Operative Blog

Operative’s Monday Mashup

A compilation of interesting news, articles and stories from the prior week…

Mashable: New Yorker, Wired and More Coming Free to Kindle Fire for 3 Months

With the Kindle targeting middle America, this move by Conde Nast and other magazine publishers is sure to boost their online magazine readership/subscriptions.  Tablets and mobile devices are one of the major driving forces behind print and digital media convergence, so as more and more consumers begin utilizing these devices to consume content, the more we will see offline and online media consolidation.

Digiday:  What if the Music Stops in Ad Tech

Exactly our point too, @bmorrissey!  We’ve been talking about this for the past year now beginning with our“Who’s Guarding Your Hen House” blog last February, and most recently in our post about the MediaBank and Donovan Data Systems merger, with respect to the ad tech “middle men”, e.g. ad networks and exchanges, and other point solutions that CLAIM to add value to the publisher but are merely shaving their profit margins.  Publishers MUST step back and take a look at their long-term business plans, as well as their current infrastructure and processes, to see if the two map and if the latter is sustainable to achieve the long-term goals and objectives.  If the answer is NO–which in many cases we suspect it is because we’ve been throwing band aids on a much larger, deeply rooted problem–then it’s time to reevaluate the entire technology stack and create one that is sustainable and will enable profitability.

IAB: IAB Announces Industry Adoption of Impression Exchange Solution to Combat Billing Obstacles

DoubleClick has had an Impression Exchange solution in place for at least a year to do early discrepancy detections.  Currently, it only integrates with DFA and Atlas, but with this announcement, we’re sure publishers and agencies will be happy to know that the list of vendors integrating with IES is increasing.

Paidcontent: AOL, Microsoft and Yahoo are Officially Ad Sales Allies

How will this “alliance” pan out?  At least someone (or a few rather) are taking a stance against the behemoth Google.  As stated in our September 19 Mashup post, we believe if there is a content play in here somewhere, this “alliance” may make sense. It seems as if there are still a lot of details to be ironed out, such as how and why a sales person – at say Microsoft – would want to sell his/her competitors (Yahoo and/or AOL) inventory?  And how much additional value will each company generate by cutting out the ad networks?  At the end of the day, brands still need to reach their target audience for the best price possible.  Microsoft, Yahoo and AOL will need to ensure they are delivering more value to the brands if this alliance is going to work.  If all three had a central “hub” they could hook into to view one another’s available inventory, in real-time, and package that inventory in a unique way that delivers more value to the brand, this concept could work.  Alignment of goals and operations is still key here and it seems there are many details that are yet to be flushed out!

Ad Operations Online: IAB Drives Mobile Marketplace Forward

MRAID, or Mobile Rich Ad Interfaces Definitions, should help to accelerate the mobile advertising industry and remove the complexities of having to recode mobile rich ads numerous times for different devices.  It’s great to see IAB attempting to streamline the mobile technologies necessary to create the mobile rich media experience just as much as they are streamlining the video technologies necessary to create the best video ad serving experience. 

AdWeek:  Google to Penalize Sites with Too Many Ads

Right, because it’s Google’s job to determine what content should be above the fold, how many advertisements should be on a page, etc.  Isn’t that the publishers and advertisers decision? 

Operative Blog: Innovation or Efficiency? You CAN Have Your Cake AND Eat it Too.

Last week Mike Leo introduced a panel at the IAB Ad Ops Summit that was asked to address the following question:  Does the consolidation of the industry’s operating systems mean less complexity and more efficiency – or less choice, less competition, less innovation?  Our response: Why choose between innovation and efficiency when you can have both with an operating system?

At the back of every publisher’s mind is a question: “Does my revenue reflect the true value of my inventory?” In far too many cases the answer is either “no” or “I wish I knew!” So how can publishers feel confident that they’re selling the right inventory to the right buyer at the right price? The answer: productization. To learn more, Amy Inlow, our blog editor, asked product manager Andrew Sullivan to explain what productization is all about.

AI: Let’s start with the basics. What is productization, and why is it important for publishers?

AS: Simply put, productization is deciding exactly what you plan to sell and being consistent about it. Consistency is helpful for your sales teams, your buyers, your inventory managers, your pricing team and your traffickers. If everyone is working with a commonly accepted product catalog with predictable pricing rules then it takes the guesswork out of everyday tasks.

In the end a good productization practice will result in a toolset that the entire organization refers to constantly. It should be a searchable catalog that the sales team uses to build proposals for buyers, the foundation for a comprehensive rate card, an implementation guide for campaign managers and a reference for analytics teams.

The goal is to strike a balance that gives buyers access to the audience they’re looking for on safe, well-defined content, while maintaining a level of structure and control for operations teams to traffic and manage campaigns. But most important, I think, productization lets publishers confidently break out of the constraints imposed on them by their ad servers so they can create products and packages that really reflect buyer demand.

AI: How does productization actually occur?

AS: There are a few fundamental aspects to the process. The first is simply segmenting all of the ad slots a publisher has access to so that they can actually be sold. In practice this means starting with ad server tags to make sure they’re following a consistent structure, and documenting clearly how to target any given site, channel, section, page, etc.

On top of that the publisher should take stock of all demo, geo, behavioral and other targeting that is feasible based on their technology stack, and make decisions about which they’re ready to expose to buyers. Are you unable to DMA target in some areas because your mobile ad server doesn’t support it? Does it really pay to allow age targeting on the home page, or is it better to limit that inventory to exclusive sponsorships? Determine the combinations of targeting that make sense for your business on each of your properties, and document those as well.

With those things in place, ongoing productization means maintaining an internally published list of buyer friendly products with documented controls around pricing, targeting, creative specs, buyer limitations – and then as much META information as possible to help sell the inventory.

AI: What are some of the business issues productization helps publishers address?

AS: A big issue is simply knowing all of the ad slots publishers have available to sell. After all, you can’t sell ad slots that you don’t know about. This may seem easy but it can be challenging when new tags are being generated every day, or if the inventory was acquired through partnerships with other publishers or networks, for example.

Another issue is delivering on customer expectations. Sales teams are often too quick to sell products that are driven by the unique requirements of the buyer. For instance, the buyer may ask for audience segmentation, frequency capping, or special creative that aren’t standard offerings. The operations team is left to figure out how to match what’s been sold with what can be delivered, and turn it around in a few weeks or days. This disconnect causes delays, discrepancies, and unhappy buyers. Productization can help eliminate that disconnect by clearly identifying what is available to a sales team. This doesn’t mean that your organization shouldn’t offer the new and bleeding-edge experience buyers want, but when a request comes in that doesn’t match up to existing products, clear product definitions should provide the time and context the publisher needs to really capitalize on the opportunity.

Inventory management also gets a boost from productization. Not only does the structure and consistency of the catalog make inventory management possible, it’s also a way to prevent campaigns with combinations of targets and ad slots that have no chance of delivering in full. Is it worth it to deal with the booking calculations for users of a certain age in a specific DMA on your travel section? If not, don’t sell it.

AI: How will a publisher benefit from productization?

AS: A huge benefit is the sustainable boost in revenue that comes from implementing enterprise-wide sales guidelines. There may be inventory that performs best when sold to particular industries, or through specific sales teams, or when offered through an exchange. Implementing controls that ensure inventory is sold with the whole yield curve in mind is the only way to raise the effective CPM across the board.

Rate card management tools also help publishers boost revenue because they set standard rates for all products by channel, including price goals and minimum floors. They also let publishers ensure that products are sold using the cost method (CPM, CPC, etc.) that delivers the best results.

Another benefit is improved reporting. Productization is instrumental for any critical revenue analytics. The holistic view lets publishers compare how their inventory performs across sales teams and channels. Since all sales teams, including performance and marketing teams, will be working with comparable products, publishers can actually compare apples to apples.

AI:  How does a publisher go about productizing inventory? What are the first steps?

AS: Any publisher doing direct sales today has been doing productization since their first IO was trafficked. Even if they haven’t been thinking about it as productization, all the placement lists, trafficking instructions, rate cards, creative specs and other materials that sit in Excel, Outlook, Powerpoint and people’s heads are the building blocks of a product catalog. The first step is to focus as an organization on the right strategy for the business and get buy-in from stakeholders to participate. From there it’s a matter of deciding on the technical infrastructure for managing the catalog and going through the process.

To really manage a robust enterprise level catalog requires an Advertising Business Management platform that can really bring everything together. It should provide the tools to generate and manage a product catalog, and ideally it will embed that catalog in the sales, trafficking and reconciliation process with hooks into business intelligence and inventory management.

Operative hosted a webinar on this topic Thursday, November 17.  Our guest speaker and presenter was Joanna Bloor, VP of Sales Operations for Pandora.  To obtain a copy of the webinar recording, please send an email to info@operative.com and we will email you the link once it becomes available.

About Andrew Sullivan

Andrew is the mastermind of Operative’s unique, multi-dimensional inventory management solution, as well as the company’s Ad Master Model and Campaign 360, solutions that enable publishers to better manage and optimize their product offerings and solutions set.  In his role as Product Manager, Andrew manages and oversees development for the software; acts as a liaison between sales, account management and development; and is continually designing solutions to meet ongoing publisher challenges.

Andrew began his career at Operative as a Campaign Manager, trafficking, managing and optimizing campaigns for both publisher and agency clients.  Within a year of joining the company, he was leading the systems integration team, working with some of Operative’s largest clients on software implementations.  Andrew also served as Senior Manager for Strategic Development, where he focused on new product innovation. 

Prior to joining Operative, Andrew worked as an Art Director at Agora Studios.  He holds a Bachelor of Science in Electronic Media, Arts and Communication from Rensselaer Polytechnic Institute.  

On Monday, November 7, I was fortunate enough to introduce a panel discussion at the IAB Ad Ops Summit on the topic of Consolidation and Operational Efficiency.  The audience consisted of Ad Operations leaders from a variety of different companies – large and small – and as a speaker, I was asked to provide content that would enable attendees to better, and more effectively, lead their organizations.

The panel was asked to address the following question:  Does the consolidation of the industry’s operating systems mean less complexity and more efficiency – or less choice, less competition, less innovation?

For me, there are three questions at the core of this topic:

1. Is consolidation really happening?
2. Should publishers have to choose between efficiency and innovation?
3. What is an operating system?

Is there Consolidation?

There certainly have been a good number of acquisitions in our industry, but innovation is also happening at a rapid pace.

Just look at the data…

For example, the number of IAB vendor members continues to increase.  Whereas there were 25 members in 2005, the number has climbed to 140 in 2011.  And the 2011 number is still higher than the 2010 number which cited 125 members.  Just last week, Brian Morrissey of Digiday mentioned in his “What if the Music stops in ad tech” article, that there are over 200 vendors listed on the LUMA Partners slide, and that’s just the display slide!  Here at Operative, the number of requests to integrate with our platform is three times what they were just two years ago.  These numbers and the activity in the space indicate to me, that consolidation is not happening.  The reality is that for every company that is bought, two to three are being created, and driving the need for solutions that solve very big problems.

So consolidation is just not happening, nor will it in the next five years, which means publishers cannot and should not rely on it to achieve operational efficiency.  In fact, M&A activity within the ad tech market is just getting warmed up.  While many people refer to the proliferation of solutions as fragmentation, a word with negative connotations, what they are really talking about is specialization.  In an industry that is changing as quickly as ours, a lot of individual innovators are required to help address the change.  We just need a way to manage it all, which brings me to my next question.

Everybody calls this Fragmentation. I call it Specialization.

Do YOU Have to Choose Between Innovation and Effectiveness?

The answer is quite simply NO.   You HAVE to do both.  You can NOT choose.

You must be able to run the car and change the engine at the same time if you want to survive in an industry going through this much disruption.  Our industry is complex but it’s not THAT complex relative to other industries.  The question should be how to balance innovation with operational effectiveness?

This may seem impossible to imagine today, but there was a time thirty years ago, when other industries were experiencing major challenges and pains managing their complex supply chains, demand channels and changing market dynamics.  But they overcame those challenges and pains, and they did it with business management software, or what we call them in this space, operating systems or platforms, that integrate with all suppliers, buyers and innovators.  These systems enabled these industries to effectively balance innovation with operational efficiency.

What is an Operating System?

Why do we even have to definite what an operating system is?  It’s because everyone calls themselves an operating system nowadays, which is creating more chaos and confusion.  We need to get beyond the hype and understand what it truelly means to have an operating system.

So how do we, in this industry, define what an operating system is?  By technical definition, an operating system:

• Is a program that manages other applications
• Is a Hub
• Integrates with other technologies
• Uses a common language

 

For a company, an operating system is a business tool or central hub that brings it all together.  It allows the company to grow and innovate, while being more efficient.  Our industry still operates in production systems and in order to become more efficient, to embrace innovation and effectively compete in this dynamic market space, we must begin operating in Operating Systems.

Imagine if when you bought a car from a dealer, they had to input the order into each and every robot on the manufacturing line.  That’s inefficient – HIGHLY inefficient, but that’s what we do in this industry, day in and day out, with our excel files and outlook databases.  We need to work differently, and simplify, in order to embrace change.

When I think about the state of our industry and I hear the pains and challenges customers are experiencing, I am reminded of the following quote:

“Nearly all men die of their remedies, not of their illnesses.”

- Jean Baptiste Moliére

This quote reminds me that solutions chosen out of expediency, out of desire to solve just the immediate problem, will quite often lead to longer term problems and pains.  It’s a good reminder to all of us in this industry that we need to think more broadly, and long-term, about how we solve or pains and problems.

Criteria for Choosing an Operating System

So how do we go about selecting an operating system and move beyond the hype?  Well for starters, you don’t want it to compete with you.  The system needs to be agnostic.  Can you imagine entering your business data into Windows, and Microsoft turning around and using it to create a competing business?

In selecting an operating system, be sure to ask yourself:

• Does the vendor compete with me?
• Do they want to replace me?
• Do they want to commoditize me?

The operating system must also be enterprise-wide, so that the entire organization is utilizing it.  This will create efficiencies and enable you to manage the entire yield curve.  And lastly, it must have scale so that it can integrate with other applications.

Operating Systems in Media

So if this is the criteria for selecting an operating system, then who are we left with in our industry?   We do not lack people and innovation to drive operational efficiency and innovation, but there is a lack of companies whose business models provide the infrastructure that enable YOUR efficiency and innovation, and prioritize driving YOUR company’s value above driving their own.   I believe we are left with only a handful of players – Operative, Media Ocean, Oracle and SAP among them.  While there are others on the image below, we do question their scale and ability to support you in the way a true operating system should, as defined above.

We believe the future consists of two main operating systems:  one on the buy-side and one on the sell-side.  And this is one reason we were excited about the MediaOcean announcement a few weeks back.

So how do Ad Ops Professionals Lead the Charge? 

The job of today’s Ad Ops professionals should be to take a step back and ask, what is my approach to building an efficient company that continually innovates?   And the answer to this question is how you lead and become the change your organization needs in order to effectively balance innovation and efficiency, or, to have your cake and eat it too.

Guardian News & Media Tackles Convergence with Operative.One

Andy Beale, Director of Technology for Guardian News & Media, discusses the company’s digital-first strategy, why they selected Operative.One to support that strategy and bring together both their print and digital media businesses, and what they hope to gain from using the platform in terms of product innovation and operational efficiencies.   Guardian is the FIRST publisher to bring together both their offline and online businesses onto one single platform, and one of the first to launch an aggressive digital-first strategy.

For many publishers, extending the CRM system to incorporate the order management functions of digital ad sales seems like a good strategy (or at least an easier one than implementing a whole new system for booking campaigns). But as many publishers have learned, it’s an approach that’s filled with formidable obstacles – inability to scale, redundant data entry, and serious investments in software development – to name just a few.  To find out why CRM systems aren’t quite up to the task of managing the digital ad business, our blog editor, Amy Inlow, sat down with Geoff Petkus, Senior Director of Product Management, and asked him to share what he’s seen first-hand.

AI: Are publishers asking their CRM systems to do too much? Why?

GP: Yes. Over a 4 or 5-year period we’ve seen publishers attempt to extend their CRM system to handle their order management functions. But it’s way more than their CRM systems can handle. The digital advertising system is unique, and CRM systems are – by design – generic, since they need to support as many industries as possible.

There are many reasons why publishers have gone down this path. Most publishers with roots in traditional media already had a CRM system in place. Since digital ad sales initially only represented a small fraction of the company’s total revenue a dedicated digital order management system just didn’t seem necessary or justifiable. In addition, emerging Internet publishers often implement a CRM solution first because that is where the growing pains are first felt, plus the CRM vendors have done a good job of pitching a low barrier to entry and ultimate flexibility and customization.

AI: What are publishers discovering once they go down this path?

GP: A bunch of pain points, actually, starting with a lot of data-entry redundancy and manual errors.  Here’s why: at the very highest level, publishers have product, sales, trafficking and billing processes, which means a lot data entry is necessary to move a campaign from one process to another. A typical, multi-channel order can require as many as 10-20 data-entry redundancies moving a campaign through the CRM, ad servers, affiliate partner systems, financial systems and so on. You can see how there is a lot of room for error.

CRM companies have successfully created the perception their systems can accommodate any business requirements you have. But that’s a slippery slope. CRM systems don’t have the fields that are standard in our industry – CPM, CPC, CPD rates, targeting premiums, number of impressions – really basic stuff.  All of that requires custom configuration.

And there’s a host of other issues that will need custom-developed fixes.  Sales can’t respond to RFPs quickly if they don’t have real-time access to available inventory, so the publisher needs a custom integration with its inventory management process. And ad servers are completely different systems, which means ad ops personnel end up entering campaigns manually. And CRM systems haven’t been designed to handle the forecasting requirements that are so vital in our world.

So what publishers are finding, in a nutshell, is that the CRM-extension path necessarily entails a lot of time focusing on software development and managing its lifecycle to make-up for the CRM shortcomings.

AI: But that’s not to say CRM systems aren’t vital to publishers …

GP: Absolutely! CRM systems were designed to help companies manage the interactions with customers and prospects, and they do a very good job at those kinds of tasks. They make it easier for media companies to manage marketing and lead-generation programs, track account activity, view the revenue pipeline, and support ticket management. I see a lot of cases where publishers are spending so much time trying to get their CRM systems to do things it wasn’t meant to do, like order management, which they neglect to fully utilize the core competencies.

AI: So what do you recommend for publishers that are ramping up to enterprise-level digital ad sales?

GP: Publishers need to remember that CRM specializes in relationship management. In order to scale publishers will need to implement a more comprehensive solution that can bring their whole digital advertising value chain together. Advertising Business Management (ABM) platforms are a great solution for integrating all of their silos. These platforms provide the underlying business layer that brings together all of the people, processes and technologies required to package, sell, traffic, manage, optimize and bill ads.

AI: And the CRM plugs into that …

GP: That’s right, the CRM system plugs into the ABM platform. What’s more, all of the people throughout the organization who need access to the data that’s stored in the CRM can access it through the ABM. So for instance, finance can get deal terms to generate invoices.  In that way, the ABM actually enhances the benefits of the CRM system by making its data more available.

AI: What are some of the operational efficiencies that result from ABMs?

GP: Publishers can streamline their catalog management and media-plan building processes. In order to sell, sales teams need a catalog of sellable products, and they need a process to sell those products quickly. But with a CRM system filling in for order management, there’s a huge amount of manual effort involved. ABM systems, on the other hand, are specifically designed to handle digital media products, so a lot of that manual intervention can be eliminated right off the bat. Sales won’t need to wade through spreadsheets attempting to find ad products that match their customers’ requirements. The ABM system also integrates with the front-end systems that agencies use, which makes it easier for sales to respond to RFPs with well-built media plans.

Ad Ops execution is another area where publishers will see huge gains in efficiency. CRM systems don’t integrate with ad servers, and that introduces a wrench for ad op teams. Without an integration a spider web of manual processes evolve between the CRM and ad servers, resulting in duplicate data entry, trafficking errors, delays in campaign launch and more. But an ABM platform provides the proper infrastructure to integrate CRM with ad servers, which means all that critical data can flow smoothly and automatically.

Another system critical to the publisher: Billing. CRM systems weren’t designed for the unique ways that campaigns are sold and launched. Nor can they connect to the financial systems that the billing department uses to generate invoices. So again, a lot of manual intervention is required, which means potential errors, and slower cash flows. An ABM platform, on the other hand, spans and compiles all of the information finance needs to generate invoices.

AI: To sum up, what are some of the benefits publishers can expect to realize by integrating their CRM system with an ABM platform?

GP: In addition to the significant operational efficiencies we just mentioned, they will benefit from reduced data entry and errors, better business transparency, and lower operating costs.

Note: Operative is hosting an EXCLUSIVE webinar on this topic Thursday, October 20th at 10:00 a.m. EST, featuring guest speaker Michael Goefron, Senior Director of Ad Operations for Alloy Digital.  To register for this event, please visit www.operative.com/crmmeetabm.

  About Geoff Petkus, Senior Director of Product Management, Operative