Best of the Week: Magical techno-beans in the Augean stable

[View web version]( BEST OF THE WEEK And another thing... Welcome to Best of the Week, mostly written in the lobby of Singapore’s Oasia Hotel. Today’s writing soundtrack: some remarkably bland hotel lobby music; James Blunt seems to be on repeat. I’ve been spending a lot of time on planes lately, more over the last 12 months than at any other point in my life. Springsteen on Broadway, family celebrations in the UK and regular trips to our Singapore office add up. It was still something of a surprise though when I received a compelling loyalty marketing email from Qantas back in September. It informed me that over the previous year, I’d flown 185,000 kilometres with them. And I reckon I’ve done another 40,000 km since then. So I’ve got to know my way round the box sets option on the inflight entertainment system pretty well. My favourite new discovery is Succession, but more on that later. An old friend I’ve been revisiting is the Silicon Valley box set. On my various flights , it’s been a delight recapping this HBO sitcom about the vanities and absurdities of US tech giants and startups. One of the long running gags across the five series is that every tech founder, big or small, claims at various points to have the same mission: To make the world a better place, no matter how absurd or unrealistic this aim is next to what their company actually does. Whether using canonical data models to communicate between endpoints, or using algorithms for consensus protocols, they’re not in it for the dollars, they’re in it to make the world a better place. Honestly. Whether that’s actually true though is the digital media world’s big question. Do they... do we... actually help make the world a better place? On Wednesday morning a one-question survey question popped up in my Facebook News Feed: “Tim, we’d like to do better. Please agree or disagree with the following statement: Facebook is good for the world.” I struggled how to answer that simple question. For one thing, those who know about such research argue that there’s little value in directly asking people what they think about brands, because making the consumer aware they are being asked will taint their response. Nonetheless, I tried to answer. On the one hand, Facebook is the main way I find my news and hear from my friends. It’s the app I reach for in that five seconds I’m waiting to cross the road or for the lift to arrive. On the other, there’s that whole tainting of western democracies and devaluation of the media ecosystem thing. Tricky, isn’t it? Although it’s only three days ago, I can’t actually remember what I finally opted for in the moment of answering that question. I think it was the wimpy option of “neither agree nor disagree”. But after getting that survey message two more things happened. First, one of the pleasures of being in Singapore is the availability of the print edition of the New York Times international edition. The NYT broke another big Facebook story this week. Under intense political pressure last year, Facebook had hired a consultancy to conduct what amounted to dirty tricks against its critics. That allegedly included linking critics to financier George Soros in a strategy that had unpleasant undertones of tapping into anti-semitic conspiracy theories. It also involved dragging Apple into Facebook’s privacy woes. This [dirty tricks claim]( was a big story, syndicated globally and followed up by news outlets across the world. On Friday morning, the NYT article was prominent in the Fairfax mastheads and republished in a double page spread in my morning copy of The Straits Times. And then I had a moment to ask myself a tough question about Facebook. Yesterday, I opened my iPhone Screentime app. To my horror and shame, over the last seven days, I’ve spent four hours and 46 minutes on the Facebook app. That’s time I won’t get back. And it’s not really something I can blame Facebook for. That wasteful behaviour is mine. A while ago, I had coffee with a former senior Facebook executive. He told me he’d deleted Facebook from his phone because he didn’t like the way he was using it, incessantly checking his News Feed. The sick feeling I have in my stomach as I contemplate how much time I’m wasting means I’ll be giving serious thought to doing the same app deletion. What I can tell you for certain is that when I head for my long-anticipated five week Christmas holiday next month, I’ll be taking it off my phone. And I’ll have to think very carefully about whether to put it back afterwards. I’m not sure it’s making my world a better place. Programmatic paranoia But when I think of Silicon Valley, the question about whether we’re in a better world isn’t so much about Facebook, but the wider digital publishing economy which is of course now intrinsically underpinned by programmatic advertising. Arguably most big technologies over the years have advanced humanity. The wheel, the printing press, electricity all had a positive impact on economic activity and standards of living. For digital media, the economic ledger may be a bit less easy to assess. For media owners, I think the rise of a programmatic-driven ecosystem been a negative. For media agencies, I think the jury is still out. And for advertisers - who use it well - the story may be a more positive one. Programmatic was in my thoughts this week because of [a guest post written for us by SMI founder Jane Ractliffe](. It’s a nuanced piece, which I recommend if you’re interested in getting a picture on what’s really happening in programmatic in both Australia and the US.. In the article she lays out the evidence that spending on programmatic ads - or at the very least programmatic’s share of the digital dollar - may have peaked. Wearing my media owner hat, It’s been a type of digital advertising I’ve never believed would make my own world better place, even as its proponents tried to persuade us otherwise. I once had a colleague who occasionally used to head out to sell ads, and triumphantly return with magic beans instead. He wouldn’t actually trade the family cow for the beans of Jack and the Beanstalk, but rather for magical techno-beans of one variety or another. He was forever returning with exclusive access to a social media monitoring tool we didn’t need or new video platform that would make our lives more complicated. On one occasion, he came back from meeting the boss of a mobile ad company with what he thought was good news. He’d discussed a deal to outsource the publication’s entire mobile inventory. It would cost us nothing, and we’d get a CPM of $1. Because we were not currently selling our mobile ads this was all free money, he explained. But the market was used to paying us a CPM of more than $70 for our desktop ads, I pointed out. Was it entirely a good idea to get our customers used to paying $1 instead? How would we make a living when our mobile traffic was our biggest audience? Fortunately, it was a battle I won. To this day we don’t carry programmatic ads. Being a specialist title, with a defined industry audience which advertisers were willing to pay a premium to reach, it was an easier decision for us than most. It was less straightforward for others. Looking back, its rise was both inexorable and inevitable. For media owners, initially programmatic offered an efficient way to sell remainder inventory that would otherwise have gone entirely unmonetised. For media agencies, it promised (and still promises) to bring efficiencies to the buying process. And for advertisers, it offered not only a precise means of targeting a specific audience, but of doing so at a much cheaper price. Not that it entirely worked out that way of course. Soon, media owners found they were bidding downwards against themselves. I remember chatting to a sales person who shared her exasperation that a client was demanding a CPM of $5 for premium inventory. How on earth does he expect you to run a business on that, I wanted to know? He didn’t care - that was what programmatic had taught him the market value of digital advertising was. The argument that it was in his own interest for the publisher to still be there next year didn’t have much impact. Worse yet, media owners began to see fraudulent accounts selling ads which didn’t actually run on their sites, but siphoned off their revenue like they did. Infamously, a couple of years back the FT temporarily switched off its programmatic offering as an experiment, yet some apparently reputable exchanges continued to offer bidders FT inventory. Meanwhile, some media agencies began to believe that there was a greater prize to be had then mere efficiency. If they could insert themselves into the chain then they could clip the ticket an extra time (or two) along the way. It’s not an unreasonable assumption that the only way global holding companies maintained their margins midway through this decade was by indulging in less-than-transparent practices in this regard. As marketing consultant [Al Crawford put it in an excellent guest post]( for us this week: “Big data has radically changed our world, but zero wastage and unparalleled accountability have not transpired. Indeed, the digital supply chain is more Augean stable than transparent marketplace.” In turn, the bigger advertisers began to suspect that their agencies weren’t being straight with them. They tightened up contracts to specifically outlaw such practices. Some agency groups got cute and tried to quarantine such behaviour within new trading arms, but most saw where the wind was blowing and - as one person described it to my recently - “de-risked” their behaviour By an amazing coincidence, the media agencies’ reported margins seemed to shrink, even while they denied the behaviour had been occurring in the first place. And these digital ads were often not as effective as the advertisers had hoped. Marketers began to worry about brand safety when their ads ran across blind ad networks. And they began to wonder whether humans were even seeing them. Which brings us pretty much up to the present. There’s no going back to the pre-programmatic ecosystem. And publishers can’t easily stand their ground on price when there’s always a cheaper deal available programmatically elsewhere. All views may not be equal, but it’s still a tough sell. And of course, it’s not as if there are armies of ad sales staff left in any case. In Yuval Noah Harari’s excellent book about the history of humanity, Sapiens, he talks about how humanity has stumbled into a trap of its own making. We started growing crops. Instead of a laid back hunter gatherer lifestyle enjoyed by small tribes, humanity became engrossed in the back breaking labour of farming those crops. Flexibility of movement was reduced and while the additional calories enabled these tribes to grow, they had to work harder and harder to do so. It happened so gradually that nobody lived long enough to notice what was happening in any one lifetime, but within generations there was no going back. But did the rise of farming make the world a better place? Not according to Harari. Similarly, there’s no going back with programmatic. Instead the least bad option (and it might even turn out to be a good option) is to try to make it work better. Using technology (I hesitate to use the blockchain buzzword…) to create a more transparent trading chain will at least help ensure the publishers get a bigger slice of the advertising revenue that is rightfully theirs. And it’s worth acknowledging that the biggest potential winners are the brands. On Thursday night we ran [the Mumbrella Asia Awards]( for the fifth time, at the Intercontinental in Singapore. It was our biggest awards in Singapore yet and the first time in Asia we lost control of the crowd noise. I couldn’t have been happier to break through the market’s typical polite silence at events and finally have an atmosphere. Writing this piece was already on my mind as I sat on Table 13. I wasn’t planning on professing much love for programmatic. But as each winner walked onto the stage, the voiceover explaining the work began to cut through over the hubbub. Example after example, many of them featuring media agency PHD as it happens, came up where programmatic had been used in a smart way to deliver well targeted ads for clients. It can be done. Media agencies do their best work when they’re clever planners first and buyers second. And the hope for programmatic to reach its potential will come when it similarly becomes a planning tool first and buying tool second. In that case, brands will be winners by getting better targeted and viewed ads at a good price. And media agencies will do okay through that simplification of the buying process - particularly when programmatic buying rolls out to all the traditional media channels. As for the media owners, I’m really not sure though. Can programmatic make their world a better place? For now, put me down as “neither agree or disagree”. Succession obsession As I mentioned earlier, my other inflight obsession is Succession, the tale of a dysfunctional American global media family. Although it went on air in the US back in June, Foxtel, which has the broadcast rights to the HBO series, has been sitting on it. The similarities of the drama to Rupert Murdoch’s family, has triggered plenty of conspiracy theories that Foxtel is trying to bury it. It will finally air on Showcase from December 6. Luckily for frequent flyers, Qantas also has the rights. For media lovers, I heartily recommend it. It’s created by Jesse Armstrong, who wrote the British TV comedies Peep Show and The Thick of it. Almost eight years ago, I reported how [buzz was growing around a film script Armstrong had written called Murdoch](. It appeared on The Black List, an annual Hollywood round-up of the most interesting film scripts not yet in production. According to the 2010 synopsis: “As his family gathers for his birthday party, Rupert Murdoch tries to convince his elder children to alter the family trust so that his two youngest children by his newest wife will have voting rights in the company.” Murdoch never did get made, and Succession, which stars Brian Cox, is just fictional enough. But the synopsis of the first episode sounds kinda familiar: “On his 80th birthday, media magnate Logan Roy, whose imminent retirement was thought to be a given, shocks his family by announcing he's staying on indefinitely as CEO of Waystar/Royco. The news shatters his son Kendall, the heir apparent who's in the midst of negotiating the purchase of a digital-media venture. Tempers flare as Logan's other children - Roman, Shiv and Connor - raise objections over Logan's intentions, including his desire to change the way his eventual successor will be chosen.” In the fictional universe, this US media titan was Scottish born, rather than Australian. But there are still three adult siblings. Instead of Lachlan, James and Elisabeth Murdoch, it’s Kendall, Roman and Shiv Roy. No spoilers, but it’s enjoyable. And although written as a drama, there are some subtle comedic performances. It will be interesting to see how much promotion Foxtel gives it. Four Corners, no hiding place And finally, I can’t let the week go by without mentioning [Four Corners’ terrific piece on the ABC’s own management disaster on Monday]( night. Having streamed it to my Singapore hotel room that night, the program then went past me twice on the Australia Plus TV network. Each time I got a bit more out of it, ands thought a little less of both Michelle Guthrie and Justin Milne. Neither came out well. Guthrie failed to convince that she deserved to keep her job as managing director. Milne seemed to have assumed being ABC board chairman was just like the realpolitik of running an actual company. Neither one seems to have learned anything about themselves. Doctoring the podcast Which is almost where I leave it. Three bits of housekeeping: First, if you’re involved in the marketing of media brands, you should be at [the Mumbrella Entertainment Marketing Summit this Thursday](. I’m particularly looking forward to hearing from Sally De St Croix, the woman in charge of marketing Doctor Who. Second, [this week’s Mumbrellacast]( is now available. I haven’t heard it yet myself. I think I’ll listen to it by the hotel pool shortly. I have a suspicion I know what the team will have to say about Ultra Tune’s Charlie Sheen stunt. And third, do check out the program for our final marketing summit of the year on December 6 - which is sooner than you’d think. It’s our [Luxury Marketing Summit](. Hear from Ferrari and find out about the psychology of high net worth consumers. That lazy morning by the pool is in prospect, ahead of QF2 back to Australia tomorrow. After that, I’m looking forward to tucking that passport back in a drawer for a good couple of months. I welcome hearing from you at tim@mumbrella.com.au (and I apologise to those who were kind enough to write recently who I haven’t replied to yet). Our agencies writer Abigail Dawson - abigail@mumbrella.com.au - will be running the weekend newsdesk. Have a great weekend. Toodlepip... Tim Burrowes Content director - Mumbrella Mumbrella | 46-48 Balfour Street Chippendale NSW 2008 Australia [Unsubscribe](| [Manage Subscriptions]( [Facebook]( [LinkedIn]( [Twitter](