Fortune favours the brave
On 21, Sep 2012 | In Blog | By agenda21
Recently, I was fortunate enough to spend a few days in America meeting the smart people at Rocket Fuel, a company that builds technology which enables a very targeted approach to buying digital.
media. They describe themselves as ‘providers of artificial-intelligence advertising solutions’, which means we at agenda21 can buy advertising impressions via a real-time auction which are then optimised, also in real time, based on how the campaign is performing, to maximise ROI for our clients. agenda21 has been running campaigns with Rocket Fuel some time with good results.
I had exclusive access to the minds and machines behind this Silicon Valley start-up’s success, lead by former NASA rocket scientist, George John, with 10 members of its workforce with PhDs. AI is at the core of their proposition. Rather than making all the decisions up front, Rocket Fuel helps agencies like us to make sense of big data by finding out what works and then targeting the most appropriate audiences with their ads.
agenda21 and Rocket Fuel are evidence of a new model for the relationship between an agency and a ‘media owner’ or in this case ‘media provider’. Both businesses rely on each other. Ultimately, neither business sets the buying price, and we have a common goal to exploit the market conditions to benefit our client. This means openness is required in how we work. As an agency it’s imperative we understand our clients objectives before we invest their money with any media or technology company and we need to be much, much more aware of what will constitute a successful campaign. There is a common frustration from many tech and supply-side businesses that agencies and clients chop and change the goal of the campaign too frequently. They make it difficult to set and run tech driven media programmes to best effect and therefore they cannot optimise campaigns. Agencies complain that a campaign ‘isn’t working’, when in reality they have changed their brief about what ‘working’ would actually look like. You can understand why this is frustrating.
Many of the newer advertising technology companies – and some of the older ones that have been reinventing themselves – have been attracting significant venture capital. This investment values some of them in the $millions. In most cases it values them at a price way above the agencies which are buying media via them. How have they this? Well, one thing was evident when I met the Rocket Fuel team: a ‘can do’ attitude rather than a ‘do I have to?’ attitude. They also had a fair degree of clarity about who was accountable for what and how things were meant to get done (quickly) a consequence, perhaps, of being more a tech company than an advertising one? It’s true they have the luxury of not having to lose the baggage of old fashioned thinking, but still it’s a relevant lesson.
As the digital advertising ecosystem has got more and more complex, many agencies have responded by hiring more people. However, just because it’s complex, doesn’t mean that agencies have seen significant additional revenue, which means they can only afford less experienced staff. But given what this type of technology can do, do you really want a middle level / junior experienced person making decisions that triggers technology that could buy thousands of impressions in real time? Impressions that can be priced up to a 6 decimal places! Really? The tech business is a people business. Agencies have always been a people business, yet there are enormous holes in how it’s being exploited – a frustration for everybody.
Businesses like Rocket Fuel are very keen and willing to have brave grown-up ideas and approaches thrown at them from agencies and advertisers. They want to exploit and push their tech and algorithms. So how does this come about?
It starts with a better version of planning. If the technology can do more you’d better know why you’re spending your money. Get the macro rules right. What is the client to achieve, not just with this media plan or campaign, but for their business. This sounds obvious but rarely is this really seen in the media plan. Once you do, you can start to write sets of rules that will drive the tech. You can have access to the best tech, data and media but if you mash them up and end up with the wrong instructions that’s a waste. It’s like having the fastest car – if you drive it in the wrong direction it doesn’t matter how fast it is!
At agenda21 we’re taking an evolving approach to media buying, and developing programmes that can react and adapt to demand in each clients’ market. We’ll be introducing some new innovative programmes for selected clients this year. It involves moving from a media brief to a media specification; from a target audience to target audiences. The price we pay for media will be variable; the volume we buy will be variable. We’ll be looking to limit financial risk for our clients but to do so we’ll need to understand what we can afford to pay to reach or convert a customer in a much more dynamic fashion. It’s neither easy nor straightforward. It creates operational issues. Fluid media programmes require fluid budgeting, and that is going to be a harder operational equation to crack. Advertisers want to respond to market opportunities but can the cash flow of your business accommodate this? Can your Financial Director deal with it? Do they realise that it’s wrong to only expect near immediate impulse ROI. Can they see the flaws in fighting the over reliance on site side analytics which are so often pushing a ‘post-click-immediate-in market-to-buy-right-this-second’ route? This alones leads to over optimisation where the budget is stripped right back and even medium term sales missed
All this requires braveness. But we need to have the confidence to run the programmes for real business performance. I’m not the man to write a detailed technology brief, but I do know what I want the tech to do; just as as much as a client can’t give detailed digital media briefs but they should know what they want their marketing to achieve.
Pioneering businesses like Rocket Fuel need pioneering approaches from businesses like agenda21. And agenda21 needs pioneering clients. And this requires somebody somewhere to be brave.