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How best to build a client-agency relationship in a programmatic era?
At The Drum’s inaugural Agency Acceleration Day US, Vitaly Pecherskiy, chief operating officer of the programmatic advertising platform, StackAdapt, tells us about the innovative technology platform that can change businesses, in a super charge speed pitch.
Questions about how to stay relevant in the agency world are common. With brands bringing media in-house, consultancies entering agency business, and technology decentralizing, media buying agencies are under pressure to reinvent themselves to stay competitive.
Because agencies are StackAdapt’s main customers, we wanted to uncover ways in which we can help them win in this ever-changing ecosystem. To do that we have worked with Advertiser Perceptions, a research firm, to survey 200 agency and brand marketers to uncover opportunities for agencies. Here is what we have learned from ‘The New Programmatic Era: How Mid-Market Agencies Can Thrive’ survey.
The survey reveals that:
- 80% of mid-size brand marketers ranked programmatic capabilities and optimization as most important when selecting an agency to partner with for digital advertising
- Marketers see mid-market agencies as more likely than larger agencies to have a culture of innovation (81% vs. 47%)
- Mid-market agencies are viewed by marketers as having a unique value proposition: creating capital through social interaction by providing a feeling of partnership that emerges through cultural alignment, transparency, trust and communication
- Marketers tend to be drawn to agencies that demonstrate partnership over rote execution
- Table stakes for marketers is that the agency has deep experience in their category (e.g., CPG, Auto, Finance)
In this research, we also received a lot of candid insight into what marketers want from agencies, and what they are not getting. “I want an agency to tell me, ‘You’re an idiot’, to be honest. ‘Whatever you’re requesting is not smart, and here’s why.’ If they don’t have that level of confidence and honesty, then they’re ‘putting lipstick on a pig’, and then somebody like me is caught in the middle between my executive and them executing, and meanwhile, the idea was crap in the first place" — as one retail marketer shared with us.
A common thread through much of the research was that brands want agencies to act as partners, not vendors. Increasingly brands were looking for smaller agencies simply because they wanted to be the number one priority.
In terms of capabilities, both mid-size brand and large brand marketers believe that Business Intelligence will be one of the most important agency capabilities. With everything moving to machine learning and data science, the next questions is “So what?” Business Intelligence answers that question.
In terms of agencies and their three-year plan, that’s where the gap and opportunity emerges. Agencies understand the need to invest in programmatic and data science, but what they miss is Business Intelligence. Interpretation of data and application of it to their business - something that brands clearly express as a need. That’s where consultancies are winning - they can tangibly apply data to the business.
What does StackAdapt do?
A deep understanding of agency business is what has made StackAdapt successful. Three years running we have been ranked number one Demand-Side Platform by G2 Crowd, entirely based on customer reviews, beating even the biggest names in the industry. Here is how our customers win with StackAdapt.
First, it’s our unique approach to the management of data. Our proprietary contextual intelligence uses machine learning to help identify users who are most likely to perform an action, such as watch a video, read content, or buy. Importantly, we can layer this data with other signals such as location. For example, we can target people who have read about shoe trends and have been within a certain radius of the shoe store. This custom audience segment then can be reached across our whitelist of 55,000+ sites with native, display, video, or Connected TV ads.
Second, it is our machine learning know-how. We are lucky to have built this company in the last few years which means that we are not dealing with old technologies and crippling technological dept. Everything on StackAdapt runs on our proprietary machine learning and that’s what drives results. For example, we have gotten really good at being able to predict who is going to click on which ad. In this example, you can see the comparison of the actual results versus the predicted results of the two models.
Bid price optimization is a key algorithm regardless of the KPIs of your campaign. Whether it be brand awareness or direct response, you should always be bidding to the perceived value of your user—and each individual user is unique. Using our machine learning, we can significantly reduce the CPM and CPC prices without impact on the scale and quality of users.
Another way to apply machine learning, which very few companies actually do, is to optimize a multitude of metrics. In this example, we've been using machine learning to optimize viewability while maintaining the same CPM price that you are actually paying for video. On the 12th we turned on machine learning and the viewability increased by approximately 250% but the CPM price only increased by 20%. The result: a drastic improvement in terms of viewability performance while optimizing for price as well.
StackAdapt is a partner of Agency Acceleration Day US 2019. Register your interest for 2020 here.
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