• by Joe Mandese  @mp_joemandese, January 19, 2016

At first thought, U.S. International Media might seem like an odd choice for MediaPost’s first-ever Programmatic Media Agency of the Year. It is much smaller than most of its competitors at the big agency holding companies that have invested vast sums in talent, technology and data to build large, complex organizations to leverage the burgeoning programmatic media marketplace to drive efficiency via automation and effectiveness, more precise audience targeting and real-time measurement of campaign results. It’s also a lot younger than most its peers. USIM’s programmatic media-buying unit is less than two years old.

But its size, independence and perhaps most importantly, youth have given USIM a fresh way of thinking about some long-standing problems that have vexed the industry, especially when it comes to programmatic TV buying.

Most of the bigger, well-established agencies have focused on developing programmatic TV solutions that are an outgrowth from the digital media — display, video, mobile and search — they buy programmatically, and that may be one of the reasons it has taken TV so long to scale. USIM has taken more of a zero-based approach to the programmatic TV buying marketplace to organize what exists, test how they work, and collaborate and innovate to develop something that works better —to scale for clients, other agencies, and suppliers.

Collaboration is a key part of its DNA and a key reason why MediaPost is recognizing USIM for this new category — because without that, it’s unlikely television will ever organize a programmatic infrastructure the way digital has. Whereas digital’s programmatic marketplace grew out of necessity — vast arrays of unsold inventory were just waiting to be organized and monetized — television is a much different marketplace, because suppliers are loath to release even unsold inventory for fear it would become commoditized.

That has changed a lot in recent years as TV’s supply side has seen the merits of participating in programmatic markets — partly for the same automation efficiency reasons as agencies, and partly because it sees some upside for leveraging data and technology to get higher, not lower yields from its unsold inventory. Interestingly, that’s the same approach that USIM has: not to focus simply on buying TV more cheaply, but buying it in a way that generates a greater ROI, because even though it might be more expensive on an out-of-pocket basis, it produces a lower “effective CPM” against the targets its clients are trying to reach.

USIM began by organizing its own definitions of the marketplace as it currently exists in order to begin testing and learning to find out what works, which parts work best, and which could be improved to work even better.

While there are probably as many industry definitions for the term “programmatic” as there are people in the industry using it, USIM broke it down into two clearly defined approaches and began testing them. One has historically been defined by the TV industry — so-called “addressable television” — which leverages the ability or cable, satellite of telco providers to target ads to specific neighborhoods, households or even individuals. The other is a more classic digital way of thinking about programmatic: using an audience-based approach to defining the medium and then buying the media segments that best match those audiences.

By approaching it scientifically, using data, and most importantly, live campaigns backed by actual media budgets, USIM has effectively begun “A/B” testing which forms work best and yield the best results for specific clients.

The unit, which was the brainchild of USIM Eastern Region President Russell Zingale, was quickly supported by founder and CEO Dennis Holt, and one of its first steps was to recruit a veteran innovator of advanced TV advertising platform development, Mitch Oscar. Oscar, who ran similar units for much bigger and more established agencies — McCann-Erickson, Carat and MPG — importantly brought one of his patented methods for spurring innovation to USIM: collaboration, an attribute MediaPost puts a heavy weight on in our agency of the year awards. Oscar’s so-called “Collaborative Alliance” initiatives at Carat and eventually MPG became important organizing principles for the industry because they sought to create a neutral, mutual interest for competitors to come together and solve common problems. He brought that same playbook to USIM. And while he has counterintuitively rebranded it as a “Secret Society,” the result has been the same, getting directly competitive agencies such as OMD, The Media Kitchen and Varick Media Management to participate in a series of discussions and meetings to solve problems surrounding programmatic TV buying that will benefit all media buyers and their clients.

To date, the meetings have largely focused on information sharing, and an effort to do an inventory on the sources of data that are available for programmatic TV targeting and ways of making them more efficient, less redundant and more effective. It’s a start, and it’s accomplishing the kind of thing industry trade groups or associations arguably should be organizing, but so far have not.

Most of the real action in USIM’s efforts has been in its own campaigns and testing, and in the spirit of collaboration it has been sharing the parameters and results of them publicly with the industry. Most of that work has been done for tourism client Aruba, because it is a brand that has very specific targeting needs and performance goals, and because it is relatively easy to measure them based on the kind of geographic and audience targeting both addressable and programmatic TV solutions can deliver.

USIM is still learning and testing, but most importantly, it is testing with real in-market campaigns, backed by real media budgets, something Oscar didn’t really control when he was attempting similar collaborations at Carat and MPG.

The results have been promising, and have enabled a client like Aruba to get back on television, a medium it had been priced out of in recent years due to the high out-of-pocket costs.

By targeting audiences more precisely via addressable and programmatic TV, Zingale says USIM has been able to demonstrate the ROI of TV and avoid wasted reach and frequency that would otherwise occur in national TV, or even spot TV buys.

So far Zingale is happy with the results, and the agency is beginning to figure out ways of applying it more broadly and for other types of clients. 

It hasn’t been easy, says Oscar, noting that there is so much noise and confusion around the different terms and ways of thinking about programmatic TV that just getting on the same page about basic definitions can be a challenge. For example, he says, some suppliers quote rates as “net,” while others quote them as “gross” costs to the agency and its clients, making it difficult to even understand what the budgets are without analyzing them carefully.

Even more complicated have been attempts to organize the way programmatic TV suppliers report their data for campaigns. When he asked one such supplier to provide a schedule of what actually ran, Oscar says it generated a report with 163,866 lines of code covering 3,563 pages, something most traditional TV buyers and advertisers might not consider practical to evaluate.

But it is part of USIM’s DNA to take on problem areas of the business other agencies might otherwise eschew. It is hard work and an unrelenting focus on improving its clients’ results that were the reasons Holt founded USIM in the first place. It’s also the reason the agency was named MediaPost’s Independent Agency of the Year in 2009, for transforming the way the spot TV advertising marketplace works, even though it created tension and problems for the spot TV sales community. Now USIM is turning its eyes on programmatic TV buying.