Data-driven buying should be an integral component of every agency’s media plan, but using a technology platform as a central media trading arm is only the first step in designing a data-driven strategy. It is important to take a holistic approach and leverage all of the components of a technology platform, such as real-time analytics, buying, and market feedback. There are three core areas where innovation is essential for any agency to be successful: the development of new skill sets, the evolution of existing processes and the evolution of organizational silos.
Skill sets: Media traders don’t exist, they must be developed
Some agencies can be slow to adopt new technology for various reasons; one being they fear technology will replace people. On the contrary, people are critical to control the subtler pieces that technology simply cannot grasp and to deconstruct technology when new situations arise. Before digital advertising, relationships and big creative ideas made the advertising world go ‘round. But technology in no way replaces the human connection. To the contrary, technology enables the evolution and innovation of ideas, but the key element to success of the technology platform is inextricably linked to the media trader.
Right Media’s service model has always been “managed to self sufficiency.” Just as we have found in developing our own people, a two week training period will not cut it. To ensure a successful program that enables our clients to really excel, we have developed an on-site internship program for a period of three to six months to grow and develop the skills of a successful media trader. The skills required of a media trader marry the instincts of a marketer with the expertise of a Wall Street trader. They must identify their audience, understand the technology, interpret and utilize data, and then apply new knowledge and insight gained to each campaign. While developing this skill set takes time, we have found that an on-site internship program provides the time and resources necessary to nurture successful media traders.
Process: The process that you created 5 years ago is holding you back
Adapting legacy thinking to new market paradigms is particularly challenging in an industry that is constantly changing. Advertising is moving from only buying in a futures market that depends on locked delivery to buying in a spot market where media attributes are changing in real time. For example, advertisers and their agencies require an insertion order (IO) with the set amount of impressions per publisher before delivery actually occurs. The resulting adjustment cycle can push out payment terms to up to 90 or 120 days, forcing the publisher or an intermediary to manage the float. How can agencies take advantage of data driven buying, real-time bidding and an auction marketplace when they are unable to efficiently pay their bills?
Advertisers, agencies, networks and publishers have their own seats, or instances, on the Right Media Exchange. For transactions to occur among seat-holders, each seat-holder must form direct relationships with other seat-holders. The ability for the agency to maintain control of the direct relationships with media sellers makes this seem like an ideal solution; however, we are seeing a trend where agencies turn to intermediaries to manage their seats in order to avoid their legacy, inefficiencies with processes and systems. The result: agencies are sacrificing control of the relationship in terms of billing, sourcing inventory and direct access to the sellers for day to day issues such as creative approval.
Organizational Alignment: Specialization silos must evolve.
Communication planning agencies are currently focusing on vertical alignment. They ensure that campaigns run at the same time and have consistent messaging across all media. While this is no doubt important, a focus horizontal alignment would enable agencies to know their overall goal, their audience, their success metrics, and how to use the strengths of each media tactic to achieve this one goal. Right Media has met with several planning agencies who are not even sure if their client’s product has a web site. This demonstrates that agencies are missing opportunities that data driven buying has to offer.
One of the best features of a digital campaign is that agencies can look at the success metrics and make adjustments very quickly. This learning effect means that each new campaign launch is smarter than the previous one. With real-time or near real-time media buying, agencies can receive feedback and improve upon each function (creative, planning, buying and analysis) in hours or days, instead of months or a year. Unfortunately, most traditional agencies operate each of those functions separately, creating silos of information that should be fundamentally linked together. For example, consumer segment knowledge from a data-driven digital campaign can be immediately applied to planning next month’s offline direct mail campaign.
As agency holding companies build centralized buying arms, they must look beyond eliminating waste and taking margin back from networks. Change management is critical across the holding company. These centralized buying arms are developing their servicing expertise, and they also need to help the entire organization think like a media trader. To make this work, the other agencies within the holding company need to have the incentive to evolve. For example, IPG’s Mediabrands ensures that all agencies within the organization align to and drive towards a singular P&L at the holding company level, instead of in isolation at the individual operating company level. This helps create seamless partnership and collaboration between the Cadreon Audience Marketplace offering and its sister Mediabrand agencies.
While data-driven buying is still in its nascent stages in this industry, we have seen the tremendous potential it has to improve the media buying marketplace. Now it is up to agencies to not only embrace the risk of change, but make it part of the culture.