Advertising technology (ad tech) remains a mystery to many marketers, who need vendors to communicate more effectively how their solutions can help their brands attract and retain customers.
At a Marketing Week roundtable event in March, sponsored by advertising platform AdRoll, the debate focused on empowering marketers and how media agencies aspire to be trusted ad tech advisers.
Lack of knowledge
According to Tom Denford, who advises senior marketing and procurement leaders, ad tech companies have been terrible at explaining what their products do.
Denford is an expert in maximising media value and performance and co-founded ID Comms in 2009, where he is the chief strategy officer. He said vendors spend too much time talking about how their technology is better than that of competitors in the ad tech market, rather than explaining what it can do for a specific brand.
“There is an opportunity to talk to marketers in a different way. How does the technology fit in with the other things a brand is doing?” he said. “There is a chance to empower brands, but if the fundamental questions are not answered, marketers will just delegate responsibility to their agencies.”
Denford, who has been global head of communications planning at media agency Carat and director of communications planning at creative agency JWT in New York, said the client/agency relationship around ad tech must be more productive and innovative.
“In the past, marketers have delegated the management of media, but as ad tech and media become more complex, brands do worry about their agencies’ capabilities. This is why they want to take back more control,” he explained. “Of course, the complexity of ad tech does provide agencies with an opportunity to sell a technology solution, but they must be able to explain to their brand clients precisely how it can benefit them.”
One barrier to marketers increasing their understanding of ad tech can be the large systems integrators that build computing systems for brands by combining hardware and software products from multiple vendors.
Royal Mail’s head of customer analytics and data planning Simon Metcalfe said these firms can delay IT projects for large brand owners.
“They are often chosen by brands because the assumption is they have the best talent,” he said.
Metcalfe added that another difficulty for large corporates is that they tend to work with a number of smaller agencies where the understanding of ad tech can be limited. It is one of the reasons Royal Mail is consolidating its agency roster.
He said the challenge for brands is how to get the best value from their agency roster while still having access to the specialist technology knowledge they need.
“This is difficult to get right, but there is a role for media agencies to support brands in this area. It is not easy because ad tech is just coming out of its innovation phase, so knowledge can be lacking.”
According to the AdRoll report ‘Welcome to the era of mad tech: Powering next gen media agencies with ad tech’, 60% of agencies started to offer ad tech options, such as social media and mobile, in the past 12 months.
Pete Robins, founder of digital media agency agenda21 and chairman of the Institute of Practitioners in Advertising’s Digital Media Group, suggested that brands expect their agencies to understand ad tech and share what they know with their clients’ marketing teams.
“The IPA is doing a lot of work to promote the leadership role of agencies,” he said. “One problem is that the briefs brands are giving to their media agencies can be very specific because they do not understand ad tech themselves. Another challenge is finding the people who have the skills to plan media but also have a grasp of the technology. These people are not always inside media agencies. Talent is being discovered and recruited from different places, including within management consultants.”
“There is a real opportunity for agencies to explain and educate clients about what data they have and its value in terms of actionable insight”
Guy O’Brien, Encore Digital
AdRoll president and CMO Adam Berke pointed out that another challenge is deciding whether the brand or the agency should operate the technology once it has been implemented. This will increasingly depend on just how empowered the brand wants to be. “It will also depend on where the skills are. Are they at the agency or within the client’s marketing team?” said Berke.
The relationship between brands and their media agencies can be fragmented when it comes to ad tech and there was a call for closer collaboration with tech firms.
According to the AdRoll report, 90% of media agencies already claim to have a close relationship with their ad tech partners. The figure for brands would be much lower judging by the mood at the roundtable.
Jessica Enright, online media manager at high-end publisher Condé Nast International’s new commerce division Style.com, manages external media agencies and planning processes online and offline. She said better cooperation would provide agencies and vendors with a healthier understanding of a brand’s business.
“Luxury brands can be scared of ad tech because they feel they are handing control over to a computer,” said Enright. “Condé Nast International is coming from a publishing and print background so for now it makes sense to have an in-house media manager who can give us an internal perspective on which ad tech will work and which would not for us.”
Naomi Hands, senior strategic partnerships manager at mobile advertising agency Somo, said there is a role for agencies to empower brands to make better decisions themselves regarding ad tech. However, she accepted that this can only happen if the agency has the people within its account teams who themselves understand what different technology solutions can do for each client.
Shifting supplier relationships
Since 86% of agencies are changing their business model to accommodate ad tech’s growing influence, according to AdRoll’s report, there is an inevitable effect on relationships between media agencies and clients.
It can be problematic for media agencies to position themselves as trusted advisers when it comes to ad tech if they have promoted themselves as software shops, which has always been a temptation.
There is no hiding the fact that ad tech companies want more direct relationships with brands to explain the benefits of their systems, but it has been difficult for them to get in front of marketers.
Many agencies are reluctant to allow their clients to bypass them and speak with the ad tech vendors, and this has created an atmosphere of mistrust. Similarly, if a brand is approached by an ad tech vendor, the protocol is often to pass on the enquiry to the media agency to deal with.
Royal Mail’s Metcalfe said that what all brands really want is for their media agencies to tell them how specific technology will boost sales, build brand awareness and generate leads.
Style.com’s Enright added that to build trust it is crucial that the people within agencies advising brands are credible. “Having experienced and knowledgeable people on agency accounts means there is transparency about why a particular ad technology solution is being recommended,” she said.
“Having experienced and knowledgeable people on agency accounts means there is a transparency about why a particular ad tech solution is being recommended”
Jessica Enright, Style.com
For Denford, it is vital agencies are seen as trusted advisers when recommending ad tech. However, brands will only have faith in the guidance they are given if an agency is neutral and not being incentivised to recommend one particular solution over another.
Speaking from the media agency perspective, James Brown, performance director at Cream UK, said agencies had to move away from traditional media buying and think more about the value their agency can bring in the world of ad tech. This includes finding more time to speak to clients to advise them confidently about technology.
Brands do want their agencies to add value in this area and agencies are responding. There is evidence more media buyers are becoming tech strategists and traders, while planners are transforming themselves into data analysts. Both agency roles now seem to include an element of creative consultancy with regard to ad tech.
Nevertheless, for Guy O’Brien, founder of Encore Digital Media, there needs to be a wider acceptance that there is a big skills gap within agencies and this must be tackled if brands are to have real confidence in the advice they are being given. Too often, he said, an agency’s own lack of knowledge will mean they expect the vendors to come up with a solution on behalf of their brand clients.
AdRoll’s senior agency lead Eoin Ryan said tech companies want to offer support to brands and agencies but the level of assistance agencies ask for varies. Some want vendors to draft a 12-month strategic plan to help them in their relationship with brands, while others are focused purely on short-term client goals.
Proliferation of data
The discussion moved on to how brands increasingly want to have more control over the huge volumes of data being collected from the ad tech they invest in.
This desire is being driven partly by security worries about brands’ customer data being held within agencies and other third-party organisations. The amount of data being generated by technology can, of course, be a double-edged sword for agencies and brands.
Royal Mail’s Metcalfe said it is all very well brands retaining their data but the challenge they face is how to make use of it. He said it is crucial that marketers and media agencies understand the power of data and its role in helping brands achieve their goals.
“I’ve spent my life in data and when I was a consultant I would describe the data powering the brand as being like the legs of a swan,” he said. “The brand is graceful on the surface but the data is driving the legs that are paddling like mad underneath.”
He added that although marketers do not need to be experts in data, they do need to appreciate its power.
“Many marketers still think of data as getting someone’s email address and the information they gather from forms. When you get into specialist ad tech, it can be difficult to explain how data can help, but marketers need to appreciate its importance,” he said.
“If the swan stops going forward, it might be because there is a problem with its legs. Marketers’ expectations can be too high if they do not understand data science and think it is simply about pressing buttons.”
Denford said many of the brands he helps want to become more knowledgeable and manage their own data so they can optimise how they use media.
“The big question is what happens when the brands have more data science than their agencies?” he said. “If brands are generating the insight themselves, what will the relationship with their external agencies look like in future?”
Agenda21’s Robins said he would love to work with brands that want to take more control over their own data.
“It would be liberating for any agency,” he explained. “Having a client that takes such an interest would bring some clarity to how an agency can add value around the whole subject of ad tech.”
Encore Digital’s Guy O’Brien believes that the disconnect between brands and their understanding of ad tech data exists because many marketers still have a direct marketing mindset, even when they are having discussions about programmatic buying.
“There is a real opportunity for agencies to explain and educate clients about what data they have and its value in terms of actionable insight,” he said.
AdRoll’s Berke added that in a digital world everything has a data trail. “Brands just need the right tools to make sense of the data and know what is useful and what they can use,” he said. “Machines can give them that information and then humans can leverage it into actions.”
As he and Metcalfe identified, making the most of the data remains the core test for brands. They need data experts internally or at their media agencies to provide the actionable insight they crave.
There was a view during the discussion that although there is no shortage of people who can scientifically drill down into the data, there is a lack of specialists who can bring the data to life and talk about the commercial implications of any analysis.
Style.com’s Enright said that because her brand was so new it was still using third-party data, which can be untrustworthy and difficult to navigate and rarely produces actionable insight. She confirmed that as the brand develops, her team will want to have more control over the brand’s own data.
The question was also raised whether it should be a brand or its media agency that pays for any increase in volumes of data analysis, especially if the extra research produces valuable insight that goes on to generate a higher margin from media activity.
Predictions for the year ahead
The panel debated how agencies needed to future-proof themselves by demonstrating to brands that they can add value when recommending, implementing and using ad tech.
AdRoll’s report highlights that 67% of agency buyers, managers and directors cite future proofing as a top priority, and ad tech is integral to that. It means they have little choice but to keep pace with their clients’ expectations. It is why more agencies are turning to ad tech platforms to cater for needs such as programmatic advertising, search engine optimisation and social media management. However, only 37% of agencies describe themselves as tech-savvy.
Hands, at Somo, said agencies must show clients they are innovative, can be trusted and can explain the benefits of different technology solutions.
Enright said media agencies must broaden their ad tech skills internally. She said brands would have more confidence in the advice they were receiving if they knew that the people within their agency had in-depth knowledge.
As for Robins, he said many media agencies need to relearn the art of media planning. “They must not try to be tech developers because they are no good at it,” he said.