Whatever influence media agencies lost thanks to programmatic is on the resurgence once again.<\/p>\n
All it took to happen was a dose of reality on the future of the open, convoluted marketplace of programmatic inventory.\u00a0<\/p>\n
The reality here is that it\u2019s stuck in a rut: The buy-side of these deals want fewer auctions to listen to because doing so costs money, while the sell-side wants to run as many of them as possible because doing so makes money.\u00a0<\/p>\n
If only there were ways for advertisers to curate ad tech sellers, pools of inventory and sites into a safer sandbox \u2014 one that\u2019s bereft of the low quality, sometimes duplicitous, inventory that tends to be a direct consequence of what makes the programmatic marketplace so open.<\/p>\n
Enter media agencies.\u00a0<\/p>\n
They\u2019re trying to bring order to the chaos. To be fair, they\u2019ve been trying for a while. The emergence of trusted marketplaces, supply-path optimization and custom bidding algorithms are proof of this. But they only worked up to a point. Agencies have only been able to aggregate so much buying power around programmatic, after all. That\u2019s changing \u2014 slowly but surely.\u00a0<\/p>\n
The change is happening slowly, because it\u2019s a change that started years ago when agencies began consolidating their ad dollars into fewer ad tech vendors, or programmatic marketplaces known as supply-side platforms. It\u2019s also happening surely, because this sort of consolidation was never going to give agencies the control over programmatic inventory they craved. Not when those deals were really about agencies using their buying power to negotiate volume-based discounts.<\/p>\n
\u201cThere are still agencies trying to consolidate the number of SSPs they buy from, but many of them have moved on from this and are now looking at how they curate programmatic inventory using SSP tools,\u201d said Kyle Dozeman, Chief Revenue Officer of ad tech vendor PubMatic\u2019s Americas business.<\/p>\n
That is to say the big media agencies are asking the likes of PubMatic to create tools they can use themselves to separate the wheat from the chaff in the open auction. This means the ad tech vendor would have no involvement in the curation, activation or management of those marketplaces. They would just provide the tools to do it all across a broad set of inventory the agencies want. In short, the days of SSPs trying to create programmatic marketplaces that the account teams at the largest media agencies find valuable are fading.<\/p>\n
\u201cWe\u2019ve been able to support agencies in building their own marketplace solutions that help them empower that service layer, improving performance and reducing manual work for the advertisers, while also supporting clean, and more direct supply paths,\u201d said Phil Acton, country manager at ad tech vendor Adform. \u201cThis allows for agencies to build a service layer that adds transparency and allows them to optimize for their specific client\u2019s needs in an active vs. reactive way.\u201d<\/p>\n
It\u2019s still early innings, of course. Even so, it\u2019s already clear that agencies have a lot riding on these deals. Success or failure could mean the difference between a differentiated programmatic strategy in an otherwise already crowded and commoditized ecosystem or further disintermediation. This is no mean feat given how hard it is to show value to a client in an industry like programmatic, where success tends to come from following the easiest route to digestible metrics and plausible results.<\/p>\n
Still, agencies are nothing if not adaptable.<\/p>\n
\u201cThere is a place for someone with enough market intel to step in and perform curation on the supply-side and then package that inventory up for the demand-side to purchase,\u201d said Ryan Eusanio, managing director of digital activation at Omnicom Media Group. \u201cAgencies have been stepping into that space recently because we\u2019re so close to the actual end client who wants to buy the inventory. We\u2019re curating with their goals in mind.\u201d<\/p>\n
Curation at this scale is tricky. Agencies aren\u2019t just trying to curate another supply-side platform\u2019s inventory anymore. They\u2019re also creating their own supply pipelines of curated inventory. That requires a certain blend of data science smarts, product engineering nous, artificial intelligence and machine learning bidding algorithms to make it stick<\/a>. Otherwise, these efforts do more harm than good, causing the wrong data to be collected in the wrong ways for the wrong outcomes.<\/p>\n It\u2019s no wonder agencies like Omnicom have been working on nailing these auction packages of sorts for several years already. It\u2019s a massive undertaking with many moving parts.<\/p>\n For instance, the agency has to have a set of guardrails around what inventory it wants to curate on behalf of its clients. But it can\u2019t really do that unless it has the expertise and tech to vet, gather and process the data needed to fulfill that philosophical view. Even then, this only makes sense if the agency has the commercial clout to drive down the costs of running such a vast and complicated operation. All told, there are prerequisites to doing this sort of thing.\u00a0<\/p>\n \u201cWe see over 1,400 different ways to buy a 300 by 250 [ad unit] on one site alone through our inventory graph \u2014 and that\u2019s just in the month of January,\u201d said Eusanio. \u201cIf you don\u2019t have all those prerequisites in place and you try and do this curation then the risk is you make optimizations for the short term that are not beneficial in the long run.\u201d<\/p>\n If it\u2019s not already clear, SSPs are key to these plans. They have more data on inventory than demand-side platforms.<\/strong> More data means better curation, which means marketers have less of a need to buy from the open auction. This won\u2019t happen overnight, obviously. It will, however, be given a boost from the need for more transparency and richer data sans third-party cookies. Different as these trends are, both are predicated on agencies getting closer to the supply-side of programmatic advertising.<\/p>\n For example, Horizon chose the sell-side platform OpenX as its first programmatic partner to directly integrate its Blu.ID identifier so the agency\u2019s marketers could leverage proprietary data segments through deals.<\/p>\n \u201cThis is definitely a shift in the marketplace but shows that advertisers are looking to the supply-side for publisher-adjacent targeting capabilities so they can achieve greater control, transparency and performance,\u201d said Matt Sattel, svp of sales at OpenX. \u201cThe supply-side is meeting buyers\u2019 desire for control through deeper integrations with their first-party data and preferred identifiers moving the industry away from cherry picking and towards data-driven deals which has always been the promise of programmatic.\u201d<\/p>\n<\/div>\n