How do we make Programmatic Reserve really “happen”?

Interesting article last week on Programmatic Reserve by Jay Sears in Ad Age (call it “‘guaranteed” if you want – just don’t call it “premium”).  Jay’s a smart guy and right on the money with respect to the potential for a broader definition of “programmatic” to fundamentally change the online ad landscape and dramatically expand the pie.  So from that angle I was in violent agreement, but two things still kind of grated on me as I read.

First was the shifting tense and implied timing.

Seemed to me that we went freely back and forth between present and future tense as the article unfolded.  We were talking about a ripe opportunity for Programmatic Reserve, then something that was happening now, then sorting out the technology to make it happen.  Those of you who know me (and/or read this page) know this is a topic near and dear to my heart.  It’s most certainly a ripe opportunity.  But it isn’t happening now to any meaningful degree.  Lots of talk.  Maybe almost that much work going on too, but not a lot of real money moving yet.  Perhaps what he means is that this is the year that the work bears fruit and Programmatic Reserve becomes real.  Possible, but we really have our work cut out for us.

Which brings me to my next issue – what needs to happen to make it real?

Jay outlined a vision including structured electronic RFPs on the buy side, structured electronic catalogs on the sell-side, even index funds.  This was a good synthesis of many of the ideas that have been discussed over the years.  So I love the aspirations, but I think the harder part is how to get there.  That’s what folks haven’t been able to figure out yet (yes, that includes me when I was at Brand.net).

Exactly what problem are we trying to solve?  Are we (as this article’s subheader suggests) trying to get up front budgets running through RTB?  Not really.  Are we trying to compete with excel as some others have suggested?   I’m not sure that’s exactly right either.  Is this primarily a buy-side problem or a sell-side problem?  Seems to depend on who you talk to.

I think we’d be most productive as an industry to answer these questions once and for all, rather than spilling more (virtual) ink on the high-level vision for the future. So I am going to do my best this year to do just that.  I.e. figure out what’s the right path to get us to this future we all see and frankly must create to keep growing long term.

I’ll keep you posted, and I’m very much looking forward to your input!

Can we please retire “Premium”?

I spent some time on Wednesday talking with John Ramey over a couple of the delicious finger sandwiches we were serving after our latest AppNexus Summit.  During that conversation, he and I agreed that we hated the term “Programmatic Premium” to describe the process of using technology to enable media buyers to buy, in an efficient way, specific packages of media from specific sellers that guarantee delivery.

He and I are not exactly spectators in this arena, so I think this convergence is worth noting.

Unfortunately, the label “Programmatic Premium” is gaining traction as the broader online ad industry’s attention turns to the simply huge opportunity presented by [whatever we call it].  I think it’s important we get the terminology right before we’re stuck with the current kludge by default.

Here’s the problem: nobody agrees on what half of this unfortunate handle – “premium” – even means.

A recent Digiday article is typical of the debate.  Group of informed grown-ups, simple word, complete lack of convergence on definition.  If we can’t agree on what this term means, we’re not going to make the progress we need to in this area.  As I mentioned in a post a few years back, I think a big part of the problem is that folks are conflating the “quality” dimension and the “reservation” dimension.  These dimensions are correlated, but distinct.  The very fact that we are still having this confusion/discussion 3 years later pretty much proves that this term is a problem.

I believe when folks talk today about “Programmatic Premium”, they are essentially talking about automating the planning and guaranteed allocation process that today most often occurs through a direct sales interaction (reservation dimension).  Indeed, this process often deals in higher quality inventory at higher prices (quality dimension), but that is secondary and using the “premium” term invites unnecessary confusion precisely because of its subjectivity.

This is too important to keep getting confused about.   85% of the money in the display ad ecosystem is still transacted, inefficiently, “the old fashioned way”.  If we use a different term, we can avoid muddying the the water by grafting the irrelevant “what is ‘premium’?” debate onto a critical, urgent conversation about how technology can be used to streamline the process between buy side and sell side for media that cannot, should not or simply will not be traded via RTB.

Can we please all just say “Programmatic Reserve” instead?  “Reserve” focuses on the notion of a delivery guarantee or reservation, while retaining the positive associations with quality and supply-side control (think “reserve wine”).  And it gets us away from the all-too-squishy “premium”.   At least give me “Programmatic Guaranteed”.

Anyone care to second?

Programmatic Branding

Today’s AdExchanger roundup highlighted a great presentation by Bob Arnold of Kellogg Company.   His talk was on brand marketing via programmatic buying.  We obviously hear a lot about programmatic buying (primarily RTB) for DR campaigns, but this is a great reminder that we’ve still just scratched the surface of what programmatic buying can offer.

First of all, there’s much more that can be done with RTB to help brands increase efficiency.  Given the size of Brand budgets, this is a big (huge) area for growth.  Bob shares some great case examples from Kellogg’s experience:

1)    Having the right measurement framework is critical.  Bob’s not talking about CPA and conversion attribution here.  He’s driving long-term changes in purchase behavior through an offline channel.  So he divides metrics into short-term (brand safety, viewability, composition and frequency), mid-term (attitudinal lifts like awareness and purchase intent) and long-term (offline sales lift as measured by Marketing Mix Models).  This is all stuff I’ve discussed before, but we in the tech community can’t hear it too often and it’s particularly great to hear it from a big marketer explicitly in the context of RTB.  Nielsen for one is listening.  They already had a big presence in the first and last buckets, and they recently doubled down on the middle with their Vizu acquisition.   Vizu and Nielsen work great together, so this is a very smart deal.

2)    Creative is fundamental.  In Bob’s words: “Creative quality is paramount…the media plan simply amplifies the creative message.  Studies from comScore and Dynamic Logic [show that] 50-80% of the value of a branding campaign comes from the creative…it’s imperative you get that right.”  Great creative is altogether too rare online, but there are some great examples out there, like this one.  This ad made me stop and think.  And the more I thought, the more it took me away.  I will remember it and it will make me more likely to buy Legos for my kids.  Bob’s comments and creative like this are a reminder that while advertising – the activity – will be an increasingly technical pursuit for the foreseeable future, the best advertising – the thing – will continue to be driven by great creative that leverages this technology to connect people with products in a way that creates a lasting impression.

3)    Doing it right drives great results.  Bob claimed that programmatic buying for Kellogg doubled targeting accuracy while increasing viewability to >70% (higher than direct buys).  It also cut eCPM (CPM adjusted by comp & viewability) by >50% from their starting reference point.  The combination of these factors (assuming creative was comparable before and after) drove improvements in ROI (via MMM) by ~5X.  Just a stunning impact.

These examples demonstrate the power of RTB, in the hands of a savvy marketer, to drive Brand results.  Good news for all of us.

But I also want to point out that there’s more to programmatic buying than RTB.  There’s a whole set of programmatic premium, automated reserve (or whatever else you want to call it) capabilities possible on which the ecosystem as a whole as has barely scratched the surface.  A couple of the pioneers in this area include Brand.net and isocket, but I assure you there will be other, larger players down this path after them.  These next-gen programmatic capabilities are a great complement to the current set of RTB capabilities and they are tailor-made for branding.

It’s exciting to see a large marketer smartly leveraging the available technology in a new way to drive such great results.  It will be even more exciting to see what’s possible as the market begins to deliver more technology focused on this important class of use cases.

Joining AppNexus!

Super excited to announce that I will be joining AppNexus as SVP, Strategic Accounts!

Thanks to Michael Learmonth at Ad Age for some great coverage of the news.

More company in the “Future”

A noteworthy installment from Cory Treffiletti on his MediaPost board yesterday.

I wrote on the topic of media futures several several times and in detail in my past life at Brand.net (the pioneer in this area), so nothing new for me in Cory’s piece.  But it is nice to see more and more folks coming around to recognize the need for and value of a futures market for digital advertising.

I specify “digital” advertising here even though (as Cory mentions) the upfront provides a futures market of sorts for “non-digital” television advertising today.  It bears repeating that format convergence means all advertising will be digital in the not-too-distant future.  The innovation in transactional models for media will continue to be driven in the market we see as digital today, then as more and more IP-connected devices ship we will see the old TV upfront model subsumed by the new futures model that was developed for digital.

Not going to happen tomorrow, but will certainly happen.

I would also highlight Cory’s point that it is large clients – many of whom have sophisticated trading operations in other raw material inputs – that will likely drive this change.  With some exceptions (Digitas and Hill Holliday notable among them) most media agencies lack the required skills and perspective.

Given this reality, I wouldn’t be surprised if the desire for a futures-driven approach to align media buying with other raw material procurement initiatives is a catalyst for more than one large advertiser to bring their media buying in-house over the next couple years.

IBM, SAP and others seeking to enter the media market by working directly with marketers should give this some thought.

How did they know to search for that brand?

Just a quick post to highlight a recent piece of research by attribution modeling company C3 Metrics (thanks AdExchanger!).

There’s more interesting detail at the link, but the headline is that in 37% of all online transactions analyzed, search on a branded term was the very last action before purchase.

That’s obviously bad news for the (too) commonly used “last click / last view” attribution approach.  As C3 CEO Mark Hughes put it, “If an advertiser is still using last click analytics, they would mistakenly think that brand search was responsible for a third of their results.”

This research underscores the fact that attribution is important, difficult stuff and requires a lot more horsepower than last click / last view.  I think folks like C3 have a great opportunity ahead of them.

C3’s findings echo a great piece of Microsoft research from a couple years back.   As I mentioned in my commentary when the Microsoft research came out, it’s clear that a lot of the money that brand marketers are spending on other media (online and offline) is having an impact – whether or not we can measure it precisely today.

Worth some thought.

Where’s the “LUMA slide” for branding?

Very interesting article today from Brian Morrissey at Digiday, channeling Jeff Levick of AOL.

As Brian put it:

“The truth of the matter is much of the machinery of the programmatic buying landscape, captured in the Luma Partners slide, is dedicated to non-guaranteed inventory used for direct response advertising. Where’s the Luma slide for guaranteed ad space for brands?”

Now, that’s a great question and Jeff has obviously done some great thinking on the matter.

After you give the article a read, check out our results in connecting online ads to offline sales here.

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