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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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Marketers must stop prioritising strategies built around cookie data if they’re to succeed in the 2020s. Speaking on a panel at The Drum’s Predictions 2020 event at Sea Containers this week, Andy Chandler, Adjust’s VP for UK and Ireland, called for brands to evolve in the post-cookie world and start to work out whether they’re truly adding value to their customers’ lives.

“With Google Chrome getting rid of third party cookies, brands need to start looking at data differently or they’re going to very quickly get left behind,” he explained. “We are moving into a cookie-less world, where consumers are interacting more with apps than browsers, so the way we measure data needs to truly reflect that. We need to keep evolving and keep up with where people are, ensuring we add real value to their lives.”

A recent feature by The Drum explored the impact of Google’s plans to “render third-party cookies obsolete” and how brands must now respond. According to Ed Preedy, chief revenue office at Cavai, one solution could be for brands to use online messenger apps to speak directly to their consumers. He says messenger apps can ensure more tailored advertising and better conversion rates when it comes to making a purchase.

He added: “In 2019, there were 73 trillion posts across all messaging apps. And in markets like APAC and Latin America, something like 63% of consumers purchased over a messaging app or spoke directly to a business. These are becoming hotbeds for commercial opportunity and it will only grow in the decade ahead in the UK too.

“Messaging apps allow for a genuine two-way interaction. They qualify what users want and who they are almost instantly, so therefore the advertising that runs is contextually relevant. They will become so much more important as cookies start to dissipate. I think there will be a wider move to more personalised platforms, where advertising is less random.”

It was a frank assessment that Tanzil Bukhari, managing director for EMEA at DoubleVerify, very much agreed with. He insisted consumers now want to see more relevant advertising and that getting rid of cookies will ensure this happens more consistently. “The Google Chrome announcement will mean publishers have to offer much richer and directional content, and that’s only a good thing.”

Using data in the right way

But there was also a message of caution in the air, with Vodafone’s brand director Maria Koutsoudakis warning that brands and agencies who prioritise data too heavily risk becoming irrelevant, on a panel earlier that morning alongside Ogilvy CEO UK, Michael Frolich. Koutsoudakis asked the audience: “When was the last time you spoke to a customer? If you stood back from click attributions and A/V testing then what do you really know about your customers now?

“By only really focusing on data, there’s a risk we create a generation of marketers who don’t understand brand, consumers or behavioural change and aren’t agile enough to cope with it. There needs to be more of a blend of people being on the ground, really speaking to their customers, as well as having a good data strategy. If marketers only care about digital metrics then there’s a risk they become irrelevant in marketing in the 2020s.”

With consumer data obviously so important to the UK mobile network’s business, she admitted it has taken a back step to ensure it’s precious about protecting it. “We don’t sell this data as we can’t afford to lose our consumers’ trust,” she admitted. “Being so cautious might mean we get left behind, but I think it’s worth it as we can’t take any chances.”

Frolich agreed with Koutsoudakis’ sentiment. In the 2020s, he said ad agencies shouldn’t be using client and third party data unless they can absolutely prove it has a positive impact on creativity and this in turn enriches the lives of their customers.

“We aren’t a data company, we are a creative agency,” he insisted. “We use client data and third party data to feed our creativity and build better work that consumers then enjoy. If you’re using this data and it isn’t creating better human insights then you’re using it incorrectly.

“Agencies have bought big data companies and it isn’t working because they’re not using the information to create better marketing. If we can work with a client like Vodafone and use their data to feed better creativity then we’re winning.”

The sentiments around trust were picked on another panel, where Courtney Wylie, VP of product & marketing, Mention Me had a word of caution: “We’re going to continue to see this evolving trend of lack of trust. A declining trust in influencers, brands, marketing channels.”

However, the way the relationship between agencies and brands works will become a lot more adaptable over the coming years, with a one-size-fits-all approach now completely redundant. John Readman, CEO & Founder, Modo25, explained: “In past there were only two options: work with an agency or do something in-house, but we will see these lines blurring more and more. There’s no reason why a combination of both won’t be the best way forward.”

Talking about the way forward, Andrew Challier, chief client officer, Ebiquity predicted that the industry will finally see “the rebirth of creativity and the importance of creativity in engaging people and reaching people in a meaningful way.”

A more ethical way of thinking could impact Facebook and Amazon

As we move further into the 2020s, some of the event’s panellists warned that established retailers and social media brands could start to fall short, as consumers switch to a more ethical way of thinking.

“Yes, lot’s of people still buy off Amazon, but the fact Brits also want to become more engaged with their local community means independent retailers should be confident heading into this new decade,” predicted Hero Brown, founder of Muddy Stilettos.

She explained further: “We’ve noticed a real shift in our readers wanting to support the high street more and more, and there’s this ethical thinking coming through, which could be detrimental to an Amazon. Shoppers want real-life experiences, even from online brands. They’re starting to get tired of faceless fast transactions and want to see brands brought to life in a more physical way. This trend will only intensify in 2020.”

Meanwhile, Darren Savage, chief strategy officer at Tribal, would like to see Facebook’s dominancy recede in the social media space. “I think major firms who consistently lie will come unstuck in the 2020s as people won’t put up with it anymore,” he said. “An immoral toxic cess-pit like Facebook will come tumbling down.

“The blatant lies they tell around consumer data will mean people will leave the platform in much bigger numbers. Truth is more important than ever before and just being a big business isn’t going to protect you if you mislead consumers.”

Proving you’re making a difference

This ethical way of thinking also extends to a brand’s commitment to sustainability, and Misha Sokolov, co-founder of MNFST, believes this will only rise in importance over the coming years.

“I spoke recently to someone at the Volkswagen Group and he was telling me how they calculated they were responsible for 1% of all global emissions, and that’s why they now want to be carbon neutral within 10 years,” he said. “The smartest brands won’t just put a nice message on their packaging, but do something that has a provable positive impact on the environment and helping reduce climate change. It must happen automatically as brands will lose market share if consumers don’t think their being ethical enough. There’s no excuse in the 2020s.”

And businesses shouldn’t just think of sustainability in environmental terms either, with it also being just as wrapped up in how a brand and business treats its employees. Stéphanie Genin, global VP of enterprise marketing at Hootsuite, says employee advocacy will be a huge trend moving forward, as consumer want to ensure their favourite brands treat their staff good before supporting them with a purchase.

She added: “Employee advocacy and employee generated content will become so so important. When you empower employees to be the communicator of what your business stands for it really adds to brand value and boosts sales. I think marketers are missing a trick by not prioritising this more heavily.”

However, Readman, added none of this will work unless it’s part of a global governance policy. “It’s all good being sustainable and doing good things for employees in one market, but if it’s not something you’re doing consistently across the board then consumers will work it out and there will be a backlash.”

Meanwhile, for John Young, executive creative director and co-founder, M-is, as brands start to really understand the consumers through personal engagagement, “the advertising budgets will transfer into experiential budgets.”

Be as safe as possible

Another topic of conversation that came up throughout the day was brands ensuring the data they keep on consumers remains safe, especially as more and more of their ads are traded programmatically.

Francesco Petruzzelli, chief technology officer at Bidstack, said that 13% of global ads are currently fraudulent and that while major brands know it’s a “big issue”, they’re not necessarily doing enough to prevent it. “We acquired a publishing guard to protect publishers, but I find a lot of people aren’t thinking seriously enough about this issue. It won’t go away!”

Dan Lowden, chief strategy officer at Whiteops, added how he recently worked with a major brand who believed bots were accounting for up to 5% of fake views of its £10m campaign, but says his team worked out they were actually accounting for 36% of traffic.

Looking ahead, he concluded: “The bad guys aren’t going to let up and will keep on persisting with cyber crime in the 2020s. We all need to be serious about tackling this problem and do more to collaborate as an industry to ensure that marketing dollars are genuinely being spent on human engagement and not just robots.”

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Sourced from The Drum

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About time too: a major advertiser has become so frustrated with Facebook and Google’s limp attempts to police the content they publish that it has taken matters into its own hands. Vodafone will no longer rely on website “blacklists” drawn up by the social media titans and its own advertising agency. Instead, to prevent its ads appearing next to hate speech or fake news, Vodafone will issue a “whitelist” of sites on which it is happy for its commercial messages to appear.

The new approach is sensible. Indeed, it’s a wonder that major advertisers have been so slow to protect themselves from Facebook and Google’s failures. Vodafone spends £400m a year on online advertising. Even if 99% of that money ends up being directed to reputable sites, the other 1% can do serious damage to a brand while also generating revenue for some hideous websites.

Advertisers’ reluctance to take the initiative may stem from two factors. First, the worry that drawing up “whitelists” and employing human judgment is a more expensive way to advertise. Second, a sense that Google and Facebook’s machines are too big and powerful to challenge.

Vodafone, let’s hope, has shattered both ideas. Yes, it’s a big advertiser that can afford to carry a few extra costs but it is surely right when it says algorithms, designed to carve up demographic categories, are simply not up to the job of making editorial judgments. It also seems to have little difficulty in laying down the new terms of trade to Google and Facebook.

Other advertisers should follow Vodafone’s lead – and, if not, explain why they’re happy to turn a blind eye when even small portions of their advertising budgets end up funding some of the internet’s most gruesome offerings.

Shawbrook would be better going private

Shawbrook is the challenger bank that has been a challenging investment at times for its shareholders. Floated at 290p in 2015, the shares fell as low at 130p a year ago after the referendum result – Brexit was deemed by the market to be unhelpful for UK buy-to-let lenders. Then came Shawbrook’s confidence-rattling revelation of lending “irregularities” in one division.

In the circumstances, you might have expected the board to embrace the takeover approach from Pollen Street, already a 38% owner, plus fellow private equity house BC Partners. That was the way the plot seemed to be heading when Shawbrook agreed to open its books. But the board has now rejected four offers, deeming the bidders’ final pitch at 340p a share, or £868m, to be an undervaluation.

One admires the independent directors’ determination to squeeze Pollen Street for every last drop of value. In the end, however, resistance is likely to be futile since acceptances are already 45% and many of the other shares are already in the hands of arbitrage funds who are only there for the final bump in the bid. The real question is whether the bidders manage to pass 75%, at which point Shawbrook would be delisted.

It would be a shame to see the ranks of quoted challenger banks depleted. But, actually, Pollen Street and BC make a fair point. The strength of the Brexit storms are unknowable for specialist lenders and may be better combated away from a public market that tends to demand lending growth in all circumstances.

It’s possible that Shawbrook, whose returns on equity have been strong when it has avoided cock-ups, will sail through happily. But the bidders aren’t making a risk-free bet. It’s probably best to let Shawbrook go private.

Bailey stays on trend at Burberry

The annual report would have been a good place for Burberry to explain what on earth the job of “president” involves. Christopher Bailey, the outgoing chief executive but continuing chief creative officer, will have presidential status from next month but the demands of the role remain obscure.

The “evolved structure”, which will see Marco Gobbetti become chief executive, “will allow me to redouble my focus on design for this next phase, and on making products and telling stories that inspire our customers”, Bailey tells shareholders in the report. But isn’t all that designing stuff covered by the creative gig?

Maybe the un-corporate title is just there to remind everyone who is really boss. The remuneration arrangements suggest the same. Bailey, who has just picked up £10.5m as a delayed retention bonus, will be able to earn an indicative maximum of £7.6m in the coming year. Gobbetti will be chasing a whisker less at £7.3m.

A difference of £300,000 is a rounding error at those levels, of course – but maybe it simply wouldn’t do for the president to be denied bragging rights.

Image: Vodafone: flying ahead of rivals with its new advertising policy. Photograph: Toby Melville/Reuters 

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Sourced from The Guardian