Programmatic buying: rise of the machines

John Sheehy

John Sheehy joined Starcom, the world’s largest media buyer according to RECMA, in 2011 from Leo Burnett, where he has spent much of a his career.

In this interview, Starcom MediaVest Group’s global president of operations talks to Mumbrella Asia Robin Hicks about how media buying done by machines is affecting media agencies, the thorny issue of arbitrage and agency trading desks, and why dealing with media owners is now like wrestling.

What do you mean by programmatic buying?
It’s really all about reaching your target more accurately and efficiently by using more data than we had before. The problem is that there are a lot of vendors out there, and we need to invest in the right technology. There are still issues over reliability.

I can’t think of a term that makes the discipline sound less exciting. Is it too late to change the name?
Like a lot of new terms, it’s just an anchor phrase. In a few years’ time we’ll probably call it something different, as new layers are added to the technology and new things can be done with it.

There’s been a lot of talk in the US over the issue of arbitrage and a lack of transparency with agency trading desks. Do you think the issue is as serious as the trade press is making out?
Look at it from a client’s perspective. If they are confident that agency trading desks are an efficient and effective way to reach audiences, that’s fine. But if media agencies are not going to offer that at a competitive price, clients will find other ways to do it. They’ll take the function inhouse.

Inefficiencies in any market will always be weeded out. And the race is on for media agencies to invest in the technology and talent to trade online media better than their rivals.

What are Starcom’s big global clients saying about the issue, are they concerned?
Everything is out in the open. Nothing is being hidden. The ANA [the Association of National Advertisers in the US] have been asking what the issue is, what is at stake, and what media agencies are doing to ensure clients are getting fair value. Clients are asking questions, just as they are about all areas of the media buying process.

What will happen to the traditional media buyers if they can be replaced by an algorithm?
We all think about how safe our jobs are. Will programmatic buying change the way we do business? Yes. But there’s an art and a science to it, which does not exclude people and good judgement. It never will.

Will media agency work forces shrink as a result of programmatic buying?
I would say yes. Certain aspects of what a media buyer does are changing, as some of the job gives way to automation. That is happening in other industries, not just ours.

But look at it another way. Media agencies used to be purely in the service business. We’re creating products now. And that creates jobs in other areas. We’re taking messages in real-time and matching them with the right content and the right people, as we try to keep up with the consumer.

What impact do you think programmatic buying will have on the relationship between publishers and media agencies?
The model has shifted. Our clients want us to maximise what we do for all of our offerings. The same dynamic is happening in our partnerships with media owners. I was at a convention the other day, and a media owner said to me that all we used to talk about was media planning and buying. You launch a campaign, set it to run for however long, then move on to the next. Now we’re talking about sourcing content in real time, and managing campaigns in real time. It’s not longer a straightforward transaction, as it once was.

I used to be wrestler. In wrestling, to be successful, you have to put one move in motion that leads to another, to complete what you set out to do. You have to chain a series of actions together. That is what media is like now. It’s about agility.

Do you think programmatic buying can reduce the incidence of unfortunate media placement in online that might not occur if humans were doing the buying?
A bigger issue is not that ad messages are popping up in the wrong pace. It’s that they’re not popping up at all. But as the technology improves, there will be more consistency and reliability, not less. Clients now expect things to be done in real-time. They want it done now, not a day later.

Look what happened when someone hacked an AP [Associated Press] Twitter account and claimed there was a bomb in the White House. The stock market went into a panic. That’s how immediate the world has become.

You spent much of your career on the creative side of the business with Leo Burnett. Do you see media agencies as more future-proof than their creative siblings?
Starcom and Leo Burnett are both great brands, but I looked at how our industry is changing, and I saw more opportunity in media.

We have access to media owners, measurement firms and technology companies like Google, Facebook and Twitter, and on a global scale. We are ROI focused. And we’re not just measuring the impact of a 30-second spot, we’re measuring how everything works together, which I think makes us more future-proof.

We’re all trying to keep up with the consumer and what our clients want. If you’re not humble and you’re not hungry to change with them, you’ll be left standing still.


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