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Mediasmith Anvil |
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Volume 9, Issue
1
March 11, 2010 |
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Death of the Impression/Rise of the Data Economy |
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Editor’s
Note: This article first appeared in MediaPost
Online Metrics Insider. View the original article here. Article highlights: · The future of advertising is about data · Most of the standard methodologies for buying an audience do not
translate to the new world of infinite media channels · Core
brand positioning has an intrinsic value but sophisticated marketers are
already learning that it is about the right message at the right time to the
right person Recently
there has been buzz on the rise of advertising exchanges which bring media
inventory into a liquid, dynamic environment driven by automation and
technology. The exchanges come in many flavors but they all move in the
direction of allowing wide swaths of media impressions to be bought in a
computerized manner. Google, Microsoft, and Yahoo are all in the game and
ever increasing amounts of inventory are becoming available in this
environment. In
one sense this movement is a natural extension of the race to build the bigger
and better network that can offer the one stop shop to agencies and clients.
Aggregate enough impressions, guarantee reach, sprinkle in some targeting
solutions and you have a winner that can appeal to a wide range of clients.
It is a simple enough model and an easy extension to the traditional media
buy. But beneath the surface of this move is a far greater shift that will
shake up and unsettle marketing as we know it. It
is about data. Data in ways we have never before fathomed. The future of
advertising is not about social, not about viral videos, not about mobile,
not about any new medium or any new ad unit but about data. Those who know
what to do with this will be the new kingmakers, the new rulers of Madison
Avenue -- or the creators of a new Avenue of media. |
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Mediasmith Morsel The Players Platforms Accessing
this inventory on the advertising exchanges is done for what is currently
being called a "demand side platform." The players in the place include
networks opening up their internal systems to marketers (Turn, Lucid Media)
to next generation platforms specifically built for this purpose (Mediamath,
Invite Media, DataXu). List not inclusive of all new entrants and the range
of players is growing every month. Inventory The
players offering up inventory on the Exchanges include the big guns (Google,
Yahoo, Microsoft) to a range of publisher centric networks (Rubicon, AdMeld,
Pubmatic, AdBrite). New tools and platforms are being offered that allow
publishers to offer their inventory through these systems such as the new
DART for Publishers upgrade announced recently. How Much
Inventory? The
speed with which this new inventory is becoming available is astounding with
recent estimates putting the current amount of monthly impressions available
somewhere between 500B to 1.5T per month with more coming online as we speak. |
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Why
is this so? Because the impression by itself is becoming worthless. In
the past media was a relatively constrained commodity with a finite amount of
time or attention that could be rented. There were only so many publications,
so many channels, so many avenues to reach the audience you coveted. This
is no longer true. We have reached terminal velocity, the exponential, the
moment when it is clear that the number of media vehicles and opportunities
has far exceeded the ability for any marketer to manage without the use of
technology. Welcome to the beginning of a seemingly infinite media world. Some
perspective: there are now over a trillion known web pages, more than 500,000
Facebook apps, 140,000 iPhone apps, billions of videos on Youtube -- and more
have been created since you started to read this sentence. The depth and
breadth of content is mind boggling and we have only just begun. All trends
point to an accelerated world of content as ever larger percentages of the
global population come online armed with easy and powerful tools for
capturing, creating, spreading, and consuming digital assets. The
standard approach to deal with this has been to work with networks that can
aggregate this inventory into manageable bundles. However, this has its
disadvantages. The fundamental problem is outsourcing the core understanding
of what works for the business. The strategies, audience data, and all of the
other factors that make a media buy successful are hidden to the marketer.
Want to buy on a new network? It's time to start over again. This
is not the only problem. Buying from multiple networks? Chances are you are bidding
against yourself because many of the networks are vying for the same
inventory sources behind the scenes. Looking to find your customers via
re-marketing? Add yet another tag to the site and give another vendor your
valuable customer data. It
gets worse. Most of the standard methodologies for buying an audience do not
translate to this new world. When there were only a few channels it was
pretty easy to get a good sense of the media with which a certain demographic
resonated. When there are infinite channels this approach doesn't scale. The
person in the cube next to you might be an exact match on every normal
demographic point and yet have a radically different media consumption
pattern. In
this new world the successful brands will be the ones that speak directly to
you. These brands will be able to identify not that you are a likely traveler
but that you are traveling to Atlanta next week. They will be able to tell
not that you are likely to play games but that you are a hardcore street
fighter player with your own custom joystick. The brands that get you are the
ones you will reward with your time, your attention, and your wallet. |
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Mediasmith Morsel Dynamic Media
Optimization: Learning to Leverage Real Time In
a recent study by Forrester, advertisers were asked what prevented them from
spending more online (see figure). This question led to 4 areas that were of
concern to those advertisers who wanted to be able to do more with their
digital dollars. Data: Data is driving
strategy on the web. Automation: Although the
foundation and the strategy for this automation will always be left to
skillful strategic media planners, making real time buys based on audience
microsegmentations will be something that must be done automatically, within
milliseconds. Bid-based buying:
Determining
the true value of audience microsegmentations will determine the true value
of your digital media. Access to
inventory at scale: Today buyers achieve this kind of reach by working
through portals, exchanges and pulisher-side platforms.
For the full report, see here.
Source - Forrester Report: "30% Of US Display
Spend Will Trade Through DBO And Demand-Side Platforms By Year End 2010" |
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The
critical component that makes this new world work is data. Not simply general
research data
but data about you. This is something that goes far beyond just behavioral
targeting. Your preferences, your interests, your actions -- all of the
signals you send as you move through the grand stage of life. The revelation
is that this new world is no longer the far off land on the horizon -- we've
hit the beach. Right
now the new world looks something like this: a global Wall Street of ads in
which media trading firms will bid for your attention at every part of your
life -- when you are at a computer, using your portable device, in front of a
digital billboard, listening to your personal radio station, chatting with
your social network, flying for business, playing your favorite game, and
numerous other modes of interaction we have only dreamed. A world in which we
can connect to the net whenever, wherever, and however we want to is a world
which presents an infinite variety of means for an advertiser to engage and
interact with us. The
first preview of how this looks can be found in Google. For not being fans of
advertising, Google has certainly done a good job at it. What makes Google
different is that the ads are content themselves on Google. The better
targeted the ad is to the user's interest, the more often the user will click
-- and the more money Google will make. Their entire ad system is built to
encourage advertisers to tailor their offer as specifically as possible to
what users are searching for. It may not be a perfect system, but it works. Google
also hints at what the future of publishing might look like. While Google is
a search engine, it is also a publisher: one whose content is search engine
results. In that sense Google might be the most highly monetized publisher on
the planet. The lesson for publishers is that the more you know about your
users the better the experience you can provide for them -- both in content
and ads. Already moves are being made in this direction with companies that
aim to open up premium inventory on the exchanges with a range of targeting
options and controls. An open marketplace based on data will reward the best
publishers for the attention and trust they have gained from quality users
and enable advertisers to quickly and fairly price this attention -- and
customize ads to fit. Publishers that wall themselves off will eventually
find themselves irrelevant as marketers buy their audience without them. When
we turn to the current aggregators of publishers-the networks-it is clear
that disruption lies ahead. In one sense networks have been the first to use
the impression and data exchanges to extend their reach and targeting
capabilities. Many agencies and advertisers have been playing in this new
economy without realizing what was happening in the background to make their
media buy successful. Increasingly, however, marketers will access this
inventory and data directly and cut out the high margins that the networks
have enjoyed. This
shift will splinter the network world into a few different factions. Some
networks will become more like agencies and partners for brands and use their
optimization and campaign skills to grow a client's business. Vertical and
specialist networks that are site specific will still exist along with
networks for emerging media that has not yet been commoditized by the exchanges.
The losers in this new economy are the networks that have only existed for
reach without a high degree of additional value and insight. When marketers
seek ever higher returns for their dollars it will be difficult to justify
the extensive arbitrage which has played out in the first version of the ad
economy. Just
as networks will have to look more like agencies to survive, agencies will
increasingly have to look more like networks through the use of custom
technology, proprietary trading strategies, and a deeper understanding of how
to leverage vast pools of liquid inventory against massive data sets. Instead
of media buyers there will be media traders whose jobs look something like a
blend between a Wall Street number jockey and an Army field general. Premium
negotiated placements and custom deals will always be part of a large media
buy but the days in which most deals are done over drinks and a handshake
will look like the Wall Street paper slip days of yore. |
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Mediasmith Morsel The Sea Change for Advertisers and Publishers In a recent study by Forrester an
agency responded to Dynamic Media Optimization. "We are completely
bought in that this is not just today's hot thing but representative of a big
shift in the way online media is handled. And it has been easier than
imagined it would be to persuade clients to shift dollars into [DBO]." Advertisers Experiment: Adjusting to the Industry Change Trialing directly and through agency partners - using DSP's and agency teams to find out how
Dynamic Media Optimization can improve business Buying for performance-marketing goals - Efficiency and Effectiveness are keys to this
shift in industry practice. Although primarily Direct Response oriented,
dynamic optimization has caught the attention of branding advertisers as well
to improve the effectiveness of creative Mapping cookie data - Understanding
the audience that advertisers already have, will help them understand which
audiences can be tapped into Reallocating Spend - Moving
budget from current media vehicles to scalable exchanges Improving efficiency - the
goal here is SEM type efficiency
For the full report,
see here. |
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There
is the question of creative and the role of the message. Core brand
positioning has an intrinsic value, but sophisticated marketers are already
learning that it is not about one message, but the right message at the right
time to the right person. The more data and insight marketers can understand,
the greater the ability to customize the ad for that user at that moment --
yielding engaging experiences and high ROI. This trend can already be seen in the e-commerce space, with
giants like Amazon that have pioneered smart recommendation technology and
ads that are targeted to your preferences and choices. As this technology
filters down, ads will grow increasingly intelligent and persuasive. Finally, there is the data itself. Direct marketers have known
the value of a good list for years, but this is an entirely new playing
field. Data will come in all shapes and sizes: from your standard demographic
breaks to infinite categories of interests, activities, thoughts, locations, relationships,
purchases, and any and all properties that can be abstracted into a database
table. Data is the oil that fuels every part of this new ecosystem and the
real challenge for the marketers of the future/now is how to understand,
price, and act against it. Google, Amazon and the like have understood this
for many years and are using their information hegemony to dominate existing
markets and terrify new ones. Numerous issues and practical realities remain to be solved, from
ensuring adequate privacy controls to brand protection safeguards, but there
can be no doubt that the shift has already begun. The only question is how
you will adapt to survive and thrive in this new media economy before the
gravel road becomes a quantum highway. A version of this article
originally appeared on MediaPost's
Metrics Insider. Michael Andrew is the
Director of Search and Analytics for Mediasmith – Mediasmith is a
globally-recognized digital advertising media agency, with expertise in
targeted media planning, execution and measurement. With web expertise dating
back to 1995 and with the recent introduction of the M3 service suite
encompassing emerging technologies, social media and search, Mediasmith
continues to be at the forefront of the evolving media landscape. |
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