“Data-Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media.
Today’s column is written by John Donahue, CEO and co-founder of WLxJS.
The only certainty for media agencies is that every single year somewhere between one-quarter and a third of their business will be reviewed. Although many of these reviews don’t result in a pitch, just as many will – and could potentially net massive opportunities for growth.
But as the worlds of media, technology and commerce become evermore intertwined, agency reviews have become more complex, the number and nature of potential outcomes has increased and so has the parceling out of tasks to domain specialists, in-house teams and others.
For advertisers, this creates a challenge not just in determining the optimal organization to work with, but also raises profound questions about what to ask and how to measure the quality of the answers – particularly in respect to the price of media and the cost of outcomes.
There are several keys to understanding the impact of biddable media on a review.
But first, what is biddable media?
Perhaps the single most significant change in media trading has been the shift from a reserve and spot market based on relatively predictable supply and demand to an auction-based real-time market, which we call biddable media.
This is not only programmatic. Biddable media likely makes up the majority of any given paid non-linear media budget, and includes everything from programmatic and search, to YouTube, Facebook/Instagram, Twitter, Pinterest and beyond.
Bidding strategy that involves the evaluation and activation of data across multiple bidders and platforms is central to the outcome. An agency’s approach, operations, data prowess and data assets are what make it possible for a marketer to yield these auctions.
In the past, it was possible to make pricing promises and guarantees for almost any media unit. It was also possible to write contracts based on those promises. In the new market … not so much. The traditional agency value proposition of network buying power has now been put into the auction – a place where the price is what wins.
So, what do marketers need to know about how an agency network functions so that they can drive their desired outcomes through biddable media?
A live market
The “buying” component of today’s pitch must shift to be about the processes and assets that create favorable outcomes from biddable media. The central “pitch premise” of inflation mitigation and renewable savings strategies has changed.
An agency must demonstrate its ability to understand the impact of pacing, agile investment strategy and supply management for each platform and supply source. These will impact an agency’s ability to drive immediate efficiencies and to mitigate cost inflation in future cycles.
Although automation and platforms have made a lot of promises, the only guarantees are speed – and complexity. The way in which an agency is able to optimize media delivery on a daily basis is critical in order capture opportunity and minimize waste.
Advertisers deserve SaaS-like service agreements from their partners underpinned by trafficking and optimization processes focused on KPIs that drive P&L growth.
The application of data
Agencies should test the ability of their partners to synthesize and secure data along with other rentable data assets or assets they own. Ask them to demonstrate how they carry data from planning through to activation, implementation and attribution in a real-time manner. This is critical to business success, because it impacts the cost and volume of outcomes throughout the funnel.
These dynamics will differ between data poor and data rich advertisers, advertisers that have direct consumer relationships and those that don’t and advertisers on a spectrum of purchase decision complexity. Ultimately, however, expertise across sources of inventory, data, means of access to that inventory and the ability to apply the data will be decisive in every case.
The world of automation and platforms has unintentionally complicated matters – but the benefits are abundantly clear.
Through intelligent and exemplary execution, an agency network can drive marked results. To achieve success, though, advertisers need to change the way they work and identify partners that can manage outcomes through biddable media markets.