Q&A: Accuen CEO Megan Pagliuca Takes Staff From Omnicom Media Shops, Cuts Vendors by the Dozens
Accuen, Omnicom Media Group's trading desk, is preparing for marketers' expected increase in spending through programmatic systems by revamping its organization, its vendor strategy and even its thinking around planning.
But Accuen isn't following the example of other agency holding company revamps. Rather than exporting its people to posts at sibling media agencies, as Publicis Groupe's Vivaki did, the shop is taking in talent from Omnicom media agencies OMD and PHD, beefing up the central digital group and training traditional buyers to use its programmatic platforms.
Megan Pagliuca, who was named CEO at Accuen last summer, talked to Ad Age about this new strategy, investing in "programmatic planning" and why it recently fired 37 vendors. Our interview has been lightly edited.
Ad Age: Why are you making these changes now?
In the next evolution of programmatic, it needs to address two challenges around the trading desk model. One is in the press often. I don't like to dodge it. It's around client trust, and trading models.
It's incredibly important that we give clients options for what pricing model they want to work with us on, and we also work very hard to give them transparency to all costs within the supply chain. The initial approach was, don't show them because it's scary.
The second one, and it's a negative of the first generation of the trading desk model and for every holding company -- us included -- is that programmatic was treated as just a line item on the media plan. It could have just been another vendor or ad network next to ABC. The point is to buy audiences and publishers through technology. That wasn't happening cause of how the units were set up. We're focused on building out our programmatic planning capability.
Ad Age: What does the heightened focus on cost transparency mean for Accuen's arbitrage buying alternative, in which the group takes ownership of inventory and bundles costs such as inventory, technology and agency fees?
Ms. Pagliuca: We offer our clients multiple ways to buy programmatically. We have both bundled solutions as well as a la carte models where all servicing, technology and media costs are clearly defined. We work closely with all of our clients to build the best solution based on their specific needs.
Ad Age: What do you mean by programmatic planning? And why go this route?
Ms. Pagliuca: The role historically of a trading desk was to create partnerships with DSPs. They have people running the media on the DSP. So there's a career pathing challenge. At a certain point, people don't want to push a button and play with levers. We restructured to create programmatic planning roles focused on consumer experience. Our process is that we actually do planning and budget allocation with that audience first.
Traditionally, agencies would allocate budget to programmatic as a channel and not allocate budget against formats, screens and publishers. It was very tactical. Now, we think about which publisher to buy, which audience, which format and on which screen.
Ad Age: How is Accuen implementing programmatic planners and this new approach?
Ms. Pagliuca: We've added more strategic tasks. We have open headcount. We're filling Accuen with internal, manual planners and buyers from within the agency teams. If you think about Vivaki, where they broke up their team and have programmatic with traditional agency planners and buyers, we're doing the opposite.
Some clients have only allocated 30% of their digital spend to programmatic. Next year, it may be 90% of their spend. In the future, we need less manual planners and buyers and more programmatic planners and buyers.
Ad Age: As more tactical traders move into strategic roles, how does that affect your vendor partner strategy?
Ms. Pagliuca: In Q3 or Q4 last year, we fired 37 vendors. We have neutral partners across Facebook, Google and the other walled gardens like Amazon. We have to be consumer-centric and look at the majority of where people are spending time on the Internet. We have to shift strategy, prioritize and reduce our number of partnerships. The original vision in ad tech was, with the launch of programmatic tech and bidding, use one demand side platform. If you have multiple in auction, you're bidding against yourself.
The panacea of using one DSP has been destroyed by walled gardens. Unfortunately, Facebook, Google, and Amazon came along and said I'm not giving my data or inventory to independent DSPs. You can only buy from me. Now it's about minimizing partners.
Ad Age: What's next for Accuen?
Ms. Pagliuca: I've been focused on moving some of the direct IO, publisher spend into programmatic. The challenge within real-time bidding and traditional programmatic is it doesn't allow you to ensure publisher commitments. By definition, it's non-guaranteed. The new Accuen platform has programmatic planning as well as publisher-management capabilities. We just released this functionality at the beginning of March. It allows us to have spending commitments within programmatic.
We're also taking fraud very seriously. We're working on creating our own internal face-bots to check our own systems. The team builds bots to test safety.