Agency of the Future

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Operative and The Media Kitchen’s Darren Herman illustrate new ways to reduce costs, increase efficiencies and improve client satisfaction to launch a digital advertising agency into the future. Mr. …

Operative and The Media Kitchen’s Darren Herman illustrate new ways to reduce costs, increase efficiencies and improve client satisfaction to launch a digital advertising agency into the future. Mr. Herman shares how ad technology has allowed The Media Kitchen to improve margins and become more strategic and client focused.

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  • Hi Everyone.  I am Lorne Brown, Founder and Chief Evangelist for Operative.  I’d like to first thank everyone for joining our webinar today entitled “Agency of the Future: Digitally De-Averaging”, featuring Darren Herman.  Well known as a leader in the industry, Darren Herman is currently the Chief Digital Media Officer of kirshenbaum bond senecal + partners & The Media Kitchen and founder of Varick Media Management. He is directly responsible for overseeing digital media capabilities and infrastructure including ad serving, data warehousing, digital media strategies, and tactics for all clients.In 2008, Darren incubated and founded Varick Media Management, a targeting and data platform ("DSP") for MDC Partners (holding co.) that has appeared in the pages of AdWeek, Ad Age, NY Times and Wall Street Journal multiple times to critical acclaim.Darren has spent the past 12 years in various entrepreneurial capacities including having founded and grown IGA Worldwide Inc., the first independent in-game advertising platform to over $40MM in capital thru various venture backed investors including Intel Capital and NBC Universal. His companies achieved numerous awards including Avenue-A | Razorfish’s critically acclaimed, "Breakout Company of the Year" and AlwaysOn’s "Top 100 Private Company." He also personally won BusinessWeek’s Top Entrepreneur award in 2006. He has been featured in a MTV documentary and is frequently quoted in global marketing, technology and financial periodicals.Before I had the call over to Darren, I just wanted to review a few housekeeping items.  If you would like to ask a question, please type your question into the question box and we will try our best to respond to each at the end of the presentation.  If you would like to ask us a question off-line, we have included our email addresses on the first slide of the presentation. The webinar is being recorded and will be made available to you by the end of the day.  Please do not type questions into the chat box. OK and with that, I’d like to hand the call over to our guest speaker, Darren Herman - Darren
  • ANIMATION – 1 website > 2 websites > many websitesIt’s hard to envision the future without understanding first where we’ve been. With the growth of the internet has come the opportunity to advertise via a new network of channels to a more specific audience than ever before.
  • The old way of buying media space is a “top down approach.” The message was blanketed over the audience, treating everyone the same. This was the average way.
  • The Media Kitchen’s role Historically – How it has evolved.
  • Digital ad spend is set to grow almost 14 percent from $45.6 billion, in 2010, to $51.9 billion, in 2011, according to a forecast from Borrell Associates.The future of digital delivers the ability to go beyond averages. As long as we can serve & track media on any channel, we can “de-average.”Digital media allows us to take a “bottom up” approach, starting with the audience then overlaying the media. -We continue to see the small to mid-size traditional ad agencies scramble to become better equipped with digital technology in fear that they will get left behind. As we see it, if agencies don’t have digital solutions then that will greatly impact their opportunity to develop new business. As the digital market continues to grow in 2011, an agency’s capabilities need to go above and beyond just website development, SEO and banner advertisements. – quote from Off Madison Ave
  • To Elaborate on Ad Tech Landscape
  • *API Definition *- An Application Programming Interface (API) is a particular set of rules and specifications that software programs can follow to communicate with each other. It serves as an interface between different software programs and facilitates their interaction, similar to the way the user interface facilitates interaction between humans and computers.Elaborate on API driven buying.
  • With API Driven buying we can:Purchase Audience ProfilesEvaluate Billions of Media OpportunitiesAlgorithmically OptimizeData Warehouse for Advanced analytics
  • With API Driven buying we can:Purchase Audience ProfilesEvaluate Billions of Media OpportunitiesAlgorithmically OptimizeData Warehouse for Advanced analytics
  • The Agency of the Future is faced with a unique set of operational challenges in order to stay on top of the latest digital ad technologies.Agencies must establish complex trafficking processes and systems in order to execute digital campaigns. With this comes the need to:Scale according to digital campaign variances – and do so cost effectively Campaign volumes naturally ebb and flow depending on the number of clients, seasonality and other factors, making it difficult to manage and maintain adequate resource (cost) structures. We often had to stretch our staff during high-volume seasons in order to cover trafficking tasks, or, they would have too many hands on deck during low volume campaigns. Make sure operational tasks are being completed as efficiently as possible Due to data re-entry errors often occur, resulting in an unhappy client.Keep up with high value add activities to ensure client satisfactionTrafficking and campaign management execution often take time away from creative and strategic work on accounts while clients are still expecting high value ideas and activities.Keep overhead costs down – improving profit marginsThe number one issue TMK was faced withTMK was spending time worrying about the complex business of executing ads, instead of strategizing with clients on campaigns and developing cutting-edge creative. Weneeded to stay current on digital opportunities without neglecting clients as we adjust to the new channels.A large portion of The Media Kitchen chefs’ daily activities consisted of tactical and tedious campaign execution, performing such tasks as ad trafficking, as well as reporting and analysis.  We took note of the disproportionate amount of time chefs were spending on ad serving systems, uploading creative files and changing targeting parameters and realized that most chefs were spending a large portion of their time completing tactical trafficking tasks, and that this time would be better spent on strategic and imaginative development for client accounts.  In an effort to free up the team’s time and allow them to focus on value-add activities, such as creative brainstorming and strategic planning, we decided that we eitherneeded to either expand the trafficking team, or take on a partner to complete the monotonous, repetitious, and time-consuming campaign execution tasks.
  • We sought a Partner who would be able to take on our Ad Trafficking and Campaign Management tasks.
  • Thanks, Darren. What I’d like to do now is spend a few minutes talking about why we were brought into the Media Kitchen and why.Darren was seeking a Partner who would be able to keep the business focused on core offerings. Things like execution of media, data entry, reporting, trafficking and doing quality assurance were a distraction. They up a huge part of his team’s time and for the amount of effort to maintain this part of the business, and the value created was nowhere near proportional to the effort. The Media Kitchen needed to stay focused on 2 things in order to keep them as the agency of the future all the time, which is not a one-time thing as we all know:Ongoing Innovation Delivering best-in-breed services that create valueThe third thing, that is just as important is infrastructure, expertise in best in breed commercial technology, ad serving and rich media. By partnering with Operative for this 3rd piece, Darren and his teams are able to do the first 2 things really well, giving them the ability to be great at all 3, but putting most of their efforts toward the first 2.
  • So let’s get more specific here:When Darren and I first met, his management team had been concerned with the high turnover rate in their ad operations and trafficking department. Due to the tedious nature of the ad trafficking role, it is common for employees to hold it only for a limited time. In addition, the Media Planners and Buyers were spending almost a day, even 2 days per week at times, dealing with Ad Operations and Trafficking issues. It got to the point where it was hard to scale and Darren found himself always adding media resources every time he signed a new customer.Upon partnering with Operative, they realized that using Operative staff to traffic ads meant they would no longer waste time having to constantly train new employees on the minutia of ad execution, detailed training on commercial ad serving and rich media and the rigorous process of QA, which was necessary as the Media Kitchen prides itself on flawless execution of their clients advertising. They also discovered that by allowing Operative to take on all ad trafficking tasks, fluctuations in campaign placement volumes could be better managed.
  •  They often had to stretch their staff during high-volume seasons in order to cover trafficking tasks, or inversely, they would have too many hands on deck during low volume campaigns. Through its partnership with Operative, the agency has found balance, as Operative manages staff to handle the trafficking needs of various accounts, according to when each client needs it most, which ensures more help is available during high-volume seasons. The impact this has on an ad agency’s margins can sometimes be significant.
  • So what does this mean from a metrics standpoint, how did we change the business financially?Since partnering with Operative, 15-20 % (or one full day per week) of The Media Kitchen staff’s time has been reallocated back towards strategy and planning. Darren and I had coffee about 3 months after we deployed our program there and I’ll share that with you:“by leveraging you guys over the last 3 months, we’ve been able to free up 20% of our Online Strategists’ time. Instead of focusing on ad operations & always troubleshooting issues, my team is now spend more time with clients and focused on meeting their goals.”His team at Operative spends a lot of time at the Media Kitchen Headquarters, we are able to educate his media teams on best in breed technology, what they need to know and how they work together. When they select a new technology or are looking at something new, and as we saw, there are a lot of technology logos out there, we typically have already expertise in that technology, having over 300 media companies that run their infrastructure and ad operations business on Operative.In addition, Darren has told me often that it would have been very difficult to move to this “de-averaging”, audience based strategy if his core teams would have been in the weeds over the last few years. As we all know, it’s hard to elevate your thinking when you’re trying to problem solve other things all the time.
  • Now I’ll give a short 1 minute commercial on us. Operative has been helping Agencies scale for over 10 years. Our clients include Group M, OMD and other most of the Agencies inside the Omnicom organization and of course, the Media Kitchen.Our services include:TraffickingCampaign ManagementBest Practice ProcessesReportingCommercial ad technology consulting and expertiseSome problems we help our agency clients deal with are:Difficulty scaling the business Margins are shrinking and costs rise along with revenueTurnover in ad operations frequentlyLimited in your ability to offer innovation or new technology ideas to clients because of lack of in house expertiseErrors are common in campaigns, always starting late or trafficked incorrectlyIf you are having any of these problems, we’d be happy to come in and share with you how we work and how we may be able to help you, as we’ve helped the Media Kitchen.
  • With that, I’d like to open it up for questions. Take questions – direct at DarrenAfter last question, continue Lorne....Thank you everyone for joining our webinar, and thank you Darren for being our guest speaker. We hope you found the information presented today informative and enlightening. Again, this has been recorded and will be made available to you later today via email. If you have any questions, please do not hesitate to contact me. Thank you again and enjoy the rest of your day.


  • 1. 1 Agency of the Future Digitally ‘De-Averaging’ Lorne Brown, Founder Operative Darren Herman, Chief Digital Media Officer The Media Kitchen dherman@mediakitchen.tvClient logo goes here Operative Agency Breakfast Seminar | 9.21.11
  • 2. 2 Where We’ve BeenClient logo goes here
  • 3. 3 The Old Way  Top down approach  Blanket message  No audience distinction AVERAGEClient logo goes here
  • 4. 4 Traditional Media Buying Channels ① Site Direct ② Ad Networks ③ Rep FirmsClient logo goes here
  • 5. 5 Where We’re Going  Bottom up approach  Leverage new digital technologies  Provide cutting edge digital solutions DE-AVERAGEClient logo goes here
  • 6. 6Client logo goes here
  • 7. 7 How Are We Doing It? TRADING DESK APIClient logo goes here
  • 8. 8 API-Driven Buying • Audience profiles • Billions of media opportunities • Algorithmic optimization • Advanced analyticsClient logo goes here
  • 9. 9 Delivering a “Bottom Up” Plan • Audience insights • Billions of websites • Data warehouse • API-driven & custom integrationsClient logo goes here
  • 10. 10 The Challenge Digital ad technologies add complexity to agencies’ operational processes. • Manually intensive • Distracting from core jobs • Requires ongoing ERROR technical expertiseClient logo goes here
  • 11. 11 We Needed HelpClient logo goes here
  • 12. 12 1 More than 10 years of The Solution Ad Operations experience Why 2 Easily scalable team 3 Technology-enabled services provide critical transparencyClient logo goes here
  • 13. 13 Partnering with • Established best-practice trafficking processes • Managed staff training • Flexibly scaled team to meet fluctuating volumesClient logo goes here
  • 14. 14 The Problem Managing Peaks & Valleys Average Work Volume Scaling Cost-Effectively Typical Staff Level Maintaining Expertise BELOW AVERAGE EMPLOYEE LOAD ABOVE AVERAGE EMPLOYEE LOAD Providing Proactive Service - Poor utilization (as low as 20%) - High opportunity cost - Burn-out - Poor service - Employee attrition - Unhappy Clients - Unchallenged employees - High errors rates - Gap-fill resource expenseClient logo goes here 12/23/2011 Proprietary and Confidential.
  • 15. 15 Results • Increased operational efficiency • Minimized campaign errors • Freed up 20% of our staff’s time, enabling us to focus on: • New revenue opportunities • Strategic planning • Clients • Lower employee attrition rates • Higher client satisfactionClient logo goes here
  • 16. 16 Ad Operations Services for Agencies • Ad Serving Support • Ad Trafficking • Campaign ManagementClient logo goes here
  • 17. 17 QUESTIONS?Client logo goes here