Agency & DSP – together in perfect harmony?

Agency & DSP - together in perfect harmony?
Let’s dive into buy side technology in programmatic advertising and the aspects of the services around it. How to choose, how to onboard and generally how to manage it. Useful insights are provided by Fabian Zimmermann, account director of DQ&A for the Nordics and the DACH Region. DQ&A is part of the Incubator Group and is specialized in building a full service solution around anything on marketing tech; not only the programmatic and display side but also the search and analytics side as well as services on the media and creative side.

ADRIAN
Let’s focus on the buy side technology, the so called demand side platform (DSP). What is your opinion on DSPs and its development? There was obviously a lot of fuss about it in 2021 for many reasons. What’s your opinion on that? And what’s your take on the market?

FABIAN
As you know, the market is fairly splintered. There are a lot of DSPs around. And it is difficult to pick and choose what you need and what matches your needs. All the platforms have different complexities and those need to be explained in order to make people comfortable using them. Those services are usually connected to a certain spending commitment which is, on one hand, understandably frustrating for new users. But on the other hand it is important for resellers and companies to protect their assets. Because in the end, only if you have a certain spend, you can earn a certain amount of money. And that’s the same with DSPs. It enables a certain amount of service.

ADRIAN
Many will have experienced that. Paying for service, for people who teach us how to do things, is definitely something worth paying for. For bigger advertisers and brands it is no problem to commit to spending and test programmatic advertising. But what if you are a small advertiser or a small agency that wants to support smaller clients? In that case, spending commitments are quite a big issue.

FABIAN
Especially as an agency, this is one of the challenges you need to overcome. But I think, within the programmatic world, we are at least starting to move away from real spend commitments. Because the payment model usually works with a certain platform fee based on the media cost that is running through. And if the DSP has the goal to enable their partners to use the platform, then it should be kind of a fair split with a fair amount of money being spent on a training that gives you immediate value. Then you can actually move away from a spent commitment in order to make it a pay as you go model.

ADRIAN
I was always a fan of the hybrid model that you suggested. But let’s take it in another direction now. There is an endless amount of DSPs out there. It goes all the way from famous ones or the top of the market, like DV360, Double Click, Adform or Nexus. But there are many different DSPs that nobody has heard. So is DSP really a commodity? Or do you think this phenomenon is just an opportunity in the market to take advantage of the lack of knowledge?

FABIAN
I am coming from SEO, and it is not a parallel development, but 10 – 15 years ago SEO was still Wild West with a lot of shady link building Google ultimately punished you for. And if we apply that to the programmatic world, it is as it usually is with the internet. It is now about quality and transparency. Especially larger brands and marketers want to know where their ads will be shown. And many smaller DSPs, especially the ones where you can buy inventory for very cheap prices, usually don’t tell you that. Or have pages with very bad quality. And then they try to make sense of it with a high impression count. But an impression on one page is not as valuable as an impression on another page.

ADRIAN
That is a whole nother topic, talking about the value of impressions. Remember the early days of every intern or trainee that comes into programmatic and you explain a banner being loaded is an impression. But that does not mean anybody actually saw it.

FABIAN
Yes, and as an advertiser you also have to decide where you want your ads. And where you want your ad to be displayed. And this is one of the main decisions you need to make before choosing a DSP. And also to make sure that the people on the buy side understand how and where you want your ads to be shown. And can they provide that? If they say yes, but cannot show you how, you know that you are probably not in the right spot.

ADRIAN
I always thought that that practice was reserved for agencies. From your experience, do the ad tech vendors also do that? Are there still DSPs in the world that will not show you where your ads will be displayed?

FABIAN
Not as many as a few years ago, but it’s also not just about where they show the ad but where exactly they show it. A domain is one thing, but where on the domain is the other thing. So it is actually a gradual level of where these ads are shown. If you know the landing page you have full transparency and know what’s happening.

ADRIAN
Today you can probably tell where 90% of your ads run. So from an availability point of view, it is becoming a commodity because you can just go and grab yourself a contract somewhere, but from a knowledge perspective – is it easier to actually run programmatic successfully or use a DSP successfully?

FABIAN
People need to get a certain understanding of DSP first in order to run it effectively and efficiently. This is where the agencies come into play. And where agencies and the providers of the technologies have the responsibility to educate the market.

ADRIAN
You basically confirmed my belief that while technology is a commodity, the service and the skill in the market are not. And I think that the demand for agencies or service providers around advertising technology is increasing because the complexity is increasing. How do you see that model working?

FABIAN
The first question always has to be “what do you want to achieve”? You need to start at the beginning and make sure that the choice they made, like using DV360 is the right one for them. Because working with GMP ist not for everyone.

ADRIAN
We have mentioned GMP now once or twice. For those who don’t know, can you explain what this is?

FABIAN
It’s the Google Marketing Platform consisting of the Google Campaign Manager of Display and Video 360. And also Search Ads 360 and Google Analytics 360 with Tag Manager and Google Optimize.

ADRIAN
All of the advertising solutions that you cannot sign up for free and start spending but the ones where you need some kind of sales support and high budgets to get on board.

FABIAN
You don’t need high budgets per se but a certain amount. It also helps to run with the machine learning algorithms in the back to get automation going. That’s one of the large benefits, where it is difficult to pull off with lower budgets. And that’s where we come in, to sharpen the understanding. Low budgets mean more time for personal control. That’s why the Google Display Network and Google Ads can also outperform anything that’s coming from GMP. So you need to make sure to carefully pick your tool of choice. Define your KPIs and optimize towards them.

ADRIAN
My take from what you are saying is that the complexity increases and the services are needed. To start wrapping it up – what do you think are the most common pitfalls when a company decides to practice programmatic? If I am an agency, what are the top things I need to look at and pay attention to?

FABIAN
The first thing that comes to mind is knowledge level. What’s the knowledge level I am dealing with? How do I explain things? Second, how is programmatic embedded in their overall strategy? You need to make sure that it makes sense, so we need to make sure to ask questions and that we get the answers we need in order to set things up in the most efficient and most beneficial way for the client. So that’s the main pitfall, to not ask enough questions and to not ask the right questions.

ADRIAN
So would you recommend people to go and talk directly to the vendors or go to service providers to get a status quo of the market and understand that from a service perspective?

FABIAN
Go to the specialist. If you want an independent opinion and a different view, don’t go to the DSPs themselves. Go to a service partner, to an agency.

ADRIAN
And the last question. To educate yourself – do you have any preferred source of education? Can you recommend anything as an entry point?

FABIAN
The materials provided by the DSPs are usually a good starting point to understand what is happening. If you then need a more differentiated opinion you can talk to someone who has worked with different platforms or read articles or consult YouTube – this is usually a very good source of information in a snackable size.

To sum it up. From a technological point of view DSPs are a commodity. But there is still a hole in the market in the area of service. And understanding and practicing that. If you want to start in programmatic advertising go and talk to the vendor or, even better, a service provider to understand which tool to choose and how to avoid pitfalls. And the most vital thing is to understand the complexities, because everyone can just set up a campaign and try to run with it. But preparation is key.

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