The automation debate and the opportunity to pivot
Posted 17 April 2018.
By John Baker, Managing Director, Lassoo Media & PR
Debate has raged for a number of years now around the merits of programmatic trading of digital advertising, with considerable focus from some commentators on its perceived risks. The negative focus has largely been on the issues of advertising fraud, viewability and brand safety.
The principle of programmatic concerns some media owners who perceive a risk to their existing media distribution model as, increasingly, advertising and content is served to consumers directly from other platforms based on behavioural data. The media owner ‘gatekeeper’ status for consumers has eroded.
But let’s be frank. The issues of ad fraud, viewability and brand safety have been with us since the development of contemporary media and well before the internet. Publishers and broadcasters have never been able to guarantee that 100% of their audience is exposed to ads, the risk of negative content adjacent to advertising campaigns has always been with us and there have always been crooks. Yes, some of these issues (particularly brand safety) have been amplified but they are not new and certainly not exclusive to programmatic digital or digital advertising per se. Let’s remember what nineteenth century Philadelphia retailer John Wanamaker said: “Half the money I spend on advertising is wasted; the trouble is, I don’t know which half”.
Addressing these issues and mitigating these risks has always been a key role of agencies and the suggestion (from some) that agencies might be broadly complicit in negative aspects of programmatic trading does not stack up.
The issue of “relevancy” has been one of the biggest vulnerabilities of traditional media planning and it is in this area, in particular, that the use of smart data and automation can optimise client investment alongside a more traditional approach. As data products and machine learning improve and evolve, expect this to become more significant with a greater focus on consumer value and utility across all media platforms, including traditional channels like television. The future looks good.
Another debate centres on the supply chain of automated digital, with sometimes legitimate questions asked about what is being funded and how this may dilute the digital ad spend on its way to the publisher. As we move to programmatic trading across platforms like TV and OOH, don’t expect these questions to go away.
While there is need for greater transparency to build marketer confidence, it is illogical to suggest that the technology, IP and resource that delivers automation and optimises targeting should not come at a cost. Traditional media company structures with large commercial teams that intermediate between markets/agencies and audiences have always been a part of the media spend on the way through to reaching the consumer. I don’t advocate the end of media sales teams, as they often add significant value, but I do question the modus operandi of some media companies. It’s time to pivot.
At a time when revenue is challenged, media owners might reflect on the intrinsic value they provide agencies and marketers, and that is to deliver deeply engaged audiences within relevant contextual environments.
The reason why so much investment is made in Google and Facebook is because it works. Many agencies and clients would like to see more marketing dollars funding New Zealand journalism, but first and foremost we have a duty to deliver optimal returns on marketing investment. The legacy model of some media companies is damaging to innovation and competitiveness.
It is time for established media companies to re-examine their service, utility and ideas; focusing on the journalistic and creative elements that make their media compelling to audiences. To invest in more and better journalism, creativity and content and to consider how to optimise automation and data to make their alternatives more attractive to trade with and leverage to create demand.