Starbucks in NYC
LESSONS LEARNED WHILE SEARCHING FOR A STARBUCKS IN NYC
It’s a humid Wednesday morning in Manhattan, and I’m walking up the seemingly endless flight of stairs from the subway stop on 53rd and 7th. Upon reaching the summit, I begin what I hope to be a very short stroll to the Starbucks on 55th and Broadway. I’ve got 8 minutes before I’m due to meet Devin Whitaker, Starcom USA's Programmatic Manager for Samsung, for coffee to discuss the role of programmatic buying in TV advertising.
3 minutes pass and I’m at the corner of 55th and Broadway, but there’s no Starbucks. I cross the street three times before panic begins to set in, as I have neither my work email nor Devin’s number on my phone. With no tangible action plan, I decide to swallow my pride and walk into a nearby building to ask for the location of the closest Starbucks. The doorman points me one block down to 55th and 7th. I arrive at the Starbucks at 9:30AM on the dot with the expectation of seeing Devin waiting inside upon my arrival. I’m a bit surprised after 8 minutes with no Devin in sight.
A couple more minutes pass and finally Devin walks through the glass door, but he’s holding a half-empty cup of iced coffee. I question him about it as we greet each other, and he explains he’s been sitting in another Starbucks about 200 ft away wondering the exact same thing as me. We laugh it off as we head back to his Starbucks.
There’s two takeaways from this quick little story: One – give adequate details when communicating information to co-workers. It’s important. Two – don’t underestimate just how many Starbucks there are in New York City when making plans to meet up for coffee.
Okay. On, now, to the good stuff.
COFFEE WITH STARCOM'S DEVIN WHITAKER
What I enjoyed most about Devin and I’s conversation was his ability to explain things in a way almost any college student could relate to and understand. That's much easier said than done when talking about programmatic buying.
PROGRAMMATIC TV
As someone who’s only spent 2 weeks learning about programmatic, I didn’t expect to understand much when I asked Devin to take me through some of the differences he sees between programmatic digital versus programmatic TV. Before going into more detail, here’s Devin’s quick explanation of those differences:
“The definition of programmatic is just data-driven marketing. When (the programmatic team) uses the word we’re referring to real time buying, but really at its core when you do a digital direct buy with data layered on that’s really a programmatic buy. Programmatic TV is programmatic in the old-fashioned sense. It’s just data-driven marketing.”
I'll quickly rattle off some statistics about Programmatic TV that might raise some eyebrows before diving into it in a bit more detail.
By 2018, programmatic will account for 6% of all TV ad spending. That leaves enormous potential for growth.
Programmatic TV spending is expected to be the same size as all online video spending combined by 2019.
Programmatic TV ad spending is expected to account for $17.3 billion worldwide by 2019 according to IDC reports.
Today, advertisers still buy and measure TV ads based on the Nielsen system, a really old fashioned way of measuring viewership that's been around since the 1950s. When we talk about programmatic TV, really what we're doing is taking a digital data set (built in Adobe, CRM list, etc.) and matching it up to Nielsen's rating system, which calculates ratings based off share and standard demographic data. What it spits out is not actually an automated buy, but a recommendation for what to buy based on your data set and how it indexes on Nielsen. Once this recommendation is received, you still have to go in and negotiate the buy just like any other TV buy.
While Devin sees this method changing in the near future to an extent, he believes we’re still years away from being able to go into demand side platforms to buy TV impressions in real time like we’re able to in the digital world. There’s so much infrastructure that has been in place for so long, and with network providers holding all the cards in negotiations with advertisers there’s no real incentive for the current model to change. “(Network providers) are making a killing right now, why change?” he asks.
It’s a fair question, and one that I immediately asked Devin to answer. Why might TV providers opt to change their structure in the future to accommodate real-time programmatic TV buying? It's not unrealistic to expect some changes to the way we buy TV in the somewhat near future, but Devin doesn't think network providers will develop new technology to allow for real-time programmatic buying until they start to see dollars shift away from traditional TV buys to other media channels. 10 years is the number Devin gave me when I asked him when he thought TV buying would reach the same level of efficiency as digital buying today.
What remains to be seen is whether real-time programmatic TV buying would truly drive the cost of TV advertising down or not. Although providers are allowing advertisers to layer more and more data on (which would allow them to up-charge for the ability to do this), advertisers are also able to be much more efficient with their buying because they don't have to waste any money targeting people they don't want to. In the current TV landscape, Devin sees the programmatic team's largest opportunity with OLV (online video) and OTT (Over-the-top television). Think Watch ESPN, NBC Online, etc. As cord cutting continues to increase, Devin thinks we're going to see a shift in TV advertising towards these alternatives, resulting in the cost of TV advertising to go down. "Advertisers want data-verified impressions," Devin explains, "and until linear TV can provide that we're going to continue to see ad dollars shifting towards OLV and OTT." We're well on our way towards a point where TV has to drastically redesign their strategy to become more reliant on OTT and OLV.
q & a TIME
How many years have you been at starcom?
My three year anniversary is *looks down at phone* wow, it's today actually!
WHAT'S IN YOUR CUP THIS MORNING, DEVIN?
Ah, redeye -- it's a coffee with a double shot of espresso. You need a log of caffeine working this job
What's the secret sauce to success at starcom?
The biggest advice I would give to someone incoming is to be interested, excited, and involved in as many things as you can.
We know you're an expert in programmatic. what's something you're an expert in that other people might not know?
Uh, I make music actually! This kind of electric, singer/songwriter-y kinda thing. So that's kind of my geeky background -- music software.
Oh really? Who's your favorite artist?
I'm a big Radiohead guy.
obviously there's a ton of incredible personalities working at starcom. is there anyone in particular you'd highly recommend all the interns reach out to & get to know?
Oh man, I don't even know where to start with that question. There's so many. I think the beauty in that question is that there's something unique to be learned from literally every single person that works here. We work with such incredibly talented people that every day you continue to be humbled. You get to a point where you think you know what's going on and then someone totally rocks your world and shakes your perspective on something. It's great to work with a group of people like that.
Finally...
I want to give a huge thank you to Devin for taking the time out of his day to first find me and then sit down to talk with me. If you're interested in Devin's music, his name on Spotify is Noble!
Stay tuned, as next week I'll be discussing the role of programmatic in social media with Starcom's Dwight Holden and Jacob Ditchek.