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Managing Marketing: The Role Of Technology In Improving Media Agency Productivity

Tristan Ozinga Managing Marketing

Managing Marketing is a podcast hosted by TrinityP3 Founder and Global CEO, Darren Woolley. Each podcast is a conversation with a thought-leader, professional or practitioner of marketing and communications on the issues, insights and opportunities in the marketing management category. Ideal for marketers, advertisers, media and commercial communications professionals.

Tristan Ozinga is the Co-founder and Chief Vision Officer of Advvy. He discusses with Darren the transformation occurring within Media Agencies as technology such as DMP, programmatic trading desks, AI and blockchain make the business of media agency planning and buying more automated and efficient and in the process improves the productivity of the agency resources for the benefit of all involved.

You can listen to the podcast here:

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Transcription:

Darren:

Welcome to Managing Marketing and today I’m sitting down with Tristan Ozinga who is the Co-founder and Chief Vision Officer of Advvy. Welcome, Tristan.

Tristan:

Thank you, it’s great to be here.

Darren:

Chief Vision Officer—I love the title—does that mean you’ve got 20/20 vision for the future?

Tristan:

I wish. It’s more that I’m the big ideas guy. The ah-ha moment to start Advvy was mine. I’m always thinking the big picture kind of thing. Getting to the detail and execution– that’s for Chris, my Co-founder and CEO, to do.

Darren:

The book the E-Myth says that all businesses need three types of thinking: the entrepreneur, the manager, and the technicians. So, you’re obviously the entrepreneur, the big thinker, the driver of the idea and Chris is your manager. He makes things happen.

Tristan:

He’s very entrepreneurial as well. We’re ying and yang. I’m the bad guy with a bit of good; he’s the good guy with a bit of bad.

Darren:

That’s a great way of putting it. This is quite an interesting area that you’ve got into at Advvy. It’s a start-up.

Tristan:

Yeah, definitely.

Darren:

But you’re basically setting out to revolutionise the productivity of media agencies.

Tristan:

That’s right. Both Chris and I come from the media industry (we’ve been 10 years in media) and know its strengths and foibles. We started Advvy three and half years ago –we just knew there’s got to be a better way to do this –cutting and pasting spread sheets, rekeying in data systems and there was no streamlined way and I just knew with technology that there’s got to be a better way.

So we naively started the company and thought we could do this easily but it’s been a wild ride and we’re starting to really get some traction.

Darren:

One of the problems I’ve found, especially in agency world is that embracing change for an industry that is all about creativity and innovation is really difficult for agencies isn’t it?

Tristan:

Yes, it sure is. The biggest change is when they went from fax machines to printer software and suddenly they’ve got software that does part of their business. And programmatic has obviously been the biggest change in the last 3 to 5 years.

But now it’s like the biggest thing needed is the integration of systems and bringing everything together and that’s from the publishers to the agencies and the brands. We can’t underestimate the challenge of trying to have a single view of an audience across multiple media types when the process of actually placing a spot is still very manual in some publishers.

Booking that spot with an agency is still keying something in and then the brands are getting a spreadsheet that’s not live–maybe some dashboard of their digital but it’s still all over the place.

Darren:

When you consider paid media is worth around $16 billion in Australia and globally it’s in the trillions you’d think that the way of placing media would be keeping pace with technology or at least managing the process wouldn’t you?

Tristan:

This is the interesting thing. The technology is there to have a fully automated media buying system. Google brought an automated way to buy TV 5 or 6 years ago and the networks said ‘we don’t need to do that. We sell upfront and all our industry is taken care of thank you very much Google’.

Another big software provider also attempted to have a single platform to rule them all. The tech is there but it is a people problem. The industry also needs sales reps. No one would buy a car if there wasn’t someone to sell you one. That’s also the challenge.

Darren:

It’s very people focused and relationship based. Sales reps are not necessarily there to sell things; they are there to make people feel more comfortable about the purchase decisions they make. They’re more relationship managers than sales people.

Tristan:

Exactly.

Darren:

And they’re going into media agencies, building those relationships and getting their fair share or better of the client’s media budget.

Tristan:

Exactly.

Darren:

One of the things you see in media agencies especially is that over time they’ve flattened. Instead of having 5, 6 or 7 layers often they’re down to 3 or 4 and you get this huge wide band of juniors (and you were that once coming into the media industry—wet behind the ears. straight out of university) basically doing quite manual tasks, putting reports together.

Tristan:

That’s right. Re-keying data between spreadsheets. The strategy piece, which I loved about media and why I got into it, it’s so small in terms of the gross manual hours which are done to produce a piece of work. That’s why we’re seeing a homogenisation of ideas because there’s just not enough time to spend in doing really good strategy work. The hours and head count is in the grinding of the gears.

Darren:

Is some of that because when people move from commissions to getting paid for head hours and retainers that it was like how many people can we load onto this client to justify our fee?

Tristan:

That’s right.

Darren:

Doesn’t that work against the whole idea of improving productivity because if you’ve got a technology platform that reduces people, and clients are paying for someone to cut and paste or re-key data.

Tristan:

Exactly. We came into building our platform naively not realising the big change in remuneration systems—oh it’s all commission based and efficiency is what they want because if you reduce the time it takes to do things then their margins are going to go up.

Now, it’s a question of do clients want a better operating media agency? It’s a very delicate conversation because you can improve your margins with fewer people if you have a better conversation with your client. The client can see if you can use technology to run a much smaller, smoother process you’re going to have fewer people but your ideas are going to be better, we can improve the margin on each staff member.

Darren:

You’re absolutely right. When we’ve seen programmatic come into a media agency or even outsourced to a holding group the remuneration model is rarely if ever (Accenture is the only recent anomaly to this) based on head hours. It’s gone back to a traditional commission model for programmatic.

If it’s a disclosed remuneration they’ll say we’re adding 20% or 30% and if it’s non-disclosed then you’ll never know but it’s not doing it on an hourly basis because the technology itself, once the algorithm is right for the client, it does it itself.

Tristan:

That’s true. Could you have an AI-driven agency where all the manual processes are done and you’ve just got a handful of strategic thinkers and who knows what the future will become?

Darren:

You know that happened? In Denmark, a start-up called Blackwood7 which put AI with a programmatic trading desk and it struggled to get the bandwidth with clients because I don’t think they quite get how that can work for them.

It also requires the media to be programmatically traded and there’s still lots of media options beyond display and social that you can’t programmatically trade. The day when all inventory is available programmatically is probably the day it works.

Tristan:

As I said before the technology is there to do it, it’s not complicated. You could start the whole media industry again from scratch and have it all plugged in together—it’s not a tech problem, it’s a desire problem I think.

Darren:

I wonder if clients actually understand that the remuneration model that they’ve chosen works against improving productivity. If I’m paying on head hours – the more people working on my business the more I pay. But they’re thinking that’s the way it has to be done because that’s the way it’s always been done. Is that stopping agencies wanting to become more productive?

Tristan:

I definitely think it’s a barrier. We’ve got our strategies on how to overcome and prove through data that you can be more efficient and more profitable. But it is probably the single biggest barrier because they see less head count, less revenue.

Darren:

And one of the things we’re seeing is where agencies are coming to clients with platforms that save them money. The first thing that happens is their own fees get undermined.

Tristan:

I’ve never been on the negotiating table like you have. Is that how it happens?

Darren:

The agency goes we’ve got this cost-saving platform. They’re completely transparent in disclosing the cost of having that platform, whether it’s SAS, cost per seat they’ve developed themselves, and the development cost and it saves us this amount.

And the procurement team go, good we can reduce your cost by that amount. It’s because it’s such a cost-focused transaction and yet media, of all areas of advertising, is not about cost; it’s about investment and return on that investment.

Apart from making the process more efficient does it also impact on an agency’s ability to be faster to market or more accurate or make fewer mistakes?

Tristan:

It will definitely reduce errors because the whole idea from when a client submits a brief, the budget is being tracked in real time as you plan and put budget in different spaces so the error rate will definitely be reduced.

Our platform is getting used by some agencies in their new business pitches.

Darren:

As an advantage?

Tristan:

Exactly. And we’ve helped win clients on the back of that.

Darren:

Certainly it was very public and controversial when Mediacom had that problem about 3 years ago with reports not being as accurate. I’d imagine they’d be big champions of this.

Tristan:

Mediacom have seriously turned themselves around. They’ve won media agency of the year this year and they were actually our foundation client. We pitched a prototype to all the holding groups. We funded the R&D and we got some investment but we need access to your systems, processes, tools, and people and we reckon we can build a workflow platform to streamline it and make the whole work process better.

So they came onboard as our foundation client through that whole process and are absolute champions in the industry for doing so.

Darren:

Does Advvy set up a framework then to get a more consistent approach for methodology across an agency?

Tristan:

It’s not just documenting their workflows. You can build software against the way anyone does anything but is that the right way to do it? We document and go into so much granular detail—well it’s not me that does it.

Darren:

Because you’re the big picture, the big ideas man.

Tristan:

It’s our Head of Product and Business analyst, Philip, he runs and gets down to the task and sub-task level on how agencies are doing it.

And we produce through this process an actual roadmap and workflow of how an agency is working and it’s all over the place in terms of lines, tasks and dependencies and what happens. Then we try to look at that and using our technology we can eliminate this task or pull this task out and make it a lot more streamlined.

Darren:

We do a lot of benchmarking around resources required for both media and creative agencies based on their inputs and outputs and one of the things a lot of agencies have said is the amount of reporting has become huge.

Considering the amount of investment by channel and the complexity of those investments, the clients of today are demanding a huge amount of reporting at the back end and I’d imagine that a traditional methodology would make that very labour intensive. Does Advvy help people with this?

Tristan:

Yeah. We aggregate a lot of data; creating a lot of new data which was not possible to track before. The time it takes to complete a task; we’re tracking that in terms of an hourly volume. What’s coming is we’re looking at using AI ourselves to plug into all the tasks that people are doing as well as everything else they’re doing in their Office 365 environment and using some tech to create automatic timesheets.

From a client’s point of view it will be much more transparent. That’s digressing from the question. When it comes to reporting the challenge is where the data is.

Darren:

And also the format of the report and what sort of analysis is needed.

Tristan:

Exactly and we’ve got some standardised reporting like the creation of the master client plan so you don’t have to recreate that all the time. It gives a live look at all the campaigns that an agency is running for their client.

But it’s a data problem. There are a lot of visualisation and dashboard tools but they’re only as good as where the data is. I’m not at all a software guy at heart; I’m a media man. But you’ve got to get your data structured and there would be a way to do it to eliminate a lot of the manual grunt work.

Darren:

That is an issue because agencies draw data from lots of different sources, unless they have a specific DMP to manage all of that. But a lot of it is they’re pulling 3rd party data from publishers, they’re subscribing to data; being able to pull all of those together requires a DMP. And it’s also being able to structure it so you can pull it out as reports.

I wonder sometimes whether those reports are a bit ego-driven—wow, look at all these reports I got from my agency—I’m getting good value for money. A kilo of reports only cost me a couple of grand. You wonder how many people actually read them.

Tristan:

And then is it getting put to use. It’s one thing having data visualised but then the next step is taking those insights and actually doing something.

Darren:

We had a project over 10 years ago—a data and analytics insights team but it just kept growing and growing. The CMO called us in and said, ‘I don’t know what’s going on but they’re producing all these reports and they keep needing more and more people’ (this was in the client not the agency).

I asked the Head of the Data and Analytics for a list of the reports and there were more than 400 reports a month being produced by this team.

The CMO asked what should he do and I said turn them off for a month—don’t produce anything for a month (apart from about a dozen essential reports). How many out of the 400 do you think people actually inquired about? Fewer than 10. This team was producing reports and sending them out all over the business but no one had the time to look at them. It was almost like the work had perpetuated itself.

I wonder sometimes if we’ve lost sight of the fact that the report has no value whatsoever unless you can improve, track or measure. It’s like dashboards. Could Advvy produce a dashboard for the agency and the client to see how productive they are?

Tristan:

We are actually looking at this. You set a baseline of what you think is an optimal workload and how long things should take. Then we can track how long things actually take and then you can create a dashboard and report that show how efficient.

Darren:

Your productivity efficiency. This is one of the issues that we deal with all the time; clients thinking the agency is too expensive but often the agency is expensive because the client’s process is being compensated by the agency making up for the deficiencies in the client’s process. It’d be good for the agencies; I’m not so sure it’d be good for the clients.

One of the other issues we find and I would be interested to know how you’re addressing this, is the fact that so much of business focuses on the financial reporting and not the actual work itself.

Tristan:

You’re right. Having all the information in the finance system was really the biggest innovation. But there are no insights you can get from how much money you’ve spent on TV. What was the effort required to get that happening is what we can bring you now.

Darren:

We have the same problem with client’s financial systems. We’ll go in and the client might say we’ve got 40 different agencies and we’ll say give us your ledger output for every expenditure against a marketing cost sector. In one case we got over 20,000 lines of expenditure which we then consolidated manually in a pivot table and found out that they had almost 1,000 suppliers in marketing.

It told us who and how much they’d spent in an annual period but there was nowhere (even going back to purchase orders) that captured what was actually bought for that amount of money. So they could tell you for supplier A we spent $66,279.15 and then you’d go back to the purchase order and it would say purchase order for project and that amount but what was it? What was actually purchased?

Imagine getting your credit card statement and it just had where you’d shopped, David Jones, but you had no receipt to say what was actually purchased.

Tristan:

It is your credit card statement. It’s showing where you spent the money but not what you bought.

Darren:

It’s the receipt that shows you what you bought. It must be the same for the agency financial systems because they don’t tell the agency what value you are creating just how much they got paid and the cost of doing that job.

Tristan:

That’s right.

Darren:

Do you capture tasks? Like actual pieces of output.

Tristan:

Yeah. It’s a breakdown by campaign, stage and task and all that data we’re creating against a client’s activity. The financial system will tell you what you’ve bought. We’re giving you visibility on what you’re planning to buy and when you match the two together (this is only in its infancy) that’s when we’re going to start seeing some really interesting insights.

And then also to be able to give an agency a lot more insights into their suppliers as well.

Darren:

I love the media non-bills where the agency bought the media on behalf of the client but for some reason the media owner forgot to invoice it. When I first heard that it was a few years ago but I was like how can you? Who runs a business where they forget to bill for the inventory that they’ve sold?

Tristan:

I’ve heard also sorts of stories—a 7-year line on a balance sheet in the agencies where it just builds up and then 7 years later you don’t report on it anymore so it’s theirs. We don’t touch the final transaction because it’s done by the finance system. But it does blow my mind that the suppliers are under invoicing.

Darren:

We had a situation where it was more than a million dollars in a year. But the big problem for agencies that are owned by a U.S. entity (everyone goes I’ll just put that over here in a trust fund) is that SOX compliance means you have to actually declare that. And it doesn’t appear as an asset; it appears as a liability because you’re holding it in trust in case one day the media owner turns around and says oh, there’s around $1 million of media I forgot to bill you for.

Tristan:

It probably comes down to the sales reps not putting in their bookings or something but it’s getting confirmed on the agency side but then the rep doesn’t do their process. It’s got to be human error surely.

Darren:

And it’s also the whole industry has been avoiding automating or using technology to streamline the whole process. The fact that bookings have to go back to the media owner and be manually entered and then when the ad actually runs someone has to check that it ran.

Tristan:

Yeah, they’ve got to have a third party to check that the check is correct.

Darren:

And then you can bill it. Somewhere in that system it keeps breaking down. I’ve been told that some media channels or types and media owners are much worse than others.

Tristan:

We have a joke (because I don’t come from a tech background) for any problem you just throw some money or throw some blockchain at it.

Darren:

Blockchain will cure everything apparently.

Tristan:

The theory is sound. You have a piece of inventory that all parties can see and you know someone’s bought it and its been sold and the ledgers are all automatically updated. Will we ever get there, who knows?

Darren:

Lots of promise—we’ll see what happens. One of the other areas that I can imagine this increases is collaboration, potentially with media owners and sales teams, the media agency themselves and also clients because you’re mapping that.

Is that true? You’re actually improving collaboration between all of those stakeholders?

Tristan:

Definitely internally. We’re built on Microsoft technology and so integrate with everything that Microsoft is doing. Microsoft have their Slack similar to Teams, which a lot of agencies are rolling out so then discussions and collaborations around campaign records is all tracked.

We’re trying to eliminate the need to send so many emails to each other when you have live collaboration around a campaign and an idea. We’re definitely improving that process. It’s going to be the next little steps to look at how to better collaborate with the media and also your clients.

Darren:

Being built on Microsoft it has this almost universal uptake. I love it when people say it’s got an API. But will it…? Yeah, it’s got an API. O.k. good. You mentioned before you’re moving into creative.

Tristan:

Yeah. A lot of the work we’ve done is definitely synonymous with how workflows can be done in a creative agency. Definitely, there are a lot of differences; creative agencies aren’t buying media, they’re making the assets.

So a lot of the work we’ve done building the application and the workflow engine and that sort of thing where we’re going to transition over to a creative agency. It’s a little more competitive in creative agencies because there are a lot of project management tools being used but none are really media specific. There will always be a bit of vertical play for medium.

So we should be starting the process of rolling that out towards the end of the year.

Darren:

It’s interesting because more so than ever before, media channels and the content that goes in it needs to be integrated.

Tristan:

Exactly. Our dream would be to have a platform or two platforms and one on the media side and one on the creative side and then the sharing of the media plan and a universal library of inventory types. And the creative agencies can see and be visible because it’s the disconnect especially when they’re from different holding companies—you’ve got the media agency from one and the creative agency from another.

The media agency has to do all this work to strip out stuff in the media plan to give it to them because of the rates and the competitive nature of that. And the real time collaboration and the desire for it between competing holding companies to work for a client. And we’ve seen it—days to get turnarounds and things.

Darren:

Because you’re sharing the information on a common platform in a way that you don’t have to worry about the sensitivities.

Tristan:

And the roles and positioning and all that sort of thing can be handled so having a living breathing media plan is our next big step which can be shared between creative agencies, clients, and publishers.

The publishers have got their own way to display their inventory and we’ve learnt that a number of times one platform to rule them all has been tried. Our approach is instead of having a single platform having a single approach to platforming so that we can go here is the way to turn your TV spot into something readable for the media agency.

And we have conversions everywhere and you can go and build on someone else’s technology but this process we can streamline and get a common look at things. That’s our approach.

Darren:

From what I’ve seen that seems to be the Microsoft approach as well.

Tristan:

It is.

Darren:

They’ve gone from wanting to dominate the technology to now trying to build common approaches so that all technology works together.

Tristan:

That’s right. I’m a Microsoft convert, certainly drinking the Kool-Aid but there’s a thing called the common data service which Microsoft’s rolling out where anyone in an office is in a Wi-Fi environment so everything’s going to be interconnected extremely well. So we’re taking that same approach.

The stuff that Microsoft is doing to empower every organisation on the planet (to take it from their vision statement) is really successful in that regard and it’s really going to help a lot of organisations.

Darren:

I see your moving to the creative side as really important because one of the things we’ve noticed around an agency’s scope of work (for media and creative) is massive increases in the scope of work of a creative agency for a client. And it’s being driven by social and digital media because they are such beasts of media channels that consume huge amounts of content.

And it’s either customised or personalised content and so the traditional consumer packaged goods client for a brand might have outputted or required 50 to 150 pieces of work a year for that brand. Those same clients now we’re looking at maybe 5,000 to 8,000 pieces of work because of all the Facebook updates, Twitter stream, Instagram stream and all of the digital banner display ads.

So just the sheer volume of work that creative agencies are producing– their production methodology is largely linear and yet there is technology to largely speed that up and to allow data to actually inform the way of putting those elements together.

Tristan:

There is a company that works in the same office as us in Brisbane called Outfit and they’re brand automation. You build all your assets in Photoshop and then you can use Outfit and it will resize that ad for argument’s sake into any spec you want, taking into account the size of the copy, picture and suddenly turning what would have been a whole day’s worth of a designer’s time to change the pixels, it does it automatically.

That tech is there but it’s like it comes back to headcount if you’re getting paid on an hourly rate.

Darren:

But it’s what you said before: could we have a future of AI running a media agency or a creative production arm even?

Now, what does that mean? It means that the really talented, creative, strategic people won’t be employed to do the manual labour. They’ll be employed to do what you said you never had time for, which is the really interesting strategic and creative stuff.

Tristan:

That’s right but you get your start somewhere and then suddenly the experts are going to stay the experts and no one is ever going to be able to get up to their level. But that comes down to those big questions of what automation is doing in society.

Darren:

A broader discussion than we can have here. Tristan, thanks for coming in and having a chat.

What’s your take on transparency? Do you think that some agencies are more transparent with their clients than others?

 

Ideal for marketers, advertisers, media and commercial communications professionals, Managing Marketing is a podcast hosted by Darren Woolley. Access all the episodes here

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Darren is considered a thought leader on all aspects of marketing management. A Problem Solver, Negotiator, Founder & Global CEO of TrinityP3 - Marketing Management Consultants, founding member of the Marketing FIRST Forum and Author. He is also a Past-Chair of the Australian Marketing Institute, Ex-Medical Scientist and Ex-Creative Director. And in his spare time he sleeps. Darren's Bio Here Email: darren@trinityp3.com

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