Operative Blog

According to the Bain Study “Building Brands Online”, in the next 3 years, brand marketers will spend close to 40% of their budget on cross-platform campaigns (up from roughly 25%).  That’s about $52,000,000,000 being spent on cross platform campaigns in the near future.  Unless you start making changes in your organization to satisfy this new rise in demand, you won’t get a dime of it.

Let’s explore why.

What do these new demands look like for marketers?                            

A marketer looking for ‘cross-platform’ means they want to use multiple advertising platforms or vehicles to convey an advertising message.  For example, a brand like Nike may want to reach women at home, on the move, during recreation and at work.  To do that, Nike needs a number of options to distribute the advertising message: display media, online video, mobile, social media, TV, outdoor, newspaper and magazines.  And, the list continues to get longer.  For example, in the last 2 months, hundreds of publishers scrambled to build their iPad app, knowing that a decent percent of their audience will flee to the digital magazine version of their product. 

Marketers are starting to require multiple touch points in their campaigns, increasingly digital.  The people who spend the money are aware that digital is an accountable, efficient way to build brand equity and are putting pressure on their marketing departments to become more cross-platform as a result.  They are looking to get a single message to a consumer across different digital and non-digital advertising channels.  In fact, according to the Marketing and Media Ecosystem 2010 Booz & Company analysis, 89% of all marketers are developing ideas that cross media platforms, including digital.        

What can media owners and publishers do to keep up with these demands?

Let’s take a break from the macro-level talk and get into the day to day reality of the situation.  The media buyer that you met at a cocktail party nine months ago calls you up. 

“Hey – long time, how are you?… Great, great…Listen, we are doing this thing for my client and they are trying to reach men between the ages of 18-49 that are interested in buying a car.  And um…they are really trying to do this across multiple outlets…something that covers all the standard online ad units, but something that’s custom too.  So, if you could put together something that’s standard, custom, across video, mobile, online, social, that’s targeted to male car buyers between the age of 18 and 49 that live in the north east, that’d be great.  Oh, wait, I need it by this Friday OK?  Thanks, you’re the best.”

Only 1 type of publisher will get this order- the one who CAN execute.  If you can’t scale, you’ll spend all of your time reacting to these requests and looking for data.  This leaves very little time to sell, brainstorm and get creative. 

Translation – you likely won’t get this deal. 

So, what’s holding publishers back from executing cross-platform campaigns?

1.    Technology and data fragmentation is still a huge problem.  A typical publisher uses 30+ systems to run their business.  The data is fragmented, yet absolutely necessary to access to stay competitive in this new market place.  There’s one ad server for video, one for mobile, and one for display.  If you want to include a TV component or a print component, there’s a whole different set of systems to access to see if the inventory even available, and at what price.  If you plan to offer ad space on an iPad app, well you have that to deal with now too. 

2.    Business resources necessary to complete the RFP or contract oftentimes don’t even sit on the same floor- let alone same office. You may have other sales teams within your company that you may need to consult with to get them on board with your client’s ideas.  They are usually removed from your digital business goals, have not been vested in the process of selling to this client, and have their own agendas in mind. 

3.     Ad operations teams are typecast and segmented by the media they implement.  For many publishers, one team traffics standard and display rich media.  Another team traffics mobile or uses an outsourced mobile ad network.  TV and print production teams don’t even sit in the same office as you.  These are not ideal conditions for selling a cross-platform deal.

What can publishers do about it?

1.    Take a leadership role by getting all of your data in one place for Sales.  Plan for the future.  According to the Ecosystem study mentioned above, 67% of media owners said they need to upgrade their supply chain capabilities in 2010.  Part of this investment translates into having one screen to access your inventory, products and rate cards available for video, mobile, display, social and even TV, radio and newspaper.  This needs to happen, regardless of the number of ad servers or execution systems you may use.  Integrate it all into one central place so at the time of proposal, Sales has all the information they need when they get the call from that media buyer. 

2.    Centralize ad operations teams and production resources.  Fragmented ad operations teams are unable to help sales drive revenue that comes from cross-platform.  While it would be difficult (today) to have the same ad ops team that implements TV also traffic digital, there are steps you can take to move in the right direction.  Get everyone communicating with each other through one platform.  The carrot is integrating their specific ad system into the platform that everyone uses.  This will make them want to be on that platform.  By merging several departments onto one system, new proposals, orders, demands and alerts from a cross-media sales teams would be visible to everyone. 

How do these steps help publishers deliver cross-media campaigns?

By implementing these steps, Sales will be able react quickly to client demands.  They will also have more data to educate buyers and move upstream in the buying process, getting closer to the people holding the budget.  Executives can get a larger share of wallet from existing and new customers.  Ad operations and production resources can become a strategic partner to ad sales teams and help provide a competitive advantage over other publishers competing for the same dollars.

Of course, this is not easily done.  Someone with influence in your company needs to step in and be the VP of Change.  Someone who has power.  Someone that cares about revenue.  That cares about your brand.  Someone that is forward thinking enough to adapt before it’s too late.  If you can get the right people behind you, integration of data becomes easier, centralization of operations starts to fall into place and the company will start to rally towards a common cause- $52,000,000,000.

For more information, please click here.

Welcome to the IAB Annual Leadership Meeting, “Ecosystem 2.0, Revenue the next wave“.  650 digital media leaders are here in Carlsbad, California- 30% more attendees than last year.  It’s Monday morning, February 22, and one of the resounding messages so far has been the fact that interactive marketing will grow next year.  2010 is about new services, products, and transparency- it is all about growth.  As an update, the Terms and Conditions 3.0 will take effect today and was based upon feedback from over 100 companies.

In one of the opening sessions, Jory Des Jardins from Blogher introduced Frank Cooper  from Pepsi.   Jory praised Pepsi’s innovative approach to interactivity.   She mentioned an example about  a consumer tweeting that they are thirsty, and suddenly a butler appears on the screen to offer a Diet Pepsi.  Companies like Pepsi are taking big risks which means they are taking a leadership position. 

Frank Cooper, Senior Vice President, Chief Consumer Engagement Officer, Pepsi Co Americas Beverages:

“We have a chance to make brands more appropriate to everyone’s lives.”  He believes the marketing that has been built for the last 75 years is now not relevant.  Brands need to add value to our lives.  The truth is that right now we are in the middle of a brand marketing crisis.  Less loyalty, lower prices, dysfunctional messages across the board, these are all problems with marketing today.  The truth is that brand marketing has NOT really changed in quite some time. 

As an industry of digital marketers, we need to rethink, redesign and rebuild brand marketing.  Brands provide consistent value and consistent price.  But identity value has become even more important to consumers.  How can brands bring new value to the audience?

Brand behavior must change from ‘only sponsorships’ to ‘opportunities based on experience’.   We must also build our brands around social networks. The consumer has to be able to sell for us and leverage outlets that are ‘connected’.  The digital space has technology that allows us to relate to consumers in a deeper way.  Social media allows brands to highlight people and elevate their experiences with a brand or product. 

Ultimately, advertising has to add more transactions, better value or higher prices to be successful.

What IS Operative.One?

Operative.One is the NEW brand for our solutions philosophy- the concept that media companies need to utilize multiple pieces of the value system in order to sell, execute and bill digital advertising (CRM, Ad Servers, Finance/Billing, Audience Targeting, Pricing/Rate Card, etc), and that all of these fragmented solutions need to feel as “one”.  It is Operative’s job to make it feel like one…To help our clients become easier to do business with.  Therefore, the “Operative.One” brand will be the umbrella for all future business solutions.

For the last session of the day, Operative CEO and President, Mike Leo, lead a discussion with Rob Deichert, Senior Vice President, Global Sales Development and Operations, AOL Advertising and Mark Ellis, Executive Vice President, Sales, AOL Advertising.  The panel explored how Sales and Ad Operations  work together to drive revenue, increase customer satisfaction, and continually optimize the consumer’s experience. 

We are in an industry of mass customization.  Everyone and every web site needs something unique and specific and customizeable - but are we there yet?  How do we deliver a custom product but on a mass standpoint?

Question: How does Sales work with Ad Ops? 

Answer: First and foremost, the work starts when the sale happens.  Ad Ops is a major partner, not an obstacle to winning and closing deals.  It’s common that the Sales person always wants to push the envelope with an agency buyer.  This is where Ad Ops has problems- a new custom environment for every agency client. 

Question: Is there one part of customization that would dramatically help? 

Answer: Optimization and billing would have a major impact on making the sales cycle better. 

Question: Does Sales appreciate Ad Ops? 

Answer: Yes (smile).  “All custom = no profit.  And all mass = no innovation.”   The key for any publisher is to find the happy medium because that is how a publisher can advance to the next level. 

Question:  Lets look at an example- AOL’s largest spending customers get the best and brightest opportunities because they have real dollars to spend.  Can we spill less blood than we did 2 years ago, if so, how do you do it? 

Answer:  The major change is that there are definitions for all products (Project Management), like an Operations role.  But in 2009, Ad Operations emerged as a major part of all implementations once a sale happened.  The majority of time though, even today, Ad Ops and Sales are not on the same calls.

Question: How do you manage inventory? 

Answer: The forecasting is more accurate when you add in multiple areas.  There is a balance between very specific sections and the ability to sell the entire site.  Managing inventory is entirely based on the market conditions.  The order of magnitude of creative in online versus TV is so different.  Online averages one piece of creative to 70k users versus a broadcast campaign which over 1 million.

Question: If the agency knew it was easier to do business with a publisher and that made business a lot easier, would the agency move more of the budget to them?  

Answer: Yes, the ability to provide fully baked programs at a strong value creates a much better relationship. 

Question: Is it part of your sales pitch, that “We are better at Ad Ops”? 

Answer: Yes, but it is subtle.  When you don’t have the best product, cheapest price, or largest site, customer service drives a large part of sales. 

Question: What improvements in the sales process have helped the most?  

Answer: One sales person, one person to talk to, one insertion order = huge win.  The online offline combination has a long way to go.  Video and TV will be the first to converge.  Others will follow.

Question: What will be the Big Wins in the next 3 years?  

Answer: The system between agency and publisher with regards to creative and discrepancies. 

“Looks like its cocktail time…”  Mike Leo

No one sets out with a business model that requires giving money back for delivering valuable products.  Yet, that’s effectively what most publishers are doing with Makegoods and over-delivery. Some have acknowledged the seriousness of the issue and have developed a patchwork of tools in Excel to do a better job of campaign management.  However, these are rarely forward looking or timely to respond in business real-time to a poorly performing campaign.

There are many reasons for campaigns to under perform: the product was oversold, the forecast was wrong, trafficking errors were not caught, and, everyone’s favorite, ad serving delivery discrepancies. How serious is this issue? How about at least $400m annually in the US! That’s assuming just 5% of IAB’s estimate for display ad revenue ($3.8B for 1H09) is disputed.  Our anecdotal discussions with publishers indicate that the number may be even higher.

The good news is that much of the loss can be mitigated by actively managing campaigns, early and frequently.  Automation can easily replace the manual routine that most publishers find themselves in: log into third party ad server, export report, pull it into Excel, reconcile with primary ad server data; repeat for every third party ad server; repeat as many times a month as you can – realistically, just once. Oh by the way, account for changed passwords, misaligned data and just try to get the data right, forget about analysis.

For those of you stuck in this resource-sucking treadmill, we have good news.

Today we are announcing Operative.One Campaign360, a product that makes it easy for publishers to centrally manage and proactively monitor campaigns.  It improves virtually every step of the campaign management process:

• “lights out” integration and collection of data from primary and third-party ad server
• Automatic reconciliation of primary and third party line items
• A simple, grid-based UI for manual reconciliation and overrides
• Robust analysis with pre-built graphs and reports for common tasks such as delivery discrepancy, pacing, top 10/bottom 10 campaigns

All the information that you need to do campaign management and billing is in one place, keeping you from having to do hours of leg work to collect the data, reconcile it, and create reports.

In other words, the product does all the heavy lifting and you focus on making sure that you get all the revenue that your sales team worked hard to book.

Based on our experience of 10 years working with publishers, we are really excited about the potential this product has in improving publisher operations. Learn more about the campaign management and discrepencies in our white paper, Making Peace with Discrepancies: Six Steps You Can Take to Proactively Manage Them, learn more about the product and contact us .

Operative Dashboard Client Summit- WE LOVE OUR CLIENTS

Yesterday we hosted our 3rd Operative Dashboard Client Summit at the SoHo House in NYC, where several clients spent the day with the Operative Product Team to envision product innovation.  The first half of the day focused on upcoming Operative Dashboard releases, and educating our clients as to what our developers are ruthlessly dedicated to deploying over the next several months.  The second half of the day included breakout sessions tackling issues such as: campaign management as they relate to 3rd party discrepancies, solutions to streamline the proposal/RFP process for sales, and best practices for managing partners and networks.

Massive thanks to our super clients for taking the time out of their crazy schedules to share with us and help us work toward the next milestone- One process, one data set. 

To see more pictures of the event, check out this URL: http://www.kodakgallery.com/ShareLanding.action?c=lefkhgf.bq3r9uqv&x=0&y=9e2rt3&localeid=en_US

I’m sitting here at the Operative Dashboard Client Summit at the SoHo House, thinking about several things from the ridiculous to the sublime.

First the ridiculous – the reverse dress code phenomena. I love SoHo House – been a member for 3 years although not sure why they accept a 50 year old sap like me. For the past month they’ve made a VERY big point of forbidding suits and ties. I’m struck by how times have changed so quickly. Not long ago ties were mandatory at NYC clubs, then optional, now forbidden. Most of us here – we’re about 30 in number – are tieless. Scott Maison of AARP is the lone brave soul who came not only with tie but also braces. I admit he is looking sharp and he hasn’t been kicked out yet.  

To something a bit more serious. The Operative Dashboard Summits – we do two a year – are our most exciting meetings of the year. Our most important software customers – large media players like NBCU, Reuters, FIM or Dow Jones, as well as rapidly growing sites like AARP, SmartMoney, NPM and Scholastic – come to hear about our roadmap and give feedback on priorities. It’s the best way by far for our development team to validate the direction we should go and ensure we’re investing where our customers want us to invest. The feedback and discussion has been amazing.

The greatest takeaway for me: the future of digital ad order management. Specifically the fact that we are on the cusp of having one integrated system to handle order management for the online and offline worlds. Despite the demand, there is a giant gap here that no one has been able to fill. Operative is spending the most significant portion of our development budget to enable a solution and we unveiled it today. Early stages but exciting. Consensus seemed to be excellent vision, a no-brainer path for someone like Operative to blaze…and many barriers that stand in the way of integrating online and offline worlds. Enabling the technology is the first step, but how about bridging the cultures of the different sales orgs?

I’d love to hear other thoughts about whether the time has come for this to happen.