Mr. Banilevi is one of 10 ad traders employed by agency trading
desk Varick Media Management, the programmatic arm
of agency holding company MDC, where I spent two days earlier this
year.
When Mr. Banilevi began his college studies in the fall of 2009,
the job he holds today essentially did not exist. Back then, the
advertising industry was just beginning to understand the benefits
of automating the digital ad buying process, which, due to its
sophisticated targeting options, requires more effort to execute
than any other medium. Unlike TV, direct digital ad buys
necessitate constant checks of inventory availability and an
arduous trafficking process where operations teams often upload
dozens of ads per campaign to a server with multiple levels of
targeting criteria.
"If [automated] Ad Exchanges are widely adopted, it could
revolutionize how online media is bought and sold," ad agency
Razorfish said in its Digital Outlook report
published in 2009. Six years later, that revolution is well
underway.
In 2015, programmatic will account for $14.9 billion of the
nearly $59 billion digital-advertising pie, according to eMarketer. That's up from $9.9 billion
in 2014 and $4.2 billion in 2013.
Until recently, many questioned the value of programmatic
advertising. Publishers saw it as a threat and buyers saw it as a
source of dodgy, low-value inventory. But with those concerns
dissipating and major brands, including American Express,
saying that they intend to buy 100% of their digital
programmatically, the practice is booming.
At the center of it all sits Mr. Banilevi.
Inside the trade
When Paul Rostkowski took the reins at Varick in 2011, the company
was little more than a seven-
person outsourcing department that handed the actual execution of
MDC's programmatic ad campaigns over to ad-tech companies and
analyzed the results. This model, Mr. Rostkowski said, didn't work
for him. He wanted control of every piece of the process,
especially the data, which he believed would be important not to
outsource to yet another third party. So Mr. Rostkowski grew the
agency to 52 people, and now it does everything in-house.
Despite the fact that traders like mr. Banilevi are fresh out of
school, mr. Rostkowski declined my request to take a spin with the
technology and actually do some ad buying. "it takes our traders
quite a long time to actually begin to trade," he said.
Instead, i spent hours sitting alongside mr. Banilevi, who gave
me an inside look at the technology itself and the buying
process.
Working on a programmatic ad-buying system is not exactly a
glamorous endeavor. Much of my time with mr. Banilevi was spent
uploading and checking ads, an arduous process. After that step was
completed, mr. Banilevi selected inventory sources and applied
targeting criteria. One targeting selection, for example, directed
the campaign to focus on the top 20% of ad placements most likely
to be viewed for the longest period of time. Mr. Banilevi also set
criteria directing a campaign to target those who abandoned
shopping carts while excluding those who already purchased. He then
set bids and campaign budgets.
As Mr. Banilevi pushed through the campaign setup process, he
was mindful to help Varick make its margins. The agency agrees on
an average ad price with its clients and then its traders go out
and find the inventory for less money. That spread is what Varick
takes away in profit. In some cases, Varick agrees on a flat
percentage rate on the media instead.
Traders like Mr. Banilevi handle the actual buying, but Varick
employs five people for every trader. He is surrounded by account
management, product, partnership, engineering and data science
teams. Employing so many people leads to inevitable questions about
how automated this process really is, but their presence allows the
traders to run, and consistently optimize, a large volume of
ad-buying activity. Mr. Banilevi, for instance, was running 33
campaigns when I visited Varick. A colleague, he said, recently
broke 40.
"Don't forget to use your resources," Varick Client Solutions
Manager Ali Weissburg said before the campaign setup got underway,
emphasizing the importance of the support surrounding the
process.
The data crew
Of all the groups, Varick's data science team is perhaps its most
critical. The group sits to the right of Mr. Banilevi and consists
of analysts with degrees in either math or economics -- or both.
There's Albert Klyachko, 33; Josh Suskin, 24; and Eamon Kavanagh,
26. These are the guys who build algorithms to predict the results
of football games for fun. (Yes, they actually did this.) And even
though they sit in an ad agency with badges and business cards,
it's hard to believe they're in advertising, rather than developing
software or building financial models on Wall Street.
They sort through campaign data, reams of it, pulled via API
from buying technologies and handed over in rows and columns with
information on each ad placement. The data guys collect information
like the site the ad ran on, the ad-tech it went through, how much
it cost, the location it ran in, when it ran and whether it led to
a conversion. They then run this wealth of information through
algorithms, coming up with optimizations that help traders like Mr.
Banilevi find what they refer to as "juicy pockets of
inventory."
