Why Kellogg Buys Most Ads Via Machines

Despite what agencies and ad tech firms say, the vast majority of media currently being traded programmatically is for direct-response and performance-based purposes. But according to the Kellogg Company, it doesn’t have to be.

Speaking at the Digiday Exchange Summit in Miami today the brand’s global digital strategy director, Bob Arnold, acknowledged that programmatic is, essentially, a direct response tool, but stressed that it can be adapted for branding purposes, too. The company has had such success with programatic that the majority of its paid digital media is now traded that way.

“I want to show other marketers that programmatic can be used for brand marketers, ” Arnold said. “It is a direct response tool, and we are driving a round peg in a square hole, but we’re still seeing tremendous results anyway.”

According to Arnold, the company set up a framework and decided performance indicators it’d be happy with — viewability and right audience — and decided to see if programmatic was capable of hitting those targets. Turns out it was, and it’s been ramping up its programmatic efforts consistently over the past twelve months as a result.

“For us clicks aren’t indicative of success. We’re actively trying to figure out what other real-time signals we can find that show that our message has broken through. Things like dwell-time, and viewability are some.

Kellogg’s foray into programmatic isn’t being driven by an agency trading desk, though. Instead, the brand works directly with DSPs and uses its agency, Publicis-owned Starcom, in a more consultative role. Many brands have expressed concerns about the trading desk model, suggesting it allows agencies to charge clients twice, or at least that they’re not as transparent as they could be with how and where advertisers’ budgets are being spent. Kellogg’s is one of them.

“We want to be more hands on with what’s going on behind the scenes,” Arnold said. “Our motto is that agencies can help us on the consultation side, and to find new partners, but we work directly with the DSPs.”

What would help convince brands to tip more investment into the channel? Transparency from publishers Arnold concluded.

“We need more visibility from publishers. John Battelle recently wrote a blog post about fraud in ad tech and I couldn’t agree more; there are shady things going on. But when I was reading it I smiled because he’s chairman of Federated Media and he and other large pubs can help solve the problem by being more transparent. If publishers do that, brands will work with them.”