The past 12 months has been a torrid one for advertising as marketing budgets were slashed. While traditionally during a downturn companies retrench, become risk averse and focus on what they know, in the world of online display advertising the current economic environment has actually helped accelerate the adoption of new exchange and trading platform technologies.
For agencies, the accountability, efficiency and control these platforms offer for media buying are very attractive. At the same time, however, they should not only be looking at investing in new platforms but also ensuring they have people with the right skills to effectively use these technologies.
As advertisers become even more metrics and measurement driven, the delivery of tangible results has become essential for making marketing investment decisions. This has driven a wider acceptance and adoption of performance marketing rather than pure branding campaigns. Now, advertisers want to buy campaigns on a Cost per Click (CPC) or Cost per Acquisition (CPA) basis, rather than the traditional Cost per Thousand (CPM), something these platforms are geared up for. They are also helping advertisers identify the link between price and actual value as via exchanges, buyers never overpay for inventory, moving away from the traditional approach of buying based on artificially defined pricing.
These platforms are redefining the way media is being purchased. They represent transparent, automated, auction-based buying platforms, making the whole media buying process faster and easier, helping eliminate barriers to business by removing traditional inefficiencies.
We are already seeing the agency world beginning to change and adopt these technologies. The major agency groups are investing in their own trading solutions, highlighted by the launch of Cadreon, B3, VivaKi, and Adnetik. A new breed of agency is now emerging, putting trading platforms at the centre of their operations, and companies are also being set up to help agencies manage buying on exchanges.
With such technologies being adopted and becoming more mainstream, the whole media buying process is moving away from deal negotiations and lunches to one based on predictive algorithms, data and bid management strategies.
What this new approach means for media buying is that new skills are now needed to operate successfully in this new environment.
Such change reflects the way offline direct marketing developed in the 80s and 90s. Growing sophistication and targeting required data analysts to crunch data and drive greater insights, improved targeting and greater campaign ROI. Segmentation, profiling and merging proprietary and third party data to deliver better results became crucial. These are now becoming the sought-after skills in today’s online display world in order to drive digital tactics.
Traditionally seen as requiring strong sales and negotiation skills, media buyers are now becoming bid strategists, needing to understand how dynamic auction environments operate, how to combine automated bidding algorithms and data modeling to drive pricing strategies, and how to effectively optimise campaigns. Data insights are needed to improve targeting, develop segmentation and remarketing strategies and create more refined media buying.
Testing is becoming increasingly important. Exchanges are constantly expanding, increasing in reach and impression volumes. Media planners and buyers need to constantly refine their activity to take advantage of the opportunities. Frequency capping, day parting and pricing options all need to be tested to tweak and improve campaigns while the emergence of real time bidding also brings greater opportunities, and challenges, to the media buying process.
There’s no question that media buying and the required skills needed are both changing. The traditional traits – relationship building, sales and negotiation - are still important but a new breed of tech-savvy people with data analytics and statistical backgrounds are also required. With greater volumes of media bought on exchanges businesses need to be focused not simply on adopting these new technologies but also ensuring they are correctly resourced to generate maximum value from them.
Author: Damian Scragg, European Sales Director, Right Media