Greg Hills

I’m attending the Right Media Open in Chicago and, no surprise, change is in the air. Although there is a general consensus on where the industry is headed, I am seeing a healthy debate around the timeline for that change.

While discussing the importance of indirect, bid-based sales to publishers, Dave Zinnman from Yahoo pumped on the brakes, saying that if you believe exchange-based inventory will become dominant in a “career-relevant timeframe”, you need to “step back from the punch bowl.” For me, “career-relevant timeframe” is the most important phrase I’ve heard today.

No matter what your business, its important to have a realistic understanding of how fast your market is changing. Just today, VMM founder Darren Herman retweeted his 2008 post comparing the rate of innovation with the rate of adoption, and reminding entrepreneurs to build for today’s market. That’s the relevant timeframe for a venture backed startup between rounds.

Here in Chicago, the question of the day is: what is the relevant timeframe for advertising-related companies evaluating the momentous shift toward automation?

Up until now, I think media decisionmakers have been very confident in their ability to influence the rate and direction of change. At the 2009 24/7 Real Media Summit, I was struck by GroupM CEO Irwin Gotlieb’s remark that he felt it was, in some part, his responsibility to manage change in this new media landscape on behalf of various stakeholders. Consolidated media buying firms exist for the sake of exerting this type of influence and the comment made me think a lot about how and when the industry would change.

Now that Google has turned its focus to display, they will radically shorten the relevant timeframe for considering change. Google has more clout than any single company and they have built their business on automation and bid-based buying. Whether or not you believe that audience is more important than content in valuing an impression, it is impossible to deny that a lot of client money is lost to the transaction costs of directly buying standardized display inventory. I began my career as a media planner and, like every planner, I spent plenty of time “guesstimating” and doing menial tasks in the current advertising operating system: phone, fax, Excel, email.

Its not necessary for agencies and publishers to surrender to Google — in fact, I think that’s a terrible idea. But it is necessary for agencies and publishers to recognize the economic imperatives that drive Google’s strategy. Without Google, media companies might have been able to defy gravity for a career-relevant timeframe, but that’s no longer the case.

Tagged: automation, exchanges, future, Google, markets