ECI was at DMEXCO in Cologne this week: from ethical hackers to in-housing, here’s what we learned.
Important questions and lots of answers
ECI joined thousands of fellow ad industry professionals at DMEXCO in the German city of Cologne this week. The digital marketing and advertising trade fair and conference has become a key feature on advertisers’ calendars as they seek to understand and capitalise on the countless opportunities – and avoid the pitfalls – offered by ad tech. There are so many questions on these people’s minds – should I bring my ad tech in house? Who are the right suppliers? How can I best leverage my company’s proprietary data? If the answers to these questions are anywhere, it’s at DMEXCO – although you have to filter out a lot of noise on the way…
We came away from our two days at DMEXCO with two big takeaways. The first is how cluttered the marketplace is and the (perhaps related) knowledge gaps, particularly among those who should really know better. The second – quite possibly a result of the first, as we’ll discuss later – is the debate around inhousing ad tech versus outsourcing it.
A cluttered marketplace and knowledge gaps
DMEXCO is crowded, noisy, hot and very exciting – much like the industry that it showcases! As we found while we were there, the more you learn, the more you realise just how much there is to learn, and the effort required to keep up with the latest developments in online marketing. As is so often the case in the digital world and particularly the digital marketing industry, buzz words and phrases were swirling around – ‘performance marketing’, ‘attribution’, ‘intelligent’, ‘data’, ‘personalisation’ and ‘disruption’. Our old friend ‘email marketing’ is still up there, with general consensus that it remains an important tool. The new phrase on everyone’s lips – one to watch out for – is ‘ethical hacker’, the information security experts who identify vulnerabilities that non-ethical hackers could exploit: critically important in these times of cyber threats and security breaches. We observe, with a wry smile, that DMEXCO is perhaps the only place where the words ‘AI’, ‘machine learning’, ‘algorithm’, ‘performance’ and ‘optimisation’ can be used in the same sentence unironically.
Despite this lack of irony, there was some healthy scepticism at the conference. Taking to the stage in the event ‘The next mission in marketing’, Philipp Markmann talked about the ‘absurd level of complexity’ in the media market, with far too many services to choose from, meaning that advertisers are overwhelmed by choice. Is this because publishers and vendors are targeting and talking directly with CMOs rather than focusing on agencies, who traditionally identified the best solutions on their clients’ behalf?
Perhaps this is partly down to surprisingly low levels of knowledge in the industry. A common opening line from exhibitors at DMEXCO was “do you know a bit about ad tech?” We raised this with one of them who explained that a large proportion of attendees had a lower than expected knowledge of ad tech and digital advertising. AppNexus, one of the largest ad tech suppliers which was recently sold for $1.6bn, was mistaken for an app creator by more than one attendee, while one ad tech exhibitor said that they met with a media agency rep who didn’t know the difference between a first and second price auction, let alone the implications of each. There is evidence that the struggles, illustrated here, to keep up with online media markets are leading to irresponsible media buying, ultimately resulting in advertisers taking matters into their own hands by bringing their activity in house.
In-housing or outsourcing?
It was no surprise, therefore, that the in-housing of media buying was the subject of many of the events and discussion at DMEXCO. It’s being driven by a feeling that media agencies need to be doing more to earn their clients’ trust, but also by the understanding that marketing and sales in general, and online marketing in particular, should be closely integrated with a brand’s core business – especially when it comes to technology and strategy. Philips’ global head of digital marketing Blake Cahill, speaking at an event entitled ‘Brave the seismic shift – the future of creative digital consultancy’, recommended a mix of in-house and agency, with the latter focusing on media strategy and planning. This consultancy role would allow them to increase their fee – a glimmer of hope for agencies alarmed by clients taking activity in house. Meanwhile, in ‘The next mission in marketing’ event, speakers concluded that, in order to thrive into the future, agencies need to be experts, strategic and proactive thinkers, and reduce their complexity. Interestingly, as we reported last week, WPP’s new CEO, Mark Read, announced this as part of his strategy to future-proof the group.
Media and creative agencies were notably quiet at DMEXCO – is that because of the problems they are having keeping abreast of developments in the space? Advertisers and publishers, as well as Google and Facebook, were prominent on the stages, while ad tech providers and publishers dominated the exhibition floors.
But that’s not all
Of course, discussion at DMEXCO also went far beyond whether advertisers will move their tech stacks in house and what that means for their agency partners and others. To succeed in digital advertising, marketers must ‘focus on the real consumer needs, understanding their behaviour’, as Alexander Ewig said in ‘The next mission in marketing’ talk. Rahmyn Kress, Henkel’s Chief Digital Officer and Debora Koyama, Mondelez’s CMO, also spoke about what success looks like in digital marketing at the ‘Future skills in brand marketing: how to transform into a modern marketing department’ event. They agreed that the FMCG sector is lagging behind when it comes to digital marketing, and that they – and all brands – must focus on the problem they want to solve, rather than the tools at their disposal. Kress and Koyama also concurred that data must be at the very heart of digital marketing; this is indisputable, but there was also a feeling across DMEXCO that advertisers should seek a balance between hard data and a more human gut feeling.
A final observation has to, of course, come from Google. Their space on the exhibition floor was colourful, eye-catching and designed to look like a garden, complete with a wooden fence around the perimeter. A witty take perhaps on how Google and fellow tech giant Facebook are often called walled gardens for their reluctance to allow third-party tracking? We mentioned this comparison to a Google rep outside the fence, who laughed and then gave a very reasonable explanation for the fence: some advertiser heavy-weights were inside, making important deals with Google. Funny that in our world of AI-optimisation, data driving and agile bidding, business is still done over coffee and sealed with a handshake.
Thumbnail image: Helene Kruse
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