This week, the heart of the ad tech industry has descended on Cologne, Germany, for the annual Dmexco conference. Digiday caught up with Starcom Mediavest Group’s (SMG) global CEO Laura Desmond ahead of her session entitled “The New Brew: Data, Content and Relevancy” to discuss some of the biggest trends and pressure points in the industry.
How have your conversations with clients changed over the last year?
Everybody is asking different questions. There’s a high degree of uncertainty and insecurity in the marketing industry about what the way is. The last 50 years, there was a formula. We are now navigating this period of disruption at a time when every major marketer is struggling to get growth, drive ROIs and relevancy globally.
So our client conversations begin with acknowledging that it’s all bananas. At times of insecurity, you must take your clients on the journey with you. Be focused on capability, education, proof pointing and data pointing everything you do. If you can do that and make it transparent and easy to understand, while building capability around that, they feel they are getting smarter themselves, along with the agency. That’s how you win.
Transparency has become a hot topic. What are the pressure points there?
We are very clear about our business model. We are in the business to make clients and brands great and drive growth, not put media at the center, unlike other holding company models. Our business practice is extremely transparent, and built around cost efficiency and value for clients, not padding our own bottom line.
Where we have ventured into ad tech or DSP work either through AOD or Run, we have operated a disclosure model. We break down the value chain and are transparent, and we’re comfortable doing so. We have made big investments in these areas. We have principally invested in building ad tech, platforms and developed algorithms that provide competitive advantage. We’re not shy about that. We believe that has tremendous value and should be paid for by clients. But we will do it in a disclosed way.
How challenging is it to undergo so much change within your own agency group while advising clients on their own need to transform?
Oh, sometimes it’s a bitch. Let’s face it, these times just stretch you and stretch our clients. But you can’t be afraid of creating strategy in a world of unknowns. If you wait until you have all the data, trends and facts you will be too late. The successful companies know who they are, where their business operates, and will do smart trending over the next five to 10 years to predict where the market is going. Then they really just put a very simple, broad strategic plan in place. Don’t be afraid to fail, commit to fast iteration.
How critical an issue is ad fraud for you?
Marketers and agencies must have confidence in what they are buying. Bot fraud, verifiability, and viewability — it’s a huge issue. When Google’s own research says only 50 percent of publishers say their ads are fully viewed, that’s frightening. In my view, ad fraud is a bigger long-term issue than transparency.
The media transparency issues with the agencies will work themselves out really quickly — let the market decide. Clients will either decide whether they trust their agency or not. Ad fraud is a much bigger issue for an industry that needs to know what it is buying and what it is measuring. And measurement is without doubt the single biggest driver of confidence to change. If you can get measurement right, many marketers and agencies will make some big shifts to their media model.
What’s your stance on walled gardens and the open vs. closed debate?
Our view is that walled gardens and silos do not help brands or marketers. People want to go across and pay attention to the content they care about, and publishers and video they care about, and follow any of those things across devices and screens. The absolute necessity of going across those walled gardens and integrating the stacks is clear. That’s what consumers do, and that’s what marketers want.
Where is SMG’s place in all that?
SMG’s proposition in the long run is to be able to integrate and aggregate and go across those walled gardens with the ad tech and data we have supporting. To do that effectively, our belief is the walls must come down. If we are to be an effective partner for our clients, we must bring down our own walls, so share data, be more transparent, and continue the development of code and technology.
Do you think the likes of Google and Facebook, among others, will stay closed for good?
I think they can’t help but do what they are doing now, which is building walled gardens and closed stacks, but when they start to see growth being capped and that marketers won’t be able to hand over 100 percent of their budget over to them, they will adapt. And I can see it happening quickly, because as other forms of media convert to the digital world of IP addresses, ROI, data and the addressable media you can get out of them, will be just as high as the data you can get from the digital world.
What is the toughest thing about your job?
[Laughs.] Really inspiring clients and talent, that they can stay ahead of change and of disruption.
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