Ad Tech Progress Requires Drastic Shift In Agency Priorities

by , Jan 30, 2014, 9:28 AM
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The amount of data and intelligence available for programmatic media buying grows exponentially every day. RTB platforms can distill the data and design algorithms to endlessly exploit their potential. This gives agencies and their media buyers a daunting -- but not impossible -- challenge. They must effectively evaluate the ability of one platform or algorithm against another in an age where technology is growing more complex.

Media buyers are not data scientists, nor do they have a preternatural understanding of how to evaluate or judge the logic behind an algorithm. Yet the demand side is doubling down on the science, creating more complex and interesting solutions. Of course, complexity does not equate to high performance across the board. If media buyers are expected to vet technology in a programmatic age, then agency priorities must change.

There are plenty of brilliant planners and buyers in our industry, but truth be told, we also have a young, underpaid and overworked work force that marketers depend on for media decisions. Due to their limitations, there’s never enough time to truly digest the workings of a technology. Ad tech companies tout their algorithms as a means of differentiation, but simply having an algorithm is no longer enough from an agency’s perspective. Being able to understand what that algorithm is and does is important, but agencies never ask to see the algorithm. They don’t want to see it, or really even know what do with it. If algorithms are the means of differentiation, but agencies aren’t prepared to identify attributes of an algorithm, that’s a problem.It’s great to pit two tech companies against one another and have them go head to head, but that’s a slow process, and media buyers don’t have time to test every technology.

Demand-side technologies are adding to the complexity by productizing menial features that are more effective as an acronym than as a differentiated product. Tech companies are also moving into what was previously agency-only turf, creating a clear and present danger for the current agency model. The people on the front lines of agency decision-making and vendor meetings  aren’t equipped to see through the marketing fluff.

Real-time technology partners do not get a free pass on this one. They are as guilty as agencies. We employ a dated sales strategy and staff that can’t articulate what makes their science so special. Deals are often completed because of marketing jargon over more substantial conversations.

Instead, everything should be based on what technology can provide. Relationships are important in any business, but should not be the foundation of a well-articulated media plan in the programmatic age.

It may be impossible to resolve these issues overnight, but we can all agree on the need to take a step back and reexamine skill sets needed within the agencies and technology companies. Simply put, we are not having the right conversations between buyers and sellers because we often do not have the right people in the room.

Nearly every agency and technology partner I deal with wants this shift to happen, but it takes greater investment in staff. This would change the current agency practice of hiring recent graduates who will work for relatively low wages and happily report to the front lines. Lower-level buyers will still be important, but they won’t have as large a role in the technology decision-making process.

Even then, the agency side has to be wiser about how they look at technology. Agencies need a repeatable evaluation process if they are to work easily with multiple platforms. This process comes down to three things:

Clearly define goals, with and for clients. Is the campaign all about conversions? Clicks? Verified audiences? How much should those events cost clients? Are they willing to pay for it? Be realistic, but also challenge the status quo. Media plans should change as consumer behavior changes.

Examine how data is processed by various technologies.  The values assigned to data will vary within tech platforms. For clients working under strict KPIs and last-click attribution systems, quantity will win out over quality. For brands that consider consumer quality and frequency paramount, an algorithm or technology that values consumer behavior and engagement is more valuable.

Leverage the flexibility of programmatic to pivot and deploy new tactics. The greatest potential of programmatic buying is in its ability to change course and quickly deploy new tactics. Listen to the data and follow it. Do not try to back the results into the goals.

All these pillars refer to practices that are not easy to learn overnight, and require an experienced media buyer who knows what to look for. Agencies as a whole aren’t broken, but if they fail to devote resources to media talent, they’ll continue to cede ground to bigger tech companies. Legitimate investment in talent and ad tech education on the front lines of media planning should be a priority, for both agencies and their advertiser clients.

1 comment on "Ad Tech Progress Requires Drastic Shift In Agency Priorities".

  1. Daniel Backhaus from SQ1
    commented on: January 30, 2014 at 11:45 a.m.
    Will, Great post and very timely. I agree with all the points you make, though, I suspect, perhaps to varying degrees of intensity and from a slightly different point of view. For one, I believe agencies could do themselves a huge favor - and perhaps also help to appear less "broken" - if they were more open to embracing data, analytics and technology and the changes to current business models (and the processes that support them) these developments are forcing. The fact is, agencies are currently deeply vested in a status quo that is inherently ineffective, wasteful and opaque. One that serves neither advertiser nor publisher very well, but allows intermediaries to extract value, all too often without adding much benefit. Agencies must embrace the coming change and evolve their model, which will require investment in new processes, new platforms and, yes, human resources. Their relationships, contacts, and innate understanding of marketing and advertising principles agencies bring to the table are valuable but they alone will not be enough to sustain them in a data-driven, technology-centric world.

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