Intermediaries: Adding Value, Or Just Complexity?

“Middleman.” Perhaps because of the streamlining obsession borne of technology (not to mention the outdated gender reference), the very word seems to come preloaded with not-so-positive connotations these days.

That certainly seems to be the case sometimes in programmatic television, where a plethora of aggregators, platforms and data providers has sprung up amid the birthing of the new practices and systems needed to leverage new media, data and technology capabilities.

The current value and limitations, and future prospects, of intermediaries working with media and media buyers were the focus of a recent MediaPost Television Insider Summit session titled (with a tongue-in-cheek nod to perhaps-unfair perceptions): “How Many Middlemen Does It Take To Screw Up TV?”

Asked about the number of middlemen and their roles in a typical PTV campaign today, Oscar Garza, global director of programmatic for digital agency Essence, first offered context by  describing the scenario in programmatic digital media buys.

“In the current digital display system, you could have an impression pass through a dozen different entities between the publisher and [the viewer],” Garza said. “And what’s happening is that publishers are [yielding] 20% of the bid, at best — which is not good, because they need to make money in order to produce the content that draws people. The only way to [address] that is to have the visibility that enables me to say to my clients, ‘This is what’s happening with your impression. There are people interrupting it and not adding value,’ or ‘There are people that are adding value, and we need to negotiate what the cost cut is.’”

In the current PTV arena, the agency has direct relationships with inventory providers or media operators and DSPs are providing a clearinghouse function but, as happened a decade ago in digital media, middlemen are proliferating, he said. “Right now, I get to negotiate with my DSP, and I get to bid for an impression on the open exchange, but I don’t get to negotiate the one or two points that happen between this entity and that entity all the way through the supply chain.

“We’re at the start of this journey [in PTV], and the question is, ‘Do we take the opportunity now to set some standards and create transparency, so we don’t end up with as much of a mess as we have in digital,” Garza said.

Transparency Is Key To Credibility

Co-panelist Walt Horstman, president of AudienceXpress, a platform that aggregates MVPD and telco inventory and optimizes programmatic, linear TV buys on a national basis, agreed that transparency on the part of vendors and “across the whole ecosystem” is the key to the credibility required for PTV to evolve expeditiously.

Vendors should be confident and able to explain to marketers and agencies “exactly how everything has run and what’s been delivered” in a campaign, he said. “Providing excellent reporting that’s verified by a third party is critical, as is being upfront and educating people about exactly what you do as a middleman.”

In recent times, the advertising industry, particularly in the digital media arena, “has been suffering from a crisis in confidence, with viewability and transparency issues and too many intermediaries passing the buck,” he said, agreeing with Garza that the players in PTV should strive to avoid the same pitfalls.

But he also stressed that the fact that PTV “can get complicated and require some technical prowess” means that marketers and media buyers must also exercise a high level of due diligence.

“I hear people saying, ‘I’m telling my client this is what happened, because my DSP told me that’s what happened … and the DSP said that based on what the DMP said happened.’ Unfortunately, that makes everyone, up to the marketer, feel a bit less confident about what’s going on.

“Clients and agencies should ask tough questions,” he added. “They should interrogate the intermediary they’re working with, drill down, and not be afraid to make them feel uncomfortable.”

Specifically, Horstman said, he would advise buyers to ask the vendor or platform to walk them through the workflow: “Explain to me in laymen’s terms how all of this works, how an ad gets on air in the various parts of the ecosystem, how it gets from my shop to that set-top box in Philadelphia.”

Buyers should also demand to understand how data is being used, he said. “Too many times, I’ve seen data distorted post facto. In a post-campaign analysis, it’s made to fit whatever aired in the campaign to make it look like it did what it was supposed to do. So you need to ask hard questions about what data sets are being used, how they’re being applied and how their success is being measured. It’s incumbent on the agencies on behalf of their clients to be able to say, ‘This is the report of how your campaign ran, and I have confidence in every step.’”

The same applies to making decisions about working with specific intermediaries in the first place, Horstman said. Middlemen “do have value — you just have to be clear on what that value is,” he said. “The agency needs to be able to say, ‘I chose to work with this partner, I stand behind this.’ That will make everyone build a better offering.”

Buyers Must Understand The Nuances

Garza agreed that buyers must be (and are, at Essence) trained to understand the nuances of media, and “ask questions all the way down to ‘Where did this impression come from?’” He added: “We ask for [the specifics] both in laymen’s terms and in the most technical terms possible.”

He noted that, in his view, the problems in digital media developed partly because the industry had no existing structure and ground rules, but also because some intermediary players exploited the fact that most media buyers weren’t well versed in how databases and other technology work. Similarly, as PTV develops, if marketing and buying teams lack staff with technical expertise, “people are going to try to exploit some of the corners, and we could see problems down the line,” he said.

Garza argued that PTV should avoid a central problem with digital media: lack of transparency into the paths that impressions take. “If I understand every entity an impression passed through from origin point to the consumer, I can identify where problems are happening” and work with the appropriate intermediaries to resolve those problems, he said.

Having honest, meaningful conversations that allow an agency to stand behind a middleman requires “real visibility into the provenance of the inventory and the data,” he emphasized.

Many in the industry have observed that a shakeout of vendors and platforms is bound to occur as PTV evolves.

Asked by the moderator, MediaPost programming director Ross Fadner, what the future is likely to look like for intermediaries, Garza said that he believes that those companies that demonstrate that they genuinely add value, including enriched data providers, inventory aggregators and measurement firms, will survive the cut.

“It’s all about the technology,” and companies that offer technology that makes inventory access and buying easier and streamlines workflows will continue to be valued partners, said Horstman. “If you’re a true tech company and your technology works, you ought to have a highly scalable business, so you shouldn’t have to keep adding more staff,” he added.

by Karlene Lukovitz, Staff Writer
Karlene Lukovitz is a regular contributor to MediaPost’s “Marketing Daily,” “InPublishing” (U.K.) and other business and consumer publications, and edits “MBR Daily Publishing & Retail News,” a newsletter for publishing and retail executives.
Courtesy of mediapost

 

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