How to determine the role your agency plays in adtech

Finding the adtech wizard at the end of the yellow brick road takes a lot of heart, a bit of brain and some courage to hash out better arrangements with your agency and vendor partners, writes Sam Smith.

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This article originally appeared in The Adtech Issue, our current special issue of Marketing mag produced in collaboration with TubeMogul and SpotX.

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Sam Smith headshotAlmost everyone I know would say I’m an optimist and see the best in all situations. I believe that if you seek, you will find – but I know that the journey in this case doesn’t look easy. With a lot of heart, a bit of brain and some courage I can tell you that there is a wizard at the end of that long, windy, yellow brick road.

For many, the current brand-agency relationship isn’t where it should be. Brands have tried to embark on this ‘yellow brick road’ journey, only to find more and more confusion.

At TubeMogul, we don’t believe that this needs to be the case. We strive to instead give our partners the knowledge and tools to make their relationships work – whether that means having a direct relationship with a brand or working with them through a selected media agency partner. But in this world of uncertainty, with demands for new skill sets in relatively untested waters, how does a brand move forward?

To date, media has (for the most part) been incredibly transactional. Very few marketers have had the opportunity to invest critical time in media decisions, meaning that the relationship between agency and advertiser has been one of incredible reliance. But the rise of digital that enabled the prevalence of software and programmatic buying within the media landscape has led to new questions. Many brands are beginning to ask about trading models, fees, rebates, mark-ups and more.

The recent ANA (Association of National Advertisers) report unveiled in the US earlier this year (and more recently by the AANA here in Australia) brought these issues to the light – and when brands start building out their own technology stacks – establishing relationships directly with software platforms – transparency is frequently mentioned as a key reason.

 

Related: P&G’s Marc Pritchard’s speech calling for transparency from agency partners is being hailed as the most important marketing speech in years, but will it make a difference? »

 

Despite the need for new ways of doing business, the relationships between brands and agencies are not adjusting quickly enough to keep pace. Internally, brand marketing teams have historically been more focused on distribution, price wars and packaging, with media and data somewhat secondary. But that is rapidly changing. Budgets are stretched and more is needed from existing budgets in order to drive similar returns.

Marketers know that smarter use of their data is the key to meeting these challenges, but disagreement emerges over who owns that data.

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Before making any decisions, many brands are conducting an audit of their existing set-up. In this audit, marketers are asking questions about their current situation. What is working and what is not in their relationship with creative and media agencies?How am I getting billed and what is the raw media cost? What are the current benchmarks from which to compare and how do I determine whether goals are being achieved? If I don’t have any benchmarks, why not? Where is my media being delivered? And if I can’t see transparently where it is being delivered, why?A good audit will gather answers to all of the above both internally and externally. Find answers not only through internal analysis, but also by consulting friends in your marketing network. Attend events to determine best practice. Look for independent thinkers. Australia is blessed with an extraordinarily healthy marketplace with many of our best talent moving to bigger markets.Take advantage of this by picking the brains of our leading lights. There are (if need be) big and small consultants, but ask them about their own experiences and how deeply they are connected to these issues. You don’t need to go it alone. Our industry wants to punch above its weight and, in my experience, it is easy to find help when it’s asked for.

Following an audit, most brands entertain one of three approaches:

1. Asking their agency to make the technology decision for them

Here the agency owns the technology relationship and the contracts and will always manage everything associated. This option is the most convenient, as it means that media buying continues to be a one-stop shop with agencies selecting preferred partners to conduct their digital ad buys.

While it is the easiest turnkey option, it can also be the least transparent. In some cases, the media agency also owns the software provider or trading desk, meaning that transparency on price and performance can be an issue. While many agencies are completely above board and transparent with their business models, this scenario does place brands in a situation where they can still question whether everything is in their best interest.

2. Deciding on the technology themselves and asking their agency to manage it for them

This is a ‘best of both worlds’ option as the technology provider remains completely independent, transparent and agnostic with their ad buy, while the brand benefits from the time-saving benefits and overall buying power of the media agency. Transparency could still remain an issue, but only when the brand doesn’t demand site-by-site breakdowns and full disclosure that the technology should provide. If reporting doesn’t change and site-level transparency isn’t obtained, then there is an issue remaining either with the technology or the agency – sometimes both.

3. Selecting the technology themselves, bringing the whole machine in-house and using the agency much less than they did before

While this does provide the best returns in terms of transparency and optimisation, it also requires the most input and work. Staffing, training and maintaining strong education for the team is critical to make this work.

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With any approach, though, some best practices are emerging:

  • Independence is key. Pure buy-side technology (DSP-only) is built to drive the best result for the advertiser regardless of screen, format or inventory source. This includes enabling and encouraging third- party verification across the entire buy, eliminating conflicts of interest.
  • Transparency should be non-negotiable. There should be insight on performance, price, decisioning, product roadmap, how the vendor makes money and working models (managed or self service).
  • Ease of use and commitment to education. As with most things, understanding and buy-in from all levels within your business is vital for success.
  • Cross-channel approach. So you can see your entire audience regardless of screen, format or publisher. Workflow efficiency and maximum performance is best achieved when all of your tools are in one place – including your media, reporting and data.
  • Future-proofed. Businesses that align with clients lean in and allow them to strategically shape the product roadmap.

 

All of this may sound difficult on initial glance, but starting to gather knowledge and ask questions will rapidly clarify your decision and get you on your way. It’s too risky to stay in Kansas anymore and not start to explore this yellow brick road. Best of luck as you go ‘off to see the wizard’.

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Sam Smith is MD of TubeMogul ANZ.

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For more insights, case studies and research from TubeMogul, including Australia-specific content, visit https://www.tubemogul.com/insights
To learn more about TubeMogul comprehensive training curriculum and certification program for brand marketers, visit https://www.tubemogul.com/education

 

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BY Partner ON 14 February 2017
This article was produced by or on behalf of a partner and does not necessarily reflect the views of Marketing Mag or Niche Media.