Agencies and trading desks must invest more heavily in hiring data analysts and strategists, say providers.
A recurring theme during New York's Advertising Week last month was real-time, data-driven media buying, made possible through emerging technologies such as ad exchanges and demand-side platforms (DSPs.)
During a keynote speech delivered to an audience of online marketing professionals at the IAB Mixx event, Google executives said real-time transactions on its DoubleClick Exchange more than tripled in the past year, and predicted that at least 50 percent of all targeted online display advertising will be bought through real-time platforms by 2015.
However while these technologies afford advertisers greater targeting and media efficiencies, executives from companies selling data to inform such ad buys suggest agencies must invest more heavily in staff dedicated to the practice to help drive it forward.
During Advertising Week's "Data Congress" event, numerous panelists and speakers from online ad data firms suggested a lack of agency understanding and resources could be hampering the growth of the practice. "Hire more math majors," said Mark Zagorski, chief revenue officer for data provider Exelate, when asked how agencies can prepare for the shift towards data-driven media buying. "Agencies need to understand the science behind it, not just the art," he said.
Scott Knoll, general manager of Aperture, agreed and said an opportunity exists for agencies with the right resources in place. "The agency role is going to become even more important. There's more data to analyze and more opportunities," he said. Knoll emphasized the need for more data-minded agency staff, stating, "The job is definitely becoming more complicated."
Speaking with ClickZ last week, Omar Tawakol, CEO of data marketplace BlueKai, said agencies will increasingly play the role of a "system integrator." He said that function will require bringing together data, real-time media buying, and custom creative to reach granular audiences.
Tawakol suggested that trend is beginning to alter agencies' staffing needs, with a focus on data-centric hires. "We’re starting to see data strategists and experts as new roles in the agency... Most agencies already have the data-minded skill sets to support optimization and analytics. Now, instead of just analyzing data for campaign optimization, they are using those skills for smarter media buying," he said.
In attempts to capitalize on the emergence of real-time bidding platforms and the increasing role of data in media buying, large agency groups have invested in their own dedicated staff and technologies. WPP's Media Innovation Group has developed a DSP, dubbed B3, and Publicis launched its Vivaki Nerve Center and Audience on Demand (AOD) platform in 2008, designed to give its sister agencies access to targeted audience buys.
Kurt Unkel, SVP and director at Vivaki's Nerve Center, said the group has expanded aggressively over the past six months and intends to keep on doing so. "We started the year with less than ten staff; we expect to be 50 by the end of the year," he told ClickZ, adding that the group purchased around 2.5 billion impressions in 2009, but has already bought over 14 million to date in 2010.
As far as working with data partners goes, Unkel said AOD has two full-time staff dedicated to understanding the various data providers and data marketplaces currently in operation, including companies such as Exelate and BlueKai.
Unkel's long-term goal is to educate the rest of the Vivaki network about the practice, and the Nerve Center has teams that meet with agency staff to promote the platform internally. "That's been a big learning lesson for us, getting people's heads wrapped around the opportunity. It's complicated, and can be daunting for media buyers," he said.
Meanwhile rival agency network GroupM, owned by WPP, has taken a similar approach, building out a central technology resource for use by its member agencies, dubbed the Zeus advertising platform (ZAP), alongside its B3 audience-based buying solution. "We have decided to separate technology out of the agencies and manage this centrally...but we are investing strongly in building skills in the agencies related to the use of data," said John Montgomery, COO for GroupM Interaction's North American operations.
To help bridge the gaps between its technology and agency teams, data relationship managers are being installed within GroupM agencies to evangelize and integrate the use of data-driven media practices, Montgomery said. The technology side of GroupM's business is now growing "much faster" than other areas, and it intends to continue to invest in central audience-based buying capabilities, he added.
From an agency perspective however, the practice still has its limitations, and must mature further to attract a greater portion of media spend, therefore driving the need for more data-centric staff in-house. According to Angelique Gilmer, Media Director at Publicis-owned digital agency Razorfish, the cost of layering data onto media buys often outweighs the benefits at present, with effective targeting data costing up to twice as much as the inventory it's being used to inform.
She also raised the continued issue of context and brand safety for many of the agency's clients. "Brand advertisers will only move into that space if they feel 100 percent comfortable... I hope it gets to the point where we can only bid against tier one or tier two inventory, for example," she said.
Join the Industry's Leading eCommerce & Direct Marketing Experts in Chicago
ClickZ Live Chicago (Nov 3-6) will deliver over 50 sessions across 4 days and 10 individual tracks, including Data-Driven Marketing, Social, Mobile, Display, Search and Email. Check out the full agenda and register by Friday, Oct 3 to take advantage of Early Bird Rates!
Jack Marshall was a staff writer and stats editor for ClickZ News from 2007 until August 2011.
IBM Social Analytics: The Science Behind Social Media Marketing
80% of internet users say they prefer to connect with brands via Facebook. 65% of social media users say they use it to learn more about brands, products and services. Learn about how to find more about customers' attitudes, preferences and buying habits from what they say on social media channels.
An Introduction to Marketing Attribution: Selecting the Right Model for Search, Display & Social Advertising
If you're considering implementing a marketing attribution model to measure and optimize your programs, this paper is a great introduction. It also includes real-life tips from marketers who have successfully implemented attribution in their organizations.
October 23, 2014
1:00pm ET/10:00am PT