Operative Blog

…they could all force publishers to change the way they sell and operate in the near future.

Have you ever had one of those digital media moments where you thought, “cmon, really?!”  Well, on Monday morning I attended Digiday at the W Hotel in NYC and for a moment, thought exactly that… for a minute.  I think it was brought up numerous times that it’s no longer appropriate to call your inventory sold and unsold, but more like ‘reserved and non-reserved’ as Darren Herman put it.  I thought to myself, hmmm, ok, let’s go with that…it sounds better than remnant for sure…but then later that day, it was then proclaimed ‘premium and sub-premium’…I guess because ‘non-premium’ sounds too much like a fake Louis Vuitton handbag sold on 5th Avenue next to the hot dog vendor – you might buy one, but you’ll feel a little icky after.

Believe it or not, all this renaming and debating over what to call unused inventory went on all morning.  All of a sudden, these silly proclamations started to make me think.  If people are spending all this effort debating over what a specific category is called, there must be a disturbance in the force; the growth of this ‘sub-premium’ inventory is growing exponentially.  Jason Kelly from Time, Inc agrees that with “…the growth of  Twitter and other social media, non-premium inventory is growing at a rapid pace, which also means finding premium inventory is getting harder.”  He also added that “non premium display has great opportunity for growth.” 

So as sub-premium inventory grows at such a rapid pace, the dynamic of how advertisers interact with consumers is changes along with it. 

French children are told a story in which they imagine having a pond with water lily leaves floating on the surface.  The lily population doubles in size every day and, if left unchecked, will smother the pond in 30 days, killing all the other living things in the water.  Could the growth of sub-premium inventory threaten publishers ability to compete in the future?  The answer is yes - if you don’t take action.  Here are some thoughts on how agencies are looking to innovate and some action items publishers can take to keep competitive in this newly evolving landscape.

1. Agencies are Buying Audience:  You may say, “duh” to that, but with all the impressions available on the Internet,  coupled with new technologies, there are more and more ways for agencies to buy audiences.  Darren Herman, who runs digital media at the Media Kitchen and is also President of Varick Media Management, talked about their own data initiatives and is working with 27 different data providers to mine data for audience segments. 

2. I also traded some emails with Steve Katelman from OMD and when I asked him what the next big initiatives were for agencies, he said “It’s all about audiences and the evolution of real time bidding.”  These activities signal that agencies are pushing the envelope and taking media buying to the next level since brands are getting smarter about which agencies they work with. 

3. To make things even more interesting, GroupM decided to go against the IAB initiatives for Ts and Cs by claiming ownership of data it collects.  According to GroupM’s COO, John Montgomery, this is a way to “…protect the confidentiality of our clients’ campaign data and information.”  One does wonder if this becomes a trend, how it could create a dynamic  of publishers competing against their own customers OR new price pressures down the road.

So now what?

As a publisher, you need to start to understand your audience.  Quantcast is  great way to take a first step at understanding the segments you can offer – but that won’t be enough.  Taking action on that data and integrating it into your product catalog so it’s easily findable by your ad sales team, will ensure you are ready to sell the way agencies want to buy. Now, that’scompetitive advantage.  This was echoed at Digiday by Janet Balis, President of Digital Media Strategies, who spoke on the importance of, at the very least, keeping an up to date “product catalog and sound inventory management strategy” as the industry looks towards more advanced ways to reach consumers.

Industry vet and pal of mine, Nick Johnson from NBCU mentioned that “mining data and looking for specific audience segments is a big focus for us…we are in the business of unlocking data to create value for our clients and their clients.”  In order to do this, Nick added, “You need to operate more efficiently and look for places in your business that don’t scale and fix them.”  If you want to elevate your game, you need to fix the basic data fragmentation issues in order to solve for the future.

Even if you can get your house in order for this audience revolution, there is still a miss-match in terms of how you set up your resources.  Currently, “50% of ad ops time is focused on 15% of the revenue,” says Josh Wetzelfrom Pubmatic.  Basically, this means that in addition to getting your data in order, you may have to find ways to free up your ad ops resources to stay focused on big ticket integrations and less on the more repeatable, low CPM, ‘sub-premium’ tasks.

I look forward to your comments.

Lorne

Let me join some of the other survivors of iMedia Austin who by now have shaken off their jetlag, sent all their follow-up emails and started to blog thoughts about last week’s Agency Summit.

Like a couple of others who’ve beaten me to it (Adam Kleinberg and Lorne Brown two great examples), I think the folks at iMedia did another great job. The mix of attendees is always strong, the sessions/panels interesting and the BS quotient tolerable. Most importantly, however, what sets iMedia apart for me is the ability to not just listen to panels but to have quality debates with peers in the industry.

There were several times at the Summit in which the audience became the panel. Adam has already mentioned the infamous one minute match-ups, where for those who haven’t experienced them, every attendee gets basically one minute to tell another attendee their “pitch”. After a minute, the bell rings, mercifully ending the conversation you know you have no interest in continuing, or, more often, giving you a wonderfully unique chance to understand a company and the people behind it.

Another chance to turn the audience into a panel was Operative’s breakfast session on Monday, May 18th, where we had about 80 publishers debating the question in the title of this post. The quandry we put to them was simple, “The good news is that we’re seeing a bottoming out of the downturn and several publishers predicting greater volumes ahead. The bad news is that all of us just spent the last 4 months cutting staff, budgets and resources to the bone. Without resources, how do you grow?” We had some excellent people to help moderate the discussions: Carter Brokaw of Meebo, Steve Patrizi of Linked In, Larry Gelfand of NHL, Lisa Marino from RockYou, Brian Silver of The Travel Ad Network, Joseph Tripp from Cooking.com, Tom O’Regan from TheStreet.com and Marti Funk from SportGenic. All are veteran sales leaders who are facing the same issues.

The discussion was amazing. We’ve summarized it in a whitepaper you can see on our site. I won’t do it justice here, but check it out for insight on what publishers are seeing as obstacles to growth, and some ideas we came up with for how to overcome them.

Marti Funk (Sportgenic), me, and Steve Patrizi (LinkedIn)

After going attending iMedia in Austin last week and spending lots of time with VPs of Ad Sales & Media Directors, one thing is still clear.  It’s really hard to get in front of an agency to influence an RFP.  It requires effort, research and diligence…and since all those things sound like “work”, too many media sellers take the easy way out; just trying to get on the RFP.  By just trying to get included in the circulation of a document that’s already been co-authored by your competition, you are setting yourself up for certain failure.  Failure may be too strong; you may get a small spend, but most times, you’ll never hear back from them or if you do, you may hear something like, “you weren’t the right fit” or “we went in another direction”…sounds like a interview rejection. 

Now, in defense of media teams everywhere, there are some real obstacles to influencing the agency.  Last Monday morning down in Austin, I attended John Durham’s (Catalyst SF) panel titled, “Trading Places”.  This is where 4 heads of media sales got on stage with 4 heads of media buying to air their issues.  The publishers brought up great points around why its so hard to get in front of and deal with an agency:

1) David Blumenfeld mentioned how “agencies are always looking for that outside the box idea, but make sure it’s inside the spreadsheet.” 

2) My favorite one was the cream cheese incident by Carter Brokaw from Meebo…where you get a meeting with a power person at an agency to join your pitch and the only person there is a junior media buyer asking “where’s the veggie cream cheese?”  They also came to the meeting without a pen or notebook. 

3) And of course, the classic, “We need you guys to really surprise us on this one, get creative and we need a response from you by EOD tomorrow.”

So now what…it’s hard to get a meeting with a decision maker, it’s hard to get the lion share of the budget, it’s hard to influence the RFP and when you do win the biz, it’s hard to keep them coming back.  Here are some thoughts to help you navigate through these erratic waters:

1) Getting a Meeting with a Decision Maker:  people with the “power of the pen” are often getting lots of emails and calls.  Hundreds per day.  Sorting through the clutter is time consuming and usually emails are just skimmed for pockets of interesting ideas.  If you are sending an email or leaving a voice mail, make sure you are giving someone a good reason to call you back.  Find out why their previous campaigns failed, if they post a personal blog and what challenges their clients have had in the past taking products to market. 

That said, you can do all the right things and still not get the meeting, so then what?  Educate your media buyer to sell for you.  I had lunch with Darren Herman from The Media Kitchen yesterday.  “Don’t ignore the media buyer”, he said.  Most of the ideas he takes on are ones that are pitched to him from his media team.  If you don’t think your media buyer can share 3 compelling reasons with their boss on why you should be included, get back in there (and keep it simple, don’t overwhelm them with slideware).

2) Getting ahead of & Influencing the RFP:  I sat in Scot McLernon’s Upstream breakfast last week, also in Austin and this was a big topic.  Lizzie Widhelm, VP of West Coast Sales for Pandora Media sat on the panel and had some interesting ideas.  “Find the opportunities where there are not opportunities already.”  Like, if you wanted to sell to Coke, Pepsi or Gatorade, go to a food an beverage show since that’s where people are trying to figure things out.  “You won’t find many digital media folks there at all.”  Get your idea out early and plant that seed ahead of time at the right levels…by the time an RFP is under way with an Agency, that seed will be planted in cluttered soil and the chances for growth are slim.  

3) Keeping them Coming Back:  Back at an iMedia a couple of years ago, Randy Wooton from Microsoft Advertising Solutions said a “5% increase in customer loyalty can equal a 25-85% increase in overall profit.”  Ad serving language is often times foreign to a sales rep.  Make it easy for your sellers to report back to your client in business friendly terms & have all your data in one place.  This way, when you call on them to become part of the next big idea, you know what happened in the past, where things went wrong and what they could do better.  If you can’t influence the RFP, at least when you get it, having the information at your finger tips around what they paid, if it delivered on time and what you optimized for them during the campaign, can go a long way.

Although some of this may seem like actual “work”, keep in mind pain ripples within AND ouside your organization.   If you are frustrated, chances are, your customer is frustrated too.  Being prepared for meetings and helping to educate them on a consistant basis will often benefit you both.

Check back to learn more about the Operative-sponsored breakfast at the iMedia Agency Summit in Austin, Texas and White Paper on “How to Grow and Protect Revenue”.