Commentary
The Rise Of The Audience Marketplace
- by Gord Hotchkiss , Featured Contributor, August 30, 2016
Far be it from me to let a theme go before it has been thoroughly beaten to the ground. This column has hosted a lot of speculation on the future of advertising and media buying -- and today, I’ll continue with that theme.
First, let’s return to a column I wrote almost a month ago about the future of advertising. This was a spin-off on a column penned by Gary Milner, "The End of Advertising as We Know It." In it, Milner made a prediction: “I see the rise of a global media hub, like a stock exchange, which will become responsible for transacting all digital programmatic buys.”
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Milner talked about the possible reversal of fragmentation of markets by channel and geographic area, due to the potential centralization of digital media purchasing. But I see it a little differently than he does. I don’t see the creation of a media hub -- or, at least, that wouldn’t be the end goal. Media would simply be the means to the end. I do see the creation of an audience market based on available data. Actually, even an audience would only be the means to an end. Ultimately, we’re buying one thing: attention. Then it’s our job to create engagement.
The Advertising Research Foundation has been struggling with measuring engagement for a long time now. But the struggle was due to the fact that the foundation was trying to measure engagement on a channel-by-channel basis, and that’s just not how the world works anymore.
Take search, for example. Search is highly effective at advertising, but it’s not engaging. It’s a connecting medium. It enables engagement, but it doesn’t deliver it.
We talk multichannel a lot, but we talk about it like the holy grail. The grail in this cause is an audience likely to give us their attention and, once they do that, is likely to become engaged with our message. The multichannel path to this audience is really inconsequential. We only talk about multichannel now because we’re stopping short of the real goal: connecting with that audience.
What advertising needs to do is give us accurate indicators of those two likelihoods: how likely an audience is to give us their attention, and what is their potential proclivity towards our offer.
The future of advertising is in assembling audiences -- no matter what the channel -- who are at a point where they are interested in the message we have to deliver.
This is where the digitization of media becomes interesting, not because it’s aggregating into a single potential buying point, but because it’s allowing us to parallel a single prospect along a path of persuasion, getting important feedback data along the way.
In this definition, audience isn’t a static snapshot in time. It becomes an evolving, iterative entity. We have always looked at advertising on an exposure-by-exposure basis. But if we start thinking about persuading an audience, that paradigm needs to be shifted. We have to think about having the right conversation, regardless of the channel that happens to be in use at the time.
Our concept of media happens to carry a lot of baggage. In our minds, media is inextricably linked to channel. So when we think media, we are really thinking channels. And, if we believe Marshall McLuhan, the medium dictates the message. But while media has undergone intense fragmentation, it has also become much more measurable, and thus more accountable. We know more than ever about who lies on the other side of a digital medium, thanks to an ever-increasing amount of shared data. That data is what will drive the advertising marketplace of the future. It’s not about media; it’s about audience.
In the market I envision, you would specify your audience requirements. The criteria used would not be so much our typical segmentations -- demography or geography, for example. These have always just been proxies for what we really care about: an audience's beliefs about our product, and predicted buying behaviors. I believe that, thanks to ever-increasing amounts of data, we’re going to make great strides in understanding the psychology of consumerism. These strides will be foundational in the audience marketplace of the future. Predictive marketing will become more and more accurate and allow for increasingly precise targeting on a number of behavioral criteria.
Individual channels will become as irrelevant as the manufacturer that supplies the shock absorbers and tie rods in your new BMW. They will simply be grist for the mill in the audience marketplace. Martech and ever-smarter algorithms will do the channel selection and media buying in the background. All you’ll care about will be the audience you’re targeting, the recommended creative (again, based on the martech running in the background), and the resulting behaviors. Once your audience has been targeted and engaged, the predicted path of persuasion is continually updated, and new channels are engaged as required. You won’t care what channels they are -- you’ll simply monitor the progression of persuasion.
Cory, I think it's fine to speculate on "audience" based advertising, by which you actually mean using digital, not traditional media, as the basis for the advertising of the future. However, in a practical sense, not only is this, as yet, merely a dream for TV, radio and print media, but it is also an oversimplification. Even if a digital advertiser could actually identify every consumer in the U.S. who is interested---or "in the market" for what his ads are trying to sell and also how they are pitching the product/service---and send only these people "audience targeted ads", many of the ads will still not be of interest. Why? Because they are for unpleasant or mundane products---toilet bowel cleansers, upset stomach remedies, etc.----or because the ads are pitching a brand the consumer doesn't like or has had a bad experience with. You just can't get around the fact that many ads are going to be unwanted, no matter how they are targeted.
Gord, I believe your prognostications about improvements in predictive marketing, but I think there is another large audience marketplace emerging that does not rely on predictive, which in my view if you boil it down means more about guessing based on history than anything else. The emerging audience marketplace is the ultimate first party dataset, because each individual has opted-in to marketing on the specific criteria by which they want to be alerted on for the specific products they are on a journey to buy. 30 top 200 retailers are rolling this out this Holiday, as our large players in automotive and hospitality. The technology merely embeds a form near a Buy Now button that gives viewers the option to leave an email address or SMS number to be alerted on any number of product/service updates: price changes, new product launches, new reviews posted, back-in-stock, other. Some top retailers are reporting a 3X to 5X lift over their current predictive-driven marketing campaigns. Seth Godin coined the term Permission Marketing 16 years ago, and I believe we are finally seeing it emerge affordably and at scale. Forrester is calling it Individualization versus Personalization.
Gord, pardon me for calling you Cory---my humble apologies.
Caveat: Information out to the public will be based on what the ads say and to whom. So the information you get about, let's say tainted dog food, could be either omitted or tainted itself. As bad as it is now, information will be tainted in leaps and bounds because the buy will be based on what it said in print(on line has printed words, just a different print base)/video) rather than fact. There will always be biases, but the way you describe centralization will blur what is true or not. The world is flat.
Gord: I like your statement ... "Ultimately, we’re buying one thing: attention. Then it’s our job to create engagement."
New kinds of audiences like personality / psychographic segments can help understand peoples motivations and how they may respond to certain kinds of ad messaging and engage with various creative.
Ultimately, what the advertisers want is sales... attention, engagement...all these are merely indicators for attribution and wapoints on the path to sales. Businesses spend the money (wisely or not) because they're hoping for RoI (whether long-term or short-term). That may be an obvious point, but sometimes we forget it in our fascination with new mechanisms (or fashions) for generating that RoI.
Three things.
1) We're not an "audience.. That's a delusional conceit that conflates advertising with what it funds, and for which there is actual demand on the receiving end. Demand for advertising rounds to zero—or less if you factor in ad blocking, tracking protection, ad skipping and other forms of avoidance and prophylaxis.
2) We do not wish to be "engaged." The belief that we do is just one example of the industry smoking its own exhaust.
3) None of us want to exhibit "resulting behaviors." It's an insult to our humanity to be treated as subjects of behavioral experiments, as if we were rats or pidgeons.
Or, to compress all three points, quit driving drunk on digital: http://bit.ly/stdrunk. It's not attractive.
Please do what you do best (and wins the most awards): make ads that clearly sponsor the content they accompany (we can actually appreciate that), and are sufficiently creative to induce positive regard in our hearts and minds. That advertising of this old-fashioned and time-proven sort is hard to measure on a personal basis is a feature, not a bug.
Bonus link: http://j.mp/adbwars
Sales, sales, sales. Let me repeat, sales, sales,sales. Most market folks are missing the point. Consumers don't give a shit about engagement. They want INFORMATION to make an informed decision on buying or charting a course of action. We are delusional and ultimately painting ourselves into a data corner if we continue to believe that data is the driver.
Simply put..CREATIVE is the persuader that will open a path to inform the consumer.
Let's get back to the business of advertising and stop bowing to the data. We are slicing the data baloney so thinly, that that it's not even baloney anymore. It's hot air.
Ester Dyson hit the nail on the head. Businesses want sales, not chasing after the "new, next." Ad agencies want to appear as cutting edge experts using metrics only they understand. In the end use media platforms that work best, not this week's latest fad.
Gord. Congrats on being called Cory by Ed. I've not seen a Cory post without an Ed response, so kudos to you;-)
And Gord, double up the creds for getting input from Esther Dyson. From my little backwater here in London, I feel like I won front row tickets!
Esther, what's the next best thing to a sale? Leaving behind all the complex stats and attribution, what do you want if you can't get the sale? What's second best?
Robin
Thanks all for your comments. I actually just submitted tomorrow's column before the recent round of comments. There's a lot of potential follow up here..especially Esther and Doc's contributions. I'll be ruminating further on this.
The audience is the most sacred asset of today’s brands. While the idea of ‘buying’ an audience seems attractive and efficient, the reality is each brand’s audience is unique and needs to be developed over time. Using 3rd party audiences for prospecting new customers can certainly be effective if executed properly, but I believe the most crucial point here is that successful brands in the next decades are/will cultivate, nurture and protect their own audiences, and the means to do so will be in large part the basis of said brand’s competitive advantage, particularly in the B2C space. Sales, ROI, and other business outcomes are crucial, but simply buying audiences off-the-shelf expecting cost-effective results is not realistic nor should it be the foundation of a digital strategy.
" “I see the rise of a global media hub, like a stock exchange, " Gord, I agree there does not need to be a new hub. But the reason is we already have one. It's called the New York Stock Exchange, and the NASDAQ. Investors that purchase stock create the billion dollar advertising budgets that media professionals love to spend. However those investors expect a cash return on their investment. And that return can only happen if Advertisers make an increase in sales. And that is the goal everyone involved in marketing and advertising should be focused on. I am glad to see at least a couple of commenters on this blog share the same point of view.