Rob Norman will speak at AdExchanger’s Industry Preview conference, taking place in New York on January 20-21.
If you were forced to name one media buying entity that sets the agenda for the rest of the industry, it would have to be WPP-owned GroupM.
It was GroupM – umbrella to Mindshare, MEC, Xaxis and Essence among others – that acquired 24/7 Real Media in 2007 and laid the groundwork for greater ad tech investment from agencies. It was GroupM’s smack talk about open exchange inventory in 2014 that raised the urgency for media companies to embrace technology to support direct buys.
And it was GroupM that imposed an ad viewability standard in 2014 that was far more stringent for sellers than what the industry had previously agreed on, sparking a debate that raged for the first half of 2015.
Rob Norman, the guy responsible for setting GroupM’s agenda in the digital arena, spoke with AdExchanger about last year and what to expect this year.
On 2015’s only big surprise:
“2015 played out entirely predictably apart from one thing. No one knew at the beginning of 2015 about the wild card of client [re-evaluations] that would culminate in a rash of agency business reviews. Reasons included the transparency and disclosure issues raised by the Association of National Advertisers, and the growing role of activist investors at global corporations, which led to a new generation of zero-based budgeting management.”
On 2015’s smaller surprises:
“Everybody thought 2015 was going to be a year of two things: relatively straightforward progression in programmatic volumes and growing volumes in video in particular. And I think they thought it was going to be the year marketplace integrity issues around viewability and fraud saw significant steps. I think both those things played out.
It was also a year that revealed firmer and thicker garden walls around the Google and Facebook ecosystems than we knew there would be. This was evidenced by Google’s decision to put programmatic access to the YouTube TrueView inventory inside the protected envelope of DBM, and Facebook’s decision not to make any really significant moves toward third-party ad serving and viewability.
Also, note to self: The two largest media companies in the world don’t make any content.”
On open exchanges versus private deals in 2016:
“We’re going to see less demand for bad supply in 2016. I suspect the amount of inventory that we ever bought in the pure open exchanges was relatively low in comparison to the total impressions in the markets. I’d like to think that [GroupM client] AT&T was buying a lot less than that than the University of Phoenix.
The private marketplace is clearly a safe and relevant haven for many significant advertisers. The idea that you can control your supply chain yet still deliver into that supply chain is a happy combination.
What Brian O’Kelley and Michael Rubenstein at AppNexus did very boldly in spring 2015 was to launch operation cleanup on the supply side into the marketplace. If you can combine clean network inventory with private marketplace inventory, that’s great. As people start thinking of programmatic in a more varied way than just who is claiming the last click at the bottom of the purchase funnel, we will move toward the happy marriage of content relevance and programmatic delivery. Isn’t that what everyone always wanted? And get it at a price that represented effectiveness and not necessarily retrofitting engagement back into CPMs [as a proxy for] effectiveness.”
On his wish for 2016:
“One of my big hopes for the year is that the long-form/professional video industry massively increases its efforts to collaborate over data sharing and help create a consumer engagement vehicle with advertising.”
On the telcos’ interest in the ad economy:
“The challenge to the telcos is they have not owned inventory. Clearly what Verizon is doing both with the AOL and Millennial acquisitions and the Go90 launch is testing the water with whatever it has spent – 2% or 3% of its market cap – to find out if the appending of cellular network data does provide the value accelerant that has been so clearly proved in the case of Facebook and others. Is this the third data cloud?
AT&T is in a different situation. They’ve made a significant investment in DirecTV. When they’re thinking about rights. They’re thinking about monetizing rights, but also they’ve expanded in other ways.
As capital expenditure companies, these are the biggest in the world, spending in the realm of $20 billion annually. It’s clear they’re expecting a massive increase in the amount of traffic in the wireless world. In many ways seeing the rise of the SVOD [subscription video on demand] market, they’re fairly well placed.
I would describe Verizon’s purchase of AOL as an experiment with the advertising market but also looking at wider platforms to monetize other rights they might acquire, such as sports streaming deals.”
On the financial outcome of Verizon’s AOL buy:
“AOL sold for 1/50th of its all-time peak. Millennial also sold for a fraction. I’m not sure how much cause there should be for celebration.”
On GroupM’s most recent digital advertising acquisitions – Essence and The Exchange Lab:
“We think that Essence is well positioned to solve complex data and advertising decisions. By coincidence they have a bunch of skills on the Google stack. What I don’t want you to think is that GroupM itself or even Xaxis itself is somehow at odds with Google. We’re having some of the best conversations about teaching our algorithms to work on DBM.
As for The Exchange Lab, when it comes to client-level tech stack decisions, the only choice was to go ‘meta.’ We have to have a meta layer that can talk to any of those DSPs. We’ve been through the fantasy land of saying we’re going to align only on our own tech, or only on Turn, DataXu and so on, and we realize that’s not an option.”
On DSP platform partners:
“We’ve been through and continue to go through a rigorous process. When we don’t work with AppNexus our next biggest partner is The Trade Desk. They’ve been fairly reactive. The Trade Desk has been very nimble in responding to agency requirements and focusing on distribution through agencies.”
On the need for better alignment media and creative agencies:
“The only way they can come back together is behaviorally. They’re not going to come back together structurally.
When you think about making advertising if that’s what you want to call it, or content marketing, you can easily see the agency planners working directly with the likes of Condé Nast and The New York Times. Whether that also means by extension that creative agencies will work with The New York Times on distribution I don’t know.
The logical connector between creative agencies and media agencies needs to be data, to flow data back into the creative process and improve the number and variety of creative assets. What I hope is the creative agencies ingest more data into the planning process and into the creative evaluation process.”
