• by Amy Auerbach , Jason Krebs , November 18, 2010

From a seller of digital advertising:A friend of mine who is a media director at one of the large digital agencies told me earlier in the week that corporate has mandated they utilize their buying desk. A media plan that had been put together and approved by the agency's client was partially scrapped (and with it my part of the plan). This would seem to put the needs of the agency in front of the needs of the client. Is this what is happening in the wider agency-client world? If so, aren't media teams hampered by corporate mandates such as this?

Amy says: As  DSPs and trading desks entered the landscape, I was skeptical that buying would ever move that way.  Digital media planners and buyers on the front lines of the business are not easily convinced that a new way of doing things is a better way.  And holding companies and advertising agencies haven't necessarily found great success when they try to implement technology solutions.  Agencies in general have been slow to adapt in the digital world, so it did seem that maybe DSPs and agency trading desks would be just a fad.

However, the trading desk concept does seem to be taking hold across the industry.  Ad networks are changing into data companies -- and I'm sure there isn't a new business pitch happening today without some sort of demonstration that a holding company's DSP lowers CPMs for clients and therefore improve campaign efficiencies.  The benefit for the advertiser is clear:  a more targeted audience at a lower cost.  So in that way, the use of DSPs is actually the right thing to do and does put the client's needs at the forefront.

I think the more important issue is how the sales side can prepare for the inevitable and further commoditization of media impressions and media ad sales in general.  The digital media space --  that is, the Internet and websites/mobile platforms and apps/digital TV and content-on-demand -- is too big and fragmented to continue to be sold just by people.  Billions of impressions per day are going unsold; there isn't any end in sight of how big the media landscape could become.  DSPs and real-time bidding will make it possible for our business to scale.  And eventually, CPMs will rise above the pennies currently traded.

My prediction is that once most sites are participating in some kind of digital tool for buying and selling impressions, aka trading, the original dynamics of supply and demand will be restored, and media companies will start earning revenue like they used to.  CPMs should rise in alignment with the value of the impressions based on the auction environment.  In the meantime, we are all going to have to cope with the uncertainty and innovate our own business models to anticipate and prepare for this change.  "If you don't like change, you're going to like irrelevance even less," as General Eric Shinseki, Chief of Staff, U. S. Army, said. So stop your whining and get busy figuring out a way to exploit the new way of buying.  It's up to the media companies to find new ways to add value

Now I realize I didn't give you any information that you probably found helpful, I just tried to give you the tough love. 

Jason, do you have any TLC for our troubled seller?

Jason says: As the great philosophers, Air Supply, once said, "I'm All Out of Love" when it comes to this topic. I am afraid I don't have any soothing words to assuage your anguish. There is nothing that any of us can do to stop technology from making its rightful march to wherever it needs to go and in as many places as it warrants. You can't stop progress.

Now, I am not one of those loons who want computers to do everything. I learned my lesson watching Who Made Who. I don't care if my refrigerator knows when it is time to order milk. I don't need my phone to tell me where the nearest Starbucks is. I don't even think we need alarm clocks. I will get there when I am good and ready.

What is useful, though, is allowing mundane, thoughtless tasks to be automated (I'm talking to you, department store perfume testers). Let's take the digital RFP, for instance. Is it helpful? Rarely. Let's hope that goes away soon.

And what about these buying platforms? Are they useful? Entirely. At its heart, all of advertising is focused on taking a product, telling a story about it, and putting that story in front of a potential consumer. The best way to do this for the past 100 years has been to buy access to a number of potential consumers and then use convoluted research to gather empirical data to determine how often you were right. Now, we're simply exchanging that research for mathematical formulae, and advertisers don't want to pay for being wrong. Buying media via audience targeting is here to stay, always and forever. So get used to it.

Still, your business partner should not be misleading you. If you think your agency is only buying an audience via mathematical equations, then you need to either a) get a better, stronger, more accurate buying algorithm then they have or b) infiltrate where math hasn't won yet. Be creative with your ideas. Think about ways your client needs to tell a story that goes beyond a cookie campaign. Use your far superior human intelligence to do things that a machine can't do -- things clients need you to do for them. This is not new. My friend and industry sage Doug Weaver made this well known a long time ago with his Oreo metaphor.

So is your agency making decisions that are in the best interest of their company and not that of their client? Well, shiver me timbers. I'll alert the (word) presses.

This is the new way in the media world, so deal with it. Don't cry about it. As our COO, Mark Pinney, says, "Let the machines do what they do, and we'll do what we do." In other words, Let It Be.