Operative Blog

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

Dan Murphy, SVP at Univision Interactive Media and LONG TIME supporter of the IAB, gave an update on the IAB Ad Operations Council.

The joke of the day is that Ad Ops has become a REAL job- where everyone is wearing suits and leaving the jeans and sneakers at home.  According to Dan, both the agency and the publishing sides have value to bring to the table.  6 years ago, the industry was talking about all of the same problems we continue to address today (late creative, intrusive ads, audience measurement, rich media specs and discrepancies).  6 years ago, Ben Reid (when working for About.com) spearheaded the “OARS- Online Ad Reporting Standards” project (ebusiness).  Today, Operative still has a stake in the eBusiness initiative: Geoff Petkus has continued to work with the IAB committees on standards and specs to unite both publisher and agency processes and data models.    

The new IAB audit will go a long way to standardize the industry.  An overwhelming amount of impressions are audited throughout the web, and verification systems will need to help the ecosystem and not hurt the process.  According to a survey Dan initiated, “Ad Ops is 50% more complex than it was 3 years ago”.  Fragmentation is out of control right now because of the different sites and structure in the marketplace.  While innovation and growth are not slowing down, the largest concern for media companies is “Inventory and Yield Management”.  A close second is “Billing Discrepancies.”

Kamal Chadha (CBS Interactive)- Panelist

Tim Messier (The Weather Channel Interactive)- Panelist

Steve Sullivan (Microsoft Advertising)- Moderator

As an industry, we’ve made strides in discrepancy management by implementing guidelines and best practice processes.  But the issue of discrepancies is still catastrophic.  Between human error and mapping line items to placement ID’s, manual processes and lack of automation only continue to perpetuate the impact of discrepancies.

Real life example: Today, the publisher gets the tag from the agency, and inserts the tag into the ad server.  For each tag, there is an associated publisher #.  How do you sync the tags with the publisher #, and report on the two?  Answer: more reporting options.

1. Madison, the CBS Interactive media custom server, collects all line item information.
2. Weather.com uses Solbright and passes a flight ID to the ad server for unique information.
3. Schedule standardized reports that will help you get in front of these issues before billing at the end of the month.
4. The last option is reporting through access to the ad server’s API.  CBS Interactive’s goal is to have an API automatic system that pulls 3rd party numbers every night with an alert function that highlights areas of concern.  There’s a new solution on the market with similar functionality.

Next steps- get the IAB council back together.  Educate the industry on possible solutions such as AdJuster and Operative.One Campaign360. Finally, establish partnerships that will ease the discrepancy pain.

IAB Ad Ops Summit - Operative Booth

We are announcing a NEW PRODUCT today at the IAB Ad Operations Summit, so come visit our booth OR CLICK HERE to read about it!

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 .

Is this your product catalog?

As I talk to clients and prospects, one of the most common fallacies I run across is the idea is that inventory costs are fixed and cheap. However, when we dig a little deeper we find that isn’t necessarily the case. Many people I work with in digital media feel there is little risk to adding another layer of targeting or packaging capability to their portfolio. The assumption is that if the targeting isn’t used, it doesn’t cost the publisher anything. In other words, more is more.

How did this approach come to be? In my opinion, the roots are in our DNA so it’s especially hard to resist. We are a medium founded on technological advances – it’s natural to keep adding capabilities. In the 90’s header info (geo-targeting, OS and browser targeting) and registration info (gender, HHI, etc.) were major leaps forward. But now we’ve layered on behavioral targeting, re-targeting, performance targeting, keyword phrases, social media profile info etc. and it shows no signs of stopping. Companies like DoubleClick/Google, BlueKai, MediaSix Degrees, Tacoda/Ad.com Quantcast have helped with this proliferation. In part this comes from a renaissance of entrepreneurial companies seeking to meet or exceed the power of Google’s ad-word target benchmarks as focus returns to performance. As always, marketers seek to avoid wasting budget as much as possible. Often publishers are challenged to say no to new capabilities that seemingly all their competitors are adopting.

Well, if we turn everything on but don’t use it, what’s the harm? In a word, clutter. I liken some sites I know to the homes we see on the show Clean House. Verdict: Foolishness! There are two challenges with having a bloated product catalog:

1)      The operational costs to manage. These hidden costs are everywhere – extra time to get complex avails into the plan, extra time explaining (and re-explaining) what a specific capability is to all parties, product sheets, added trafficking time, potential vendor management time, product catalog analysis, campaign reporting, optimization, invoicing, etc.

2)      Distraction from Core Competency. Advertisers buy your site because you have a great audience. The further you winnow out ‘waste’, the further away you get from what makes your site unique and the more your impressions become commoditized.

So is RON the answer? I hope not. The trick is finding your Innovation Fulcrum.

To do this, you’ll want to create the simplest product catalog, baseline the effort and revenue associated with it throughout the selling process, then add in layers until you find the point where the margin becomes unacceptable. This is called the Model T method. You then have two options.

1)      Stop. Create artificial constraints for the overall health of the company

2)      Change the equation – perhaps with a targeting premium or a change of process, an additional layer or two becomes profitable

All participants in the digital ecosystem should be going through this exercise in this climate. Given their position in the company, Ad Operations has an opportunity to take the lead in assessing the right balance of operational complexity and revenue opportunity. Only sites that have a compelling product offering with an internal efficiency will be able to thrive. Taking steps to assess what the right mix of capabilities are for your business will pay for itself for years to come.