STRATA Offering Digital Media Buying And Selling Stewardship Says CEO Shelton

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April 6, 2011 – 9:44 am

STRATA on TVexchangerJohn Shelton is President and CEO of STRATA, a media buying and selling software company, and a Comcast-owned company. Can you give a bit of background with STRATA?

JS: Headquartered in Chicago, STRATA has been supplying solutions to the media buying and selling industry since 1983. The software solutions supplied by STRATA empower clients to sell and efficiently purchase all media types including Digital, cable, broadcast, print, radio, and outdoor advertising mediums. On average, over $50 Billion in advertising dollars flow through STRATA systems per year.

A Comcast Cable-owned company, STRATA has over 180 employees. On the client end,  STRATA has over 12,000 media users and works with nearly half of all media buying firms.

STRATA's system for Media Buying Agencies integrates all media into one cohesive database and user interface that allows organizations to conduct large-scale transactions.  As a leader in EDI development, STRATA has integrated automated tools for order delivery, confirmations, makegoods, client approvals, electronic invoices, and much more.

Considering the company's roots in the traditional world, what were the challenges in creating a Digital product line?

We have been working in Digital for over five years. Digital is quickly evolving and really combining with other media. Were there challenges? Sure. Not as many as a result of our traditional background as much as the nature in which Digital media was developing.

The media started with low volume levels where deals could be cleared manually with Excel and business rules could be created/applied as needed on a case-by-case basis. Having the Digital buyers and sellers consider a structured system that loses the unlimited flexibility of Excel and having to determine a common set of business rules was challenging. We only saw desire to head down this road once the Digital buyers and sellers realized that the inability to scale operations was creating a false ceiling on their revenue potential.

Who do you see in STRATA's competitive set in Digital? How do you differentiate?

In some aspects,  DDS's iDesk, Facilitate Digital, and Transis are the primary competitors in Digital. We’ve differentiated ourselves by offering full lifecycle, Digital stewardship that exists within a single environment which manages the media stewardship for all channels in the overall campaigns. This allows our clients to evaluate the entire funnel in one system for ROI considerations. Additionally we have been open to partnerships. We started as ad-server agnostic and have partnered with most agency ad-servers at this point.  We have also partnered with companies to allow for the purchase of premium, self-service inventory directly from within STRATA’s system. We continue to seek out meaningful partners that can streamline the Digital Planner/Buyer or Campaign Manager’s workflow.

Is there a big financial and time commitment by clients to buy your product? How do you get them to "switch" from other providers?

Based on the fact that many agencies are handling Digital media by adding headcount to oversee the many manual processes, our software provides both a financial and time savings. We present the end-to-end capability of the system and the ability to stream line the process in a way our competition have not yet achieved. We have also approached Digital with a fresh perspective and have designed our system for the specific needs of Digital versus trying to shoe horn it into an existing media type’s functionality.

Has audience buying impacted STRATA? If so, how?

It has certainly impacted our roadmap. Because there are a considerable number of players in this space already, STRATA will likely seek out partnership with an existing DSP and build a tight integration to that platform in order to provide our users with the ability to manage their buying in one place.

By aggregating all the buying through AMBIT, what are the unique efficiencies the platform can provide?  Is effective attribution modeling possible?

AMBIT allows us to correlate media activity with hundreds of different metrics. We measure the impact that the media activity has on a given metric and trend that impact over time in order to level the results. This accomplishes two very important things. The first is that it allows us to build a cause/effect data set that can be used for predictive or "what if" scenarios in the future. The second is that it evolves the idea of goals in the media industry to go beyond traditional audience delivery goals.

As for effective attribution modeling being possible…it really isn't. There simply isn’t data to support the model to gain true attribution metrics. What we have decided to do is use contextual insights to directionally estimate attribution. The reality is there are forces at work on many metrics such as sales that have nothing to do with Marketing and/or Media activity, so it is impossible to accurately define the attribution based on media inputs alone.

When will targeted television finally achieve significant scale that will earn the interest of advertisers? Why?

This will happen once a two-way infrastructure related to broadcasting television can be standardized and either is homogenous or act as though it is homogenous. This could happen through the efforts of cable MSO’s like our parent company Comcast, by new products or services offered to change the devices used to view mainstream TV, or by some type of alternate device that monitors the usage of TV in its current infrastructure and provides the feedback loop for measurement.

We are working with many cable MSO’s to target from zones to more specific data like income or buying habits. That will come out shortly and our systems will be ready.

Who are the key target markets for your Digital products? How do these markets differ from your traditional clientele?

We target our Digital platform to both traditional agencies and Digital agencies. Often these are the larger agencies or larger in-house media buying organizations. The pursuit of Digital-only or primarily Digital agencies is very different in that the structure of a system is seen as an obstacle rather than a desired guidance. Because of this we have had to make the system very flexible while retaining enough business rules to carry out required reporting and bill/pay functions in an auditable way.

Where does the traditional world have its biggest advantage over Digital as it relates to media planning? Will it change someday?

As far as traditional vs. Digital, it is the megaphone concept. With traditional channels you can reach out to the passive targets that may not be looking for the advertisers products/services, but still need to be reached. Digital is more targeted.

In traditional channels, buyers and sellers have mature, optimized operational practices that limit the personnel overhead required to steward the media types. This in turn makes these media channels more profitable and in many cases is allowing for the subsidizing of Digital which in many cases is a drain on the agency P&L due to its overhead. This will likely change as systems like STRATA apply technology to the process and decrease the headcount necessary to remain competitive in Digital media. Also, as the lines blur between traditional and Digital, the planning strategies need to merge as well.

What company milestones would you like to have achieved a year from now?

We wish to become the single place that agency buyer/planners and campaign managers can go to carry out all of their Digital transactions. This will be achieved through development and partnership opportunities that make sense. We are well on our way to our 1,000th agency customer and will hopefully pass that in the next year. Also we have $50 billion worth of transactions flowing through our system annually, with the growth of Digital and new STRATA platforms, we hope to see that grow to $55 billion and more.

Follow STRATA (@gotostrata) and (@tvexchanger) on Twitter.

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April 6, 2011 – 9:44 am

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