AdExchanger Talks: A Standard-Bearer For Standards – Detailed Summary

Release Date: January 21, 2025
Host: Alison Schiff
Guest: Ben Hovines, Chief Media Officer at Omnicom-owned Media Agency Network OMD Worldwide

Introduction

In the January 21, 2025 episode of AdExchanger Talks, host Alison Schiff delves deep into the critical topics shaping the advertising and marketing technology landscape. The episode, titled "A Standard-Bearer For Standards," features Ben Hovines, Chief Media Officer at OMD Worldwide, who brings his extensive expertise to discussions on transparency, media buying principles, ad auction standards, and the evolving role of AI in advertising.

Guest Background

Ben Hovines boasts a robust career within Omnicom, progressing from roles such as Associate Director at Resolution Media in 2014 to his current position as Chief Media Officer at OMD Worldwide. His journey through various leadership positions underscores his comprehensive understanding of the media landscape.

Notable Quote:
"I was actually a pretty serious violinist in my youth. I played for 10 years."
— Ben Hovines [00:12]

Current Role and Responsibilities

As Chief Media Officer, Ben oversees expansive media strategies, fostering strong relationships with practitioner leaders across Search, Social, and Programmatic domains. While he no longer engages in hands-on media buying, he emphasizes maintaining a direct connection with platform developments through his team.

Notable Quote:
"I do miss that sense of direct connection with the platforms."
— Ben Hovines [03:36]

Transparency in Advertising

Definition and Importance:
Ben defines transparency as a cornerstone for healthy relationships between advertisers and agencies. He highlights that transparency varies based on individual perspectives but remains essential for trust and accountability.

CASA Program:
Back in 2020, OMD launched CASA (Council on Accountability and Standards in Advertising) to establish advertiser rights, focusing on media delivery transparency. This includes understanding the context in which ads appear, such as adjacent content placements on platforms like Facebook or Snap.

Auction Standards Working Group:
Ben spearheaded an initiative to create standards for ad auctions, addressing the opaque nature of pricing and allocation in the current ecosystem. This group, under the MRC's guidance, includes over 70 companies worldwide aiming to standardize auction processes.

Notable Quote:
"Transparency is in the eye of the beholder."
— Ben Hovines [12:33]

Agency Consolidation

Alison probes Ben about the ongoing acquisition between Omnicom and IPG, raising questions about data capabilities, potential lawsuits, competition with big tech, client conflicts, integration timelines, and layoffs.

Ben's Response:
Ben remains tight-lipped about the specifics of the acquisition, emphasizing the confidentiality during the deal's finalization phase.

Future Outlook:
Ben expresses skepticism about a massive wave of agency consolidations, suggesting that as long as diverse agency strategies resonate with different advertisers, multiple competitors will thrive. He dismisses the notion of an oligopolistic landscape dominated by just a few mega-agencies.

Notable Quote:
"As long as there are multiple different narratives that are good fits for different advertisers, there’s going to be room for multiple competitors."
— Ben Hovines [07:31]

CES Highlights

Coolest Innovation:
Ben recounts witnessing an agricultural robot resembling a Mars rover, designed to address labor shortages in farming. This futuristic technology underscored the potential of robotics in agriculture.

Ridiculous Sight:
While not directly mentioned, the conversation hints at diverse and sometimes incongruent innovations at CES, balancing between practical solutions and whimsical gadgets like a cat-shaped device that cools hot beverages.

Automotive Displays:
A standout at CES was the advancement in automotive display technology. Companies like BOE showcased sophisticated in-car screens that could transform and retract, presenting new advertising opportunities within vehicles.

Notable Quote:
"It's very James Bond."
— Ben Hovines [08:58]

Retail Media Standards

Need for Standards:
With over 600 retail media networks emerging, the industry faces fragmentation challenges. Ben emphasizes the necessity of standardized frameworks to streamline processes and ensure consistency across various platforms.

Historical Perspective:
Drawing from past experiences with viewability standards, Ben underscores the importance of collaborative efforts in developing widely adoptable standards, avoiding the pitfalls of fragmented initiatives that hinder industry progress.

Notable Quote:
"It's like when you buy a toaster off of Amazon... you don't need transparency into the exact specifications of this toaster."
— Ben Hovines [14:34]

Principle-Based Media Buying

Definition:
Principle-based media buying involves agencies purchasing media directly from owners and reselling it at a markup, aiming to secure better rates through direct commitments.

Pros and Cons:

• Pros:

  • Financial Benefits: Enables agencies to leverage scale for significant discounts, passing savings to clients.
  • Transparency Options: Offers clients the choice between cost savings and complete transparency.

• Cons:

  • Conflict of Interest: Potential bias towards media sellers with whom agencies have financial agreements.
  • Transparency Concerns: Lack of visibility into cost structures may undermine trust.

OMD's Approach:
Omnicom maintains a firewall between its principal media buying arm and brand agencies to prevent conflicts of interest. Additionally, a double opt-in process ensures clients consent to each media purchase, maintaining transparency and trust.

Notable Quote:
"It's completely possible to trust a business partner without having 100% transparency into their cost basis."
— Ben Hovines [27:18]

AI in Advertising

AI Buying Agents:
Ben introduces the concept of AI Buying Agents, encompassing tools like Google's Performance Max and Meta's Advantage Plus. These agents automate media buying processes but often operate as black boxes, raising transparency concerns.

Evaluation Pillars:
OMD developed five pillars to assess AI buying agents:

1. Constrainable: Ability for advertisers to set boundaries on audience, creative, bid strategies, and placements.
2. Directable: Clarity on the objectives the agent can pursue.
3. Transparent: Visibility into delivery and performance metrics.
4. Verifiable: Third-party validation of the agent's operations.
5. Declared Alignment: Disclosure of whether the agent prioritizes the advertiser's interests over its own.

Challenges:
The opaque nature of AI tools can lead to inefficiencies and distrust. Ben stresses the importance of declared alignment to ensure that AI agents act in the advertiser's best interest, akin to managing the principal-agent problem.

Notable Quote:
"Game theory of this is if you know your agent is working for you faithfully... then an advertiser should be truthful about their willingness to pay."
— Ben Hovines [35:02]

Future of the Open Internet

Advertisers' Sentiments:
Alison raises a provocative question about advertisers' genuine affinity for the open Internet, given their significant investments in walled gardens like Google and Meta. Ben responds by asserting that advertisers prioritize performance over personal preferences, emphasizing that effective, measurable results drive media investments.

Fixing the Open Web:
Ben outlines four key issues plaguing the open Internet:

1. Signal Loss
2. Publisher Ad Load Death Spiral
3. Unsophisticated Ad Marketplaces
4. Ineffective Ad Formats

He argues that breaking up major players like Google won't address these fundamental problems and advocates for collective efforts in standardization to drive meaningful improvements.

Notable Quote:
"The only high ground for media is performance."
— Ben Hovines [38:25]

Lightning Round Highlights

In a rapid-fire segment, Alison and Ben touch on various topics:

• Chrome Privacy Sandbox:

  • Do you still care? Ben: Yes. Mostly out of nostalgia. [41:20]
  • Do clients still ask about it? Ben: They used to, but not anymore. [41:28]

• AI Tools Usage:

  • Ben: Uses GPT as a sounding board and to condense prose.
  • Alison: Mentions using Otter AI for transcription, saving significant time. [36:50]

• Industry Buzzwords:

  • Ben's Favorite to Kill: Web3.
  • Reason: It’s overhyped and often irrelevant, turning pitches into empty promises.

• Analytics Reports:

  • Ben's View: They aren't capable of creating real, sustainable change in the industry.
  • Reason: The nature and process of analytics reports often fail to provide actionable insights.

• Fixing the Open Internet:

  • Ben's Take: Breaking up Google won't fix the open web.
  • Necessary Actions: Addressing signal loss, ad load issues, marketplace sophistication, and ad format effectiveness through collective standardization efforts.

Notable Quote:
"Constraints breed creativity."
— Ben Hovines [40:44]

Conclusion

Ben Hovines offers a forward-thinking perspective on the advertising industry's challenges and opportunities. From advocating for robust transparency standards to navigating the complexities of AI in media buying, his insights provide valuable guidance for marketers, advertisers, and technology providers alike. The episode underscores the importance of collaborative standard-setting and unwavering focus on performance to drive meaningful advancements in the ad tech landscape.

Notable Quote:
"If you're just evaluating media on the basis of like, how many impressions did we buy? You're missing something."
— Ben Hovines [39:43]

This episode of AdExchanger Talks serves as an essential resource for understanding the evolving dynamics of advertising standards, the impact of AI, and the necessity for transparency in fostering trust and efficiency within the industry.