Everything is in real-time: Media in the age of conversation
If one long sentence could sum up what 2012 means to me, it would be this: We are living at the intersection of advertising and publishing at a time of hyper growth and innovation, which separately and together present us with both formidable challenges but also game-changing possibilities.
Put another way, everything today is in real-time: not just content but mobile and bidding on media. I call it "Media in the Age of Conversation." The concept of SoLoMo – the convergence of Social, Local, and Mobile – is the activation point for the connections occurring between consumers and content in a specific place in time. Just as media is being created in real time, it’s being sold in real-time: a perfect pairing, which succinctly and simply describes the sudden rise of ad-tech.
Here’s some of what I learned this past year:
The traditional ways of doing business are crumbling faster than we think.
The dynamic pace of change in technology has not only disrupted the status quo in many industries, but has required companies, in a bid to stay competitive, to make rapid adjustments. The problem for all publishers is how to keep up – data capture, analysis, and use requires a cap ex (building and maintaining a data warehouse) and a talent pool (engineers, data scientists, etc) that does not come naturally or affordable to most media companies. Delivering content to all devices is hard enough...delivering real time advertising is that much harder.
Case in point, no form of advertising requires more rapid adjustments than mobile. It’s a challenge precisely because the value of an impression is so often tied to location, weather, and/or time of day plus device and content. But mobile advertising is finally being described in the present tense and not as a medium coming in the future. For instance, over Q1-Q3 we experienced 700 percent growth in mobile paid impressions through our strategic selling platform and added 30 mobile publishers this year.
But it extends way beyond mobile, and there is nothing simple about today’s programmatic age. It requires a sophisticated understanding of data as well as a truly thought out revenue strategy. That starts with quickly creating and then leveraging the right mix of video, mobile, audience, and yield often via a private marketplace to achieve the best revenue results in real time. It’s already happening. Ecommerce plays are increasingly using their sites and audience data to generate advertising dollars; Federated has a sales team focus on sponsorships but now programmatic channels are covering the rest of their media inventory, and Facebook started an ad exchange for PC and mobile.
A Forrester total economic report looked at some of our own clients’ performance and reported that the old way of doing business in selling media – direct sold vs. indirect/programmatically traded inventory kept entirely separate – was evolving. This has resulted in more publishers looking at their inventory holistically with this artificial wall finally coming down. For example, high traffic news, weather, and commerce sites saw that they could now optimize these previously segregated channels in real time to create new revenue opportunities and capitalize on short-term traffic spikes. No sales force could have generated as much revenue during news coverage of Hurricane Sandy, or ecommerce activity during Cyber Monday, as programmatic channels did.
Welcome to the world of real-time bidding: Think algorithms.
As such, 2012 needs to be seen as the watershed for the growth of algorithmic media. Primarily driven by Real-Time Bidding (RTB), this new way of matching buyers and sellers of media finally got the attention of more than the ad operations team within most media companies. Over this holiday season, we saw that up to 60 percent of advertising in some publisher categories is sold through RTB.
With the industry moving towards dedicated digital platforms like these, publishers can now evaluate where, how, and when to sell all inventories. IDC projects that by 2016, 27 percent of all digital media will be sold programmatically, which will inevitably increase efficiencies on both the publisher and advertiser side. Since display is expected to pass search by then and thus become the leading digital ad channel, 27 percent represents a massive number.
Mobile and video will have RTB and private marketplaces as well, and all sales channels will be baked into the RTB auction, letting publishers securely allow their best customers programmatic access to unique inventory and audience data. Data is the new currency determining media value and that is why RTB is growing so quickly.
The lesson to be learned is that as the cost of doing business goes down – online is currently an incredibly efficient medium to buy and sell media – we will begin to notice inventory being sold in more strategic and innovative ways in an array of areas, including cross-platform, cross-media, cross-device media planning, targeting and campaign optimization, custom audience segments and custom content, not to mention performance and dynamic targeting.
Yes, publishers are starting to keep pace with technological innovation.
Another lesson from 2012 that I took to heart is that publishers are starting to think like the businesses that are helping to enable them to keep pace with technological innovation. That’s right, I said publishers, who are famously allergic to innovation. But as indicated, many publishers are starting to get it, including my former employers at Time Inc. now launching an audience platform.
The media companies we all grew up with are just now waking up to the reality that the information behind each impression is what determines value. Publishers are also beginning to partner with agency trading desks, like Starcom and Group M, to pool data and create unique and valuable audience segments. These publishers have ultimately decided they are not going to roll over to the changing medium, and are moving to recapture advertising value in the secondary premium market.
Meaning, they have created private marketplaces to enable their best customers to see unique inventory and to buy and serve their audience directly, and have begun to acquire or partner with sites that have a similar audience profile in order to increase their scale – think ESPN and Grantland/sports blogs or Allure and beauty blogs; they have begun to use the information and insights gained from RTB to change their sales strategy.
Success is more than mastering the technology; it’s applying tried and true skills to the digital age.
Smart publishers realize that becoming a mere adopter of innovative technology is just one, albeit, important step.
Instead, properly used by a data scientist, revenue strategist and a fierce sales team, media technology is really a springboard to provide insight across all your inventory, audience and sales channels. To win in a real time media world you have to be constantly monitoring and adjusting to the brands that want to advertise on your properties, what content the audience is engaging with, and on what devices. Every publisher needs to know and use their first party audience and site data, from Amazon to Google from Zagats to Fodors.
It often comes down to sound revenue and user engagement strategies. Similarly, if you are doing online video, good content alone will not be enough to compete with YouTube. It’s not easy work; you have to master your smaller pool of first party data in order to compete to turn engagement into ad dollars. It’s about building strong relationships with independent partners to develop scalable, enterprise grade solutions that work in everyone’s best interests.
Hopefully, I've learned even more long-lasting lessons in 2012.
Of course, what I’ve learned in 2012 is not simply about ad-tech and its applications for brands and publishers. It’s often about something bigger. As a result my next two lessons relate to corporate culture and the very fundamentals of learning.
First, a valuable lesson I learned is to stop talking about diversity and instead do something about it. We are not going to solve the lack of diversity in the tech and ad industries by talking about it, discussing it during panels, or publishing reports. We simply need to create a business justification, and demonstrate the tangible benefits. This requires us to invest more time and attention towards identifying diverse people qualified for positions in this rapidly moving marketplace.
Last one: Get outside your business and think like a kid again. Much of my own philanthropic work with Camp Interactive, working to empower inner city youth, continually reminds me of the innate wisdom and gut instinct of this age group. So, take the opportunity in your own life and in business – whether it is with volunteering, teaching, or even your own family – to surround yourself with kids who are (I hope) oblivious to industry jargon. Tap into their sense of wonder and possibility about all that awaits.
If you can reach them you can reach everyone.