Comments on Tip of the Spear Blog: Agency Trading Desk Myths & Memes Debunked (Part I...

UPDATE: From a traffic standpoint, three consecuti...

2011-06-05T13:42:53.679-05:00

UPDATE: From a traffic standpoint, three consecutive days of record traffic - clearly this subject has struck a nerve!

Another interesting comment came in about a perceived conflict that ATDs and agencies could have.

"An example of this would be the publicis acquisition of razorfish from msft. As part of the deal publicis is required to spend a certain amount of $ w msft properties...Also basic economics, holding companies buying in bulk via all agencies should get a lower cpm. Would this necessarily be the best media for the client or the media that offers the highest margins for the agency holding company or trading desk?"

These deals have little to no agency profit margin impact. First, most digital media agencies are not making a spread off traditional media buy. If they did, they would probably all be broke these days. Although back in the mid-90s my old boutique agency Streams was able to charge for both. These days, it makes more sense for agencies to charge a consulting fee or have a retainer for the incredibly labor-intensive process that is planning, buying and managing digital media. And don't forget to include the analytics time to measure it all.

Second, have never heard of holding companies actually planning and managing campaigns; that makes no sense since they are financial animals not operating companies. Instead, media is planned and bought on a client-specific basis: either ad hoc or maybe through a reverse auction. Sure, a holding company may have a negotiated discount off of the rate card CPM but that is going to be re-negotiated again on a client-specific campaign basis.

Third, agencies just can't foist media down their clients throat - it just doesn't work that way. All clients have the final approval over the buy - they scrutinize, challenge and tweak media plans. It would stand to reason that they are therefore keenly aware of the rate card, holding company rate, their last rate and proposed rate.

As Mythbusters would say: BUSTED.

Jeff - thanks for the comment. We will have to agr...

2011-06-04T17:57:44.745-05:00

Jeff - thanks for the comment. We will have to agree to disagree though.

What is wrong with agencies trying to make a buck through an innovative service? ATD's give advertisers a chance to unbundle what ad networks have historically packaged up and admittedly quite conveniently.

However, the problem with your arguments is that as an advertiser they makes no sense. With respect to your first supposed issue, what you perceive as a bias is non-starter. Why shouldn't ATDs consolidate and centralize? To do otherwise is just assanine although but the utter confusion that would ensue would work well for sell-siders. That's why so much of the innuendo just comes off as sour grapes.

Regarding the second issue - it sounds like you may have believe your own PR. Advertisers really don't (or shoudn't) care about your spiffy technology and team except perhaps VCs. Unless your INSERT ALGORITHM HERE can measurably move my top and/or bottom-line - just don't care. Show me applicable results and I'm listening.

The real conflict is the one that sell-siders have and that is perhaps conveniently falling on deaf ears. And for advertiser's - that should really be more of a concern. Their choice is: a) work with an arms dealer that sells it to anyone and everyone that pays or b) an ATD that offer comparable tools and team that will work to help make their client win.

Hey Dom, Starting my career from an ad network (...

2011-06-03T09:23:54.615-05:00

Hey Dom,

Starting my career from an ad network (the alternative to contracting an agency trading desk), this is a breath of fresh air. I'm now at an Agency Trading Desk and we're very proud of the work that we're doing for our clients. ATD's are an easy target because everything we do is transparent. The learnings belong to the marketer.

A little bit about the alternative to using DSP or ATD: Networks use competitive first party data (Telecom 1 vs. Telecom 2), bid on exchange inventory without transparency, contract on a CPA pricing model and USE ONLY RE-TARGETING, cookie bomb, deliver all of a CPC campaign on a single gaming site that doesn't appear as click fraud via third party data, and they do not share site-level data. You'd think that by employing these tactics, they'd outperform DSP's. They don't.

Demand should move the market, and marketers are demanding analytics that networks can't or won't provide. Any analytics they do provide are not true insights as they only apply to their own distribution sources. Using networks is good for attaching CPA to media cost with opaque attribution data. If digital is the best platform for analytics marketers should make sure they own the data, best practices and true insights, as you do.

Thanks for sharing. - Flood

Comment came in from a colleague about ZAP - devel...

2011-06-03T06:39:39.359-05:00

Comment came in from a colleague about ZAP - developed by holding company WPP's (full disclosure: was a contractor at Grey SF) Media Innovation Group.

Uniquely includes includes DMP, DSP, search management and of course pub-side Open AdStream (full disclosure: I'm an alumnus of RealMedia) functionality. Actually in the late 90s, RM Europe had an agency side ad server but it was not marketed here to compete with DFA, MediaPlex and Atlas (whatever happened to this?).

All told, WPP is definitely offering a different relationship/configuration than InterPublic, Omnicom and Publicis.

Unlike Havas' spinout of Adnetik as a standalone technology company, MIG while uniquely home-grown by WPP is still under the WPP umbrella.

Great piece Dom, well above and beyond the call of...

2011-06-02T16:50:21.795-05:00

Great piece Dom, well above and beyond the call of duty. It's been and will continue to be a hard transition out of the ad network era, harder on the sell side for sure. But truth be told it's not an easy task educating a generation of display strategists, planners and buyers to understand that media/audience buying no longer needs to be outsourced to a middle man. The marketplace is there and has been frankly for some time. When you bring the pieces together then the light bulbs go. Sr. leadership and client directs tend to get this quickly, for all the points you hit on. The sell side has done a great job cultivating strong relationships with these groups, as they should, and that coupled with this recent Ad Hominem fallacy has gotten some of their heads spun around who actually provides value in the chain.

The upside is, data driven display has never been smarter, more efficient, and more transparent than it is today. And the marketer themselves has never been more empowered.

I'm really proud of how far we've come in such a short amount of time. This was long overdue and always a matter of time.

Cheers,

Mac

A very thoughtful and well written piece. Thank y...

2011-06-02T09:47:55.263-05:00

A very thoughtful and well written piece. Thank you for that. The essence of the problem that I am seeing in the market is that an agency building an ATD is essentially an agency building a new business designed to provide digital buying efficiencies for their clients. In its' purity, there is no conflict there. The problem is that they ARE building a new business. With that comes significant investment, risk, cash flow issues, personnel issues, etc. The result has been that agencies are pushing client spend through ATDs in a biased manner and, essentially, building these businesses with the clients money. Given that none of these businesses can be imminently scalable, staffed competently, efficient, etc. day one, bias is built in by design. We hear repeatedly from agency folks themselves that they are highly "motivated" to move dollars through their own ATD even at the expense of performance and scale. That's the first part of the conflict issue -these are new businesses whose growth is funded by client ad spend. The second issue that I see is once these businesses are up, efficient, proven, scalable, etc. they then have to endure. Advertisers will demand, rightfully, increased rate transparency and the squeeze will be on. What will we end up with? ATDs that are essentially providing the exact same services as GOOD networks provide today, without the capital to continue to invest in technology. Even leveraging new tech partners takes huge investment ahead of the curve. In fact, an ATD will be inherently handcuffed as revenue concentration issues (and subsequent overhead support) will be built in by design and that is not a healthy concept. The loss of a large advertiser due to an AOR change could make the whole house crumble. I'm just not sure what all this got anybody. GOOD networks provide what all this leads to- quality end to end campaign delivery leveraging state of the art technology, data, and domain expertise.

Thanks for all the email support but it is interes...

2011-06-02T06:03:11.647-05:00

Thanks for all the email support but it is interesting that there are no public comments.

I expected this post to raise a few eyebrows but this blew the prior traffic record away.

According to Google Analytics: Thursday, 6/1 was 2.5x the highest visit volume which was back in March (Fear & Loathing in the Ad Technology Stack).

67% was US-based with 23% from the UK.

40% from NYC DMA, 22% Chicago and just 5% from SF and then Boston.

Busy digital marketing people viewed on an iPhone at 8%, Android at 5% and both iPad and Blackberry at 3%.