Undertone chief executive Corey Ferengul tells M&M Global about the ad tech company’s acquisition by Israeli firm Perion and why programmatic has done a ‘disservice’ to advertising.
The global boss of Undertone, Corey Ferengul, is expecting things to start hotting up at the New York-based cross-screen digital ad solutions provider.
It has already been a busy period for the firm, of course. Fresh from its acquisition in December by Israeli software company Perion Network, the business recruited former Apple ad boss Michael Pallad as its chief revenue officer, while Diane Malloy arrived from PubMatic as vice president of programmatic sales and strategy.
It also recently experienced a change of leadership in EMEA, with ESPN’s head of digital sales Rob Garber joining to head up Undertone across the region.
Bolstered by owners that “value growth”, Ferengul says the industry will see a lot more on the way of M&A activity from Undertone over the coming months and years: “When you’re private equity owned, you tend to take a more measured approach. Before, we had financial owners. Shareholders value growth, and that means a more strategic angle.”
He also reveals that the ad tech firm also plans to “attack new geographies quicker”, including markets such as France, where Perion has a strong presence. Asia is also “on the roadmap”, says Ferengul, with a likely first foray into China or Japan.
With the addition of new leaders such as Pallad and Garber, Ferengul claims Undertone is moving towards becoming less introspective and more “brand-centric”.
While around 60% of its business in the US involves direct relationships with brands, that figure plummets to around 10% in markets such as the UK, where brand marketing teams are smaller, and agencies have a greater influence.
Ferengul believes the company must be more focused on advertisers’ commercial goals, and less vocal about the technology itself: “Now we have to talk to brands differently, and less like an ad tech vendor and a little bit more like an agency.”
“We may get the right ad in front of the right person, but what if it’s a bad ad?”
He argues that, for all the improvements programmatic has offered to the media buying process, the technology has done a “disservice” to other elements of marketing.
“It kind of depersonalised the whole advertising process; we lose serendipity and the opportunity for someone to find a product they weren’t looking for, or a brand to find a new audience for their product they didn’t anticipate. We lose the importance of creative. We may get the right ad in front of the right person, but what if it’s a bad ad?” he says.
“That message is getting through, and we can see that in the way programmatic is changing. It was all about volume, low-cost, efficiency. While that is still the case with true DR, more we’re seeing big brands use private marketplaces where they know they may [have to] pay a different rate.”
The “biggest unspoken challenge” facing the industry, according to Ferengul, is the on-going fragmentation of audiences. He describes the complexity in stitching together a media plan incorporating a multitude of tiny ‘publishers’, including social media influencers, to aggregate and reach an audience.
Even in the case of larger platforms like Facebook, Twitter and Snapchat, each requires a unique creative approach. “There are very few things you can do standard. Your implementation becomes much more complex,” he says.
And the media landscape is evolving at a rate of knots, making yesterday’s advertising decisions increasingly irrelevant for tomorrow’s consumers: “Two years ago, Snapchat was not the best way to reach a Millennial; today, it probably is in the US. That is how quickly a new publishing platform because important.”
“I haven’t talked to an advertiser yet that is comfortable putting as much of their budget into Facebook and Google as they are”
Ferengul says that agencies can play a role in helping advertisers to keep up with this tumult, but argues the “trust issue” must be overcome first.
Clients, he says, are keen to reduce a dependency on ‘walled gardens’ like Facebook and Google, but continue to be “seduced” by the simplicity of their offerings, and the deterministic nature of their data.
“At the end of the day, Facebook and Google suck all the money out of the industry, and make the rest of us fight for what is left. And those two are very happy to create tools to make it easier and easier not to look elsewhere,” he says.
“I haven’t talked to an advertiser yet that is comfortable putting as much of their budget into Facebook and Google as they are, but yet they are doing it. The problem the rest of us have is that no one can have the same scale as they have. Look at Twitter, and it has a big head start.”