I had the pleasure of sitting down with Richard Wheaton, UK Managing Director of Ogilvy’s digital arm Neo, to discuss the digital landscape as it lies currently and also get his take on what to look out for in 2012.
Richard is a stalwart of the industry – having started in digital running a web development agency in 1997, he moved to Carat in 1999 and set up their interactive division. After a few years client-side, Richard was approached to take the reins at Neo in 2006. Since then he has grown Neo UK from a mere five people in 2006 to 95, and developed it into one of the biggest digital agencies in UK.
Representing Cisco, Sony (Europe), Amex, IBM and a raft of other blue chip clients Richard describes Neo as a full service agency with a leading capability in every field of the digital media sphere.
What are the benefits of sitting within an organisation like Ogilvy?
There are many benefits, but there are two aspects that significantly influence our agency positioning: one is that we are in a creative organisation, and the other is that we originated from within a performance-driven direct agency, OgilvyOne. The performance side shapes our approach to branding and acquisition media: we base our media planning decisions on our clients’ business data in a very structured way. What this means in practice is that we squeeze every possible insight from the data to match our media investments through to specific, targeted outcomes. We bring our clients the ability to attribute the full chain of digital touchpoints – in search, display and affiliates – to their results.
Additionally, we sit amongst the creative thinkers of our clients’ brand campaigns, and this has a great impact on the way we work as media strategists. It’s just a more integrated approach. I’m not saying that a media-only agency can’t also develop integrated strategies, but there’s got to be better integration when you’re taking the brief with the guys who are developing the brand strategy.
I think that above all what most people within Neo would say is that it’s just great to be working within such a creative organisation like Ogilvy. Here we can bring the media thinking to our clients together with the creative ideas, and both teams can adjust their approach during the planning and crafting process.
How do you do you see traditional advertising media as complementary or separate to digital?
We absolutely see them as complementary media. The fundamental role for a planner, in my view, is to understand the customer journey in the fullest possible terms. So whether you’re working in online, offline or both, you need to ensure that each set of tactics are in sync with the full stream of brand communication. That’s a primary responsibility of an agency to its clients – not just to represent the benefits of one channel at the expense of others.
Television remains the primary driver of demand in a large number of categories, particularly where interest is low and the client’s marketplace is crowded. Kodak is one of our clients, and we have helped them become leader in their category of consumer inkjet printers through the use of TV. Digital has been fantastic for driving brand and acquisition, and has an unrivalled role in the consideration phase of the buying process. But TV has been the lead channel for Kodak, and our online, print and in-store tactics have been driven by the awareness of the challenger proposition that we created in our TV commercials.
In terms of the digital ad dollars spent, search has really been the dominant force in UK for the past five years – what are your expectations of 2012, do you think it will continue to grow or do you see the other channels making a dent into the search market?
I do think the other channels have been pushing forward in the past year, and that that will continue in 2012. Search has really had its run at the media dollars over the last few years but there’s an inevitable slowing down when search gets as large a slice of the budget as it does. It’s over 60% in the UK, and inevitably that growth rate has had to slow. But, that aside, digital display is making a comeback because it’s being implemented more efficiently.
At times I’m shocked when I hear people being so dismissive of banner advertising. But there has been some unnecessary waste and inefficiency and a lack of accountability in this channel. Some CPMs were over-priced, or poor quality impressions were being bundled with the good quality, and so the industry as a whole moved budgets away into other more accountable digital channels. There is a collective responsibility between agencies, clients and media owners for this perception.
But RTB (real-time bidding) and specifically DSP (demand-side platforms) are giving us a new level of control and transparency that is changing the landscape. Now we can deploy digital display media at scale in a more focused way and obtain forensic results on the tactics that worked. At Neo in 2010 and 2011 we’ve shifted budgets dramatically over to RTB as our campaigns benefit from this control.
DSP management incorporates our search skills with our digital planning methods, and still embraces the need for negotiation and partnership. Our in-house DSP team is like a brokerage, bringing together the right packets of inventory, insight and data to drive far better results, made possible by the set of RTB tools and working with media owners to get the mix right.
Neo has been incredibly innovative in the display market – can you tell us a bit more about your approach to the market and how you see it going forward?
I believe you’re referring to our “Realise The Potential” campaign that we planned and bought for Amex. This was a really interesting campaign, and I think it’s symptomatic of a new confidence in digital where brands are engaging with their target audience away from their website. Facebook brand pages and Twitter feeds are an example of this.
With Amex we did this, but in a rich display campaign. Our goal was to communicate the exclusive access that Amex brings its cardmembers through showcasing exclusive content sourced from Spotify, LoveFilm and The Guardian, and serving it within ad units on media sites, rather than forcing consumers to come to the brand website and interrupting their browsing. The real innovation was in the Flash ad units that we developed with OgilvyOne and InSkin, to provide video, audio and images in the most simple but sophisticated mini-microsites I’ve ever seen.
That sort of brave strategy takes investment and vision, and Amex is an amazing partner for that kind of work. It’s all about creating new levels of engagement, and having the confidence that we can measure its value to the brand, changing perceptions over time. Some brand “conversations” take months to convert consumers to take action, and with Amex we have a very robust methodology for measuring and harnessing the value of the brand conversation.
As I said, I think this is part of quite a zeitgeist change in the last few years. Increasingly brands are happy for you to engage with them on different channels – there have been plenty of manifestations of this in recent years, but Facebook has really been the driving force in giving brand managers the confidence to shift from an obsessive focus on the behaviour of their customers only on their primary web domain. It used to be that unless you drove a user to the advertiser’s dot.com it didn’t count as a “response,” but now any interaction that’s on the brand’s terms and can be measured can be seen as valuable and a positive ROI.
What are your thoughts on Google’s acquisition of Admeld and how do you think this will impact the RTB market? Do you think we’re soon to see the end of the digital sales person with the rising popularity of this market?
Well, Google has been critical to shaping our current online trading environment – whilst they didn’t invent the idea of bidded media in online, they made it their own in search. Now Google is making a big play in the bidded media space, and you know they are going to be a dominant force.
The interesting thing with the acquisition of AdMeld is that previously Google always professed that they were a technology company and not a media company. Most agencies always thought this was a tenuous distinction for a company that has so much to say about where clients should invest their budgets and how consumers behave. But now they find themselves firmly in the media trading world. This will change their relationship with a lot of agencies and sites, as they now wear a media-owner hat. This inevitably changes their proposition and I think will be fascinating to watch going forward.
In terms of the effect on the life of the sales person, RTB has already changed the agenda of the conversation between media owners and agencies. But of course there’s still a role for the sales pitch and trading relationships, and that’s where agencies have always valued their sales reps. Real-time bidding frankly opens up a lot of revenue streams to media owners – it offers a volume of buyers and bidders that they could never access through one-on-one salesperson relationships. The platforms open doors for all involved on a much broader scale – and that has to be a good thing.
What are your thoughts on the changes to the EU Privacy Directive and do you think these changes to the laws of data and privacy will impact how we advertise with social media?
All the surveys and reports that I’ve seen show that people are wary when it comes to being “shadowed” by a brand, or having their behaviour tracked – and rightly so. It’s a good thing that we now have an open dialogue with the consumer about data and privacy.
One of the challenges of the privacy debate, in my opinion, is that the discussion tends to bundle together very different types of data sharing into one big issue. Personally, I am very protective of my personal information (such as home address, phone number, etc), but I am relaxed about brands dropping a cookie on my PC allowing for better targeting of ads to me. They are both data issues that require rules and standards, but they are vastly different.
The EU Directive is tackling all data. Having attended many industry forums on this subject, I’m confident that the UK is addressing the issue very proactively, whilst determined to avoid the dangers of undermining our fledgling entrepreneurial digital economy. The challenge remains for our government and for agencies and brands to know exactly how best to behave to conform to all of the intentions of such a broad directive.
I think social media is a bit of a beacon in this industry – the amount of data that we share in social suggests that we’re happy to have a lot of our data out there on the web. I’m not saying that this suits everyone, and there have to be safe-guards for people that want to limit their data sharing, but for the vast majority of Internet users, it’s their choice. Many young people aren’t aware of a time when they weren’t sharing information about themselves.
So in some ways social has been responsible for people really opening themselves up to sharing their identity online. Sometimes I’m surprised about the data I’m being asked for on Facebook, but I’m presented with the choice and I can choose not to do it.
The clock is ticking though for the May deadline and I think the IAB has been great in the UK at bringing the UK digital community together with the government agencies to address the matter. My overall plea is that laws are used to stop criminal behaviour, and not to attack all behaviour. I have total confidence that leading agencies and brands would never knowingly abuse user data. I want the authorities to crack down on those abusing the system, be it through scams, abuse of the advertising codes or illegal misuse of digital data. If people see these perpetrators being punished then the wider public will start to see that their justified concerns are being addressed.
Finally, what can we expect from Neo in 2012?
Well, as a digital agency we fight on so many fronts. That’s what makes Neo what it is. We have one of the biggest affiliate teams in the UK and we’re really looking to grow that; our search team is also pushing forward. And we’re looking to explore more in social in 2012 as the new listening tools turn it from a chaotic and apparently random space into a measureable one that is ideal for planners like us.
Each of our client teams will go forward in their own way in 2012 but Neo has a unique leadership position in the DSP space right now and this will be a critical area for us to develop next year, to get even better results and value for our clients. Real-time bidding is where I expect to see the most growth next year.