25 Jan 2015

STAYING WITH THE TIMES-Adapt (to programmatic) or Die

The advertising industry has come a long way from the Mad Men days. If those guys had to compete in today’s market, they would not be successful, and here is why.

Back then, the focus of advertising was on the creative, whether that was a billboard, a magazine/newspaper ad, a radio commercial or a TV spot. In today’s advertising industry, we are moving away from focusing efforts on the creative and spending our energy more on strategic distribution of the advertisement. The creative is still crucial to the process because in the end, the engagement of the audience is the defining factor of the success of a campaign, but digital focuses more on the messaging than innovation; online advertisers consider not only what the context the audience is viewing the ad in, but also the right age, location and even time of the day.

Digital is the main cause because with the revolution of digital advertising, creatives had been limited to 160×600, 300×250, or 728×90, etc. sized banners on a user’s computer. Even video advertising is different from TV ads because on a computer, the user a lot of the time has the option to skip the ad. All in all, the landscape of how advertising is done has changed so much in the past half-century that the Mad Men we glorify might not even be fit for an internship at a digial media shop unless they learned how to transition their skills into the digital environment.
This brings up the question of what will happen to the companies and personell currently working in the offline advertising sector. From my perspective as well as many of my peers in the digital media industry, the answer is simple: Adapt or Die. It still baffles me today that when I speak to account directors and media buyers at agencies, I sometimes spend 5 minutes of the call explaining to them what CPM is. Their focus for decades has been creative, budget allocation, and relationships with offline media publishers. Even the younger generation at these agencies was trained by their predecessors so they get influenced by their perspective as well. This is not to bash ad executives of previous decades, many of them have become pioneers in our modern eco-system. Because they understood the simple truth of: Adapt of Die; they stayed up with the changing times and technology. There are so many features in digital advertising that are non-existent in it’s offline counterpart. Online advertising, especially with the integration of RTB and programmatic buying, has given both advertisers and publishers a lot of advantages that were left essentially to a guessing game previously. Here are some of the many added benefits of online advertising versus offline:
– Measurability (Buyers can spend $1 or $1000 on a domain depending on how they see fit)
– Transparency (Publishers can see what type of creatives are being served on their inventory and block any categories like auto-audio even though they generally trust the brand)
– Cost-Effectiveness (Buyers can allocate spend as specifically as virtually possible so they do not spend money showing ads to people that will not be interested.)
– Efficiency (The reason that more and more money is being funneled into programmatic is that ITS WORKING! Higher ROI is good for everyone on both sides.)
– Results are Known Sooner – (Earlier, lets say with a magazine ad, you didn’t know the influence of the advertisement on product sales until weeks later. With digital, you can track a creatives influence on sales within hours which allows an advertiser to change direction sooner and waste less money.)
– Precision Targeting – (With offline media, you can target an entire magazine’s readership, but with digital you can narrow that down to that magazine’s online readers within a specific age range, of a certain gender, in a certain country, between specific hours. The more specificaly we enable advertisers to buy, the better their ROI will be, which will result in them spending more over time. More spend is what will let publishers flourish.)
If the players, both companies and their employees, in the offline advertising space make efforts to learn the basics of how digital is progressing, they as well as everyone else will be better off. There is one factor about digital media advertising that is both positive and negative depending on where you’re looking at it from, that is the fact that is is growing rapidly and changing constantly. If you’re already in the space and making efforts to stay updated, it’s fantastic. If you are not in the space, there is nothing more daunting than trying to understand something that is changing constantly.
Programmatic buying and the sale of advertising through real-time-bidding auctions has been a fascinating phenomenon to watch and be a part of. I am so happy to be in an industry so exciting and fast-paced and I look forward to all of the challenges and achievements to come in the future.

Thanks for reading! Please feel free to comment or reach out directly with any questions, concerns or suggestions.