What Is a 'Next Generation Agency'? Q&A with Andy Cocker & Martin Kelly, Infectious Media

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A ‘Next Generation Agency’ epitomises the changing face of the agency model. Agile, lean, independent, with proprietary technology, that doesn’t necessarily fit the ‘agency’ label. Infectious Media are the embodiment of this model. ExchangeWire meet with Andy Cocker, co-founder & COO, and Martin Kelly, co-founder & CEO, Infectious Media (both pictured) to uncover the secrets to their success.

Martin Kelly and Andy Cocker founded Infectious Media in 2008, having both come from different sides of the industry. Cocker hails from the commercial side, having started as a TV buyer at Zenith in 1994. Kelly came from the planning side, starting his career in print. Both moved to online in 1999, at the start of the digital revolution, and were two of the first online planner/buyers in the country.

Why is this relevant? To understand where they’re going, it’s important to know where they’ve been. They were different times in the late 90s/early 00s. “We were making it up as we went along”, said Cocker. They were buying digital using the same methods as traditional media – all deals were made over the phone and IOs were the unit of currency. It quickly became apparent that it wasn’t scalable. There were no third-party ad servers to centralise distribution to publishers. According to Cocker, it was so manual, it almost wasn’t worth doing.

In 2007, Cocker and Kelly felt they were in a position to be able to run their own business. This mutual feeling coincided with a time when there was an industry fascination with new, emerging, and disruptive technologies. Yahoo had just bought Right Media for a sum of USD$680m (£514m). It was just an exchange where you would log in and buy your media in an auction model; it was still very manual, but it was disruptive technology.

Cocker and Kelly wanted to be disruptive. They saw an opportunity in emerging technology. In their many years in the industry, they had seen and experienced it all. They believed the shift that was happening in the way display media was traded would require specialist skills and technology – and they wanted to deliver it.

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Martin Kelly

So, what sets Infectious Media apart from the traditional media agencies in which they had built their careers? They believe it’s their ability to adapt. Both know firsthand the difficulties for established media buying agencies to adapt to an auction model. According to them, media agencies, to this day, still find it difficult. They were built around an infrastructure of buying power and the ability to negotiate, to buy inventory as cheaply as possible. However, paid search came along and these agencies were no longer able to leverage scale in the auction. The negotiation and buying power they had developed as part of their core model meant nothing. This was a lightbulb moment for Cocker and Kelly: “Processing power is the new buying power.”

They saw an opportunity to develop a business to house the skill sets and infrastructure needed to successfully buy media in a new world that doesn’t revolve around negotiation power. The ‘agencies of old’ have the people, but little understanding of data and technology. “We always laugh about the maths tests”, said Kelly. “‘Calculate 7% of 7’ was the defacto maths test within agencies”, he said, referencing the fact that technology just wasn’t in the DNA of those businesses. According to Cocker, what was needed was the right tech, people, and data infrastructure, at scale – a completely different model from the ‘agencies of old’. While they didn’t have a name back then, they had a firm belief that all addressable channels would be transacted programmatically, and they saw this as their opportunity to start a new programmatic business from scratch.

According to Kelly, to be built for programmatic means more focus and comfort in owning and building your own technology: “We learnt from experience that operating platforms are inflexible and built for the lowest common denominator.” So, success for them meant growing your own. Around 50% of Infectious Media sits within engineering, data, and analytics, with the other 50% sitting within traditional agency functions. “Our clients perceive us to be an agency”, said Kelly, “but we have a different DNA.”

So, how do Infectious Media address the challenges that are faced with legacy advertiser perceptions of programmatic? According to Kelly, there was a real disappointment from advertisers who invested in programmatic early. It was treated as a way of buying the same ad space with the same campaign objectives in a different way – there was no differentiation, except that you bought over a platform, rather than over the phone. “To this day, clients see a gap between what’s being delivered and what’s actually possible”, said Kelly. “We were not trying to force feed old media into our business model – you can’t treat programmatic as a broadcast channel.”

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Andy Cocker

Having opened a US office in April this year, with a Singapore office opening this Autumn, Cocker and Kelly have found that their model lends itself well to international advertisers, as programmatic allows centralisation. It gives advertisers with central marketing functions or technology platforms the control to operate in multiple markets. In their experience, advertisers with such infrastructure have been disappointed with the fragmentation within traditional media agencies, where local markets are briefed with different plans and no cross-border consistency exists. Infectious Media use their technology and reporting platforms to execute across all markets, with standardisation that is globally scalable.

When asked if their clients (which include Expedia, Adidas, John Lewis, and Experian) tended to be more digitally structured than those you would find working with a traditional media agency, Kelly said their clients are looking for a new model: “They are looking for more control and are pushing programmatic hard, as they seek answers from it.” In fact, Infectious Media often find they aren’t pitching against traditional media agencies; they’re pitching against DSPs or against the option of moving operations in-house. For many clients, agency trading desks at holding-group level just aren’t the right answer, as there is a lack of control and it sets them up for disappointment.

What about the technology powering the industry? There are a lot of technology platforms out there; but, in Cocker’s opinion, the ecosystem is becoming more closed, not more open. Referencing Amazon, Google, and Facebook as walled gardens, Cocker said a one-platform solution isn’t enough for a traditional media agency. Infectious Media’s clients expect to access all inventory across all environments – a need for any global advertiser, but it requires multiple platforms.

Workflow and resource for planning and buying across multiple DSPs and then combining that data in one place to make centralised decisions is challenging. A lot of the technology developed by Infectious Media is designed to streamline the process of working across fragmented demand-side technologies.

Their operating system, Impression Desk, is a combination of multiple tools, bringing optimisation, analytics, workflow, billing, reporting, and finance into one place. It’s also connected to four data management platforms and seven demand-side bidders, as well as their proprietary bidder; which is used as a default as it can perform many operations the others can’t. Infectious Media also work with their clients to build custom algorithms and proprietary measurement and optimisation technologies, which allow them to measure “way beyond last click and last view”, according to Cocker.

I was given the chance to experience Impression Desk for myself and it is a powerful platform, the holy grail of workflow automation. Writing from experience of working across multiple platforms within a traditional media agency, the ability to be able to pull all of those functions into one place means that resource can be effectively invested in adding value for clients, rather than admin. It’s not a blackbox, everything is transparent, easy to use, and clients can access whatever information they require. A perfect fit for a client demanding customisation and increased control.

But how can you help to evolve an advertiser with a legacy infrastructure, used to working with legacy media models, still operating with 30-day post-view measurement? According to Kelly, it’s about how clients organise themselves: “Clients have no idea where their data sits, but big organisations change. The senior top dogs are now involved and they weren’t two years ago. We were dealing with account managers, or heads of marketing, but we have less of that now. It’s becoming more of a C-level conversation.”

“It’s very common”, continued Cocker, “that the first six months of a client relationship involves transitioning away from short-term, legacy attribution models towards a long-term fit for programmatic.”

So, what does a typical Infectious Media client look like? According to Cocker, they don’t have a typical client profile, but many of their clients manage their own PPC in-house. These clients may have tried to bring programmatic in-house too, but have found it to be very complicated. “It’s not easy”, said Cocker, “as you need things you don’t think about: who will build your black list? How do you decide upon fraud technology? It requires a massive amount of internal expertise and everyone in the industry sounds the same.”

When asked what makes them a ‘Next Generation Agency’, Kelly replied, “everything”. However, what’s most different is their technology and their comfort with owning, operating, and building it. “Agencies are good advisors to clients, and that will always remain so”, said Kelly, “but this space is different and it takes different techniques to make it work.”

Cocker continued, “Our technology gives us compelling differentiation over traditional media buying businesses. It’s all very well thinking about starting down that road, but if you don’t have control over technology to execute that start, it’s a waste of time. The smartest stuff we do is executed through our own bidder. Owned and operated makes things possible, that wouldn’t otherwise be, as you’re not in control of the third-party vendor roadmap.”

“You must take a position on technology”, said Cocker. “Don’t own and operate all of it, but help clients to navigate the complex and fragmented ecosystem. The barriers to entry for building tech are lower than ever. Five years ago, you needed tens of millions of dollars to support the infrastructure to run it, but now that computing power is available at a fraction of the price. It’s quite an old view to think it’s prohibitively expensive to set up.”

According to Kelly, the advertisers they work with see the opportunity of customising the integration of data into their ecosystem. That investment in tech resource on the advertiser side allows Infectious Media to do what they do best.

Are Cocker and Kelly seeing new competitors come onto the market with similar propositions? According to Cocker, traditional players are reinventing themselves, but there are a few examples of businesses similar to Infectious Media, which he referred to as ‘native programmatic businesses’. “We are unique in the way we present ourselves; we are solely advertiser direct focused. This was always our intention, but it wasn’t always true. We were a bootstrap business and we took what we could get; but in the last four years we’ve been focused on direct advertisers and we are comfortable in this space.”

When asked what was next for programmatic and Infectious Media’s focus, Cocker said there is a lot of talk about a new model: “This is just online, but quickly, within the next 10 years, this infrastructure will be powering all forms of media buying.” According to Cocker, Infectious Media are definitely going in this direction and they are going as fast as those media channels are evolving. They have already run some activity with programmatic audio and are talking to lots of vendors about OOH and TV.

Infectious Media are a success story with ongoing growth. Currently a team of 80 people, they have 30 heads open, five of which are in the US and five in Singapore; both markets that are fuelling growth. Their client-led globalisation is the untold story that’s been driving their business forward. Their ambition is not to be a business built to service thousands of clients. They consider themselves to have a much more boutique offering, servicing data-centric, innovative, international advertisers, which they can properly integrate into their technology. Their clients are top-tier, multinational businesses, wanting customisation, and are excited by what Infectious Media have to offer, which, in turn, makes Infectious Media a very exciting player in this market.

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