Ads industry shake-up will be programmatic — AOL’s Mike Treon (video)

23 Jul 2015

AOL's VP of product strategy Mike Treon: the onset of programmatic will bring about a level of upheaval not seen in the advertising industry since the internet arrived

The 21st-century advertising industry is already unrecognisable from the classic age of the 1960s as depicted in Mad Men. But programmatic will drive a whole tsunami of change requiring different skills and mindsets, says AOL’s VP of product Mike Treon.

Treon, who was listed recently in the Advertising Age “40 Under 40” list 2015, is a driving force in AOL’s push towards programmatic revenue.

AOL’s 170-strong operation in Dublin is in the vanguard of a major shift in the online and media giant’s transformation of its ad delivery systems. AOL was recently acquired by US telecoms giant Verizon for US$4.4bn.

The Dublin operation has the distinction of being one of the few online advertising giants in Dublin for whom the bulk of its workforce is focused on core development.

Based in Chicago, Treon has global oversight of AOL’s transformation towards programmatic and he believes the move to programmatic will favour players with scale.

“Programmatic is the enablement of a lot of the trading and execution that we do with media, but leveraging technology — what can we target, who are we going after and in real-time. How we decide in real-time, which media properties and leverage that for optimisation and use that for the speed of, I hesitate to say trading, but really the execution of media.”

Just as technology has disrupted traditional industries like hotels (Airbnb), taxis (Uber) and music (Spotify), programmatic will lead to the biggest upheaval in how advertising is bought, sold and executed.

Powered by analytics, future ads strategists will deploy entire campaigns across websites and digital platforms like TV in one click, controlling the entire experience on a dashboard.

Analyse this

The current advertising industry involving agencies and creatives will never be the same, Treon says. Survival will favour those who embrace data analytical skills.

“I think if you look at even what happened in the finance industry, folks like Goldman Sachs who could use real-time technology and still be creative and consultative and that’s what we are seing now. Folks are transitioning from being relationship oriented to being data oriented and those relationships both on the sales and client site are driven by who’s bringing the intelligence to the equation and who can affect change leveraging that data.”

For AOL, which owns media properties like the Huffington Post and Techcrunch, balancing programmatic with the content consumers want requires creating entirely new toolsets and dashboards that orchestrate content and revenue simultaneously.

“When you look at how that ecosystem is circular, how audiences consume media and how media has monetised on behalf of the publisher, it is important to understand those relationships.

“We are focused on both sides of that but delivering really good content to the consumer is expensive and costly but making that worthwhile for the publisher and making it efficient to drive deals for publishers and also deliver results for advertisers is what is going to make it sustainable.”

Programmatic for the people

AOL is ramping up programmatic, in particular in Dublin. I ask Treon how is that is changing the organisation?

“I think it is very pervasive; our culture, our hiring and prioritisation of where we are focused from a strategy standpoint. It underlies every strategic initiative. If you look at mobile or video, everything has to have that programmatic component. Even something like the Huffington Post and our other content properties: the focus is always how can we leverage programmatic to drive greater monetisation and leverage throughout.”

He believes programmatic advertising will become so pervasive in advertising that it will be the industry standard.

“All the platforms you mentioned [Google, YouTube, Facebook, Twitter] rely 100pc on their scale and you really can’t scale without programmatic or without being able to leverage programmatic to get the scale out of those platforms.

“I think we are looking for ways of applying it to really great content and creative and Facebook and Twitter are applying it to their social and engagement platforms. It’s going to be a tool that manifests itself in a lot of different ways for both marketers and consumers to interact with those messages, whatever form they take.”

For the advertising industry, Treon says new kinds of people and skillsets will be required.

“That’s part of what the struggle is, in that it is not moving faster. You deal a lot of times with legacy organisations and siloed decision making and data control. Programmatic is pushing that away to break down silos, make central decisioning and budgeting and really requires different roles.

“The mixing of marketing roles with technology roles and having people who can really span data analysis and marketing intelligence, it is really a new skillset that is driven by this.”

Programmatic will remove a lot of digital clutter

AOL’s efforts, including those of its 170 workers in Dublin, are bent towards creating a single toolset that will make it easy to manage advertising programmes in real-time.

“Our goal is to really build a platform that supports this ecosystem, that supports an advertiser or marketer’s interaction with content and advertising. We are doing it in a way that is bringing together lots of different assets we’ve accumulated at AOL over the years.

“We are doing it in a way that addresses a lot of the complexities that are in the market. We could call it an operating system but it is really a simple collection of tools that are open. We know that everybody is not going to use every one of our tools but we want to make it interoperable and we really think that is addressing some of the over-complexity and confusion that is caused by technology right now.”

Is the media ready for more upheaval?

As the tech industry, especially AOL and Google, rushes to embrace programmatic, traditional media like TV and print and news websites that aren’t part of the scaling picture could be left behind.

I ask Treon if programmatic is a tsunami force that could transform media forever?

“Yeah, I think so. It is definitely going to take different forms with different channels and platforms.

“If you go back to that core concept of it being about some sort of automation and addressability and speed of insight to action, really wrapped in technology, it’s not going to be the same for linear television as it is for display ads and outdoor media and radio but those concepts are going to be pervasive throughout

“We are leveraging the technology, targeting identity and really good measurement around media to effect change and make it effective for all parties.”

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years