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

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!

A Housewarming for Procurement

There was a really interesting article in Ad Age last week that underscored the increasingly important role of corporate procurement, or strategic sourcing, groups in the media buying process.

This is not a new development by any means.  We first referenced this trend on this page last year and it began years before that.  However, the appointment of a formal ANA task force designed to improve the relationship between procurement groups and their partners – in this case marketing teams and agencies – shows how far this trend has gone.

The boxes are unpacked and the renovations have started.  The new neighbors are here to stay.

One might ask why such a task force is necessary.  One study, for example, presents a pretty stark picture of the need.  There’s clearly a significant perception gap between procurement groups, marketing groups and agencies; each has a very different perspective on the role and value add of the others.

Procurement teams see their role as constructive.  Their involvement helps improve the return on a critical corporate investment with a focus on increasing value rather than reducing cost, a view clearly expressed in this Q&A with several prominent procurement executives.

But according to the study results, agencies and marketing teams apparently do not unanimously agree.  Marketing teams and agencies clearly feel that procurement can err on the side of the numbers, ignoring important qualitative, creative or relationship factors.  There are also perceived skill gaps; only 14% of agency executives, for instance, said procurement “is knowledgeable in advertising/marketing”.

The ANA task force appears dedicated to ironing out these differences in perception to improve the efficiency and tranquility of the “neighborhood”, if you will.  Part of their remit is to help procurement teams get up the learning curve quickly on what for some is a new domain – marketing.  There will also no doubt be attention paid to focusing procurement efforts on areas where they can add the most value the fastest.  Getting points on the board quickly is a key ingredient to successful change management.

To that end, I think there are some helpful suggestions in another Ad Age article.  The author casts procurement as a tool to help marketers and agencies build working budgets by improving efficiency, accountability and control.  That’s a state I think all constituents would agree represents success.

Renegotiating agency compensation is one thing on which the three constituencies could reasonably have tension.  But there are many issues on which agreement should be fairly straightforward.  Would anyone argue against a lean, streamlined briefing process, or for travel when Webex would suffice?  Does one account really need a sprawl of different agencies?  These seem like relatively obvious areas where experienced procurement practitioners can leverage experience from other domains to deliver significant savings that could be channeled back into working media budgets.

Even more strategic would be leveraging procurement’s experience in sourcing other direct and indirect materials to drive improvements to the processes for planning and sourcing media – particularly in digital.  As the author mentions, this is an area of great potential due to its rapidly growing share of budget and the extreme complexity in today’s digital process/ecosystem.

I couldn’t agree more, but as I mentioned in my own Ad Age article, procurement teams need new technology to help them add this value.   Accurate forecasts, meaningful delivery commitments, guaranteed quality – these are all indispensible tools to help procurement teams do what they do best in other domains.  These capabilities are just as critical in digital media, but the solutions have been sorely lacking.

One author goes so far as to suggest we replace the entire process (procurement, agencies, marketing – apparently the whole kit and caboodle) with what would have to be the worlds gnarliest optimization model.  You know when you’re comparing the complexity of your model to those that (attempt to) predict the weather you’re off to a bad start.  But even if all the neat stuff described in this futuristic piece was possible today, you’d still need accurate forecasts of capacity and price, and the ability to reliably deliver against forecasts to get real value out of this magic box.

My personal advice is for the incumbents in the media value chain to welcome procurement.  In my experience, procurement teams are very much aligned with the objective of helping marketers and agencies build working budgets by improving efficiency, accountability and control.  These new partners are smart, focused, disciplined allies that understand that advertising combines art and science.  They are here to help.

We’re proud to offer MFP On Demand to all of our customers, particularly the client procurement teams whose needs have largely been ignored by the Silicon Valley (and ‘Alley) technology communities thus far.

Creative matters.

Very interesting article in Ad Age on Monday.

Not standard fare for this page – I usually focus on media as opposed to broader marketing or creative topics, but I found this article thought-provoking.  The author argues that establishing the right name for a new product category can be just as important in the long term as establishing a brand presence within it and uses several effective examples to illustrate the point.

While his goal is to highlight the importance of thinking carefully and independently about the product name and the category name, I don’t think he would argue that both are essentially branding exercises.  I.e. the same level of thought that goes into branding a product should also go into branding a new category, should you be lucky enough to have that opportunity.

Definitely a theme that we’d be wise to keep in mind in a space as dynamic as online advertising where it seems there’s a new acronym every quarter, whose definitions can often lack clarity even within the industry itself.

I was immediately reminded of the goosebump-inducing carousel scene from the finale of Mad Men Season 1 (worth watching again even if you have seen it several times, by the way).

With all the attention on media and media technology these days, let’s not forget the creative.

What Online Advertising Should Learn From TV’s Upfront Market

Just a short post today to steer folks to this year’s Ad Age Network & Exchange Issue.  In it I have a byline that outlines, in a more popularly accessible way, the main ideas of my previous technical piece on on the importance of the futures market for Brand marketers.

We think that the Futures market is a critical and under-served space in online advertising.  So we’re proud to offer the industry’s first and only web-wide Media Futures Platform, which has powered guaranteed delivery of high-quality campaigns with phenomenal offline sales results since 2008.

As always, we welcome your thoughts and comments!

Privacy Issue Reheating?

Interesting articles in Ad Age and MediaWeek today calling attention to potential privacy & regulatory issues surrounding Behavioral Targeting (BT).

The specter of regulation has loomed since the NebuAd debacle, but has seemed somewhat less menacing as Washington has focused on a stream of crises beginning with the financial meltdown in late 2008.

That now seems to be changing.  In addition to these articles and others, privacy/regulation was recently both a major theme in IAB CEO Randall Rothenberg’s remarks to the IAB’s 2010 Leadership Meeting and the subject of the hilarious Onion article mentioned in the Ad Age piece.  Quite a range of coverage.

I think there is legitimate discussion to be had about both consumer privacy and the related issue of data rights/ownership in the value chain.  These are both critical issues and the industry has only just begun to scratch the surface on both.  So it will be interesting to see if the privacy angle in particular gains steam once again in Washington now that the Health Care battle seems nearly over and the dust has settled somewhat from the “Great Recession”.

Something tells me the embers of the NebuAd conflagration are still good and hot, just awaiting a little oxygen.

Online Video: Our Opportunity is VAST

In my guest article today in Ad Age, I state that the IAB’s new video ad serving standard (“VAST” for short) has serious implications for video-only ad networks (e.g., Tremor, Brightroll, etc.) for two reasons:

1. A significant portion of the engineering work in which the incumbents have invested enormous time and money will effectively be marked to zero by the market

2. Existing, technically sophisticated display ad networks will enter the video market quickly and effectively.

To be clear, when i say “video”, I’m not talking about in-banner video or overlays, “bugs” etc.  I am talking about :15 and :30 second pre-, mid- and post-roll video.  This is the video advertising format where the environment is most similar to TV and the creative is directly transferrable from TV.  As such, it represents >90% of advertiser demand for online video and will continue to be the lynchpin in moving TV budgets online.  VAST effectively hits the “reset” button on this market in 2010 and while many current players will face serious trouble, for some companies this is an enormous opportunity. is one of those companies.  Melissa, Elizabeth and I have been astonished how often and emphatically during the past year the top agencies, as well as Top 100 advertisers directly, have asked us to extend our market leading brand display platform capabilities (SafeScreen, SmartScale, etc.) to video.  So our sales force is out taking orders for a platform extension that does just that.

Top 100 advertisers want online video to explode as an advertising medium.  It’s the obvious, and (to stay in front of their target audiences) necessary, successor to the $60B they spend on sight, sound and motion brand-focused TV buys each year.   But today’s video ad networks simply don’t provide the brand-focused capabilities Top 100 advertisers require.   What have they told us for the past year they want from online video?  The ability to guarantee Quality, Scale and Value.

Music to our ears.  Stay tuned.

CBS’ Decision

Some quick comments on this morning’s Ad Age article on CBS stepping away from networks. The “publishers vs. networks” issue has ebbed and flowed pretty consistently since I started in this business at Yahoo! in 2002.  It seems to ebb when revenue is scarce and flow when demand picks back up, with clear evidence of both trend and seasonality.  There is obviously some rationality to this pattern, but I have always thought that the “turn ‘em on, turn ‘em off” approach is a blunt instrument that doesn’t serve publishers, particularly in the long term.

For example, in this article, CBS draws a distinction between the third party networks they are turning off and agency-owned networks (e.g., Vivaki) with whom they will continue to do business. As Michael Zimbalist of NY Times points out in another recent article, from a publisher perspective these agency-owned entities have a lot in common with third party networks.  So it’s unclear how leaving them “on” makes sense if the best solution for third party networks is “off”.

Apart from this inconsistency, two other big issues with the on/off approach are lack of resolution and poor responsiveness to dynamic market conditions.  While networks overall may monetize at a lower rate than direct sales efforts, certain networks will be more or less competitive for certain inventory (resolution) and at different times (dynamics).  RTB was designed to address these two “hard coding” issues (amongst others), but neither AdX 2.0 nor Right Media are close to ready to be relied upon as sole indirect demand channels.  Internal agency network efforts are still nascent as well.  The bottom line is that vastly more demand still flows through third party networks than through of any of these channels.

So rather than bowing out of a significant majority of the quickly evolving ad ecosystem, I think the right publisher solution is a framework that coordinates direct and indirect sales efforts to create the competition for inventory that drives maximum revenue for the publisher. Based on my long experience at Yahoo!, I laid out the broad strokes of such a framework in an article for MediaPost earlier this year. Publishers that learn fastest and best how to apply such a framework in their particular circumstances will achieve levels of monetization that increasingly distinguish them from their more isolationist peers.

None of us is as smart as all of us; the key to staying on the cutting edge of monetization is coordinating the best efforts of both direct and indirect channels on a dynamic basis.  Today and for the foreseeable future, third party ad networks are an important part of that picture.

Echoes of Exchange 3.0

Just a quick note pointing to a short, but interesting post today that echoes my recent article in Ad Age.  Clearly Pete Kim and whoever he was talking to understand that it’s not all about DR.  Kudos to them.

Again, today’s re-energized battle for display is just warming up.  The long-term winner will be the one that provides brand-focused capabilities on top of the evolving supply platforms to help brand budgets follow audiences online.

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