As 2014 rolls along and we head into yet another upfront buying season, it is interesting to think about some of the changes we have seen over the past year. These changes (primarily driven by data and technology) have affected every aspect of our business – how we develop insights, how we put together communications strategies and plans, how we solicit partners/ideas/innovation, how we buy, and how we measure success.
It is easy to get smitten with all of the jargon and sensationalism around data, programmatic buying, the newsroom phenomenon, location-based services, addressable advertising, dynamic ad insertion and the like. Instead of buying into the hype, let’s take a look at some of the more substantial changes rocking the foundation of our industry. These changes are creating a significant opportunity to recast and redefine media value in an omni-channel world.
There are three basic axes of change: the changing consumer, the changing business of marketing communications and the new measurement paradigm.
Much has been written about evolving consumer expectations and behaviors. In summary, it is fair to say that consumers today require greater access, greater transparency, and more consumption options than ever before. Their media diet is more dynamic, and they transition from screen to screen seamlessly. Nielsen just released a new study focused on video convergence. In it, they hint at a total and imminent convergence of television and digital advertising. We have been speaking about this for many years, and while it is true that each year the video marketplace becomes more and more holistic, the way that we plan, buy and measure video across screens is still quite different. Consumer usage necessitates that as an industry we figure out how to look at the marketplace holistically. A lot of progress has been made, but there is still more to do.
Making Measurement Make sense (3MS) is an initiative that is squarely focused on tackling the multiscreen currency challenge. It involves all of the major industry organizations including the 4A’s, the ANA, the IAB and the DMA. The stated purpose of the initiative is “to identify and define digital media currencies and the core metrics for planning, buying and evaluating Brand advertising across all platforms.” It has been operational for about 2 years and this year we will see several of the 3MS initiatives make their way into the marketplace. Exciting times indeed!
The business of marketing communications has never been in such flux. The complexities on both the buy and sell side have reached epic proportions. There is no doubt, that if we do not figure out ways of automating and reducing the friction in the system, the industry will collapse under its own weight. We are very encouraged by the progress that we and our partners have made in the past year automating the business of media. We have dissected the workflow and are tackling the bottlenecks one by one with partners across the ecosystem.
In the new measurement paradigm, the building block of value is media inventory. According to Wikipedia, inventory refers to the goods and materials that a business holds for the ultimate purpose of resale. We are thinking about inventory today in ways that we have never done before. Much like the stock market or other electronic trading platforms, we are beginning to look at how we manage media inventory in a similar way. Technology has enabled us to create both private and public marketplaces for housing and manipulating inventory, and data has enabled us to value that inventory in new and innovative ways. This new measurement paradigm is creating a new currency for our business.
If there has been one constant in the measurement conversation it has been around the need to move from counting exposures to understanding resonance, or engagement with an audience. This elusive engagement measurement has vexed the industry for years. In many cases, we have looked beyond engagement and tried to create direct correlations between marketing spend and sales. Over the past year a lot of work has been done to get closer to cracking the elusive “engagement” metric. As part of the larger 3MS initiative mentioned earlier, we have acknowledged that there are three categories of engagement: cognitive, emotional, and behavioral/physical. Each of these come with a unique measurement opportunity: measurements of campaign awareness and attribute recall are part of the Cognitive group; brand loyalty and physiological response in the Emotional area; and gaze time and swipes in Behavioral/Physical.
It is not outlandish that as we head into another annual buying season we should rethink about the value we place on the inventory that we plan and buy. It is time for a new currency that goes beyond the antiquated demographic targets of age and gender. That currency can be based on a cost per sale a cost per engagement or a cost per Brand experience. A simple CPM or cost per view does a disservice to an industry that has reinvented itself over the past decade.
The year ahead will undoubtedly bring with it exciting developments in our business. Let’s avoid the temptation to buy into the hype and remember that we are in a marathon rather than a sprint. Let’s focus on building our business from the foundation up, focusing on creating a new currency that can fuel our business internally and externally.