Advertising is going through a significant innovation period right now and it’s fascinating to take part in it. Online advertising (strictly online) was established and tested in the 90s and now has billions of dollars being spent. Brands are spending increasing amounts of money to engage with their audiences in the digital world.
The Internet is really the first medium that is enabled by technology, potential for mass reach, and the ability for anyone to aggregate audiences (niche or mass). Television, print, radio, and OOH (out of home) all have significant barriers to entry in terms of both human and capital resource. Because of the lower barriers to entry and the adoption of billions of people worldwide, the Internet has become one of the most fertile feeding grounds for technology geeks and media mavens to innovate within and to make a difference in a short amount of time.
With all of the properties that exist online (web only or hybrid), a common theme for many of them has been monetization by advertising revenue. Over the past decade, companies like Poindexter, Atlas, Overture, DoubleClick, Google, Burst, Sonar, Tribal Fusion, and a whole slew of others have helped brands reach their audiences either through technology or advertising sales (enabled by technology).
Up until very recent years (and in many cases, even today), when you advertise online, you are reaching the audience of a particular website. For instance, if you are advertising on FerrariChat.com, you are going to reach the affluent crowd that visits that particular site. To put this in context, you would advertise (place your media) on sites/properties that have a high composition of your target audience. If a sites composition is 92% (of your audience), it means that for every $10,000 of media dollars spent, you are wasting $800.
Of course, we all like to create efficiencies and limit our wastage. Advertising technologies are in a high-growth phase where audience data is becoming highly sought after and important. Most brands and companies have tons of audience data but generally, it’s always existed in many different silos (divisions of companies) or the technical (or operational) infrastructure was never in place to crunch the data. Now that entrepreneurial visions and technical infrastructure are on the same wavelength, advertising is becoming increasingly technical.
Lets throw away our old models of buying mass audiences.
Lets look at new models of buying single people and I’m sure you see the benefits of this. This isn’t revolutionary but it’s becoming mainstream. Some smart people have been thinking about this for quite some time but there are finally enough media dollars behind this to move everything forward and validation is occuring.
Separate audiences from the page and on top of that, fragment the audiences into singular conversations (impressions).
In order to buy single targeted impressions, you must have data on the impression. Data is key. Dare I say, data is the new king (content)? If you have data and aren’t afraid to roll up your sleeves and analyze it, you can do some really interesting things today. Just having data however does not mean a thing…. quantitative analysis and modeling abilities will allow everyone from agencies to technology companies create unique audience segments and add color to single impressions.
Whether your a venture capitalist looking for your next investment, a media planner/strategist looking to figure out where to spend your ad dollars, or a brand manager looking to grow your P&L, there are no shortage of companies emerging (or have emerged recently) that could provide this data. Just look at the behavioral targeting networks that emerged such as Tacoda, Revenue Science, and Specific Media. Not only do these networks allow you to target based on behavior, but they provide added value in the sense that they show you who your audience really is by analyzing the data they have on the audiences who react to your brand messaging. This data is turned into reports that are given during and after the campaign has run for your brand. Of course, this is very interesting.
Look at Lotame, 33Across, Datran, Media6 and others that have quite a bit of data about users that can be leveraged for reaching audience segments. Matching an impression with a chunk of relevant data can be extremely interesting.
Who will win the near/mid-term advertising game?
This is a very interesting question. I think that there are quite a few players in the market who have quite a bit of data and also have an ad-sales team. Many times, these companies keep the garden walls “up” with this data and you can only receive minor parts of it through your ad buys. I think there are ways to monetize that data individually aside (but maybe not mutually exclusive) from having to buy media. I’d like to see companies leverage all of their data together to make impressions more valuable, whether they are bought from the respective company or a 3rd party.
Where does this play out? In the exchanges, networks, and sometimes, site buys.
Food for thought: While most of this conversation was centered around the Online Advertising world… it’s safe to assume that this will take place for all media channels in the next few years. As we’re one power outlet away from being a fully digital society, we’re going to be able to buy single impressions across television, radio, print, OOH, etc. Data will make this infinintly more valuable. Get excited… I know I am.