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Programmatic media buying is on the verge of a new era built on collaboration.

This was the key thread in the panel session on the future of programmatic run in association with digital advertising technology provider PubMatic at The Drum’s Agencies 4 Growth Festival. Watch the fascinating panel here.

Although advertising as a whole has been battered by the pandemic, the use of programmatic media buying continues to increase. At the beginning of October, IAB Europe published its 2020 Attitudes to Programmatic survey, which showed that the number of advertisers spending more than 41% of their display budget through programmatic channels had increased from 55% in 2019 to 77% in 2020. Similarly, the number spending more than 41% of their video advertising budget programmatically grew from 50% in 2019 to 54% in 2020.

As programmatic grows, the way it’s being managed continues to change. The IAB survey found that the number of advertisers using hybrid models, where brands bring some elements of programmatic buying in-house, supplemented with agency expertise, had doubled since 2019 to almost a third. In-housing of programmatic, meanwhile, fell from 38% of advertisers in 2019 to 20% in 2020.

Speaking on The Drum panel, Richard Kanolik, programmatic lead at Vodafone, put this change down to the growing level of programmatic expertise. Programmatic used to be a “black box” tended by the agency, he said, but now advertisers want more visibility and control of their media buy, and they can hire in the people to deliver that.

But he argued that there’s still a need for agencies to fill in the gaps.

“Advertisers can underestimate what’s required to bring programmatic in house,” he said. “Hence the hybrid model.”

This view was backed up by Chris Camacho, chief performance officer at Mindshare. He pointed out that in-housing involves more than just a deal with a DSP provider.

“You also need to think about the set-up, data, tools and talent,” he said. “It’s not easy, but with the right infrastructure, the right support and the right agency, it can be done. There’s a lot of value to having a guide.”

Lisa Kalyuzhny, senior director, advertising solutions, EMEA at PubMatic agreed that working together is crucial, both across the business and between the business and its agencies.

“It’s about knowing what your strengths are as a brand, and being able to use the people you have on the ground internally as well the agency, and being able to really collaborate. That’s where we’ve seen the most success,” she said.

But brands and agencies working together isn’t the only form of collaboration that’s changing programmatic buying. Kalyuzhny pointed out that the introduction of header bidding revealed to advertisers that they could be using 20 or 30 different partners to buy the same inventory, and they started asking themselves what the benefit was.

“Supply Path Optimisation has become a catchphrase for many different adtech initiatives. At the core, it’s about buyers understanding and optimising supply. To deliver better media buying and selling strategies, the collaborative relationships and understanding of both buyers’ and sellers’ goals are a must have,” she said. “In digital advertising, brands and publishers are ultimately working towards the same goal: creating a transparent programmatic set-up that optimises consumers’ ad experiences and values inventory at a fair price for all.”

Kanolik argued that programmatic’s transparency problems were self-inflicted, the result of an infant industry prioritising technology and innovation at the expense of clarity. But he also said that buy and sell sides know that transparency is crucial to programmatic maturing as a medium, and that awareness is bringing the two sides together.

“For programmatic to evolve into a trusted medium, transparency is key,” he said. “We’re moving towards that, and it will kick off a new era of programmatic advertising.”

To watch the entire panel discussion on the future of programmatic media buying, presented in partnership with PubMatic, click here.

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Sourced from The Drum

By Yuyu Chen.

With more than $1 billion in revenue and over 14,000 employees across 32 offices globally, PricewaterhouseCoopers’ digital arm, Digital Services, is encroaching on agency turf through mergers and acquisitions.

Now, the practice is helping clients (it declined to share its client roster) set up trading desks on their own, as more and more brands are planning to bring programmatic in house for more transparency.

But one thing PwC Digital Services doesn’t have an interest in building is its own agency trading desk to run programmatic campaigns for clients.

“Media buying is not the most complex marketing problem that our clients want to solve,” said John Swadener, chief operations officer for PwC Digital Services. “We are working with clients on in-house media, but we don’t want to — and will not — get into media buying.”

For instance, if a software company wants to move programmatic in house, Swadener’s team will help the brand figure out how many people it needs to hire in order to manage the new processing, how to structure the teams, the proper technology platforms and how to implement the technology. The only thing that PwC Digital Services doesn’t do is buy media on behalf of the software client. It’s like buying furniture from IKEA: All the materials come in the box, but there is assembly required.

Swadener thinks that programmatic is like search back in 2000 when there were lots of small independent search agencies, but search gradually became an in-house marketing functionality for most brands.

“If clients pass media buying to us, they will always try to keep the cost down in the future by switching to a different agency,” said Swadener. “So why not just help them build their own trading desk in the first place?”

PwC Digital Services doesn’t plan to acquire media agencies or ad tech firms in the near future. The company, along with other Big Four accounting firms and consultancies, is very focused on digital design and user experience, as evidenced in their mergers and acquisitions.

For example, PwC acquired agency Fluid in February of last year and Deloitte bought Heat around the same time. Accenture snapped up a few shops recently, including Germany digital agency SinnerSchrader last month and U.K. agency Karmarama in November 2016.

All of the above are creative shops that specialize in digital design and web development.

John Kaiser, partner of investment bank DeSilva + Phillips that sold Banyan Branch to Deloitte in 2013, thinks that agencies that understand design, user experience and customer engagement are more valuable to big consulting firms because as the consultancies work with companies in transforming their businesses to be more digital, a key consideration is how companies can improve the experiences customers have with their brands and how companies can attract and retain customers in a digital world.

“Today, at least, media planning and buying is less focused on enhancing the customer experience and more oriented toward automation and efficiency, which is why the consultancies are inclined to not have media in-house,” said Kaiser.

Also, media agencies compete on scale, so it is hard for a new player to enter the market, added Brian Wieser, senior analyst for research firm Pivotal.

Media agency execs aren’t exactly sweating, either. Charles Fiordalis, chief digital officer for agency MediaStorm noted that he has never seen a single consultancy get its hands dirty and actually implement its reports on clients’ digital media systems and strategy.

“Even when consulting firms make recommendations, our clients come to us to help interpret them and to take action,” he said. “If anything, they are a helpful force because they have brilliant people who provide frameworks and assessments we can use to help guide change.”

But things are different on the creative side. In the case of PwC Digital Services, it consults CMOs on brand strategy, market insights and marketing performance, and it executes its suggestions for brands.

For instance, if a client doesn’t generate enough return on investment and Swadener’s team identifies that the reason is the brand’s loyalty program doesn’t drive incremental sales, PwC Digital Services will redesign the client’s loyalty program.

“Of course, the brand can bring our structure analysis to other agencies for execution,” said Swadener. “But if that’s the case, the client will need to start over and bring the new agency partner up to speed.”

By Yuyu Chen

Sourced from DIGIDAY UK

Sourced from AdExchanger.

Welcome to the first episode of AdExchanger Talks, a new podcast on data-driven marketing. Following this discussion with GroupM’s North America CEO, Brian Lesser, we will publish new episodes twice monthly.

If you need further proof of the big agency holding companies’ seriousness about programmatic advertising, consider the rise of Brian Lesser.

Lesser started his WPP career as an ad tech product guy at 24/7 Real Media, which the holding company bought in 2007. After launching Xaxis and growing it into a $1 billion dollar business, he was promoted to CEO of GroupM North America, one of the biggest jobs in media buying.

“The nature of what GroupM is and does is changing,” Lesser says in this episode. “GroupM is much more reliant on data and technology platforms and automation than it has been in the past.”

He notes that GroupM was set up 13 years ago to create leverage for clients by aggregating their spend for media negotiations. He says leverage still exists today, but it’s more about data and technology.

“Thirteen years ago, the concept of leverage was much different,” he added. “My job is to transform GroupM to be much more about gathering data about consumers, because that’s where our leverage is going to come from in the future. And that’s how we’re going to drive performance for clients.”

For the inaugural episode of our AdExchanger Talks podcast, we’re pleased to share a half-hour conversation in which Lesser answers a range of questions on GroupM’s media buying ethos, agency transparency and the changing programmatic industry.

Sourced from AdExchanger