Trade Desk CEO: IPO funds will fuel Asian expansion

The Trade Desk’s CEO Jeff Green has every reason to be bullish.  Since the IPO last September, his buy-side programmatic firm has seen its share price nearly double after a 70 percent spike on listing day.

“I believe that Wall Street is believing our story and believing things about the future that we believe,” he told an audience of brand marketers and agency figures at an exclusive Hong Kong briefing in partnership with Campaign.

So what are those beliefs?  For starters, it’s that eventually all $650 billion dollars of global advertising will be done programmatically.  Green feels it’s inevitable, much like stock market trading turning completely electronic.

Asia, he said, will lead global growth.  But more than this, he predicted it will become 100 percent programmatic before the US does.  Why?  Because it’s harder to bring in as much money per sales person in this market as anywhere else, so digital transactions make more sense. 

Therefore when Wall Street analysts ask him what he’s doing with his IPO funding, Green tells them “we’re going to grow and there’s no place that we’re going to grow more than in Asia,” though this growth will be careful and measured.

It’s an odd time to hear such swagger around programmatic these days, which has been on its heels of late.  Marc Pritchard’s manifesto on digital media buying earlier this year has pushed the messy issues of transparency, viewability and brand safety to the front of many conversations around programmatic.

Speed bumps

Green acknowledges these are a real issue, but considers them “speed bumps” on programmatic’s rally road that the industry is collectively working on. “These issues will be solved,” he says. “We’ll sufficiently contain them to create a thriving ecosystem,” noting this is already being done.

Interestingly enough, when a couple of financial services brand marketers took to the stage, brand safety wasn’t their top programmatic concern, largely because they tend to guard their brands more cautiously anyway.

“If you like to drive fast cars there’s always a chance of crashing,” said Seraphina Wong, UBS head of brand management and advertising in Asia Pacific.  “But if you think of the upside in efficiency and learning from it and how to engage in a more meaningful relevant way then it’s worthwhile.”

Campaign's Olivia Parker (left), hosts a panel featuring marketers Suresh Balaji of HSBC and Seraphina Wong from UBS

Wong says the proportion of her digital ad spend on programmatic has been steadily rising over the past few years to about 60 percent currently.  But she’s not going all-in, preferring to buy into some premium media directly where she favours the fit of the editorial context.  At the same time, she said she accepts there will be imperfections and wastage both inside outside of the programmatic spends.

“Those buzzwords like relevance and cost efficiency really sell well to senior management,” she said.  But the C-suite rarely looks beneath the hood of the engine to test how well it’s really running.  “I think the pain is really the uncertainty and what you do with the numbers to prove what.”

Programmatic "pains"

HSBC’s Suresh Balaji, regional head of marketing for retail banking and wealth management, was more blunt about his ongoing experiences with programmatic, noting the "pain" involved too.

“It’s been hard for various reasons.”  Immediate returns have been elusive and there still remains a lot of learning. Asia continues to lag behind mature markets like the US, he added, so there’s understandable frustration.

At the same time, Balaji sees the obvious benefits.  “It’s front-end analytics at its best,” he said, adding “For the first time ever, the loop is closing.  You actually know where your customers are going.”

Balaji urged the audience to “think of programmatic as the Tesla of the world, not GM,” meaning that the model benefits from scalable learning through data.  But he conceded that not all organizations are built to produce Teslas, which is why we won’t see a 100 percent programmatic world.

Both marketers spoke about how advertisers need to learn-as-they-go with agency partners. Wong said all parties need to shoulder some responsibility in lessons along the way and support each other in the emotional gap that comes from not seeing where your marketing is showing up on an outdoor billboard or with a favourite media partner.

Green conceded that programmatic firms need to further simplify the bidding processes to help marketers in their learning, adding that newer offerings are aimed at doing just that.

Attribution aggravation

The largest part of Green’s message was aimed at dispelling the last click attribution model, a particular pet peeve for those who feel search advertising is taking the credit for far too many sales that have been influenced by other marketing channels.

Green painstakingly walked the audience through a typical day in his life where he viewed 1047 ads, with 778 of them on desktop, 229 on mobile and the rest elsewhere.  The search ads he clicked on were largely navigational yet cost advertisers the most money.  Some native ads were clicked on but regretted, while some of the unskippable ads he paid the most attention to were digital audio and video.

“We have to do a better job as an industry of educating our clients on better attribution models and we have to insist on looking at things holistically,” Green said. “That is the only way for us to do the right thing for them. When I say the right thing, I mean that we are buying mobile, social, video, display, search, native informed on what’s happening in each of the other channels.”

The future of TV advertising: ads on Netflix

In conversation with Campaign, Green said he was surprised at how little progress the linear TV industry has made to adapt to a programmatic advertising world.  “I personally think linear TV will never be programmatic.”

Given that Green sees a 100 percent programmatic world, his logic follows that linear TV will disappear, replaced by connected TV, which he feels is moving steadily towards an ad-supported model.

Robert Sawatzky, head of content at Campaign Asia-Pacific, in conversation with Jeff Green

Nowhere is that more true than in Asia, Green says, where subscription-based OTT players like Netflix must look for growth.  Countries like Indonesia, he points out, have massive audiences, but average incomes are too low to afford subscriptions.  These markets, he says, make some advertising support necessary. 

It’s a pitch Green gets to make often, he concedes, since Netflix CFO David Wells sits on The Trade Desk’s board. 

Relevance: finding the magic moment

Underlying all programmatic conversations is the question of how to get consumers to pay attention to ads.

“If we fear ad blocking, why are we creating such shit ads and targeting people with things that aren’t relevant?” asked Scott McBride, chief digital officer of IPG Mediabrands at The Trade Desk event. It's a common refrain, with a common solution: make ads entertaining or relevant.

McBride outlined IPG efforts to address the latter, led by the company's own addressable content engine which sits on top of its programmatic strategy and is designed to generate personalised experiences on a global scale.  While "one-to-one" remains an ideal goal, he continued, a combination of programmatic, precision and addressable marketing means that the needle has now moved as close as “one-to-few”. 

McBride used the example of a campaign created for Coca Cola. “People think Coke has a really easy life in marketing...but their control in the market is actually getting less,” he said. In the Netherlands, for instance, the brand discovered an issue around finding a time and moment to address teenagers. 

Scott McBride of IPG Mediabrands

IPG’s researchers came up with the insight that teenagers’ lives are full of obligational milestones such as exams, chores and homework, all of which create many “mundane moments” when all they are looking for is escapism. “They just want to be entertained,” explained McBride. “And we discovered they are also more susceptible to brand messaging during these periods.”

Talking through one strand of their resulting addressable strategy, McBride asked the audience to imagine a teenager doing their homework. “They are super bored, so they get on YouTube. They are into sports, so they are looking for sport, and they love football...so they want to watch the latest clips from the Premier League.” These clips offer Coke covetable opportunities to reach their target audience — whom they can then serve with a short, fully customised ad.

Plug any alternative teen moment, digital hangout or specific interest into the programme and you would find a different opportunity for a different customised spot, said McBride. “There are nine or ten thousand variants of all these ads,” he went on. “Using programmatic in the way we should be gives real time access to target people at a split second moment in their journey. The most important thing is finding that moment and making it as memorable and creative as possible.”