Insurgent: How to take down Dart and Atlas

Ad MetricsMaybe the title of the post is hyperbolic but at least this idea could put a big dent in their agency revenues.

Note: these are my thoughts, not necessarily reflected of my employer.

We talk about agencies having a digital backbone. Yet, for the most part, the technologies are licensed. For today’s and yesterdays reasoning, this made somewhat sense. Moving forward, I think I lie on the other side of the fence and could argue that agencies or their holding co., should own/operate their infrastructure.

For todays post, let’s focus on the most essential part: the ad server and data store.

I’m skeptical of Google and MSFT, specifically with the hundreds of billions of impressions they serve collectively. It would make sense that every campaign served thru them would make them smarter. Hey Toyota, did you know that your campaign for the Toyota Camry just made Honda’s campaign for the Accord much smarter?

There is the above issue and now an important one. MSFT and GOOG can see every advertisers campaign that uses their system including cpms, impressions, conversions, etc. Being that MSFT and GOOG sell media too, they have a huge advantage if they were to use that data in the way they pitch us and price us.

Google has the ability to do the above in search extremely easily thru Google Analytics. They know every search term leading to our site and can price appropriately.

I’m not saying that MSFT and GOOG are doing any and all above but its certainly an opportunity for them.

In talking with one of the other holding company execs, he mentioned to me that we need to rethink our competition and Google is a serious threat to Madison Ave.

So I have outlined a few reasons above that we (as agencies) should be scared of our partners or frienemies. Now, let’s focus on why having this technology structure in house makes sense.

Every ad served today in display, search, rich media, online video and others puts off data exhaust. Some of this is extremely relevant for clients/campaigns and some useless. However, a good team with the data within the walls of the agency/holding co (ie like Varick Media) can reap tremendous benefits. Also, the data from within holding co or agency walls can become a friendly co-op and can become a major new business strategic advantage.

Think of tomorrows data exhaust when most media is served and tracked with a digital backbone.

While every media company out there wants to service as many advertisers as possible, different agencies have different relationships with different media companies and the opportunities brought forth vary. If agencies controlled their ad server, they could build custom integrations with certain (not all) publishers that provide opportunities beyond where the market is today.

Ad servers will quickly morph into planning tools as well. Within the agency is where this needs to live. Once television ads gets served and tracked, planning will be forced into these systems (because of the sheer dollars chasing) and every agency planning team will want their own customizations. We have some tools like Quantcast that help with audience planning but imagine a custom tool of Quantcast-times-ten on the desks of all the agency staffers.

Agencies and holding companies will have to continue to differentiate and if we wanted to put a dent into Google/MSFT, then MDC, IPG, Omnicom, WPP (first mover with 24/7), Publicis, and Havas should be certainly thinking in this direction. The writing is on the wall.

The argument will be made to say that agencies cant run technology companies which i’ve publicly aligned with that in the past, but I’m going to argue it and say… Go and hire the right people. If we don’t, someone else will.

Editor's Note: This blog post originally appeard on Darren Herman's Blog: http://www.darrenherman.com/2010/06/10/insurgent-how-to-take-down-dart-and-atlas/

 



As Mozilla's VP of Content Services, Darren Herman is responsible for diversifying revenue and sustaining Mozilla’s mission through innovation in content and personalization products and services. He joined in 2013 after overseeing digital media for MDC Partners Maxxcom Media Group and running the MDC Partners/kbs+ corporate venture fund, focused on advertising and marketing technologies.

Previously Darren co-founded the first programmatic trading desk on Madison Avenue, Varick Media Management. Prior to joining the agency world in 2007, Herman spent 12 years as a marketing technology entrepreneur and raised over $40 million for his own ventures from top tier venture capitalists such as Intel Capital and NBC Universal.

Over the years, Darren has received several awards, including being named as one of the Top 25 Marketing Innovators and Thought Leaders by iMedia and named a Media All Star by Media Post.


Comments

I tend to agree that agencies need to get serious about technology, and make decisions that create a future where agencies are strong.

A future where Google is controlling the media access point and selling inventory simultaneously will not be healthy, and the agency power base will be significantly compromised. Some markets (e.g. Germany) have much more of a sense of this threat and are making decisions to control their destiny.

I do think that it is difficult for agencies to manage their technology end-to-end, as you've highlighted. There is the third option - which is working with independent technology businesses. I run Facilitate Digital in the UK - we are an independent, global, and agency-focused provider of buy-side ad serving and workflow automation technology. We've seen key agency players deciding to bundle sets of independent and agency-built solutions together, to create a technology landscape that provides them with greater control and longevity. I feel that this may be the optimal approach - offering both scalability and customized opportunities without many of the inherent dangers.

Have to say that it's just not feasible for every agency to have their own technology and there is a miriad of reasons why. Agencies should not be concerning themselves with the technology, but with the data. There are different adservers out there and they should pick the one which best suits their needs, right tool for the right job. It is impossible to just say "hire the right people", and here is just a couple of reasons why:

- who is hiring the right people? you need someone who can recognise the right technical talent and that person is technical talent themselves. Most agencies don't have this to begin with
- Is there enough talent? every agency needs a team to build and maintain an adserver, at the moment they're grouped in to technology companies, there just isn't enough people with the right skills for this to work.

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