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“Am I allowed to rant?” Trading desks debate transparency

“Am I allowed to rant?” Trading desks debate transparency

Dominic Mills has ruffled some feathers on the trading desks after questioning their transparency. Here, a ‘flabbergasted’ Marco Bertozzi, executive managing director of VivaKi, argues his work has challenged the status quo and calls for a more open dialogue with trade bodies…

Am I allowed to rant? What a funny world we live in when representatives from the trade press and trade bodies are happily chirping away at the dastardly trading desks. We are not transparent; we are sitting on hoards of gold, laughing into our hands at the lack of interest that advertisers are showing us. It is a money making extravaganza. Have you read the press lately?

What leaves me cold is that those very same people were quite happy when their advertisers were throwing good money after bad at media companies with not the slightest inkling about where the money was going or how. No results, no insights, no controls on frequency, absolutely zero brand safety right up to advertising on illegal sites.

Oh that’s fine because those companies delivering the ads are not in an agency group. Even today there is a major RTB ad Network that revealed in its financials that it makes over 60% margin. Is that OK, advertisers? Same people, same budgets – totally blind by the way and totally unaccountable to the auditing or pitch process.

Let me explain what we have done (and by we I mean AOD because it’s worth noting not every trading desk is the same), us terrible, evil operators – we have brought transparency to our clients. AOD was built on trust and transparency. It was built to be the safest, most secure and trusted solution in the industry. It was built for clients first, not shareholders, and for that reason our advertisers know exactly what is media and what is not.

We have been stringent in brand safety terms with our VivaKi Verified process (our proprietary methodology that rigorously reviews all media, data and technology partners to ensure the highest level of brand safety, consumer privacy & client data protection across all channels) so advertisers can make sure they are not being exposed to bad content.

I am flabbergasted at the suggestion that we are not being scrutinised by auditors.”

We have frequency controls ensuring advertisers are not showing their ad 50 times and thus wasting money. Our commercials mean that we are dedicated to finding the right user not managing an arbitrage or variable margin, everything we do is in RTB, not upfront buying, not something many of the media companies can truly claim.

We do not charge advertisers set CPM or set CPC – are you still accepting that? Well ask yourself why you would in an auction world; because it is a nice safety net? Well that is your worst media procurement decision yet. No, it is because those deals make their providers lots of cash and the advertiser has no idea how much.

I am flabbergasted at the suggestion that we are not being scrutinised by auditors. Anyone who commits that to paper has clearly not spoken to anyone who works inside the relevant organisations.

It is one of the most common conversations I have between ad hoc meetings and pitches. Have you seen a pitch document recently? We are scrutinised, perhaps some are not, but we certainly are and I think it mocks the advertisers to say they are not focused on the subject. I know many who are, many.

The trading desk has challenged the status quo with many companies having to raise their game because they were being faced with a tide of transparency from us, yes us. We have demonstrated that it is unacceptable to do flat CPC, CPM deals, that you should know where your advertising appears and not deliver blind clicks. We have been unearthing how they were doing business and continue to do so. I am happy with that. I am happy we have changed things.

I think it is a shame that there is not more open dialogue on the subject, especially from our trade bodies. We are working in the most exciting revolution in digital since search. The business is changing at pace and we are working as hard and fast as we can to educate and explain, but that is not as easy as one might think and I think it’s important all trade representatives take responsibility for this.

I would love to come to an ISBA conference and do a working session or Q&A on the subject of trade desks. I suspect, however, that Thinkbox or the PPA will probably be filling the agenda.

Twitter: @m_bertozzi

Brian Jacobs, Founder, BJ&A, on 05 Dec 2013
“As well as spending the best part of my life in advertising and media agencies, I have been observing, blogging and commenting on trading desks and transparency for several months (www.bjanda.com/blog). To make sure I'm informed, I've talked to several trading desk leaders - including going in to see Vivaki at their invitation (although sadly Marco wasn't around).

If you strip away the rather hysterical rhetoric, and the sense that the world is out to get the poor old agency groups, some of Marco's points have merit. Yes, the notion of a new service offered to clients by the media agencies, based around advanced data analytics is a good idea and a positive move (although why on earth you would call such a thing a trading desk, given the reputation of those nice people in the City is a mystery).

Yes, it is reasonable to expect clients to pay for such a service (in just the same way that it's reasonable to expect them to pay for any added value service linked through to their media agencies. Omnicom's Brand Science; WPP’s OHAL and Publicis Groupe’s Ninah all charge and all seem successful). No, it's not reasonable to expect clients to pay extra to ensure that their ads appear where they should. Isn't that part of the basic planning and buying service?

But, as I said in my latest blog on this topic: "That flapping sound you hear is chickens coming home to roost. For many years media agencies have focussed their efforts on the buying end of what they do. They've cut their prices to win business, in the certain knowledge that they’ll find a way to make up any shortfall. They've failed to convince clients to pay for what we can shorthand as planning services. Now that they have created a service potentially of value, particularly to data-rich clients they’re being judged on their past record on transparency. It's no good them whingeing about how it's so unfair that they're not properly paid for their efforts. They need to reposition themselves to their clients by stressing the benefits they bring through their planning abilities before it's too late."

Vivaki's trading desk is at the end of the day a service to improve the way that Zenith and Starcom Mediavest plan and spend their clients' budgets. As such it is not really that different in principle to the agencies' research functions, their econometric offerings and so on. A centralised group offering a superior service to any that could be afforded in an individual operating unit to their media agency partners, and through them to Vivaki clients. But I wonder how well informed the partner agencies' planning teams are about the services and the benefits offered by Marco’s operation? I suspect (in fact I know from personal experience) not well informed at all. How well do they – the client facing teams, the account leads, even the media agency managements – sell and price Vivaki’s services? Again, I strongly suspect, not well at all.

Marco's piece misses the point of Dominic's article by a country mile. The key fact is that clients increasingly are losing trust in their media agencies. Look at the recent WFA survey; observe the likes of Unilever, Procter, Kimberly Clarke, Kellogg's increasingly doing their own thing; read the US trade press (and in particular Michael Shields' excellent articles in AdWeek); read the blogs, like the Adcontrarian. In fact raise your eyes above the narrow and inward-looking ad tech world to the broader world out there and what you see is sophisticated advertisers demanding transparency from their media agency partners and acting when it isn’t delivered.

If you don't trust a supplier you certainly don't hand them the keys to your data. To do so ties your hands, as an advertiser when you decide for whatever reason to move agencies. Which of course is why agencies are trying to persuade clients to part with their data. And why clients are loathe to agree to such a thing. I can imagine some interesting who-owns-the-IP versus who-owns-the-data discussions coming in a few years' time.

It's both ridiculous and arrogant to suggest that ISBA, or indeed any other trade association is obsessed with TV, or magazines (or any other medium), that they are ill-informed about online trading, and that they should give a platform to someone whose arguments are defined largely by a misplaced sense of injustice not to mention a serious lack of perspective.

One last thought. Zenith has had a terrible time this year. They've lost business and a CEO. Publicis has bought Walker Media presumably to prop up an ailing media operation. Walker Media's Chairman and co-founder is Phil Georgiadis, a guy well-known for his trenchant views on agency deals and on agency transparency. He will one imagines have a bearing, and a positive one at that on this debate. It will be interesting to watch.”

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