Liveblogging La Jolla: Day 2

What Happened in Tuesday's Sessions

The crowd is re-assembling at Estancia La Jolla on this, the second day of AdMonsters Publisher Forum 37 (you can check out the liveblog for the first day here — there was a lot going on). We had a packed day yesterday, with some excellent discussions and a ton of informative breakout sessions (which you won’t see in this blog, but which set off a lot of conversation in the hallways throughout the day. We’re about to kick it off again, this time with a keynote from Greg Johns, Initiative’s SVP, Senior Director Digital Strategy, entitled “Aligning for a Shared Cause: The Fight for Advertising.” “He’s an agency guy; it’s a little like letting a fox in the henhouse,” jokes Senior Editor Gavin Dunaway, but the gist of this talk is about how publishers and agencies can work together.

9:10: Greg is running down his history in agency ops, building out tech stacks and running digital marketing in New York, California and Detroit. He oversees the Hyundai/Kia brands at Initiative.

9:13: “Over the last couple years, we have seen an absolutely unprecedented amount of change and an unprecedented amount of pressure. This is all over the place.” More business is in review right now than ever before, he says. “These are the things that make agency people like me very unhappy.” And on the publisher side, consolidation is happening. Generally, the hundred-plus-year-old exchange of attention for free or subsidized content is falling apart.

9:15: “Brands have a tendency to do too much sometimes.” And advertising started to change when broadband became widespread and then became ubiquitous in hand-held form. Now, “Nobody is not on their phone at any given time.” And ad dollars in digital have exploded. This is a great thing for us “as digital practitioners,” he says. We’re in “a digital gold rush,” and from one perspective the sky should be the limit. So then, why are things changing, and why are we “fighting for advertising?”

9:17: A few answers to that question. First is overload. Consumers feel overwhelmed with advertising. We see the effects in the mainstreaming of ad blocking. Consumers are also becoming wary of data theft and “well-attuned to the creep factor” that comes from retargeting and other data-driven advertising. And now, increasingly, users are paying for digital content, which was previously “unthinkable.” They’re doing it, he says, “simply to avoid ads.”

9:19: All this puts pressure on marketers, who pass the pressure on the agencies, asking agencies to do more while being paid less.

9:20: The ad industry as we know it right now was based on the 30-second TV spot, and strategies were “not worried about targeting, just worried about tonnage.” Targeting in digital attracts the attention of investors, each one looking for “the next Facebook.”

9:23: There are so many players in the field, coming in from so many angles, that we have a complexity problem. “The complexity doesn’t scale with spend.” Comapred to TV, the cost to service digital media has always been significantly higher. Tools for measurement are reaching the end of their significance, with cookies becoming less meaningful, especially as mobile becomes essential to measure.

9:26: The workload has surpassed the amount of digital talent in the marketplace. Meanwhile, there are more eyes on digital than ever before, including more marketers and buying. We end up with a trust problem coming from buyers.

9:27: We used to worry about click fraud. Programmatic opened up way more things to worry about. “All of a sudden we’re dealing with massive amounts of impression fraud, non-human impressions.” That brings even more questions: “Even if that traffic is real, is anyone even seeing my ad?” Enter viewability, which has “turned this world upside down” for publishers. Agencies, who are demanding to transact on viewability, are making those demands because they’re worried. Add to that the idea that there are kickbacks and pay-for-play between agencies and advertisers.

9:30: Greg says the environment is so cutthroat that right now, these kinds of kickbacks should be expected, even though they are not necessarily inevitable. The hammer could come down on one of the major agencies; if a company the size of Enron could be held accountable, so could an agency.

9:32: Consolidation has ramped up signficantly since 2013. This reduces the number of companies in the ecosystem and “reduces the chance for thing that endanger trust.” This is a good thing. Also, ad tech isn’t the only thing buying ad tech anymore. Entities like Oracle want end-to-end solutions. This is also a good thing. Consumers are thinking about which brands they trust.

9:34: Complexity could get wore before it gets better. But digital people are rising up in the ranks of their organizations. The idea of an exec who doesn’t “get” digital “is not cute, and it’s not happening anymore.”

9:35: There are benefits to doing less, and marketers are coming to understand “the benefits of doing five things well instead of doing 25 things.” This changes the logistics, it extends throughout the system and it will “reach the shore of operations.”

9:36: “Once we rebuild trust, advertising will be on the right foot for us all.”

9:39: Agencies could be shrunk a bit without affecting output. What makes an agency valuable in the future may be a lot like what made an agency valuable in decades past — creative content.

9:41: You can come up with the best ideas, but if your competitor undercuts you, they’re probably going to get your business, Greg says. Digital has led to situations where agencies have to cut costs.

9:43: An attendee asked Greg whether the tonnage model will continue to apply. Greg says it still will in certain verticals, like theatrical, for example. But in retail — “these are some of the most savvy marketers on the face of the earth” — you have marketers who are really good at the short-term loop and trying to gauge the long game. Even the smartest marketers are seeing challenges in attribution, but they are incentivized to sort it out.

9:50: We’re talking about ad blocking a bit. Gavin asked what happened to “Do Not Track,” anyway. Greg answered that people aren’t going to take a measure like that on their broswers “if it’s even remotely hard.”

9:53: To be competitive, you need to “de-commodotize what you’re doing.” You need to highlight your differences, from a marketing perspective.

9:55: Gavin’s asking about “Reviewapalooza.” What’s this mean for ops? Greg says we need to get rid of bad behaviors in general, to solve problems on your own “instead of getting someone to jump on the phone and solve those problems for you.” That trickles down from advertisers to agenies to publishers. Agencies “are very much responsible for creating the viewability problem to begin with,” but they’re under tremendous pressure from advertisers threatening to put them under review.


Now Joanna Foyle of AOL is going to present AOL’s State of Online Video study.

9:59: AOL reviewed about 300 people in the industry. Its focus was on shifting ad budgets, mobile video, programmatic adoption, programmatic TV and branded video.

10:01: eMarketer is predicting 42% growth from 2014, and now nine out of 10 buyers are shifting budgets from TV to digital, at an average of 10% of those budgets shifting over. Half of mobile vide buyers have increased their mobile video spend since 2014. For publishers, 24% of their 2015 digital revenues are coming from mobile video.

10:05: “Mobile is the greatest beneficiary of this budget shift.” But buyers are having trouble with attribution, measurement and cross-device targeting in mobile. Mobile optimization and scale are other challenges of note.

10:08: 68% of brands say they plan to bring programmatic in-house. But it’s easier to say they want to take it in-house than it is to actually take it in-house. Joanna says it’s not uncommon for clients to lean on her for an assist when they start taking these practices in-house for real.

10:11: Now 88% of publishers are selling video ad inventory programmatically. “Some of you would say being forced to,” Joanna says. In any case that adds up to 42% of publisher video inventory being sold programmatically, and 41% saying they’re going to increase their amount of inventory in programmatic.

10:14: Sellers have fears about this. More than anything, there’s “a perceived risk of content commoditization,” a sense of losing creative control. Around 41% of publishers are using video private marketplaces at the moment, where they feel they can worry less about their CPMs falling by putting inventory into programmatic.

10:18: Gavin asks what AOL’s definition of programmatic TV is. Joanna says they aggregate local inventory into a broader pool, allowing brands to buy inventory locally with added data.