A sweeping change is underway in all forms of media advertising and media buying. The methodologies of search engine marketing are gradually expanding to traditional broadcast media, applying pinpoint segmentation and messaging, as well as measurement techniques that track advertising impact down to dollar value. Search Engine Marketing (SEM) methodologies and concepts are also the natural default advertising for emerging digital markets such as mobile and game consoles. The pervasiveness of that methodology is about to bring a fundamental change into the advertising world.
In her recent visit to Israel, Parra Ramzen-Gollent, CEO of BBDO UK (the largest ad agency in the UK), noted in themarker.com interview that some great cultural moments are produced on TV and cannot be replicated in other media. She also said that BBDO’s primary role is to create its client brand identity and messages, then to adjust it for communication in various media channels. A notion I believe may be implied from the interview is that the traditional ad business will not be substantially affected by the emergence of the Internet, specifically search and web2.0, as primary media consumption channels. Why? Because these will merely be additional media channels that ad agencies will learn to work with, and communicate their clients within, while the cornerstone of advertising remains the brand identity.
However, I also believe that a more fundamental undercurrent is occurring, one that involves a necessary expansion of perspective to fully grasp. While a successful message and creativity in delivery, the traditional ad agency role, is still very important, a new world of virtually limitless target market segmentation, pinpoint messaging, and razor-sharp performance tracking is emerging.
This world differs from the traditional advertising world. Its core is no less technology, data mining, and algorithms than creative and media connections. It is primarily led by Google and will soon sweep advertising in all media forms.
The ultimate advertising machine – atomic advertising
Imagine the ultimate advertising machine and what it would look like. In my view, it will be a machine that defines its inventory as the sum of all advertising events. An “ad event” is a single, tailored advertisement, transmitted to a specific person, through a specific medium. Getting into this atomic level will allow for maximum accuracy in valuing the ad event, selling it, and profiting from it. Using predictive models, the machine will serve only relevant ads to the profiled individual at a profitable price for the advertiser.
The machine will then track the impact of advertising at this atomic level, being connected directly to online and offline points of sale or otherwise tagging the event for follow up (much like tagging a user who clicked an ad by writing a browser cookie). The system will use tracked data as real time feedback that will be looped back into the machine for iterative fine-tuning of the predictive model. The ultimate advertising machine as I see it, has its core in consumer segmentation models and predictive models along with enabling and expanding the necessary tracking systems to all digital media formats.
The user perspective – relevance vs. privacy infringement
Atomic advertising approach might actually make advertising useful and maybe even welcomed by consumers. Can you imagine consumers actively opting in to be exposed to advertising? Indeed, there are privacy issues involved in exposing one’s preferences, habits, and media consumption trends. Application of a reliable and transparent system that allows users to define the level of privacy exposure and subsequent level of relevancy and benefit that they can expect can relieve those issues. In short, present the dilemma and let users make the choice. There is a substantial market education process involved, but people will get there.
The Google advertising history, still in the writing…
Since the launch of AdWords at the end of 2000, Google was selling advertising on its own media properties, primarily its search engines. The combination of billions of targeted searches a month and an automated, easy-to-operate and highly effective AdWords system made it a monumental success and an unprecedented cash machine.
The small, long-tail advertisers discovered the system first, followed by the large ones.
When Google moved to sell contextual advertising within web pages through its AdSense program, using its already established large and diverse advertiser pool, it was again successful. Initially adopted by many small web publishers who found a non-existent-before revenue stream, it was ultimately adopted by media giants such as nytimes.com and washingtonpost.com. The latter found in the small and relatively targeted text ads a higher revenue stream and/or better user experience compared to alternatives.
With the recent purchase of Doubleclick, Google is making a further move to secure a large chunk of online ad display spots. The combination of its large advertiser base and contextual matching capabilities, with the significant inventory of Doubleclick and its own data about users, shifts the banner advertising market forward toward the atomic advertising vision. It then eyes the major offline media with huge, existing advertising turnovers.
Convergence of media, diversion of attitudes
Currently, media buying in media such as TV, Radio, and print is done with either human sales departments and/or bulk inventory buying by ad agencies. Will Google be able to actually replace them? So far, it might be facing a harder time than expected. In a nytimes.com article titled Google Encounters Hurdles in Selling Radio Advertising, it was stated “… amid growing speculation by analysts, radio and advertising executives that the Internet giant is finding it harder than expected to muscle its way into the radio business.” Google finds it difficult to secure primary radio airtime because no media lets Google in for primary inventory if it cannot guarantee beating the current price of those spots. Furthermore, Google’s technological and automated approach inevitably poses a threat to salespeople and ad agencies. The article states that at the moment, Google may be left mainly with radio “remnant inventory” – last minute spots sold for law price, which are not very attractive to advertisers.
However, despite the hurdles of penetration into well-established media, historically Google has always started with the long tail and eventually managed to win over the big advertisers.
The hosts of small advertisers that Google can attract with its effective and automated systems is accumulating to a critical mass that can eventually allow the access it needs to primary spots and deep-pocket advertisers. When that happens, Google can influence tracking methods that the media apply, moving deeper into the vision of atomic advertising described above, i.e., the “ultimate advertising machine”.
The direction is set, and the engines at work
Hundreds of billions of dollars are spent on advertising around the world each year. There are inherent inefficiencies in current methods of broadcast advertising, tracking and budget allocation. Atomic advertising, at least in digital media, can greatly enhance the effectiveness of advertising. While some may argue that brand advertising will never be measurable, inevitably more budgets will be shifted towards achieving measurable objectives.
Search engine advertising technologies and methodologies are a good starting point to venture into this brave new world. It will come as no surprise then, if Google and its search giant peers become the driving force in leading the way into that future – with the help of search agencies.