• by Eldad Persky , March 5, 2009

It was announced last month that Publicis' Starcom MediaVest Group (SMG) and Donovan Data Systems (DDS) have reached an agreement and have ended the arbitration process they have been undergoing over the last year-and-a-half. Behind this conflict is the well-publicized acrid battle between DDS and MediaBank.

A lot of attention has been drawn to wins and losses on both sides as MediaBank attempts to grab accounts from the longtime dominant DDS. However, often overlooked is the long-term impact of this struggle, whatever its outcome may be, on the role of agency ad servers in the digital value-chain. After years of control over the process of digital media planning and buying (P&B), agency ad servers may lose ground to Mediabank and DDS, and have to find new ways to add value to their agency clients.

In the beginning, life was simple. There was DDS, one system to manage media buying and billing across media channels -- TV, print, etc. Then online entered the picture and stirred things up. Agencies had to find a way to exchange RFPs with multiple publishers, issue and track insertion orders and traffic everything for serving. This operational nightmare created a vacuum and DDS, lacking digital expertise, was unable to quickly fill this demand. Equipped with online expertise and with access to both agencies and publishers and direct connection to trafficking and serving, agency ad servers provided the digital support for media planning and buying. This was a marriage of convenience, as life had not yet gone back to normal for agencies.

Despite several attempts to integrate digital planning and buying tools (e.g. DoubleClick MediaVisor) with the DDS system, the process still was broken and the gap between these systems continued to gape. The variability of online campaigns could not be captured in the legacy billing system and discrepancies in serving data between agencies and publishers caused havoc in billing reconciliation. For years, agencies have had to accept this situation as the lesser of two evils.

Over the last two years things have started to change. DDS has developed iDesk -- its answer to the advent of the digital age while, MediaBank has introduced O|X -- its solution for media buying management across channels. Both products aim to address among others, the digital planning and buying tasks that so far have been covered by P&B products of agency ad servers. Adoption of these products by agencies are still in early stages, but it already seems clear that the main agency holding companies are all positively exploring one of these options. Within a couple of years, the era of planning and buying-related products provided by agency ad servers will see its last days and roles will begin to shift.

The expected success of iDesk and O|X is not necessarily due to a superior user interface, set of features or process design, but because it is fundamentally right that digital media P&B be reunited with P&B of offline channels and with the underlying billing platform.

One thing to consider is what does all this mean for agency ad servers? As the P&B piece of the value chain is transferred to companies like DDS and MediaBank, should DoubleClick, Atlas and Eyeblaster try to fight this trend? The evolution of digital reveals that we can count on this vibrant, complicated industry to continue to provide enough challenges for all vendors to address; So instead of resisting a natural change that is driven by core business realities and is poised to remove some of the operational pain felt amongst the industry, agency ad servers should collaborate with DDS and MediaBank. Collaboration is the key to bridge the gap between online and offline channels and products and tools from agency ad servers will enable a smooth integration, looking ahead to find other ways to provide value to agencies.

Agencies still need agency ad servers to manage and serve campaigns across publishers and to help control and optimize media budgets. In these difficult times agencies are turning to ad servers for improved platforms and tools to help reduce setup, training time and the overflow of data. There is still a cry for help for analytics that actually provides insights and expectations for the introduction of new innovative tools that help reduce creative production costs or audit and verify contracts with publishers. The list goes on and on.

Indeed we may be witnessing an end of an era, but a new one, just as exciting, has already begun. Through a more collaborative approach, the integration of offline and online channels will move marketing in a more unified direction, making room for new ways to support the advertising and marketing industry.