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June 4, 2015, Article

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Avoiding global pitfalls – MediaMath CEO on Australia’s prime programmatic scene

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From the in-house vs agency trading desk pendulum swing and the rising water level of programmatic, to value-added agency models and a peaked interest in attribution modelling, CEO of New York-headquarted MediaMath, Joe Zawadzki, said there is plenty to keep up within the buzzing Australian space.

Speaking to AdNews on a recent overseas trip from the US, Zawadzki said the programmatic scene in Australia was really hotting up – thanks in part to it not having to endure the same lengthy trial and error phases the US and UK went through.

“What we’ve found in Australia and APAC maybe in general, is that we’re seeing (as well in Japan and South Korea), that there is a little bit of leap fogging that happens,” Zawadzki said.
“I don’t know if you know the innovator’s dilemma, whereby you may start something, for example in the US, and the other regions tend to pick it up in two or three years later. While they pick it up two or so years later they lose the benefit of those two or three years of experience, but when they start, they don’t have any bad habits.

“They don’t have to start with going through the same evolution that the US, for example, or the UK did those years ago, and therefore start from a more finished state and can then accelerate faster.”

He said while APAC started later it then had years of a roadmap to say, “let’s not go through the same zigzags in the evolution, let’s do it right when we start it”.

Sharing the same view

Despite the overall water level rising in terms of people getting a good sense and a good handle on programmatic, and how they are going to reorganise their business around it, Zawadzki said there is still a lot of very regional differentiation, where certain tactics or certain approaches are market specific.

He also said overall, the baseline of the goal is to get the water level up, to get everyone talking in the same way and sharing the same terminologies as this makes for more productive conversations.

He said “we did a great job in the industry and making it too complicated” and argued that by being on the same page makes it easier to attract a new crowd from outside the industry.

On the hot topic of brands taking trading desks in-house, Zawadzki said the notion of bringing technology in-house is a “worldwide phenomenon” and is by no means limited to Australia.

“What’s happening, I think, is very similar to a lot of evolutions where it starts out as a feature or it’s a novel innovation and then once it crosses into being something that is clearly deemed to be impactful for the business, sort of transformative, then, I think brands want to get engaged,” he said.

He said they are perhaps dissatisfied with the pace of change and therefore what to evaluate and consider other options.

“I think what eventually happens is pendulums tends to start to swing and right now we’re in a period in which brands are highly motivated to look into in-house capabilities, and we’re obviously very supportive of that everywhere,” Zawadzki said.

While supportive of what he sees as a pretty stable and valuable model, he says this in turn is where the role of the agency changes, from being the “folks that are simply operating the software”, to having the technology embedded inside of the brand where they’re looking for more transparency.

“Brands want to have centralised access to data and then may have multiple agencies or partners that are operating a software on their behalf, so it’s moving from sort of a binary on-off who controls the software, to a role-based approach.”

He said in the end you end up with a lot of really interesting “value added agency models” – which he thinks is the way forward – meaning agencies will be doing things like “accelerated transformation of media”, and things that no single brand could potentially do themselves.

“There’s lots of stable configurations – in-house, all agency, and then things that are in between, he said.”

A shift in thinking – attribution

Another interesting trend Zawadzki, and Stuart Bartram, country manager ANZ at MediaMath, said they are seeing here, is the increase in client’s questioning attribution modelling and how it works.

Challenges around this however involve moving people away from the tradition last click model, which has been hard as there’s no other “default standard” that makes sense, Zawadzki added.

“The right answer is to lead right to individualised brand by brand attribution – for obvious reasons,” Zawadzki said.

“The consideration cycle for an automobile is very different from the consideration cycle for FMCG and a one-size-fits-all standard across the industry attribution model doesn’t make sense.”

He said once you’ve done the work, spent the money and created an internal business case to create proprietary attribution system – it sits there.

“It’s like a car (that’s on blocks) in front of the house. I mean, it’s like it’s great you’ve got a beautiful car but you can’t you anything with it. So we basically said, ‘look, we have to give people a power to action against the attribution’. And to Stuart’s point that’s basically what we’ve focused on a lot – and on the ability to pull in those attribution models and basically use them in real-time across your entire good landscape and that suddenly has made the attribution a real thing,” Zawadzki said.

“Suddenly, you’re now at a point where you say, ‘great, I can actually see the model work in the real world and I can see my business results getting better as a result of getting off of the last click methodology’, because you can actually use it.”

It’s not the tech – it’s a people problem

On the subject of recruiting in the ad tech space, Zawadzki said MediaMath looks for smart people who have to be “very hungry” for the space and have the ability to learn really complicated and very detailed aspects of the trade.

Zawadzki added that he is intrigued as to what will happen with programmatic and its adoption over the next three years. “Because if one thing is true, it’s been amazing, so far.” he said.

“It’s been years being in this drama, of this sort of intersection of math and marketing – but what’s happened in the past call it five or six years is people have named it. They’ve predicted what the growth would look like and every year have woefully under predicted actually how fast the next year would be,” Zawadzki said.

He said that now technology is there and it’s a not a technology problem anymore and is more of a “people problem” now.

“It is an organisational design. It’s about aligning of interests. It’s about getting partners to be able to take this sort of innovation and start to use it by changing how they do their jobs. And changing how you do your job is a hard thing, to change management.

“This is the way I’ve always done it for the past 20 years. That’s what our organisation did, for the last five – so you’ve got to chip away at that…”

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