Cannes Conversations: Michael Salerno of Turner Broadcasting

The “Cannes Conversations” will continue at two events at Cannes Lions Festival hosted by Rubicon Project: The 2nd Annual Agency Trading Desk Panel on Le Rooftop on Tuesday, June 17, 2014 at 6:00-10:00pm and the 1st Annual Publisher Automation Panel on the Rubicon Project Yacht (the Antisan) Wednesday, June 18, 2014 at 6:00-10:00pm. Guests must RSVP here.

Your Name: Michael Salerno

Your Company: Turner Broadcasting

Your Title: EVP, Data Strategy and Ad Products

SEARS: What’s your favorite candy bar?

SALERNO: Lindt dark chocolate

SEARS: On average -- out of each $1.00 of advertising revenue received by your company, how much today is from automated or programmatic channels?

SALERNO: $.06 of every dollar of digital advertising at Turner is generated via automation or programmatic channels. We’ve ramped quickly over the past 12 months to get where we are, but we are still in the 1^st phase of our evolution -- primarily executing programmatic as a strategy to fill undervalued or unsold inventory. The next phase will include the expansion of strategic partnerships, more private marketplace deals and more targeted campaigns via our first, second and third party data.

SEARS: What was this number in 2012?

SALERNO: 0

SEARS: What will this number be in 2016?

SALERNO: $.10 to $.15 of every dollar.

SEARS: Describe how most media (all media, digital + non-digital, non-programmatic media) is sold by your company today.

SALERNO: In our television business, the majority of our inventory is sold via longer term or Upfront-style commitments. The opposite is true in digital where most of our inventory is sold closer to air date, more like a traditional “Scatter” marketplace in television. Overall, the vast majority of our inventory is sold and executed in traditional manual ways -- exchange of media plans, IOs, order booking, trafficking instructions, change orders, etc.

SEARS: Tell us the about Turner Broadcasting.

SALERNO: [We are a] portfolio media company with world-class assets. We have the top domestic and international brands and programming in television and digital media including TBS, TNT, truTV, CNN, HLN, Cartoon Network, Adult Swim, and top-tier sports brands and programming for both linear and digital mediums via Bleacher Report, NBA, MLB, Nascar and PGA/golf.

SEARS: Please Tell Us:

SEARS: Overall advertising revenue via automated systems, 2013 GLOBAL:
SALERNO: $10M
SEARS: Percentage increase, advertising revenue via automated systems expected in 2014 vs. 2013:
SALERNO: 250%
SEARS: How many employees do you have globally?
SALERNO:Worldwide 10,000

SEARS: What are Turner Broadcasting’s three biggest initiatives for 2014?

SALERNO:
1. invest in programming and brands
2. use technology in innovative ways
3. improve our competitive position internationally

SEARS: By 2016, what percentage of total advertising sales across your company will be from an automated or programmatic channel?

SALERNO: 10-15% Big dependency on how we define automation or programmatic, particularly as it relates to the television business.

SEARS: To reach a higher adoption of direct order automation (also known as programmatic premium) and use of the programmatic channel, what are the major impediments to overcome? Rank these in numerical order:

SALERNO:
#1: Operational or workforce issues inside the holding companies or operating agencies
#2: Premium (direct deal) inventory availability via programmatic
#3: Alignment of agency compensation models
#4: Lack of proper ad technology
#5: Alignment of publisher compensation models

SALERNO: The pace of change in automation and programmatic is all about organizational change -- on both the buy and sell side.

SEARS: Tell us about your first party data strategy -- do you currently have a DMP (data management platform) for your first party data?

SALERNO: Yes, we have a DMP deployed across all of our digital properties. This has been in place since 1Q this year/2014. We are actively packaging targeted media with first and third party data and looking for second party data partners. This is not currently a large part of our business, but as we expand and execute on our first party data strategies, we expect this to be a growth driver for our business.

SEARS: Salesforce compensation. Do you compensate your salespeople for every dollar [or local currency equivalent] sold, regardless if the media is sold via insertion order (IO) manually or via an automated channel?

SALERNO: Our salespeople are compensated on every dollar sold -- manual, direct order automation [Rubicon Project Orders] and auction. We have a layered comp structure providing incentives for specific key initiatives by division, as well as an “all-in” incentive for every dollar sold.

SEARS: Direct sold inventory is often sold three to 12 months in advance. Which of the following choices best describe how you use direct order automation and Rubicon Project Orders -- check all that apply:

SALERNO:
1. _X_ We use direct order automation and Rubicon Project Orders to leverage our first party data and bundle it with our media;
2. _X_ We use direct order automation and Rubicon Project Orders to make available an “electronic version” of our media kit and related editorial calendar inventory packages (example: holiday or back-to-school themed packages) to buyers;
3. _X_ We use direct order automation and Rubicon Project Orders to make available premium placements such as home page, section pages and other opportunities that are not available in the open market;
4. _X_ We use direct order automation and Rubicon Project Orders to make available IAB Rising Star ad units and rich media ad units;
5. ___ We do not use direct order automation and Rubicon Project Orders and believe all inventory should be sold via auction (with appropriate business rules, of course!);
6. ___ Other, please describe:

SEARS: Have you received “Programmatic RFPs” for your inventory? What do these look like and how are they different than traditional RFPs?

SALERNO: Yes, they are asking about inventory types, availability, pricing, terms and conditions, capabilities, etc. Clients and agencies are still looking to understand the who, what, when, where and how of inventory availability via programmatic channels.

SEARS: What should top publisher chief revenue officers (CROs) do to build their direct order automation (also known as programmatic premium) and programmatic selling business with trading desks and operating agencies?

SALERNO: Educate the sales teams and the rest of the organization about data-driven marketing and how programmatic channels and automation can better serve client needs.

SEARS: Why is direct deal automation (also known as programmatic premium) so important? Is it important?

SALERNO: Efficiency of the transaction and effectiveness of more targeted ad campaigns.

Tell us a bit more about you:

SEARS: Who was one of your first mentors as a child?

SALERNO: My dad. He was a teacher in the public schools and always made time to spend with people and kids to help them grow.

SEARS: What’s your favorite movie?

SALERNO: I’m a fan of documentaries -- D.A. Pennebaker, Ken Burns, Spike Lee, The Maysles Brothers, Errol Morris.

SEARS: Money is not a concern. You no longer work in advertising or technology. What would you choose to do for work?

SALERNO: Make documentary movies.

SEARS: What is your favorite restaurant in the world?

SALERNO: It’s a tough one…but I guess I’ll go with Marea for seafood with a Mediterranean flair or Babbo for more classic Italian … both in New York City.

Thanks Mike!