Salespeople and media buyers in online display advertising have to work much harder than their counterparts in traditional media. In traditional media, there are a few months of work to line up all the buys, buys are executed, then reviewed when the campaigns end, and a few weeks of reconciliation takes place. In online, the planning and buying process is more complex -- lots more work planning and writing RFPs, much more time assembling a comprehensive buy across publishers, and most of the work in online begins once the buy is executed. There is a ton of work required in measuring, optimizing, and managing existing buys during the process of the campaign, both on the buy and sell side. And the billing and reconciliation process is much more complex than in traditional media.
We're at a pivotal moment in the history of online advertising. The legacy publisher and advertiser ad serving systems are showing their age. With the purchase of DoubleClick by Google and Atlas by Microsoft, both companies are investing heavily in re-architecting and rebuilding the advertising platforms. The question is this: How can we change things to ensure that we don't repeat the same mistakes that were made in the past? We cannot continue to support the same models that have existed for the past 15 years.
The critical change that is needed revolves around the currency and requires that we automate and streamline each part of the process: research, planning, buying, selling, inventory management, billing, and reconciliation. We cannot afford to leave things the way they are. Fragmentation of media, new inventory attributes like behavioral targeting, and the massive shifts in the agency compensation structure simply require that things change.
Moving to a model that supports substitutability of inventory has been highly contested by salespeople across online advertising due to the fear of some sort of commoditization of ad inventory. Branded entertainment and highly custom ad implementations have been pushed by sales teams as the "future of online advertising," but it's completely ludicrous. I'm not saying that there isn't a place for that kind of work -- but it's just a small piece of the puzzle. Without massive influx of scalability and streamlining of processes, we're going to be relegated to small media buys.
I would suggest we start by looking at the GRP and TRP models that function quite well in traditional media. Moving to a currency beyond the baseline impression -- one that inherently captures substitutability of inventory and is designed to flexibly evolve, incorporating new targeting and optimization methodologies without fracturing -- is critical. Dave Smith, CEO of MediaSmith, has been a vocal champion of getting the industry to adopt GRP and TRP based models since the industry first started selling ads. I've been having this conversation with him for a good 10 years.
We further have to start investing in automating the sales process, thereby enabling buyers to discover, reserve, and purchase inventory without going through a salesperson. This is highly controversial -- for salespeople. But the reality is that we simply cannot scale this industry by relying on human order-taking and negotiation. Salespeople serve a critically important role as evangelists of the value of a publisher's inventory, and in taking control of that small pool of highly customizable inventory such as branded entertainment and page takeovers. But the friction created in our human sales process is simply too great. And the vast amount of time spent on managing and optimizing campaigns during the course of a campaign must be automated.
The time to move on this is now. New architectures and systems are being put in place at the major ad platforms. We can't wait another 10 to 15 years to fix this.
Eric Picard is the advertising technology advisor to the Advertising Platform Engineering team at Microsoft.
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