Goodway Group Prez Jay Friedman Fights The Good Fight Against Last-Click Attribution

AdExchanger: What are marketers getting wrong about attribution? 

JAY FRIEDMAN: There are so many things marketers lament, but improper attribution is probably costing them more than all of that combined.

So many marketers are still on last click or last ad seen. They’re operating in silos, giving credit to programmatic separately from search and social. It’s amazing how many different agencies can claim credit for the same conversion.

This isn’t a new issue. What’s keeping marketers from moving on from last click?

One thing that has been said to me more in the past year than ever before is: “To convince my boss, I need you to win at the wrong game first. Then we can talk about changing the metric.” I’m like “Wait, first I need to use steroids to hit home runs, and then we can tell the league?”

Marketing has always been complex. It’s not that it’s harder now; it’s that we can measure so much more. But easy is not the right answer. This is a really significant uphill fight. There are so many marketers who will hit whatever goal they want, instead of having a conversation about what’s right.

You work with agencies. What’s their role in pushing that conversation forward?

There are agencies that want to have hard conversations with their clients because they care. And there are agencies who say, “My client wants this, so that’s what I’m going to deliver.”

The holding companies have aggregated amazing intelligence, tools and capabilities, but typically, only the largest clients get that benefit. The $100 million marketer probably doesn’t.

What’s the state of transparency between agencies and clients today?

It has improved, but more by force than volunteerism. There are better tools and auditing mechanisms, especially at the largest marketers and holding companies.

One thing marketers don’t seem to understand is that agencies have to make some level of profit and will make that profit no matter how hard they’re hammered. The industry is having trouble having an honest conversation about the need to make a profit.

How do they get out of that cycle? 

A client should pay an agency like they pay their best salesperson: a base fee, which keeps the lights on but isn’t very profitable, with incentive-driven pay that can make them very profitable.

Speaking of trust and transparency, how are marketers feeling about programmatic?

Very few marketers are open-exchange advocates. There are marketers who don’t have an opinion. And there are marketers who are scared.

The verification and brand-safety companies have built a subindustry around scaring marketers into thinking the open exchange is bad. Of course, they’ve been told that by the people who have to find bad stuff in order to stay in business.

Are those vendors overplaying the issue?

There’s no question ad fraud is real. But any marketer who buys on a reasonably intelligent white list, using a reasonably intelligent IP black list, on a reasonably intelligent platform is able to minimize fraud to a point where it’s a gnat and not a real problem.

One of the reasons we want to drive lift is because bots are outstanding at vanity metrics. But if it impacts scale and the ability to deliver or it impacts the vanity metrics clients are hooked on, agencies still are reluctant to rip off the Band-Aid. The agency won’t say, “We have X% fraud,” because it makes it look like they were doing a bad job.

But instead of marketers saying, “You did a bad job,” they should say, “You found and fixed this, thanks.”

Are marketers unfair to their agencies? 

Because of the mistrust, marketers play a game to make sure they’re protected. The treatment devolves from there. Agencies realize they’re not fully trusted and act a certain way, and marketers counteract.

You’ve written about the shift to first-price auctions. What are the implications for buyers?

We went from where a buyer could bid $10 and end up paying $4.01, to where, in probably 50% to 60% of auctions, a buyer can bid $10 and pay $10. The implications are profound.

I heard a lot of horror stories when the transition happened about campaigns being set and forget and prices going up 15% to 20%. All of a sudden, we’re back trying to underbid, which means we lose out on traffic we would’ve wanted.

We built a tool that bids on the probability of a conversion and what we think we can get the impression for in the market, so our costs have not changed. The only way to bid now and in the future is algorithmically based on those inputs. Any manual bid setting is going to have tough consequences.

How is Goodway approaching the advanced TV space? 

The chatter around advanced TV has picked up dramatically. The spending has picked up less dramatically. If AT&T and AppNexus built a line of code toward unifying [their platforms], I’d be impressed. Heavy exploration and integration still need to happen.

But it’s a tremendous opportunity, because Google and Facebook don’t have a better chance of figuring that out than anybody else.

This interview has been edited and condensed.

This post was syndicated from Ad Exchanger.