The Algorithm And The Seller

How does the proliferation of audience buying using real-time bidding (RTB) systems and approaches change the "buy/sell" relationship between humans? What's in all this math stuff for the folks on the front line, historically validating the merits of, and transacting, the ad deal?

For some years, even as exchanges and other network-based entities emerged, the business relationship between buyers and sellers, within the big picture, remained essentially the same.  Everyone had to know their business, the client's business, the consumer and the landscape.

But as channels have become more dynamic and platforms have multiplied, the bar has been raised for all of us. Everyone participating in the media marketplace has had to strive for a greater level of integrated perspective, cross-platform sensibility and overall aptitude. And, we've all had to get cozy with the new consumer-led reality.

I remain confident -- and I don't believe I am alone -- that bid-based, automated audience buying will not fully soak up the marketplace as we know it. Given what we are hearing from big brands, premium media companies and smart client people everywhere, buying media "in context" and focusing on relevance of placement can exist simultaneously with the bidded, large-scale media buy.  There is a push for keeping creative and media mutually accountable for driving engagement and business results, while at the same time figuring out how to get the most out of automated systems. That dual push is key to our sanity and balance as an industry.



While we know that the buy side must develop its teams to strategize, create, plan and buy on several fronts at once -- how does the new reality change the life of the sell side? Does every seller worth his or her salt now need to run out and apply for work within the DSP, AMP, bidded inventory machine?

Will the jobs be ample on the sell side? Or, are they now forever hybridized with data, analytics and account services? Must sellers learn more of the actual math to keep up?

Where is the opportunity for today's top sellers in the ad economy, if they want to stay in pure sales? It's long been true that you've got to be consultative to win, keep and grow big clients. It's been true for some time that you must understand integration, cross-platform packaging and opportunity development in order to resonate with the buy side, which faces the same changed landscape. But what is the new mindset required to professionally thrive as a seller on the new, more-automated landscape? I'm not sure any of us knows.

While the resistance of traditional media companies to supply side and RTB platforms for inventory management will lighten as they recognize more clearly the revenue opportunity these systems can yield, a certain tension will probably always remain. Traditional media companies may not ever wholly buy into transactional selling. But, as its revenue promise becomes more undeniable, more and more online and offline players will allocate inventory to transactional systems. If you are a properly consultative seller within this system, your skill becomes to steward the client -- advertisers who still want to build brands, engage consumers, and scale their business results efficiently.

Rather than banging our heads trying to figure out how to jump fully clothed into the machine and prosper by the algorithm, the onus is upon us all to figure out how to do our best blended work -- how to serve our partners and clients in the most meaningful, productive, sustaining way. We should have no interest in helping clients be a flash in the pan.  Great brands that take root now, even in the era of big math, should live on. Assuring this requires attendance to innovation, imagination, creative, context, relevancy and scale all at once. That's plenty for a good day's work.

1 comment about "The Algorithm And The Seller".
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  1. Rick Monihan from None, July 20, 2011 at 10:19 a.m.

    I've always felt that even with auction systems, the seller still has to have a top-notch team in place. If buying is left to one or two people staring at numbers on a computer screen, alot of information is lost in the process - value is sometimes skewed and misplaced. The old adage "correlation is not causation", or the flaws of predictive modeling, may well lead to purchases that are as bad as those done without information. The Sales team will HAVE to keep buyers informed of obscure or misleading data sets....and continue to play up the value of their product in order to keep buyer interest high.

    In addition, I've often said that technology is no panacea. You can hand me a Stradivarius, but I would only make some devilishly awful noise with it. A concert violinist, on the other hand, would produce valuable and enjoyable sounds. Similarly, a computer system only does what it is told to do - and if it is told to do something improperly, or if information changes and the inputters miss their timing to reprogram or redirect (which we have seen frequently in Wall Street programs), then markets become unbalanced. There is no "set it and forget it" in a market. As one of my Economics professors once said "if everyone in the market is doing the same thing, then there is no risk and no profit. If they are all doing or pursuing something different, the inherent risk produces the profit - but keeps the market changing regularly."

    Without making a prediction, it is relatively fair to say that the new technologies will improve access to the buy/sell market, reduce costs for agencies and publishers, and streamline the process significantly. It won't be easy, it will have fits and starts. As JP Morgan once famously said "the market will fluctuate".

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