Andy Cocker and Martin Kelly are co-Founders and Managing Partners of UK-based, Infectious Media Ltd.
AdExchanger.com: How does the UK advertising marketplace perceive exchanges today? What can be improved?
IM: There's still a lot of misinformation being peddled in the UK around Ad Exchanges. Some of this comes from Networks who probably feel that exchanges threaten their business model, and some comes from agencies, who again, either feel threatened, or have tried to trade on exchanges with limited success.
We also think there is a popular, mis-informed belief that exchanges only aggregate 'bottom of the barrel' remnant inventory, and a naivete around the power and importance of data in the whole exchange model.
The interesting thing is that now, advertisers are pushing their agency partners to innovate and develop into this space, and many of them are struggling to do so through lack of understanding and experience.
Collectively the exchanges and their partners need to do more to educate advertiser and agency communities on the benefits their platforms can offer. We think there has been an over-focus on serving the needs of the publisher and network community in the UK and existing exchange product and service offering reflect this. It's now time to re-balance, and address the needs of the advertiser and agency community.
We think the anticipated imminent arrival of Google Doubleclick Ad Ex 2.0 in the coming months, will draw the whole ad exchange debate out into the open, which will be a welcome opportunity for us all.
What drew Infectious Media to the ad exchange model? How do you differentiate among other digital agencies?
An efficiency revolution is taking place in digital advertising; the implications of which, should not be underestimated. Ad Exchanges are the enabling platforms for this revolution in display advertising. It's fascinating to see the impact these platforms are having on the eco-system of our industry, and how a whole new universe of associated businesses and services are emerging around them.
We were attracted to the 'ad exchange model' because we believe it represents a transformational opportunity for media agency businesses and the advertisers they represent. We think we're very well placed to develop a next generation agency model that sits within this new eco-system and harnesses the power of data across exchange platforms for the benefit of our clients.
The trend towards 'real time' targeting, procurement and optimization of audience as opposed to advanced 'over the phone' site bookings, impacts the agency model on multiple levels. It challenges existing 'value' propositions, skill-sets and business models, and requires a new data and technology centric infrastructure. We started Infectious with the philosophy that it's quicker and easier to build a new type of agency from scratch, based on these new infrastructural and value requirements, than to re-engineer the operations of a large, legacy business.
We believe that in the next 3-5 years, up to 85% of all digital media will be traded across auction model platforms. As this happens, the old agency value proposition of 'we're bigger, we can buy it cheaper', becomes less relevant/appealing. In next generation agency models, value proposition is less about 'buying power' and more about 'processing power', and 'aggregated data' is, (to a certain extent), the new 'aggregated spend'.
At the moment we differentiate ourselves from other agencies on the basis that we are 6-12 months ahead of other players in the UK and Europe. Most of the advertisers we work with are frustrated at the inability of their existing 'network' agencies to provide the service offering that Infectious does. Of course it's not always going to be like this, but we believe we're well on the way to developing a strong and specialized enough data and technology driven offering, to differentiate ourselves in the years to come.
Are you using any buying platforms today - if so, which ones? Where do you buy?
We are continually developing our own proprietary platform called Impression Desk, which integrates smart data and multi-exchange management solutions. There are several powerful buying platforms out there, but most of them have been operationally developed for the US market, and whilst conceptually that's fine (from a platform point of view), operationally a different network, publisher and data infrastructure is required over here. Impression Desk is our own platform built for the UK and European market and is a bespoke combination of technology, process and infrastructure.
Right Media currently has the lions share of liquidity in the UK exchange market place, and Google/Doubleclick has been relatively slow to take off here (although Ad Ex 2.0 looks set to change that). There is also a very heavy reliance on network buying by media agencies, even though many appear to add little in the way of value.
Impression Desk currently operates across Right Media and Google Doubleclick exchanges, and aggregates audience from carefully selected networks and direct publisher partners within these. As the market evolves and the platform develops, we will continue to build in additional supply sources, including Open X and Appnexus, which we hear are starting to scale in the US.
How's business? Any trends you can share for Infectious Media and the UK online ad market, in general?
Business is great, thanks, and we've been staggered at the speed with which the business has grown in a little over a year since our inception. There is a real appetite for greater ROI efficiency from advertisers, and growing disillusionment with existing approaches to online display media targeting and procurement. Advertisers want to take control of the data they generate and act intelligently on the insights it provides; our platform and approach allows them to do this. We're really lucky to be working with some of the largest advertisers in the UK now, either directly, or alongside their existing digital media agencies, and we've proven that our approach works.
Holding companies are pushing new platform strategies such as VivaKi Nerve Center, Cadreon and Varick Media. Are UK agencies "on-board" with the idea of platforms?
It's a good question. Our experience is that there are a handful of smart senior holding company executives who realize that they need to evolve their offering in this space. Conceptually they are 'on-board', but there is a big difference between being on-board, conceptually, and being in a position to operationally roll-out such platforms across their networks in the UK and Europe. There seems to be a pretty large disconnect between what the groups are doing strategically in the US vs what's happening on the ground in the UK. It's going to take time for the big groups to evolve, develop and re-train, and that creates opportunity for smaller more agile businesses like ours. It's a situation not unlike 6 years ago, when we first saw the emergence of specialist SEM agencies. We're going out of our way to build an agency business with a very non-traditionally skilled team. We're looking for smart, analytical, data and tech capable people, and our last two hires came from analyst backgrounds in the banking sector.
Like the U.S., the U.K. seems to be loaded with ad networks. Why?
Frankly, much of it is to do with lazy planning and buying on the part of media agency buyers, and their inability to adopt data and technology driven solutions to aggregate and optimize audience. There are some smart networks out there, with great technology which adds value and they will continue to flourish, but I'd be pretty worried if I were one of the networks that simply aggregates supply adding very little apart from a hefty price mark up.
Where is the sweet spot for Infectious Media - brand, DR, video, display, search?
Our sweet spot is in using data to deliver goal-focused advertiser solutions across auction model markets. This includes both display and search (PPC & SEO) channels, in an increasingly integrated way. The reality is that this type of data optimized offering currently works best for 'DR/ performance' type objectives, although we're sure that tracking will evolve to allow near real-time optimization towards more brand-focused metrics in the future.
There's more talk in the U.S. about cross-channel attribution - though it would seem to remain a significant challenge. Is cross-channel marketing with attribution important to UK advertisers? Or does advertising happen in silos?
This is as big a question in the UK as it is in the US, unfortunately however we are no closer to a definitive answer. There's no doubt that at a micro level, different digital media (search, display etc) have a beneficial impact on each other and there are different ad-serving/ smart tagging solutions that can help to make sense of this such as Atlas Engagement Mapping or (our fellow Brit mates) 'TAG-MAN' tags which give advertisers real insight and control. Before these type of solutions existed, many advertisers became overly reliant on search and focused budgets here which had a negative impact further up the 'funnel' and over time has made search less and less effective. Whilst it's good that we're getting a better understanding of this as an industry we're only measuring an element of the wider media mix. On that macro level it's also clear that different media such as TV and Radio have an impact on the performance of digital media, for instance without brand terms a lot of search marketing budgets would be much smaller. Econometric modeling can help advertisers to understand the underlying role that different media play within the mix, but the reality is that this only applies to a very small minority of the very largest (by UK standards) advertisers and most rely on their agencies media planning capability, which varies hugely in quality. The most enlightened advertisers we've come across are those that understand the inherent difficulties in separating out any one element and view performance as an output of their entire budget.
What insights are you providing about the consumer to your clients? Any examples that you can provide?
In the platform trading space, you have to unlearn a lot of the planning methods that have been the foundations of media planning since it's inception. The insights we work on generating are those that are actionable through the platforms we are working with. A lot of 'traditional' demographic audience metrics, whilst useful to know, are not recognized currencies across these platforms. So for example, search is keyword driven and on display exchanges it could be contextual, or based around recency and frequency of exposure to an ad. We base our planning around a strong analytics process which takes in data from a number of sources and rebuilds custom audience segments within the constraints of the platform at the start of a campaign. The reality, however, is that most campaign insights are produced once a campaign is live and generating useful data.