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6.25.13 Digiday logo

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(Digiday) – Consumers are everywhere in media nowadays. It’s time advertisers catch up.

The numbers make it clear that the modern media consumer, aka the digital native, is skipping across media platforms all the time. A recent study conducted by Time Inc. and Innerscope Research showed that digital natives change their media platforms 27 times per hour, while “digital immigrants” (those weaned on traditional media) switch media platforms 17 times per hour.

It is important advertisers recognize that consumers are using their PCs, phones, tablets, laptops, e-readers, and televisions, often simultaneously, to consume media. Instead of isolating new media from display, TV, radio or print, it’s more beneficial to integrate them. It’s no longer about digital media or standard media; it’s all of the above.

A recent Nielsen study found that consumers simultaneously use smartphones, tablets and e-readers, while watching TV. About 40 percent of consumers indicated that they use smartphones and tablets on a daily basis, while viewing TV. Conversely, fewer than 14 percent of consumers indicated “never” using smartphones and tablets with TV. Advertisers should surround consumers with ads as they migrate from one venue to the next. For example, an advertiser can run a standard TV commercial with related mobile and tablet banners and target relevant social conversations to create seamless branding experiences across multiple platforms.

Read more on Digiday.

A recent Digiday article titled, Why Agencies Will Double Down on Strategy, highlights how agencies are increasing their focus on strategy to help clients gain deeper insights into digital opportunities. According to a study conducted by agency-client relationship experts, RSW/US, 76% of agencies now provide strategic services, up from 59 percent in 2009; however, only 16 percent of marketer clients surveyed, say they make use of them. This indicates that there are still hurdles that need to be overcome.

A notable point in the article: “Ultimately, a focus on strategy could prove more lucrative for agencies, largely because it’s harder to define and to quantify. Instead of charging by the hour or percentage-based fees, and seeing their margins constantly squeezed by procurement departments as a result, the consultative approach could allow them to monetize their expertise more effectively as third parties or clients themselves handle the execution.”

Strategy is clearly a way for media agencies to differentiate and grow but first they have to achieve better operational efficiencies.  Without this first step, it will be almost impossible to attract the right people and provide them with the time and resources to do their best work. Once these two steps occur, new ways to scale the agency business will present themselves. This progression works in other industries and there’s no reason why it can’t work in ours.

With the right operational strategy in place, the future is very bright for agencies…

Mashable released a pretty interesting article last week discussing the work the FBI is conducting to build a database of iris scans throughout the U.S. By 2014, tests will take place that leverage cameras throughout the U.S. to track criminals, fugitives, and suspects through eye scans and report their whereabouts in real time. For everyone who gets skittish about ‘Big Brother,’ I’ll pause for your shudders.

We can expect there to be uproar about personal privacy and a rise in membership in the American Civil Liberties Union, however history has shown us that when technology begins to border on invasion, the populace is able to beat it back pretty quickly (see Facebook’s Beacon experiment, Carrier IQ, UDID, robust retargeting, etc.). Personally, I am pretty pumped about the government’s involvement with iris scanning because this is actually good news for advertising.

Government funding means two things: legitimate technology and secondary applications. Iris scans mean tracking technology applications that can help deliver a true view into the value of Digital OOH and place-based media.  In theory, this same technology should allow us to determine how many consumers look at advertisements, how long they are engaged, and where they are looking on the sign. We’re no longer talking about handheld clickers counting each passer-by or mapping traffic routes – this will bring us closer to digital measurement in the outdoor space than anything has to date.

Where else do you see this technology being applicable?

Read More from Mashable: Hello, Big Brother: FBI Is Building a Database of Iris Scans

On a recent business trip, I thought about all the current advertising mediums across the industry, and how many media professionals who hold ad budgets are in a state of media confusion. While awaiting my flight, I completed a very informal survey. I counted 93 individuals who were awaiting their plane, only two had newspapers and another five people were just sitting there.

Now get this, 85 people were playing, using, or surfing on smart phones and/or tablets. Ten years ago, the affluent market would focus on the task of picking up a newspaper or magazine before a trip. Three years ago, it was ensuring a mobile device was charged before a trip.  Today, it’s making sure that online content has been downloaded for viewing in offline mode. Connectivity is just as important as electricity today and only the brave will try to predict and embrace what is important in the next three years.

Along with this observation, I came across another relevant and eye-opening experience focused on the lack of adoption or simply the lack of acceptance of shifting media usage. Anyone can tell you that newspaper circulation is down, and traditional broadcast spending is down. However, it’s the status quo that marketers keep going back to due to misalignment with consumer behavior. They seem to be pairing what they previously knew against what they currently do.

For example, I recently met with a regional marketer who told me that he was fortunate to work for a brand, in which he represented its core target audience. He also described how his spend was best used on TV and newspaper to target his “core” audience. Meanwhile, he was “ironically” showing me his video advertisements on his iPad. Even more mind-blowing, he showed me what his competition was executing, which was display and pre-roll video units on premium content sites. This was a monumental disconnect. This marketer was proving there was a need for digital budget allocation as he was relying on digital media in front of my eyes.

While there are marketers who are still deeply rooted in traditional marketing, others are already executing digital media, and it is great to see their growth. However, many of these experienced digital marketers are challenged with executing campaigns that take digital media to the next level. Digital can be a lot of things to many different marketers. However, one thing proves true. Technology is shifting media usage and it’s becoming more and more difficult to execute paid ad campaigns across these opportunities. Marketers need to step out of their comfort zone and not be timid of the new. The 1974 Time magazine advertisement was static. Display ad units across premium content are simply those same ads with interactive functionality. The 1989 Sony Walkman is now an iPod.  The 1994 Pioneer stereo receiver deck is now an iPad or tablet using Spotify or Pandora.  The awesome Plasma screen TV from 2003 is now a 3D interactive experience where many children today might not even know ABC, NBC, or FOX broadcast companies.  They do know URLs or HULU, YouTube, and Vimeo.  Wires are gone, and these antiquated technologies are simply shifting into other forms.  Yet many marketers are too wrapped up in trying to grasp the big picture instead of stepping back to realize its still radio.  It’s still video.  It’s still display.  The same content from a different technology platform.

Partnering with a logistics platform to scale and increase execution in digital is crucial and it will only be more important in the months to come. It’s okay to continue talking walks, but at least swing the bat.  Get your message on the right technologies, to connect (not target) with your consumers.  Trust me, your competition already is…

Robert Hof of Forbes recently published an article titled, “Is the Online Ad Industry Too Obsessed with Technology?” which featured panel discussions from a recent Google online advertising event for advertisers, agencies, and publishers. The panelists included industry experts such as Terry Kawaja, CEO of Luma Partners, Omar Tawokol, CEO of BlueKai, Kurt Unkel, President of the digital ad buying unit of VivaKi, and more. The discussions shed light on how technology can be the answer and the problem for marketers.

In reaction to this piece, we tasked our leadership team to answer the same questions. Read their responses below:

Q: How do we get to $300 billion to $400 billion in display ad revenues? Is the fragmentation of media that people worry about actually a way we might get there?

Charlie Thomas, SVP of Sales – We can’t look at display in isolation, or it will grow more slowly than it should. We have to start thinking and talking about display, along with all other types of advertising, in context with owned and earned media. Clients want to lower advertising expenses while increasing productivity. They can do this by building integrated marketing systems that leverage their own branded networks. This approach can drive measurable business results, not just advertising metrics. We need to start thinking of advertising as fuel that makes these systems and networks run and begin aligning with the higher business outcomes they produce. This is what will make all advertising grow and raise inventory value. The question will become “What fuel do we need to run our systems and networks… regular or premium?”

Q: We’ve got hundreds of companies doing a variety of point solutions. Who’s going to simplify this, besides Google?

Shawn Riegsecker, Founder and CEO – This is the right question because it’s a huge and difficult problem.  And because it’s a difficult problem that takes years to solve, there are only a handful of companies with the scale, experience, long-term vision, and sustaining power to fix it.  The three most likely companies with the vision and ability to fix it are Google, Centro, and MediaOcean.

Q: Agencies are criticized as being unable to sort out the technology choices, and also criticized for how they make money from clients [with agency trading desks, or internal ad buying units]. What’s the answer?

Shawn Riegsecker, Founder and CEO – Agencies are too often unfairly criticized in many areas such as the ones you mentioned.  What’s most important for a vibrant and successful industry is that we have strong, creative, and healthy advertising agencies.  It’s difficult for anyone, including agencies, to sort out technology choices because there is a lot of poor technology offering incomplete solutions for the industry.  As for agencies making money in new and different ways, I think it’s great.  The old agency compensation model is broken, and in order to find the right new one, agencies should be trying and testing different approaches.

Q: How does that change how you’re paid?

Shawn Riegsecker, Founder and CEO – As software transforms how the advertising industry operates, the model of hiring more bodies to throw at problems and attempting to charge for those bodies is a model of the past. The pricing model of the future will be based on value, not labor.  Those agencies who provide greater value and are able to communicate that value will be able to charge significantly more.

Q: Two of the solutions to this fragmentation are standardization and consolidation. It feels like in display we’ve got hundreds of vendors reinventing the wheel, so we could use an operating system. You can’t have 12 of them, but don’t we need it?

Shawn Riegsecker, Founder and CEO – First, we feel standardization is a terrible objective for our industry.  Standardization leads to everyone designing and developing for the lowest common denominator which breeds poor quality.  That’s not a rich, healthy, and vibrant landscape.  We believe in creating seamless and automated workflow software that allows an agency to scale highly complex, custom, and beautiful advertising across hundreds of publishers with very little effort.  So, yes, there isn’t going to be 12 of them but there are going to be a couple of amazing platforms that help create a happier and healthier industry.

Q: TV benefits from everyone agreeing on the value of the GRP [Gross Rating Point], which has $70 billion in spend behind it. Thoughts?

Ben Pashman, VP of Business Development – Increased advertiser investment in the digital space is inevitable based on shifting world-wide media consumption habits. It is undeniable that this investment shift is happening more slowly than it should and a lack of reporting standardization is partly to blame. The GRP works in TV because every ad looks and feels the same and TV is a one way conversation. Due to the bi-directional nature of online advertising and the many sizes and formats online; GRP is a start but it is not the complete answer to unlocking massive online spend increases.

In order to achieve real scale the online ad measurement system must be torn down and re-built from the ground up. Our two standards of measurement (CPM and CTR) are both fatally flawed. CPM rewards the sell side for serving impressions and therefore all sorts of games are played by publishers to serve as many ads as possible.  These impressions are mostly ignored or never seen at all.  A recent Comscore Study quoted that an average of 31% of impressions served are never seen.  The industry shift away from cost per impression served to cost per impression viewed is a great first step.

The fact is that online is so much more than TV.  There are multiple devices, multiple ad formats and sizes, and many ways a consumer can engage with an online ad.   Re-purposing the GRP is just one piece of the increasingly complex puzzle that will help unlock significant lift in online ad spend.

Q: What about upper-funnel [brand/image] advertising? Is there enough time, attention, and money focused across this ecosystem to address that kind of advertising?

Martin Betoni, VP of Creative Services – Currently there isn’t enough of anything across this ecosystem to address it, and that has been the problem. However, I believe we’re at a crossroads. DR dollars have saturated digital advertising, and we’ve mined as much data and analytics as we could possibly exploit across it. The recent ‘cookie licking’ revelation is a great example – does this equal effective, immersive advertising? The enormous opportunity is brand and image advertising, but to do it effectively the environment has to change, and it will change. Consumers are already changing their content consumption behaviors, and the ecosystem itself is changing along with them. We have to get ahead of what’s happening and come up with meaningful, wide-scale advances to reinvent the medium.

Q: Is there really a space for creative anymore?

Martin Betoni, VP of Creative Services – To me, this question is almost a kicker. Space anymore? We haven’t even begun to put out great creative online yet! All we have is space… space to re-form, re-imagine, re-think, and most importantly, come to believe that we CAN do meaningful brand advertising digitally.

Q: Whose responsibility is it to create this kind of thing (apps as an experience)?

Martin Betoni, VP of Creative Services – The responsibility surely falls on the shoulders of the two groups most directly involved in these transactions: the sellers and the buyers. The sellers, or publishers, have to realize that consumers are speaking with their actions. They are aggregating content in much different ways than ever before, but the content they’re aggregating hasn’t changed. This content is still very important, which means its owners have a valuable commodity to deliver. Consumers are demanding a better way of delivering it. At the same time, the buyers, or agencies, have to get back to what they’re good at and where their value lies: their ideas. They do need to spend 80 percent of their time thinking and creating and 20 percent of their time on technology, and we have to help them get to that place. If publishers can implement a delivery method of content and advertising that pleases consumers, and agencies can rethink advertising as content, digital display (across all screens) becomes a viable way for advertisers to make their mark.

What is your reaction to these responses? Do you agree or disagree?

In a comprehensive 2011 IBM study, more than 1,700 chief marketing officers (CMOs) worldwide were interviewed about the current state of the industry. The findings highlighted key challenges, such as the explosion of data, social media, the proliferation of channels and devices, and shifting consumer demographics.

Four out of five CMOs recognized that the market will be highly complex over the next five years; however, fewer than half felt prepared to handle the complexity.

How can marketing professionals positively face and overcome these challenges? Here is just one example of an agency that continues to succeed:

Imagine what you could accomplish with more expertise, more time, and more money…