[The Wall Street Journal] Zipcar Embraces Programmatic Ads and Criticizes Lack of Transparency at Agencies

Zipcar is adding its voice to the increasingly loud criticisms of advertising agencies when it comes to transparency (or lack thereof) about their digital ad buying practices and pricing.

Two years ago, Zipcar dumped its digital ad agency and elected to shift all of its online ad buying to “programmatic” or data-driven, automated channels, said Chief Marketing Officer Brian Harrington. Part of the rationale for that move–besides a drive towards efficiency–was that Zipcar didn’t totally trust its ad agency.

“A big piece of my frustration in working with a traditional agency is that it felt like a black box,” Mr. Harrington said. “I didn’t like the feeling that agencies play games and direct business to their trading desks. As a CMO, that is extraordinarily frustrating for me.”

Mr. Harrington was referring to the practice that many ad agencies within larger holding companies employ these days. These ad conglomerates typically own digital ad buying specialty divisions–often referred to as trading desks–which focus on programmatic ad buying, but vary in how much they disclose to their clients about how they operate. In some cases, these trading desks simply buy ad space on various digital ad exchanges, often using different sets of data to target ads at specific audiences.

Other agency trading desks actually purchase media inventory upfront at wholesale prices using automated technology and then resell it to individual agency clients, promising highly sophisticated ad targeting using different data sources. In some cases, individual clients do not have any transparency into what prices these trading desks pay upfront for this media inventory.

Zipcar’s comments once again raise questions about the viability of the traditional agency model as firms lose the trust of clients because of their perceived lack of transparency. Executives from agencies like Omnicom and Publicis have already found themselves playing down concerns about widespread kickbacks.

Mr. Harrington, who joined Zipcar as interim CMO in 2012, declined to identify the digital agency that Zipcar had worked with previously. DigitasLBi handed Zipcar’s digital media buying from mid-2012 through part of 2013, according to people familiar with the matter.

“DigitasLBi operates on a fully transparent model for and behalf of all of our clients–past, present and future,” said a Digitas spokeswoman. “Our clients have applauded our transparency, and characterize us as ahead of the industry.”

Besides the trading desk model, Mr. Harrington–a former ad agency executive himself–cited the preponderance of “fraud” and “waste” in listing his gripes with big ad agencies.

“The strategy is often very traditional, including buying lots of ad impressions in lots of places, casting a wide net and hoping for the best,” he said. “The reason we made the move is to get beyond the approach.”

Zipcar instead began funneling all of its digital ad buying through Accordant Media, an independent programmatic-oriented media buying firm. Precision in ad targeting is crucial because Zipcar — which lets consumers rent cars for short periods of time — is only available in certain markets and typically appeals to urbanites who don’t own cars or to people who only need cars for a brief period to move or take a quick trip to the beach, said Mr. Harrington.

To that end, Zipcar is able to take its own data, blend it with other sources, and target potential customers in 31 markets, enabling the company to, for example, laser in on someone in New York who has just moved apartments, explained Mr. Harrington.

Zipcar has also been testing a proprietary set of tools Accordant has designed to help brands evaluate whether certain ad targeting data will prove effective–before they actually spend any money.

“This lets you evaluate before you regret,” said Accordant Chief Executive Art Muldoon.

That theoretically is ideal for Zipcar, which only appeals to a limited pool of people at any given time and needs to make every marketing dollar count.

“[Programmatic] lets us be super scientific in terms of dissecting consumers’ mindset and behavior on a market-by-market basis,” Mr. Harrington added. “It’s extraordinarily compelling.”

So compelling that Zipcar has actually upped its spending on digital media over the past few years, which flies in the face of programmatic advertising’s reputation for leading to reduced ad budgets. Mr. Harrington said that while Zipcar spent less than $2 million on digital media in 2013, the company’s media budget neared $5 million last year and should increase this year.

Losing out on that sort of spending surely won’t cause waves of panic in the broader ad agency world. But if enough advertisers find similar frustration with what they see as a lack of transparency among top agencies, it could set off alarms over time.

“When you are writing a check to a partner you expect them not to play games,” Mr. Harrington said. “It’s about trust.”

Дата: 03.06.2015
Источник: The Wall Street Journal

Vera Khiteeva