Real-Time Daily caught up with Keith Lorizio, the newly appointed chief revenue officer of Chango, a demand-side platform (DSP) and data management platform (DMP), to talk about his new role and programmatic advertising -- particularly as it relates to branding. He replaces Dax Hamman, a co-founder of Chango who has moved to the position of chief product officer. Lorizio joins Chango from Microsoft, where he most recently served as VP of U.S. sales and marketing.
Real-Time Daily: Can you give us a bit of background on yourself? Where did you come from and what did you do?
Keith Lorizio: I have a long career in the premium brand space. In the constantly changing digital space, I really view programmatic as the next evolution of digital media. You can probably see a few quotes from me [about it] from a number of years ago when I was at Microsoft.
I represented the publisher side and programmatic broke in, and you could see the decreasing CPM that occurred. When I was on that side I started to realize: ‘Wow, this is a new way of doing business,’ but I didn’t feel it was the best way to create brand experiences or the marketing experiences that were great for advertisers.
Now it’s a whole new world. The advance of technology [means there is now a] full-funnel set of solutions, from branding to acquisition to site retargeting. You can create true premium brand experiences as well as premium ROI and performance results.
RTD: Was there a catalyst for this, or was it more of a gradual buildup?
Lorizio: It was definitely a gradual buildup. Clearly, the tech advancements that have allowed a number of the RTB inventory pools to access premium inventory created the opportunity. As I went into the marketplace, I saw the opportunity for these pools of inventory to create premium opportunities across video, mobile and display.
So you had capability of buying all inventory sources across all different platforms via the programmatic space. And so today, you have an opportunity to create experiences that could just not be done in years past.
RTD: When and why did you leave Microsoft?
Lorizio: I left in February of this year. I had almost 8 years -- just under -- of a very successful run where I was promoted up into VP of sales and marketing, U.S., and I lasted in that position longer than most of my predecessors, and it was a great experience.
But eventually, as in many situations, we had a strategic difference of opinion of where the ad industry is going, and it was time to move on.
RTD: Did you know that you wanted to enter the programmatic space next?
Lorizio: Although that was one of the top options, I wasn’t sure. I had the good fortune of looking at a number of companies, including video, mobile and programmatic. Of course, programmatic spans across all of those, including display.
RTD: What are you short- and long-term goals in the new role?
Lorizio: First of all, the programmatic industry, to no surprise, is a very competitive space. Chango has focused primarily on building the best product in the industry, and now the product is ahead of the sales reach. My No. 1 goal is to work with the sales team that is here -- which is about 30 people -- and to grow that sales team out to a group of high-performing, trusted advisers to both agencies and clients direct by doubling the team over the next four to five months.
RTD: What is your definition of "programmatic" today?
Lorizio: We’ve talked for so long about “the right message, right time, right person,” and I believe -- I know -- that with the tech that exists in the programmatic space, you can also do it at the “right price.”
My goal is for marketers to not segment budgets; my goal is to have marketers understand … that we should see that budget all together. It should be looked at holistically in how you buy media, and you can venture into the programmatic space and obtain all of your reach objectives more affordably and effectively.
RTD: Do you think "programmatic" is well understood? Or do you, like many others in the industry, believe a lot of education is needed?
Lorizio: A huge of amount of education is needed. I would be happy to have an army of evangelists that have the same view I do to be able to help accelerate [adoption]. I’m confident we will get there, but certainly … programmatic, to some degree, still has that image of an ROI, performance-based, lower-quality inventory mechanism. That’s simply not the case. So getting the word out there that this is premium inventory -- it can be video, mobile, eventually set-top -- and that we can create premium brand experiences as well as performance-based elements of site acquisition and site retargeting.
RTD: Is Chango trying to get some bigger brands as clients, or on board with programmatic?
Lorizio: Absolutely. That’s my objective, and a huge piece of my strategy. I will look for sales talent with those relationships to accelerate that strategy; I have some of those contacts myself.
RTD: Is anything lining up?
Lorizio: I don’t have any commitments yet -- as of being here only one week -- but I pre-solicited many of my agencies and direct-brand contacts and spoke with them about the opportunity here … and i believe i have a lot of support from them.
RTD: You’ve mentioned agencies and “brands direct” a couple of times. There have been some recent reports suggesting a shift is taking place in the balance of power. What’s your view of the balance between agencies and the brands themselves when it comes to programmatic?
Lorizio: They are both important. You see the releases where American Express and P&G have clearly spoken to the fact that they want to have a greater responsibility for their marketing budgets [and] want to put more toward programmatic and bring more dollars in-house in a more self-serve environment with a platform they can operate themselves. That is interesting to hear.
Other brands are becoming more engaged, but I believe to be most successful for all parties -- brands, agencies and ad tech companies -- it is going to be critical that there is a high level of cooperation and communication between all three. That’s what will generate the best marketing results for the brands.
That will be our sales strategy: Focus on both the agency and the brand and creating a harmonious relationship, because I believe that will be what’s most effective.
RTD: Will branding take over “programmatic”? Is performance-based, or direct-response, advertising going away?
Lorizio: Performance-based is not going to go away. It will continue to be -- with all the data profiles and information we have available on the massive amounts of users that are engaging in the different platforms -- it will continue to be a performance-based product. But you’re going to see the dollars shift over to branding.
I believe it will be more 60/40 or 50/50. It will be a new vision, and as the budgets (performance-based and branding) move together, and we view the opportunity in the programmatic space to create brand opportunities, we will see the budgets shift quickly.
RTD: You anticipate the programmatic market to be somewhere in the 50/50 range of branding/direct response down the road. Where is it now?
Lorizio: Giving you a guess, or an estimate, I would say somewhere around 15/85. Maybe 20/80, with the branding side growing quickly because more and more video is becoming available.
The display dollars haven’t shifted as quickly as I’d like to see. Video is primarily where the 15/20% today comes from.