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Sep 28, 2008

Your Data With Destiny

Adweek: Media buyers still hesitant about highly targeted ad campaigns

Addressability — the ability to deliver TV ads to target individual households rather than more general groups — is the new buzzword in advertising. And a panel session at the Adweek conference in New York yesterday that included speakers from Bloomberg and NBC Universal, as well as several traditional and digital ad agencies, highlighted exactly why addressable advertising has Madison Avenue’s media buyers feeling more than a little conflicted.

In the traditional media-buying paradigm, advertisers buy audiences by buying (ed: sponsoring) content. Coca-Cola sponsors American Idol, Nissan sponsors Heroes, and so forth. But social media, ad networks, and especially behavioral ad networks, are chipping away at the “content as a proxy” mentality and positing that ads can be as or more effective if they’re tied directly to people and not to content.

Advertising Age’s celebrity columnist Bob Garfield spent half the front page of the September 15 issue and three full pages to preach the message: leverage user data to deliver more targeted ads, content and recommendations.

The cable industry has plugged over $150 million into it. David Verklin defected from CEO post at agency conglomerate Aegis Americas this summer to head up Canoe Ventures, which aims to make cable advertising more addressable by leveraging cooperative data from six major cable operators.

Major publishers are investing in it. At the Adweek session, NBC Universal’s senior VP of Digital Media, Peter Naylor, detailed how NBC executed a data-collection effort with multiple vendors during the Beijing Olympics broadcast to better understand usage between TV and NBCOlympics.com, with the end goal of delivering tailored ads and content to its users. On NBCOlympics.com, they tracked real-time stats at affinities between content and demographics. For example, Asians preferred table tennis and diving, the 65+ crowd preferred sailing and boxing. That kind of information can equip sales teams to package up inventory to a more targeted list of advertisers, or conversely, to provide advertisers more targeted audience segments via segmented content.

I’ve covered this topic here for VentureBeat in the past. But for all the talk it’s garnering, media buyers remain hesitant about jumping on the addressability band-wagon for several reasons.

First, while agencies are opening up to a more data-centric approach, operational challenges abound. One of the key issues is that it’s easier to buy a national TV ad than to set up and constantly manage a million-word AdSense campaign, or develop video creative for hundreds of demographics instead of one broad demographic.

Adweek speaker Lee Doyle of MediaEdge:cia explained, “It’s a major change for clients. A completely different way of thinking about advertising and marketing. It takes education, and it changes messaging development all the way through [to buying media]….It’s fifty percent of our conversation [with clients] and ten percent of their budget.”

Further, advertisers are struggling with the sheer volume and sophistication of data available to them. As digital marketing agency Avenue A’s Andy Fisher said, “We’re drowning in data.” And Michael Vinson of Starcom MediaVest Group, also speaking at the Adweek event, agreed and said the industry needs more quantitative talent.

Perhaps more pointedly, when an audience member asked Doyle if advertising industry leaders shouldn’t be doing more to grow the digital medium by supporting digital content creators and publishers, Doyle quickly underscored that the agency’s role is to buy media as cheaply and efficiently as possible, regardless of the medium.

My interpretation: We can talk all day about how wonderful digital media is, how addressable and trackable and cheap the media is, but the reality is that there’s a decades-long and multi-billion-dollar symbiosis between the ad industry and the TV industry. It’s going to take more than superior product, logic and efficiency to supplant that relationship. And startups like QuantcastVideoEgg and Vibrant Media are focusing on evolving and supporting that existing relationship as opposed to trying to cut old media out of the equation.

Your Data With Destiny

Bob Garfield Points the Way for Marketers in a Post-Advertising Age

"I have the advantage of knowing your habits, my dear Watson," said he. "When your round is a short one you walk, and when it is a long one you use a hansom. As I perceive that your boots, although used, are by no means dirty, I cannot doubt that you are at present busy enough to justify the hansom." 

"Excellent!" I cried. 

"Elementary," said he. "It is one of those instances where the reasoner can produce an effect which seems remarkable to his neighbour, because the latter has missed the one little point which is the basis of the deduction."
-- Arthur Conan Doyle, 1893
Bob Garfield
Bob Garfield
Hey, Mark Zuckerberg, listen up: This is about how to monetize Facebook. The billion-dollar answer awaits you just below. Just hang on for about 5,000 words, and no skipping ahead, please. That'll just ruin the suspense. 

For the moment, for all the other faces out there, a little review: 

For the past three-plus years, I've been railing on and on about a post-advertising age, one in which mass marketing will not depend solely, or even much, on mass media. Pretend, for argument's sake, that I haven't entirely lost my mind. Without assaulting you with the latest network-TV-audience figures or rubbing your nose in the horrifying implosion of the newspaper industry, I ask you to give me the benefit of the doubt. Assume that, in the near future, connections between marketers and consumers will not be principally forged via display advertising but will be otherwise cultivated online. Assume that technology will offer more and more highly refined means for the marketer to learn about the consumer and the consumer to enjoy a real benefit in exchange -- search and widgets being exhibits A and B.

Thank you for so stipulating. But if the lingua franca of our online future is indeed personal information, where will that come from? 

Data for value
Obviously, a staggering amount will come from consumers themselves. The quid pro quo between the marketer and the audience, for several centuries, has been free or subsidized media in exchange for inundation with ad messages. Madge didn't say "You're soaking in it" for nothing. In the Brave New World, and already in the last remnants of the cowardly old one, the value proposition will be similar but the barter items very different. A marketer needn't pay for episodes of "Gunsmoke" or "Married With Children" or "24"; it need only provide value -- whether in entertainment, information, discount or utility. In exchange, the consumer surrenders data. 

This is already taking place on an enormous scale. Every online registration you fill out, every cookie you accept on your hard drive, every supermarket purchase you make with your discount card is a something-for-something transaction. This new data economy has obvious privacy implications, but privacy is not an absolute. It is increasingly a commodity -- one celebrities trade for fame, travelers trade for security and most all of us trade for a few pennies here and there, scarcely blinking an eye. We get 50¢ off a can of New England clam chowder, and Safeway finds out exactly how much Preparation H we buy and exactly how often. And this doesn't even begin to consider what kinds of intimate details we post on Facebook. It's a bit eerie when you think about it, but most of us don't think about it. We accept the trade-off, take the money -- or utility -- and run. ...

Ed: We ARE drowning in data. The key is that Conan Doyle noticed the clean shoe among the thousands of other visual clues. That human intelligence needs to be programmed as artificial intelligence and scaled for millions of cases. How do we do that?

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