Starcom Is Still In The Stars
The relationship with Starcom will continue to be collaborative. Phillips was very clear that no bridges were burned as a result of Allstate’s decision.
“We were very upfront about our plans and we gave them plenty of advance notice as we were looking to make this shift,” Phillips said. “There’s a spirit of good, ongoing partnership.”
It’s an evolution more than anything else, said Karla Knecht, EVP and managing director at Starcom, in charge of supporting the Allstate business. Starcom is more than happy to roll with the punches, she said, adjusting its services to meet brand need.
“We partner heavily on the strategic side regarding marketplace knowledge, content and data and analytics, which are just a few examples outside of the core media-buying relationship where we’ve expanded how we work with Allstate,” Knecht told AdExchanger. “We’ve worked with Keary and his team for years and they’re incredibly competent at deploying digital on their own, which complements what we can do for them from a strategy standpoint.”
Phillips described the new relationship as taking place “almost on a consulting basis.”
“They have a view into things going on across the publishers they have relationships with and across the breadth of clients they work with inside and outside of our category,” he said. “They see things we don’t see based on their internal view and they can bring us strategic digital media opportunities we might not be able to find on our own based on those relationships. We still want to have those opportunities available to us, and the best way to do that is to continue to work with an agency.”
Starcom will also help Allstate figure out how digital fits into the brand’s general integrated marketing mix.
“A key thing to remember is that digital is one component in the overall marketing plan and there is still a significant amount of work that happens upstream in understanding the consumer, marketplace dynamics and competitive pressures,” Knecht said. “It’s one piece of a much larger tactical puzzle.”
Allstate maintains its own technology stack comprised of an ad server – Allstate uses Google’s DoubleClick – a data-management platform (DMP), attribution management and multiple direct DSP relationships, the latter of which, at the moment, is a mixture of in-house self-serve and managed services.
In the past, Allstate would run media off its agency’s ad server, but that wasn’t ideal from a data-aggregation and data-ownership perspective, Phillips said at Programmatic I/O. “We made the decision to consolidate all of that and have our own partners run off of our ad-serving instance so that we have all of the data collected in one spot.”
Each component of Allstate’s stack is contracted directly, although it gives its agency “the keys to the car” on certain things, Phillips said. Starcom, for example, doesn’t have its own login into Allstate’s DMP, but the brand does make data available as necessary, providing broad metrics and reporting for the agency’s portion of the planning.
Hands On Keyboards
Although he’s done a lot of prep work, Phillips is still working out some of the operational details of what the in-house team will look like and how day-to-day execution will play out.
“Heading into 2015, we’re likely to stay iterative and I expect that we’ll be evolving over the next couple of years as we figure out what else we might need to do or provide as things come up that we perhaps hadn’t thought of,” he said. “We’re engaged in the process of building out our team, but we won’t know what the ‘right’ number is until we really get into it and understand the velocity and volume of the work.”
What’s certain, however, is that Allstate needs the right talent. Phillips has added, and will continue to add, dedicated resources to his team. That said, those resources are “lesser than the resources we had supporting us from an agency perspective,” he noted. “So, we’re a little leaner [and] a little meaner.”
Phillips isn’t necessarily looking for seniority – he’s looking for know-how.
“From a skills standpoint, we want people with experience in digital, and, ideally, in programmatic, whether they’ve been at a trading desk, a DSP or another ad tech company,” he said. “We want people who fundamentally understand it. Whether or not they’re junior is not concerning.”
Programmatic Is The Best Policy
Automated buying forms part of the attraction of programmatic, but it goes much deeper than that, Phillips said.
“What was always appealing, even from the early days, was its prescriptive nature, the ability to granularly target an audience from a direct-response perspective,” Phillips said, noting that the cost benefits, although “pretty evident,” are only a fringe benefit of the ability to buy more efficiently and with far less waste. Allstate has also started to go beyond DR and use programmatic as a branding device through video and, soon, mobile.
The targeting aspect is a real draw for Allstate, which has “some very particular audiences” it’s looking to reach, Phillips said, noting that “not all consumers are created equal in our category.” Allstate sells products to people at specific moments in their lives. Why go in for contextual advertising or run of network for a car insurance ad when there’s bound to be a large portion of that audience that doesn’t even own a car?
Programmatic also allows Allstate to punch above its weight from a budgetary point of view with megaplayers, and spenders, like Progressive, Geico and Liberty Mutual.
“We’re not the highest spender in our category and we can’t compete with everyone purely on a spend basis, so we had to figure out a way to be more efficient and effective with the budget we do have,” Phillips said. “Pretty much everything we do is driven around risk tolerance and finding the right consumer.”
That all sounds great, but Phillips is the first one to say that bringing tech in-house isn’t for every brand. WPP Group CEO Martin Sorrell derided this trend, questioning whether brand clients “will be able to apply technology successfully.”
Ultimately, it’s a different-strokes-for-different-folks type of situation. Brands like Allstate and Netflix have made the commitment to go in-house, and advertisers like Kellogg’s and Kraft continue to partner with their media agency on programmatic – both work closely with Starcom – with impressive results. The P&Gs and American Expresses of the world are heavy into programmatic, but they farm out the work to their agency trading desk.
“It depends on the culture and it depends on the company,” Phillips said. “There will be certain brands that have the intestinal fortitude to pursue it, and the economics make sense for them, and there are others that are perfectly content to work through an agency or through a direct relationship with a DSP partner in collaboration with an agency.”
In-house is a lot of work – so brand ad tech buyers beware. Beyond planning and day-to-day execution, an in-house team also needs to keep pace with the rate of change in the ad tech space, which, Phillips joked, ages in “dog years, not people years.”
“Bringing digital in-house will have a real impact on our speed to market,” Phillips said. “But if you’re just doing it for the sake of doing it or you’re doing it because it seems like the thing to do du jour, then it’s going to be a huge mistake.”