Agencies are racing to keep up with the exponential increases in automated advertising. After initially setting up programmatic as separate practices, more agencies are moving to integrate programmatic within their overall media practices.
Holding groups are tackling this problem in different ways. IPG Mediabrands’ programmatic unit Cadreon serves as an incubator sitting inside the network, offering individual agencies education and training. So does WPP’s media buying arm GroupM. The agency consolidates data and operations around all biddable and real time media under a service platform called GroupM Connect. Publicis Groupe last year, the network assigned ad traders from its programmatic arm VivaKi to individual Publicis agencies.
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“When you look at those different business models and communications around them, including media strategy, operations, data and trading, programmatic is not just one thing,” said Ruud Wank, CEO of GroupM Connect. “In that sense, programmatic is a description of modern media agency on the whole instead of a single technology.”
GroupM houses four media buying agencies: Mindshare, MediaCom, MEC and Maxus. As a result of a unified programmatic approach, those agencies can compete with each other only at a strategic level –- they are not supposed to bid against each other, according to Wank.
“Maxus can come up with a completely different strategy from Mindshare. But when it comes to technology, trading and operations, they all use the same systems, tools and people,” he explained.
For IPG, programmatic specialists are part of its overall client team. While they have specialized skill sets, there’s no division between programmatic and the network’s general go-to marketing proposition, according to David Cohen, president for Magna Global.
“Many years ago, we had digital silos, search silos and mobile silos. Now we have one integrated client team that sits together and works as a collaborative team,” said Cohen.
Although holding company executives emphasized that their programmatic arms offer tools, training and education across the network, those programmatic groups exist as a separate unit with their own name. Cohen thinks that this structure makes sense because ad traders are very different from creative executives, and when a thing like programmatic is relatively new and specialized, it requires a special group of people to operate. The current situation could change, though, when agencies feel more comfortable with programmatic.
“[The structure] is more about specialization than independence,” said Cohen. “Programmatic will become a more general skill set. I imagine that in two or three years, programmatic as a word will become meaningless.”
Of course, there are doubters outside big holding companies, who point to the penchant for endless reorgs as evidence holding companies will continue to struggle with cohesiveness.
“Holding companies haven’t innovated themselves because they don’t have that kind of a mindset,” said Adam Kleinberg, CEO and co-founder of ad agency Traction. “They could certainly buy a programmatic company and run it as a distinct entity, but that is not the same as integration. There are still silos, just with the same corporate overlord.”
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