Web Industry Pursues Efficient Frontier


NEW YORK If there's a symbol of the inefficient processes of Internet advertising, it's the fax. The Internet has long promised advertisers laser-focused targeting, measurable results and sophisticated brand integrations. But much of the business still relies on human-intensive tasks, with the industry run by media plans built on spreadsheets, and buys done through phone calls, e-mails and fax machines.

The problem is at the heart of several recent moves in the online ad industry to use technology in place of human processes. While few believe advertising will cease to be a people business, it's clear automation is needed to deal with the complexity of digital media -- particularly as clients scrutinize marketing budgets in a tough economic climate.

"It's way too hard to buy display advertising," said Michael Walrath, svp at Yahoo!. "It costs too much and there's too much time involved. The reality is that placing a buy across 20 properties is hard, 200 impossible and 2,000 even more impossible."

Yahoo! last week introduced a new ad-management platform, Apt. The Web-based system is designed to take the headaches out of buying, selling and measuring digital advertising by connecting agencies, publishers and networks in a single system. The effort, along with other moves by competitors and agency groups, are bids to reshape the Internet advertising landscape, potentially changing how publishers sell their inventory and agencies operate.

Yahoo! is pitching publishers to use Apt as a way to supplement the efforts of their sales forces, with the promise that they'll get higher prices for their inventory than they would with the currently used tactic of letting networks sell what their sales forces haven't. Publishers will also be able to sell ad campaigns that target their users when they are on Yahoo! properties, potentially further expanding their reach.

Meanwhile, agencies are betting on machines as part of a larger effort to reinvent the way they do business. For all the talk of the "agency of the future," it's clear that technology will be a critical component in replacing low-value work, freeing up agency staff from mundane tasks to work on deep integrations and high-level brand strategy.

"You've had so much growth in digital, you haven't had the underlying infrastructure to support it," said Chris Vollmer, partner and practice leader for U.S entertainment and media at Booz & Co. "You've just thrown people at it. That's not sustainable."

David Kenny, managing partner of Publicis Groupe's VivaKi, believes solving the Web's plumbing problems goes hand in hand with reinventing the agency business. At the IAB MIXX Conference last week, he laid out the bare facts that it takes Publicis 44,000 employees to generate $5 billion in revenue. In his estimation, 40 percent of the work at Publicis shops takes place doing humdrum tasks.

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