One of the things I love most about working in online advertising is the pace. At various times since 1995 our industry has seen periods of rapidly accelerating change, and it seems once again to be evolving in the blink of an eye. Ad exchanges, audience based targeting and powerful new data sources are evolving so fast that what's new today seems old by tomorrow. But these trends are all driving toward a renewed period of growth. A newly-released PriceWaterhouseCoopers report projects that digital advertising will represent 25% of all advertising revenues by 2013.
Today as never before, online advertising is at a tipping point, with all the enabling factors coming together for a true breakthrough. I'm not referring to the current first step of simply buying remnant inventory on the cheap from ad exchanges, but a total transformation of the entire media buying process.
Yet while this new potential and excitement lay out before us, many media planners and buyers still have their feet firmly planted in the old model of buying site presence rather than audience. Sure they add a few networks to the buy in order to meet an overall plan efficiency metric. But few have moved to take advantage of even the most basic new tools. It's not that they're not doing their job; it's just that the landscape is confusing, and they are already handling all the complexity that they can with limited resources and demanding clients.
Take just a few steps into the world of audience-based targeting and the number of variables to consider explodes. Should the audience aggregation be based on social mapping? On demographics? On online behavior? And what about contextual relevance? Does context and ad environment still matter? And what data is really behind the aggregation being provided? Is the methodology transparent? It seems as if we are stepping out of the simplicity of reach and frequency, composition and coverage only to find ourselves in a changing kaleidoscope of brightly colored, but ephemeral options. And on top of all this, we still need to figure out what price to pay for ad impressions so that the media plan meets its goals as efficiently as possible.
Luckily, help is arriving. Until recently there was no technology that could help media planners sort through these factors one at a time, let alone in all their various combinations. This, however, is changing. The advent of real-time ad exchanges and the advent of new data providers that can deliver everything from audience profiles to context for every web page has set off a wave of analytic innovation. New modeling tools can now allow planners to automate multivariate analysis, pulling all kinds of data together to understand the relevance of each data set for a given client campaign. Then, the relevant data from various sources can be modeled in real time to determine the value of each delivered impression.
These new tools are going to change the way we think about developing a media plan, and how it gets executed. They will put the analytics team in the center of the process, not just for performance buys, but for branding as well. They will make media operations a top of mind consideration for every agency execution. And they will ignite a wave of agency innovation that will make online advertising more effective.
Are your ready to embrace the change? Here are three things media professionals need to be doing right now:
- Familiarize themselves with audience profiling services
- Understand the different ad exchanges and how they work
- Learn about the various ad optimization engines and tools that are available
Technology is transforming media buying from a gut-instinct, relationship-based business to a hard-nosed science based on automation. The results will be far more efficient than ever before with fewer dollars wasted on people who don't care about your ad. What are you doing to get ready to enter the next wave of online advertising?
