Episode 9

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Jay Friedman is a nationally recognized and accomplished digital media expert, speaker, and author. You will often find him speaking at conferences, writing for lead publications, websites, and books. He recently authored the incredibly well written, information packed 7th edition of “Thirty Days to PAID Digital Media Expertise.” He is, without question, a well-versed expert on digital media and programmatic buying.

In 2006, Jay joined Goodway Group to launch the digital division. Now in 2015, Goodway has more than 200 clients across the country.

 

 

What you’ll learn about in this episode:

  • Programmatic buying: what is it?
  • Why programmatic buying is much more effective than traditional ad buying models
  • How to know whether to bring programmatic buying in-house or work with a partner and rules for both options
  • Jay’s action plan for jumping into programmatic
  • Why programmatic partners have to continually educate their agencies
  • The qualities that the agencies that do programmatic well all have in common
  • How agencies can succeed by adapting the Airbnb and the Uber model
  • What agencies need to do to be good partners to their programmatic partners

 

The Golden Nugget:

“Agencies need hyper-specialized experts to call.” – @jaymfriedman Click To Tweet

Click to tweet: Jay Friedman shares the inside knowledge needed to run an agency on Build a Better Agency!

 

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Speaker 1:

If you’re going to take the risk of running an agency, shouldn’t you get the benefits too? Welcome to Build a Better Agency, where we show you how to build an agency that can scale and grow with better clients, invested employees and best of all, more money to the bottom line. Bringing his 25 plus us years of expertise as both an agency owner and agency consultant to you, please welcome your host, Drew McLellan.

Drew McLellan:

Hey, everybody Drew McLellan here. Welcome to another episode of Build a Better Agency. I am excited today to chat with you and to bring to you Jay Friedman. Jay’s going to talk to us about programmatic buying and real time bidding in the digital paid media space. But before we get there, just want to remind all of you that the reason I’m doing this is like you, I still own my agency, I’ve been doing that for about 20 years.

And I also run Agency Management Institute where I get to work with over 200 small to midsized agency owners every year, helping them both mitigate the risk of owning an agency and hopefully maximizing the rewards that can come with owning an agency. And really I’m starting this podcast because I want to be able to extend that work beyond the folks that I get to work with face to face.

And so it’s my privilege to bring different experts to the podcast to talk about issues of topics that I know as agency owners and leaders in an agency you are hungry to learn more about, which is exactly why Jay is here with us today. So in 2006, Jay joined the Goodway Group, which back then was a print driven marketing and promotions company.

He was hired specifically to launch the digital division of that company. So the owners saw the writing on the wall, knew that they needed to evolve their business, as many of us have talked about and brought Jay in to do that. In 2010, Goodway served its last print customer and decided to completely focus on the digital side of the business.

Fast forward to 2015, Goodway has more than 200 clients and works with many agencies, big and small across the country, as well as some clients direct, has I believe over 260 employees, which fascinatingly enough is almost all completely virtual, so they’re scattered all over the country, and is one of leaders in the programmatic and real time bidding paid media space.

Jay as an expert in this arena is also very generous with his time as you will experience during this podcast in sharing his expertise with others in the industry. He certainly is a nationally recognized and accomplished expert and speaker, writer and author. You’ll find him often at some top industry conferences writing for lead industry publications and websites and he’s even written some books.

Some of his latest books are the seventh edition of 30 Days to Paid Digital Media Expertise, and that book by the way comes with a companion guide specifically written for agency owners, and also 30 Days to Mobile Marketing Expertise. So with all of that, Jay, welcome to the podcast.

Jay Friedman:

Thank you so much Drew, it’s a pleasure to be here.

Drew McLellan:

It’s great to have you. So strange as it is in 2015, I know that there are a lot of agency owners that are sort of wrestling with the digital media piece. So when they hear phrases like programmatic buying or real time bidding, I think sometimes it sounds a little bit like the Snoopy and Charlie Brown teacher, the wa, wa, wa. So give us a basic definition of what we’re talking about when we’re talking about those things.

Jay Friedman:

Programmatic, like you said, gets a real scared reaction from a lot of people based on a lot of misinformation, but it very simply put is a set of technologies that automates the buying placement and optimization of media.

Drew McLellan:

And real time bidding is tied to that how?

Jay Friedman:

So realtime bidding is a subset of programmatic. Programmatic in and of itself is again, just an automation of what we’ve been doing for a hundred years. And it’s automated typically through an interface and it makes it easier rather than having to print something, sign it and fax it back, it’s now available to sign in an interface, also often enables agencies to optimize their inventory and what they’re buying on a faster basis.

But RTB or real time bidding is just a subset of that, and again has just as many, I guess, misnomers or whatever it is as programmatic does itself. But you can do programmatic without doing RTB. Of course, RTB is a very strong and well functioning marketplace around unsold inventory for publishers of which there is a ton. There are 40 plus billion impressions a month.

Drew McLellan:

Okay, so-

Jay Friedman:

Or I’m sorry, a day.

Drew McLellan:

So part of that is about kind of bargain shopping for your clients, right?

Jay Friedman:

So it could be looked at that way, but I would say that it is for valuing an audience as much as, or more than just the content that it’s in. And so while it could be bargain shopping, I guess at the same time, going and spending $10, 1,000 buying from a publisher direct that has 50% of its inventory unsold, I don’t know if it’s called bargain shopping if you’re going to get it for $3 or if it’s just simply called overspending, going getting it for 10.

Drew McLellan:

Right. Right, right, right. There you go, fair enough. So for agencies who are just beginning to dabble in the digital media space, so they might be interfacing with Facebook directly, or they are going out to one of the big ad servers and buying. Talk to me about how that’s different than what you guys do or what you teach agencies to do?

Jay Friedman:

Yeah. So I think the way agencies have typically looked at things is to say, all right, where do we want our ads to appear? So do I want to go to my local newspaper or do I want to go to ESPN or WebMD or Facebook? And what programmatic does is it flips that around and says, who do you want to touch? Content and context is important, it’s not irrelevant.

But the user is more important than the content or context alone. So if you prioritize and you put user first, then put contextual wrapping around it and say, “All right, I want my user, but let’s not have them in these contexts because it’s not only not relevant, but it’s perhaps distracting,” you end up getting a much more resonating message than if you just go out and say, “All right, I’m comfortable knowing that it’s in my local newspaper because that’s where my client and I look.”

Drew McLellan:

So give me a real life example, walk me through, give me a for instance.

Jay Friedman:

Sure. So real easy example, because I know a lot of regional agencies have a car dealership occasionally that they have as a client.

Drew McLellan:

Sure, yep.

Jay Friedman:

And so going and putting… So you think, all right, a car dealer, let’s say it’s Louisville, Kentucky, you think, all right, well, I’m going to put it in the local paper, on their website and then I also am going to buy some cars.com or maybe some Autotrader, for example, because that’s where car shoppers are, which is true.

But Autotrader or cars.com or Edmunds, those are all very expensive properties. Most of them are bought out at the national advertiser level at least for the good spots. And so what we do is we say, let’s flip this around and let’s realize that you are trying to target people who are beginning to look for a car in Louisville, Kentucky. Where do we find those people?

And then we have all sorts of data sources that both predictively model and behaviorally follow users who are either about to be in market for a car, or who have just recently shown that they have entered the market to buy a car. And so the key there is that if you show the right user an ad, but that ad is on let’s just say cnn.com, right? Well, that dealer doesn’t have the money to go hit the minimums on CNN and it wouldn’t make sense for them to buy a rotating slot on CNN.

Drew McLellan:

Right.

Jay Friedman:

But if we know that that user is a prime user, and this is generally algorithmically driven to a degree partly based on, or sometimes just based on past browsing history, but being able to buy one impression at a time for the right users, as long as they’re in a reasonable and respectable context is just flat out more effective than going the site based buying method.

Drew McLellan:

So how, if an agency has been buying based on… I’m buying sites, I’m buying ESPN, I’m buying my local newspaper, my radio rep through some online ads in with my radio buy, all of that, how do they move, how do they educate themselves and move to this more sophisticated buying model?

Jay Friedman:

So this is… I wrote out enough of steps here that if I were an agency owner as part of your group that I would take. So number one is to find a partner you trust. And I know you mentioned how can this be brought in house, and I’ve got a friend named Amy Recker who is a consultant to agencies and brands on bringing programmatic in house.

Her guideline is unless you have 15 people dedicated to running your programmatic media practice, solely dedicated, not names on an org chart that will touch it, but that’s a hundred percent of their job, if you don’t have that many, then you shouldn’t be doing programmatic in house.

Drew McLellan:

Well, as you know, I’ve got some AMI agencies that have brought it in house. And when they started, they had a small handful, 2, 3, 4 but you’re absolutely right, they very quickly have scaled up to that 15 or 20 person department to try and manage the labor intensive work that it is.

Jay Friedman:

Right. And, and if I were to go into detail, which I won’t because it’s long, but just around the amount of work we do with data processing around all of the data that we get for our billions of impressions that we serve a month and the eight people we have dedicated to that, there generally are not regional agencies that can dedicate that type of resources to it.

Drew McLellan:

Right.

Jay Friedman:

So I would say, and of course there’s exceptions to every rule, but for 97% of the agencies that you’re going to come to contact with, I would suggest that finding a partner that you trust is number one. And so I want to walk through a few quick ways to do that.

Drew McLellan:

Okay, great.

Jay Friedman:

So number one is demand content and contextual transparency. So if you’re going to work with a partner, it’s your data, you have every right to know every impression that every… Or every site that every impression ran on, what hours of the day, what days of the week, what browsers, what devices, what operating systems, every programmatic vendor has all of that, that is nothing that should ever be hidden.

And so I don’t care what sales people give you as the reason, if you’re an agency owner of why that’s not possible. Well, our publisher contracts prohibit that, not acceptable. It’s an open fact now that you can get all of that data. So number one is to demand transparency. If you can’t get there, end the conversation.

Drew McLellan:

Okay, good advice.

Jay Friedman:

Number two is understand their motivation. Now, I don’t think this is all that different than frankly, than forming a deal with a new client or any other vendor. But in ad tech and programmatic, so many of the vendors are venture capital funded and looking to go IPO at some point.

And so it’s important you understand what their company goals are, again, just like any other vendor. But I think it’s a little bit more acute in this space because of the space we’re in and the timing that we have and the way the market is and the valuations.

Drew McLellan:

Right.

Jay Friedman:

So understand their motivations, what is their support structure, for instance, the ratio of support people that they have to sales people. Because you’ll often get a salesperson and they say, “Yep, I am dedicated just to Northeast Louisville.” It’s like, wow, that sounds great. But you find out that they then have to go home and run the campaigns. Well, that’s not good.

Drew McLellan:

Right.

Jay Friedman:

And then of course, I would look at the ability to customize what are their minimums on campaigns because I think for a lot of regional agencies, sure you have that 20 grand a month campaign, but you also have two others that are 3 and $5,000 and you don’t want a partner who’s going to say, “Well, I’ll take the 20, but not the other two.”

Drew McLellan:

Right, right.

Jay Friedman:

So those are just what to look for, I think in a partner. I think as you’re talking to these prospective partners though, look at the media you’re buying today and determine what media can be bought programmatically. Most of it can. Radios around the corner still, there’s a little bit of TV.

And of course, if you need to be in true print, then that’s not something that’s generally programmatic. But any digital, medium, and even the print that is driven by tablet and even radio if Pandora or Spotify is acceptable to you, it’s amazing how much can be bought in programmatic nowadays if you just look at it that way.

Drew McLellan:

All right. Any other steps or is that-

Jay Friedman:

No. And then the only other step is just a reminder, going back to what we discussed before. As you’re talking to your partners or the vendors or publishers or anybody, you do have to think audience, audience, audience because if you’re-

Drew McLellan:

As opposed to media outlet, media outlet, media outlet.

Jay Friedman:

Exactly. Because if you are still in that media outlet mindset, you’re really going to get hung up a lot and you’re probably going to become frustrated.

Drew McLellan:

Well, and I think one of the things we forget about when we have our agency hat on is how we behave on the internet. So yes, you might go to ESPN, but then you’re also on Facebook and then you’re on your local newspaper website, but then you’re also on a knitting website or some other hobby website that we as human beings have a pretty broad and varied set of interests.

And so as I understand, with the tools that folks like you and your company have available to you, you have a pretty good idea of where I Drew McClellan am bouncing around from a Scrabble website to ESPN to check on my Dodgers score to wherever else I may be going and can sort of track and follow me where I go.

Jay Friedman:

Yeah. I mean, we don’t know obviously your name or-

Drew McLellan:

Sure, all right, yeah.

Jay Friedman:

Fingerprint or anything, but we know that the person who’s been sitting behind the browser that you use has gone to all of these various places. And I think also if you just mentioned how we use the internet ourselves, it’s amazing how much we don’t remember. If I had a logging device on any of your listeners’ computers and at the end of the month, I printed out every unique website that they went to, I bet you, at least a third of those, the people would be shocked, “I don’t remember going there,” or, “I’ve never even heard of that.”

Drew McLellan:

Right.

Jay Friedman:

But you click out on a link from Facebook to a funny quiz or an article or something and it’s amazing how many domains we go to that we don’t recognize. And so when you see that in your RTB or in your programmatic plan, your instinct is to say, “Well, this is no good.” But then you realize, no, you and so many other people do indeed visit those sites.

Drew McLellan:

Well, sure. Because we have to find out what our spirit animal is, or whatever the quiz of the day is on Facebook, right?

Jay Friedman:

Let’s do it. Praying mantis, come on.

Drew McLellan:

That’s right. So for agency folks who are listening to this and are a little anxious about the topic, how do they… And I will say, I will give an unrequested but firmly endorsed, the books that the Goodway folks put out, the 30 day books are awesome. They are written for agency folks, they are easy to understand. They don’t assume you know anything. And best of all, the Goodway folks are happy to share those with you at no cost.

So at the end of the podcast, Jay is certainly going to be giving you some contact information. So if you have interest in the books that he mentioned or that I mentioned in my intro of him, I know he would be happy to get that to you. So beyond your own books, where are other places or ways that agency owners can get themselves…

Because oftentimes agency owners are not digital natives and all of this is a little bit foreign to them and a little frightening, how do they get themselves and their team educated enough about all of this so that they can talk to clients about it?

Jay Friedman:

Yeah. So I think everyone is looking for that website that I can just go read every day and I’m going to come away in a couple weeks just knowing programmatic.

Drew McLellan:

Wouldn’t that be awesome?

Jay Friedman:

And if there is a website like that, the closest thing to it would be AdExchanger. So A-D exhanger.com. Very, very solid website. John and the guys over there and Zach and everybody, they’re very smart and put together a good product. That’s the closest thing there is to it. But it’s going to take a while.

And if you’re not familiar with programmatic, you’re going to probably have five questions a day just going through it. I think as part of the take action plan that I’d like to give everybody toward the end of this discussion, I have a way for users to get more educated while at the same time finding a good partner to do it. So we can certainly go through that now, or we can wrap up with that.

Drew McLellan:

Yeah, no, no, no, let’s go through that now.

Jay Friedman:

Yeah, so what I would walk away from, or if a user’s listening to this, what I would hope they walk away from is in finding a partner, first, I would recommend having a strong handle on the platform and service providers that are available in the market, Goodway is one and there’s 30 others.

So if for nothing else, certainly you can go to AdExchanger and read up day to day and see which ones you’re hearing about. You can also, of course, look at the LUMAscape, L-U-M-A-S-C-A-P-E. It’s a little bit limited in certain parts and very, very strong in others. But I would have a handle on the platforms so that you know the universe, that’s number one.

Number two, then call people like us or people like Centro or people like MediaMath and invite us in to go over how we work with agencies like you. The third step is to not believe anything that any of us say in that presentation. We are as good as any industry at telling a really great story.

The people that you hear things from, again, whether it’s us or anyone else, take note of what interests you and then ask them to verify and validate what they have done with real data. So I once had someone explain to me that they literally update every impression that their ad server sees and serves with an algorithm that identifies the exact probability of conversion and matches it with a value.

And I’m like, “Great, show me part of that algorithm.” You don’t have to show me the whole thing, it’s proprietary. Or show me 10,000 rows of data or impressions pre algorithm, post algorithm. Show me the difference, I want to see it at work. I mean, what I think people get carried away with is the stories that we have in this space sometimes seem so fantastic, both in a good way and a bad way that we let ourselves believe them and then we kind of kick ourselves for not doing the gut check or the hard investigation on the backend.

It’s doable. I had talked with a provider one time who told me that they scrub out all of the Centro data which you can look that up, it’s a long story. But from latitude, longitude information within mobile, I said, “Prove it to me. Show me your database, show me the initial raw log that came in and then show me what you scrubbed and why.” They did, I believed them.

Drew McLellan:

Right.

Jay Friedman:

And then the final thing is, I would say you need to test for culture and service. We work with vendors in a variety of areas as well, even down to the who provides our servers or whatever. And at the end of the day, culture is as important, if not more important than the claims and everything that are made in the presentation. And the reason I say that is because no matter how fantastic the claims are, if you get to working together and it’s difficult and you can’t get your clients what you’ve promised in a timely manner, then none of that other stuff matters.

Drew McLellan:

Amen to that. That’s for sure. At the end of the day, it’s your reputation that you’re putting it on the line every time you partner with somebody. So you want to make sure you’re partnering with somebody who behaves towards clients and clients work the way you do so that you have that in alignment.

Jay Friedman:

Exactly.

Drew McLellan:

Yep, absolutely. So again, for a lot of these folks though, even if they go through all of that, the world in which you and your competitors live is still pretty foreign to them. How do they learn… So I’m an agency owner, how do I learn or how do I teach my account service people how to talk to clients about this and how to know when this is a good or right solution to talk to clients about? How do agencies learn how to do that?

Jay Friedman:

Well, I think the first step is to accept that programmatic media buying can be your default for anything that’s programmatically viable. So if it’s digital, mobile, video, audio, whatever it is. I remember 10 years ago, I was listening to someone speak somewhere and they said, “Imagine if you approached your next annual plan and you said, ‘Let’s take TV off the table.’ What comes next? What do we do next?” And I think for the majority of clients at that time would’ve been digital, today, there are a lot of clients that put digital on the table first.

Drew McLellan:

Right.

Jay Friedman:

And so I think to your point, taking programmatic and saying, “Why should programmatic not be first?” I’m not saying it’s going to be. But asking yourself that question, sometimes it just is a matter of considering it and remembering that it’s there and that makes you go, “Yeah, you know what? We don’t even have to be in RTB, or maybe there’s some that’s right for RTB and we do want to buy our local newspaper, but we can buy it programmatically, which means we can pick the impressions we want with more accuracy and with better targeting.”

So I would say number one, consider it first. Number two, read AdExchanger and MediaPost and all of the other publications. And then third, in order to educate, I really would kind of go through the take action steps that I just outlined about calling the vendors. I’ve done a number of education sessions for regional agencies around the country, and they always learn something.

Obviously it’s best if you don’t call people like us in just to learn with no promise of ever working together but I’ve done a lot of these education sessions and they’ve led to a lot of great partnerships that have good trust and a solid foundation around them.

Drew McLellan:

And is it reasonable for agencies to expect vendors like you to continue to educate? So my agency and Goodway now have a relationship. Is it reasonable for me to acknowledge A, that your world is changing at the blink of every eye and B, I as an agency owner, am never going to be able to track all of that? But the that’s your job. So you’re going to help keep me educated and help me prepare presentations for clients and all that. Is that all in what’s reasonable?

Jay Friedman:

Right. So I think that goes into the expectation setting up front when you’re finding a partner.

Drew McLellan:

Right.

Jay Friedman:

And so I can tell you that if an agency came to us and said, “Hey, look, we’ve looked at everybody. We really like what you offer. We’re going to place the majority of our programmatic through you. It’s not that we’re never going to use anybody else. But in exchange for doing that, and this isn’t so much legally contractually bound, but even on a handshake, but we’d like you to bring us information about the industry and innovations, and we’d like you to help us in new business pitches and even if it’s not always directly to your benefit.” We do that all the time.

Drew McLellan:

Right.

Jay Friedman:

All the time. We have probably 50 relationships with regional agencies around the country where we do exactly that.

Drew McLellan:

So it’s reasonable to look for a partner that will help you in those ways.

Jay Friedman:

Yeah, absolutely. And I think that if you get down the road with a partner who you are spending good money with, and you’re treating as a partner, but they’re not partnering back, then you got to look at that relationship again and reevaluate.

Drew McLellan:

Right, right. So from an agency sort of culture and education point of view, when you look across the spectrum of your clients and you look at the agencies that are really knocking it out of the park versus the agencies that are struggling in the whole digital media buying area, are there commonalities amongst the ones that are doing well with it that are making good money, that are helping their clients achieve great results? What do they have in common?

Jay Friedman:

So I think the ones that have… I would say one thing that all the ones doing it well have in common is this ability to get to the important p