I have spent 25 years working either at or with some of the biggest publishers in the world. I remember working in print, for national press titles many moons ago. It was a simpler time in which:
- Brands wanted to sell stuff to consumers.
- Consumers engaged with publishers content.
- Media agencies decided which publishers had the best audience for the brands they worked on.
The maths used to work a bit like this:
100 euros spent by a brand
15 euros to the agency for planning and buying services (15%)
85 euros to the publisher (85%)
This allowed publishers to invest more money in better content, which in turn created higher engagement. Higher engagement is good for brands, so everything seems to work OK.
Oliver Gertz, Programmatic Lead for Global Clients at Mediacom, recently presented a slide at Programmatic Pioneers that suggested for every 100 euros a brand spends, only 40 euros (40%) is reaching the publisher. Down from 85%. The ecosystem is bloated and damaging for publishers. Everyone who ‘adds value’ along the way ends up taking a bite out of the publisher’s share. As a ‘publisher guy’ this concerns me.
If the publisher has less money to invest in content, then engagement strategy is broken, and fewer visitors or adblocking will impact the meaningfulness of the publishers content. If engagement is damaged, the effectiveness of every 100 euros spent has to be adversely affected.
Ad safety, fraud, visibility and trust are all major concerns in today’s ecosystem.
Some brands have taken their planning and buying in-house as a way of taking back control, but many cite the challenge of hiring and retaining the right talent as barriers to this course of action. One senior marketer at an FMCG giant told me “Us being out of town on an industrial estate doesn’t lend itself to hiring the brightest programmatic minds, and even if we could attract them, retention would be a constant struggle because the in-house programmatic department would have minimal scope for promotions”.
Just take a glance at the digital LUMAscape today, and marvel at how many businesses exist between the brand and the consumer. Just a glance is enough to tell us that something needs to change. So, what if a brand could own their tech which had their data and verification tools baked-in, and have 100% control about which supply is plugged in on a publisher by publisher basis?
It was interesting to read the recent news that PepsiCo is hiring a head of programmatic, who will be reporting into Mike Scafidi. It shows that some larger brands are still thinking about how they take back control of their programmatic destiny.
When I led supply and demand for AdMarvel in Europe, it became apparent to me that we already had the technology a brand could use to run their mobile programmatic operation. I know other platforms that could offer that across mobile and desktop today. A brand could buy a set of clean pipes, without the fraud, hidden fees and arbitrage that challenges the industry today, and only connect their data, their verification of choice and selected supply on a publisher by publisher basis.
Brands might struggle to hire and retain the right talent to run such a tech stack, so they could hire an agency to run that platform on their behalf, but still keeping 100% control of precisely what is allowed to interface with their brand.
Last week I spoke to Hossein Houssaini, advisor to the advertising industry and former Global Head of Programmatic Solutions for Havas Group, and he said “Today brands take control back by licencing technology themselves and either look to ‘in-house’ their activation capabilities or leave the buying with the media agency on their owned assets for more transparency”
Highlighting the bloated nature of today’s ecosystem, Houssaini pointed out that “There are many costs to cover on the way to the actual acquisition of an impression from a publisher. Technology has created efficiencies and a better way to buy media through programmatic, but it has also created higher risks for publishers to sustain their business models as well.”
I think this diagram is more akin to how we will see large brands manage their programmatic buying in the future:
Any ‘added value’ tech, in this scenario, would need to convince the tech platforms that they should be integrated as part of their ongoing program of improving the software as a service they were offering to brands. Tech needs to adapt to the overall needs of brands and not to needs that solve or improve a pillar in the advertising chain.
How would you simplify digital advertising if you were a brand marketer?