Op/Ed: What the death of Vivaki means for programmatic

Julian Mossanen, regional VP at Chango, on why Publicis' move is great news for brands and agencies.
julianMChango

By Julian Mossanen

By now you may have heard the big news: Vivaki, the ad tech arm of Publicis, has been gutted. Vivaki’s ad traders will be dispersed among other Publicis media agencies, such as Starcom MediaVest and Walker Media. The move amounts to an end of the centralized trading desk model for Publicis, with each media agency now expected to integrate programmatic into the core of its planning and operations.

Why is Publicis going to such great lengths to make a move that appears, at least at first glance, to result in a less streamlined operation? And why is the move, ultimately, great news for both brands and agencies?

To appreciate the answers, you first have to take a step back and remember that trading desks were initially created for two key reasons: the first is that programmatic was a new technology and centralization allowed a limited number of experts to control the process and educate others. Secondly, centralized trading desks made it possible for agencies to create bigger margins from programmatic — a promising new revenue stream — at a moment when agencies had been hit hard by declining management fees.

The problem? As programmatic has evolved, both of these rationales for trading desks have become less relevant. Let’s take a closer look at how things have not only changed, but changed for the better.

Programmatic is no longer mysterious

Perhaps the single biggest reason centralized trading desks no longer make sense is that programmatic is no longer an esoteric skill mastered only by a limited number of advertising wizards/data geeks. Today, thankfully, there are lots of marketers who know the ins and outs of programmatic buying. The education that has taken place over the last few years has made all the difference. The stacks have now been built and the market has become more commoditized.

In other words, Publicis can afford to integrate its programmatic traders into all of its media agencies because it can expect its media teams to understand how to integrate programmatic into their campaigns. And, to the extent that any additional educating is still necessary, moving trading desks to the agency level will only accelerate the process and make campaigns stronger. After all, you can expect better campaigns when the people who know the account also know how to integrate programmatic into the total mix and strategy.

It’s worth remembering that, clever as programmatic is, advertising is still about people. Brands want to know the people who work on their campaigns rather than leaving their fates to a mysterious trader who might not even understand their business or objectives.

The era of hidden margins is coming to an end

The other reason that trading desks no longer need to be centralized comes back to the understandable anxiety agencies have felt as the ground beneath them has shifted. With management fees dwindling, keeping operations centralized at one trading desk — where relatively few people were involved in the process — made it possible for some agencies to keep an element of secrecy over their operations and create margins that, in retrospect, are hard to justify.

The good news for everyone who cares about the industry is that, with programmatic now a mainstream tactic, agencies are no longer able to operate under a veil of secrecy. Agencies now appreciate both how savvy brand marketers have become about programmatic and how many choices brand marketers have among agencies with real programmatic know-how.

So, never mind that Vivaki’s revenue will disappear. Publicis is now, wisely, thinking about the group as a whole. Vivaki’s revenue and margins weren’t worth holding on to if it meant other agencies losing worldwide accounts.

What’s happening in programmatic today isn’t all that different from what happened with social a few years ago. That is, programmatic, like social, is becoming an obligatory part of every campaign. As with social, programmatic is not so much a special tactic as it is a natural part of how digital marketing works. Publicis wants every one of its agencies to be a programmatic agency. Expect other marketing conglomerates to follow the same path.

Julian Mossanen is a regional VP at programmatic advertising platform Chango.