opacity like kids playing hot potato.
Many brands – especially the big ad spenders – seem fed up. They want their digital buys to be more transparent for a number of reasons. Some want to evaluate their buying efficiencies over time. Others believe they can do a better job segmenting and targeting consumers.
“The agencies who work with those brands every day and sit in those meetings understand [our target audience],” Kraft VP of media and engagement Bob Rupczynski told AdExchanger in a previous interview. “But many of the vendors in this space can never identify the segments, the cues and signals that would put [consumers] in the segmentation in a way we understand it.” (Kraft’s media agency is Publicis Groupe’s Starcom.)
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Of course, full transparency isn’t always possible. Thompson points out that some publishers with premium inventory won’t reveal everything about the inventory sold in an open auction. “If, because of brand safety, you want to eliminate everything that’s not fully transparent, you’d be eliminating a lot of premium inventory,” she said.
Initially, publishers did this because they worried that selling transparently through the auction model would devalue their premium inventory, Stockwell said. Now she suspects it’s because publishers like Yahoo want to push advertisers into private marketplaces, where they can better control inventory access.
“They’ll still have inventory in the open exchange,” she said. “They just don’t want you to know how much or what because they want to drive you to their private exchanges.”
Client Coziness
Maintaining those close client relations is a big reason that Hill Holliday has built its own in-house programmatic discipline instead of leaning on IPG’s agency trading desk Cadreon.
“We never placed our clients’ dollars through the Cadreon offering,” Stockwell said. “That was something we evaluated, and though it’s a great model for IPG, we felt as a full-service agency, having a hand on the levers ourselves was important to us.”
By manipulating those levers on behalf of its clients, Hill Holliday can see exactly where ads are running. This makes it easier to, for instance, assess whether they’ve successfully placed media next to brand-safe content without relying on vendors’ judgments.
“And some clients even want the ability to log on and see on a day-to-day basis where they’re running, so [Hill Holliday’s model] gives them the flexibility to do so,” Thompson said.
Stockwell listed other client advantages as well, such as using information gleaned from other channels, like search or social, and applying it to media buys. That’s why Thompson, who helped design Hill Holliday’s programmatic model, suggested rolling it together with the agency’s search and social teams.
Hill Holliday’s initiatives underscore a trend in which agencies are developing their own programmatic buying capabilities. Starcom last Tuesday bolstered its programmatic chops by purchasing RUN’s DMP-DSP hybrid. Another Publicis agency, Razorfish, is also rumored to be working on a data-focused solution to serve its clients.
Getting Educated
Despite interest in programmatic, some brand clients still need to be educated on what exactly it is. A source from a media agency – which is also building out an in-house programmatic buying practice – grumbled that many clients believe programmatic simply means the ability to buy more inventory at cheaper prices.
Stockwell occasionally encounters this misconception.
“Sometimes, yes,” she said. “But a lot of clients get it. Over the last five years, we spent a lot of time educating clients on it.”
The clients who are all-in, she said, appreciate that programmatic teaches them how to optimize results. Others have to be introduced more gradually by, for example, dabbling in programmatic via private marketplaces or paid social.
“Everybody is doing some form of paid social, so clients start to understand how they can enable that in a way that’s easier for everybody and you can get more learning out of it,” Stockwell said.
For other clients – such as those whose ad strategies are traditionally TV-heavy – Hill Holliday introduces programmatic through specific inventory sources.
“Weather inventory is an example,” Stockwell said. “We can set up marketplaces for them, do deals, and quickly get them into certain types of inventory on a repeatable basis. We can help them understand what’s working for them across that inventory and help them understand that weather doesn’t just mean weather apps, it’s anything that’s weather-enabled.”
The TV Future
Programmatic TV is still remote, but Hill Holliday sees an opportunity. “We’re gearing up for it,” she said. “We’re doing a lot of learning in that area and we have clients very interested in it and tests in proposal stage.”
Thompson oversees staff with a direct response TV background, but it’s separate from Hill Holliday’s programmatic unit. Right now, the agency is still testing its capabilities. “When there’s a greater array of inventory available [in programmatic TV],” Stockwell said, “we’ll be ready to dive in and take advantage.”
She anticipates more inventory could emerge even before 2016, noting that many conversations around programmatic TV have occurred during upfronts.
“MAGNA, who we place our national television dollars through, have as part of their upfront deals made sure they have first dibs on ad insertion opportunities on some of the cable networks,” Stockwell said. “They’re trying to create a storehouse of inventory they can move through programmatic technology.”
