Madison Avenue Stock Exchange

Leading on from my previous post about how the industry has changed thanks to Big Data, I want to take a peek at programmatic buying.

Acquiring media space, traditionally, follows the format of striking deals with clients for predetermined CPM (cost per thousand) campaigns, and then comes the business of account planners ferreting away for golden nuggets of data that lead to the BIG IDEA.

The relationship between a Planner and a brand is already becoming more transparent, and more difficult, thanks to the introduction of Real Time Buying (RTB). Much like the bidding wars for keywords on search engines, planners will now be subjected to the introduction of price wars over advertising space online. For example, say a consumer searches for LCD televisions online and goes through to a reputable retailers website. Whilst the page is loading, a flurry of data will be sent out to prospective buyers and whoever bids the most wins the spot! RTB has literally removed all reasonable doubt for a brand as to where exactly the money is going. Great for a brand. Great for an Ad Agency?

Please enter more algorithms; the rapid growth in RTB has led to the inevitable introduction of DSP's (demand side platforms). They can learn over time what kind of ads and sites perform best and relay the clients money into a highly optimised conversion (Huffington Post). The beauty of this creation, unfortunately, lies with the removal of the multiple relationships between a brand and its agency.

Considering I haven't even started my career in media planning and buying it's a scary thought that by the time I get the job it could be almost obsolete. Decision based advertising, according to O'Connell and Greene, is being replaced by quant-based (and cookie reliant) tech that, by any stretch of the imagination, can guess what consumers want better than us. Maybe our saving grace comes from what I mentioned in my Big Data post... when the cookie crumbles what will brands do? At the end of the day, consumers can turn off their cookies.

This system is absolutely perfect for media owners though. Think about it. A thriving marketplace where everyone is desperate to outbid each other. Media buyers are aggregated on one side, and media owners, armed with their previously unsold space, are left an extremely attractive inventory. Premium or high quality inventory will obviously be priced at the highest rate, but the lower quality space automatically becomes more attractive. Check out this video, it's from SpotXchange; a programmatic buying marketplace based in the US.

The state of play has become interesting. Facebook is exchanging space now, allowing cookie based targeting to be bought across the social network. Real time on mobile is another reality. Director of strategy at WPP, Mark Read, has described the shift as something that agencies will have to look at closely. Investment in technology has always been supply or publisher side, agencies have made that mistake and now we are seeing ad networks come between us and publishers.

Experimenting with media research from your budget isn't a hugely popular exercise with brands. It kind of gives the impression that the big wigs at the top are desperately trying to justify those ridiculous salaries whilst sitting up in an ivory tower. That said, it seems Kelloggs is unafraid to position itself as just that - a challenger of stereotypical media purchasing. By researching the audiences they currently reach, Kelloggs have determined metrics that indicate the success of certain campaigns, a relative branding breakthrough - hence why they are able to prove the capabilities of programmatic buying.

Aggressively leveraging this tool is the aim of the game at Kellogg's, and it's paying odd. Return on investment has increased as much a six times according to Bob Arnold, the Associate Director of Digital Strategy. 

"Bottom line, programmatic buying is more efficient, more effective and more transparent than the traditional digital media buying model"

The Future of Agencies - Turbulence has arrived!

 “The advertising business may be heading for trouble – or it may be heading for a new age of glory.  Believe it or not, the direction – up or down – is in our hands.”  

Ed Artz, 1994

Predictions have always been forecast, no matter what industry you're in. But advertisers know, that no matter what the economic climate, the consumer always comes first. Edward Boche wrote a list for his 2010 advertising predictions, but even he recognised that no one really knows where anything is going.. it's all a massive game of continuation and extension.

So far what he wrote back in 2009 has been consistently correct; analytics do inform more decisions, brands do act more like people and everything is quite social. But this wasn't news was it? Anyone working in the industry could of seen all of these things happening, the problem was how to harness this insight and produce REAL accountability for investments. This complex relationship between consumers and the media have posed challenges for advertisers for the past 20 years, and it's certainly not about to get easier.

Adaptive Marketing

A hybrid between technology needs to exist if advertisers want to succeed in any market these days. However, should agencies look to dividing assets and specialising in one area, like digital specialists LBi? Should agencies, like LBi, make no promise to provide something extraordinary or outstanding for clients, should they purely commit to the idea that technology and media make brands more valuable? 

Should we put innovation back in the box?

Or is the path to enlightenment (mega bucks and a prestigious ad award) something like MediaCom's Beyond Advertising programme? The promise of end-to-end creation but in all forms of media? A total takeover of a brand by an agency? As consumers gain ever more control over content, the idea of having one product available from an agency to manage all such problems seems very appealing! Planners, by all accounts, these days will need to integrate Brand Planning and Database Planning skills to push out an effective campaign, much like a hybrid built of two previously separate qualities. 


Paid, Owned and Earned

The IPA published a paper back in 2009; 'The Future of Advertising: A 10 Year Perspective'. Details of bridging the divide between the traditional and digital worlds was the epicentre of the report, growth was predicted in all areas of advertising and yet the industry was handing over the reigns...to the consumer! The very people we try to, not control, but manipulate.

So we come to the issue of media.. how much should we invest in creating content? The IPA report did say that paid for space, as long as you're innovative, could bung an extra £16bn on expenditure! Looking into the advertising expenditure by brands, it does make sense that spending more could yeald better profits, but I don't know if that's the case for Tesco. Did you know that they spent £57.4m above the average ad spend for 2010? And that the like for like sales only rose by 0.6%? Yeah, OK, there could be numerous reasons that the brand didn't fare too well, but there's always going to be challenges for businesses, it just depends on how you choose to confront it. Throwing a lot of money at the problem clearly doesn't always work.

That brings us nicely to Owned media. Just because we know the brand is there, as a consumer, it doesn't mean that we always want to engage with flashy commercials that don't always make a huge amount of sense. Turning off the TV, closing the web page or binning the promotional leaflet is way too easy, so advertisers have cleverly adapted technology to position brands as a part of peoples lives. This technology is becoming ever more ubiquitous, and advertising is going to become more personalised, relevant and valuable.. a trend already recognised by Microsoft in the Polymorphic ads offering.

Each brand needs to decide the level of involvement it has for each type of media, obviously the interaction levels for a brand of toothpaste are going to be a bit different to a high street clothing brand. But one thing is certain; consumer involvement is key to marketing synergy and we, as marketers, need to decide how to accelerate the relationship we have with consumers to drive brand growth. As suggested by Initiative, each brand is going to have to find a unique formula across these three media channels. One thing I will say though, is be careful. Think about the social divides you create between people.

Beyond the Campaign

Tim Hipperson, I think, has hit the nail on the head when he outlines the future of media agencies. A brand has to orchestrate touchpoints to create that seamless experience, but he also recognises that integrated planning results in commercially driven creative strategy. 

So whether they're looking to become Jack of One Trade like LBi, or trying to wow brands with the 'perfect package' for content marketing like MediaCom, agencies need to develop their own unique formula. There is no quick fix with digital, or even traditional media. I've come to the conclusion it's all a bit of a do-or-die situation, you just need to pick your poison.

Big Data

Is Advertising All About The Algorithm Now?

"Not everything that counts can be counted, and not everything that can be counted counts.." - 

Albert Einstein

For ages now marketers have been droning on about data - only thing is is that there's so much of it now, what does it actually mean?

The Mad Men era is over. Romantic as it was to be part of the alternative advertising experience, brands must now relinquish their control over what consumers see and start listening to what they want. Sure, consumers do still have aspirations for certain lifestyles, but the typical 'WASP' profiling is just not enough any more. An article by George Parker, former Mad Man and Madison Avenue connoisseur, speaks volumes as to how much the industry has changed, and how quickly. 

"Back in my “Mad Man” days, the only big things we cared about were “Big Ideas.” That, plus the bigness of the lunchtime Martinis."

The idea of Big Data has stemmed, I have no doubt, from recent financial turmoil, suffered by all brands thanks to the recent economic climate. It's really no wonder that accountability is the word on everyone's lips these days - why wouldn't they want to know what their money's getting them? I would...

However this does make our job a little bit more challenging. It was such a good idea to give consumers all these platforms to talk about brands wasn't it? For hundreds of years it has been the goal of an advertisement to out-sparkle the competition, after all, advertising is art, but how did it get to the stage where we have to prove everything? 

Advertising is art. We may have to think a little bit more about how we can engage with consumers that are utterly drowned in communication, but at the end of the day some of the stuff we come out with is pretty cool.

It's all a matter of trust, not surprising really considering that once you did buy that L'Oreal shampoo you didn't look like Cheryl Cole, or that when you bought boxers from H&M you weren't as glorious as Becks in his kecks. Sources consumers trust are few and far between, so analysing the data respectively to what media is consumed is kind of the only way round this problem (see below).

This is where digital comes into play. When real people are given access to on-line platforms that can, you guessed it, connect them with other real people, they're bound to talk. Whilst TV trust ratings are still so low it makes sense for advertisers to look to other channels, and successful marketers will seek ways to leverage consumer goodwill in any way they can. But how can advertisers compete when consumer trust real friends and virtual strangers the most? How about actually listening to the facts? This is what Big Data is all about. A biannual study by Neilsen conducted over two years has shown fluctuation in trust levels across the world, yet, despite regional differences in the platforms trusted, it has been proven the word of mouth is the authority in all towns. However, with word of mouth reigning supreme, it might come as a shock to some that advertisers still carry a significant amount of sway as the majority of consumers sought out feedback from the brands before making a posting. This is the golden opportunity for marketers to 'shape the tone' of consumer content before reaching vast audiences.

Raw data is exciting stuff for advertisers, we use it to empower creativity and re-target campaigns - whilst it has become harder for us to account for every penny, it has at the same time fuelled our appetite for performance. This is echoed by Martin Larsen; engagement rate based on screen data has become a metric of interest.. it helps us discover whether or not people care. We must all become 'conductors of brand sentiment' according to Tim Hipperson, which we can sell at premium rates...if we get the right answer.

Even the Don of Advertising, Sir Martin Sorrell, has recognised the through the anarchy that advertising agencies have found themselves in, big data will drive the business. The competitive set has changed; 'it's no longer Omnicom and IPG and Publicis, it's Nielsen and GFK...'

Yet there is fault in the theory. The potential flaws in this data lie with the ability of the consumer to drift throughout cyber space with their cookies disabled. This has been recognised by ComScore, who do conduct research without the use of cookies, but so many market researchers base reports from them, so demographic profiling is subject to substantial errors, thus directly impacting the relevancy  of campaigns delivered. Be warned; the research has the potential to be hugely rewarding, just don't let the cookie crumble because you didn't check your facts.