Operative Blog

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.

AdExchanger: Operative CEO Leo Discusses New Operative.One Platform And Automation In Ad Ops

AdExchanger.com: Seven years as CEO and President for one company is not the norm for digital.  Why does it make sense for you?

ML: I love my job. I work with talented people, great clients, and we’re solving a huge problem that publishers, networks and agencies need solved. Our future is bright.  Why would I do anything else?

What problem is Operative solving today?

There are two certainties in our space:

1. The industry cannot thrive until it becomes easier to do business with.
2. Continual innovation is a requirement for survival.

By giving media companies and their partners freedom from the complexities of the digital value chain, Operative enables both.  Since the ERP evolution of the 1980s and early 90s, you will not find a leader in any other industry that has not brought together all of their value chain processes and systems. This revolution, which is a ticket to the game for everyone else, is only just getting started in digital media.

Without a platform upon which publishers can innovate, digital innovation creates chaos. We provide a business management system that supports the adoption of new innovation (new products that can be offered to advertisers) in the context of the publisher’s current way of doing business, yet integrated all on one platform.

Can you drill down from the big picture and discuss the three biggest pain points that you’re solving for clients today?

Sure. We are focused on addressing the following problem areas:

1. Demand-side planning:  With so many different technologies and channels available to monetize inventory, it can be difficult for publishers to understand what and how much is available to sell, and determine the best way to package and price. There is pain associated with managing and optimizing price, as well as pushing inventory to these channels.  Operative.One solves for this.
2. Supply chain management:  The amount of innovation that comes out of this industry is staggering. Ad production technologists like DoubleClick, Rubicon, and BlueKai are a constant source of innovations, increasing the value we bring to advertisers. But if those innovations are not integrated into the business, then chaos ensues.  Production systems are not business systems, and media companies simply cannot grow if they manage production systems independent of one another.  Operative.One enables effective cross-platform execution providing a single view across all production systems.
3. End-to-end ad execution:  For many publishers, product packaging, sales, operations and finance processes are connected manually, and internal systems that handle inventory, CRM and financials don’t talk to each other.  This limits sales productivity, reduces time to meeting impression goals, and causes billing discrepancies. We connect all business processes and systems so publishers can effectively package, sell, traffic, manage, optimize and collect revenue on ads.

Operative.One represents one place to manage demand, one place to manage supply, and one place to execute digital ads.

How has Operative pivoted its business to meet client needs over the past 10 years?

Operative has always been focused on getting the job done for its clients. Ten years ago, we began as an ad operations services company, and over the last six years, we have done significant work to automate those jobs. While the jobs remain the same (whether performed by a client’s staff or ours), our platform creates efficiencies and lowers transaction cost – ultimately getting the job done faster and cheaper.

What is advertising business management?  How do you see this evolving in the next 1-3 years?

Business management platforms are well established in industries outside of digital media. Leaders in business management solutions include SAP, Oracle, Netsuite, Salesforce… and even Wide Orbit, which serves stations and networks. For the advertising industry, business management solutions free media companies from the complexities of the value chain by integrating all of the processes and systems necessary to package, sell, traffic, manage, optimize and bill ads.

In the next 1-3 years, the industry will focus more on the business of advertising, not the system or the pain associated with industry innovation and so many disparate technologies.  Does anyone really need to know how the sausage is made? Does anyone question how a TV ad makes it on the air?  Has a Jaguar salesman ever concerned himself with how (or if) the ABB 6-axis robot is installing the sunroof before it leaves the assembly line?  Don’t publishers succeed when sales people stop talking about ad tags and start talking about how their products maximize brand value?

If you were running a media agency today, what key strategies would you put in place to survive and prosper in the future?

I would ensure that my teams were focused on marketing problems, not technology problems. It’s important for agencies to get control over variable costs and understand how to leverage technology without being in the weeds with it. The number of transactions required to execute a digital campaign are an order of magnitude more than most any other media. If you do not have control over the transactions, it’s difficult to grow a profitable business.  Agencies need to be partnering with providers who have built a business on helping agencies manage transactions, and can take infrastructure off their plates so they can grow profitably, and focus on what’s most important: client relationships and great creative.

What are the funding needs for the company? Profitability? Any plans to go public?

We are profitable and we plan to go public.

Is the DSP model impacting your business? How?

Yes, Operative.One plays an important role with any innovation that our clients choose to adopt.

Ad networks, DSPs, direct to advertisers (and more to come) – these are all viable channels for monetizing advertising assets. The key is having tight controls and a unified view of distribution channels, whatever they may be.  Having one business system ensures media companies can make the right decisions to effectively price and allocate inventory across channels.

What are you seeing from clients today in terms of current momentum?

Publishers are increasingly more focused on direct sales. The deal size is going up and CPMs are going up. And our clients don’t want to give inventory to those who commoditize it.

For publishers looking to get their arms around their data, what do you advise?  And what do you tell them regarding ad network/exchange relationships?

The secret to data is having it all together. Getting it is easy. Analyzing it is hard. The only way to properly analyze data to have it all in one place.

Follow Mike Leo (@rmikel), Operative (@OperativeInc) and AdExchanger.com (@adexchanger) on Twitter.com.

Did you miss DPAC on June 24 at the Millennium Hotel? Are you interested in some of the results of the Operative and DM2PRO State of the Industry survey? Do you want a sneak peak into Operative.One?

No problem.

Download the Operative presentation by clicking on the below link. 

Operative at DPAC Conference_6-24-10

Also, for access to our white paper, State of the Industry: Digital Operations, CLICK HERE. Read more…

Operative Survey: The State of the Industry- Digital Operations

For the last 2 weeks, we’ve been working with the team at DM2PRO to survey the digital advertising community about the current state of affairs:

- Growing need for data integration among all players in the ecosystem

- Blurring lines between publisher, agency, brand and network roles and responsibilities

- As we continue to innovate, our inability to adopt those innovations is holding us back!

- Fragmentation is NOT going away….and agencies, publishers, brands, advertisers and networks alike need to stop losing money and bring our systems together to compete effectively. Read more…

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.

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 .