How is media impacted by digital developments?

By Dale Gall and Anthony Rhind, campaignlive.co.uk, Thursday, 10 November 2011 08:00AM

Fast-changing developments in the digital world are changing the way that media agencies operate and what they can offer clients. Two agency chiefs consider how.

Gall, Rhind

Gall, Rhind

DALE GALL UK CHIEF EXECUTIVE, PROFERO

- How has the digital media landscape changed over the past 12 months in relation to your agency's activities?

The emergence of automated trading, targeting based on social and behavioural data, and smarter measurement and analytics have created renewed interest in display media. We're unpicking the heuristics of online decision-making, allowing us to redistribute return on investment more rigorously. We are also investing in media, partnerships and ideas that create demand. Also, social media has started to reach maturity. And mobile is finally living up to its promise.

- How have the much-quoted new automated and data-driven trading models impacted your activities for clients?

This is still a nascent part of our industry. While ad exchanges and third-party data providers have been around for a few years, there are still challenges around scalability, particularly in the UK, so it is only a component of our media plans. We also recognise the importance of working with media owners specifically aligned with our clients' brands and customers. However, we see a lot of potential in the combination of technology-driven media and creative solutions, with several bespoke platforms live or in development, and we're hiring more media people with technical skill sets in anticipation of further growth in this area.

- Is there still a role for creativity in digital media planning?

Absolutely. In this age of access, people gravitate to and share things about the brands they feel a sense of belonging with. The opportunity is therefore bigger and more complicated than that offered purely by technology and data. It requires a type of person able to think creatively about brands and their customers' behaviours, needs and relationship with the whole range of digital media.

- What do these shifts in the buying landscape mean for publishers and content producers in terms of their value proposition for advertisers?

Media brands have a great opportunity, but they need to react to the challenge. First, they can trade on their ability to generate better yield from their audiences by adding rich data to behavioural cookie databases, supplementing display advertising revenue. Better data will allow them to prove the long tail of propensity they create. Second, more traditionally speaking, great content is still of huge value to advertisers, so publishers should reinforce the value their own brands can create. They should challenge their suppliers to find better partnerships and think more creatively about their own value.

- Are the middlemen taking too much margin from the value chain, and what can publishers do about it?

Publishers are still learning how to extract the full value of their user data and the inventory they pass to ad exchanges, so that's an opportunity. Also, display advertising expenditure is up year on year, much of which is being driven by interest in automated trading and data, so there are a number of ways in which the data and technology middlemen are adding value. It's still early days and largely remains to be seen how this will all balance out in terms of each party's share in revenue.

- How are your clients preparing for the European Union cookie directive?

We're keeping them regularly informed of the evolving situation via our relationship with the Internet Advertising Bureau and preparing them for the more fundamental changes to come in 2012.

ANTHONY RHIND CHIEF EXECUTIVE, HAVAS DIGITAL

- How has the digital media landscape changed over the past 12 months in relation to your agency's activities?

The expansion of the data marketplace and the scaling of platforms have been significant. Developing innovative programmes across mobile, tablets and Facebook has brought great client results. Unlike many of the preceding digital marketing innovations, real-time, socially driven brand communication models are evolving simultaneously across the world. Some of our most brilliant work is coming out of Manila, Sao Paulo and Dubai.

- How have the much-quoted new automated and data-driven trading models impacted your activities for clients?

We have been focused on "programmatic buying" for more than four years. Starting early allowed us to re-tool our data management platform, Artemis, to operate in a real-time world. In parallel, we incubated and span out our impression buying partner, Adnetik. The scaling of data-driven models is exciting. The market must not limit this to "audience buying". Data-driven automation must also extend to creative design/message/offer, landing-page and site experience. Optimising the consumer experience is key. Therefore we must apply this beyond "performance" marketing - the future manifestation will include TV, tablet and possibly digital out-of-home.

- Is there still a role for creativity in digital media planning?

Absolutely. Creative media plans are necessary to cut through the tonnage of digital advertising, combat the clutter of competitive brands and activate the potential of earned social amplification. The conversation with our clients is often about "publishing" a brand narrative rather than "placing" advertising; we must all learn to be excellent storytellers.

- What do these shifts in the buying landscape mean for publishers and content producers in terms of their value proposition for advertisers?

Predominantly, the role of ad exchange has been to replace or supplement ad networks in clearing unsold inventory, with limited URL disclosure to control channel conflict issues. Some content producers and publishers use real-time bidding for inventory extension; to expand reach, frequency or control recency against known or profiled cookies. Increasingly, I hope publishers will open all their most scarce inventory to real-time and impression-level auctions, thereby moving the predominant real-time bidding model from cost to value optimisation.

- Are the middlemen taking too much margin from the value chain, and what can publishers do about it?

We are already seeing vertical integration; this trend will impact pricing as consolidators defray cost to capture market share. The most vilified middlemen are "remnant" ad networks. They exist because of publishers' secondary market distribution policies - if publishers maintain stricter control over their inventory, these intermediaries would either operate at a much lower margin or disappear. Most agencies would applaud publishers who control distribution more rigorously.

- How are your clients preparing for the European Union cookie directive?

At the moment, it is not clear what actions our clients need to take to satisfy "informed consent". The directive lacks clarity as strict interpretation would cause great disruption to web users. So while the cookie directive came into force on 26 May, it seems we are in a period of experimentation. We must work to define a model that safeguards consumers and allows the European digital industry to thrive.

This article was first published on campaignlive.co.uk

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