According to a new report by Magna Global, the strategic global media unit of IPG Mediabrands, 50% of today's advertising works and the other 50% does not, and marketers, media owners and agencies need to begin using better data, technology and predictive analytics to create more efficient and effective media buying opportunities.
"Strategies and technologies that have come of age in the past two years in digital are now available to improve and transform all transactions across the traditional and digital landscape—not only to make our media work harder, but to eliminate the low value, manual processes that still dominate the current media work flow," says Todd Gordon, executive VP and U.S. director of Magna Global. "We want agencies' staffers, clients and media owners to spend more time on high-level custom solutions that drive client business results, and less time on chasing proposals, units, and invoices."
The report says simply using sex, age and TV viewing habits as a way to buy advertising is no longer effective. Past consumer buying habits, including websites visited and brands and products searched for, must be tied into TV audience buys.
The report also suggests moving from conventional TV ratings to impression-based trading in local TV. "Local television inventory has long been traded on ratings, but fragmentation has reduced the average rating size, rendering them unstable and unpredictable," the report says.
It adds that moving to impressions-based trading would: (1) "Create additional supply by turning tiny, fickle percentages into hard numbers that can be aggregated; (2) Make local TV more comparable to other media; (3) Enable more precise targeting when combined with additional qualitative data; and (4) Feed into new, more efficient buying processes for both broadcast and cable inventory."
The report says when buying online media, "the vast number of audience interactions allow marketers to combine detailed behavioral data with contextual targeting."
It also states that programmatic buying no longer refers only to real-time bidding. "Audience targeting now occurs via both real-time and non real-time methods, and as a result advertisers are accessing more and more premium data-enhanced inventory." The report says non real-time processes will make premium publishers more comfortable with doing business programmatically.
Magna Global says global growth in digital programmatic trading reached nearly 60% in 2013, and will continue to grow another 40% this year. It also predicts that by 2017, the digital programmatic spending across the nine largest digital markets will exceed $33 billion.
Among some other findings in the report:
• Consumers are twice as likely to interact with online ad content when it is delivered in real time.
• Incorporating real-time content into online display ads improves brand favorability and purchase intent. Percentage increases compared to non real-time ads were between 13% and 19%.
• In a multiscreen campaign, the shorter the interval between TV and online ad exposures, the more memorable the messages will be. The difference in unaided recall between sequential exposures and those seven days apart was 33%.
• Sequential messaging across TV and online also improves positive responses to a brand. The results for sequential exposures on TV alone were not nearly as positive.
• Many global Internet users are in favor of their devices anticipating their needs based on passively collected data. More than 80% agreed that they would be much more likely to buy a product or service that delivered "pleasantly surprising experiences."
Fresh Approach to Big Data
The report also offers some advice to marketers on how to approach big data and integrate it into their operations. Michael Minelli, head of business development information services at MasterCard Advisors suggests seven guidelines:
• Start small, identifying the top three areas of high potential impact.
• Make sure your advertising team is fully leveraging your direct/database marketing analytic talent.
• Seek big data use cases from your peers—even if they are in different industries.
• Hire or consult some data scientists and engineers that understand the "open source" technology world. It's amazing how much analytics innovation is happening on a daily basis—and it's free.
• Create a research & development lab or function where people are 100% focused on testing new big data approaches that can be implemented. It's too hard to do it with 10% of someone's time.
• Leverage the big data vendor community. They often will put some skin in the game if you treat them like a partner.
• Make sure you have a good working relationship with your technology colleagues—they need to be an integral part of the team.
Minelli offers a rather simple definition of big data—the next generation of data warehousing and business analytics that is poised to deliver top line revenues cost-efficiently for enterprises.
Minelli says today's consumers "prefer marketers who talk with them, not at them." He advises marketers "to be ready with relevant marketing at a moment's notice" and that content "should be versioned and distributed across multiple channels." And he adds that marketers should collect holistic data profiles on consumers.
Bob Lord, CEO of AOL Networks who is interviewed in the report says that out of the company's programmatic upfront held in September 2013, it has received more than $50 million in ad commitments.
"We have worked very hard to refocus our teams and technologies on platforms that help agencies and brands scale across all screens and formats to solve real business problems," Lord says. "And I believe we're at the right place at the right time given the structural and economic pressures digital is putting on the advertising and media ecosystems."
The Magna report also lists six "start-up" information harnessing companies to watch—Sticky, VistarMedia, triplelift, idomoo, Perch and Placed.
The latest version of Magna Global's biannual Media Economy Report is titled Better, Smarter, Faster: How Data Is Changing Our Business.
"Data is inching us ever closer to that moment of real-time, one-to-one messaging, regardless of location," says Brian Hughes, Magna Global's senior VP, audience analysis practice lead, who was the main author of the report. "Those marketers who are able to most effectively harness the precision and speed that applied data enables for communications will be best positioned to thrive in the new data-driven media economy."