Good morning and thank you, Nancy, for your kind introduction.
It’s a wonderful opportunity to be here today and I appreciate the chance to talk to so many of my distinguished colleagues in one place at the same time.
The Four A’s asked me to talk about how there are no excuses for NOT understanding the digital future. The digital future – now there we have two simple words! Digital, as we all know, is a just a piece of cake to deal with. And as for the future? There’s a great Chinese proverb that says “its difficult to make predictions – particularly about the future”. And, I’m reminded that we are holding this meeting only a few miles from where Harry Warner uttered the immortal words “who the hell wants actors to talk anyway”.
There is so much conflicting and confusing information out there on digital. We have media fragmentation and massive proliferation of media vehicles. Every day I see charts and explanations that serve to confuse rather than enlighten. We couldn’t possibly have more excuses for not understanding the digital future. So thanks, Nancy, for this simple little assignment.
My role here today, then, is to try and simplify and boil the issues down to the salient points. Once we’ve established a view of the digital future, we’ll get into the issues and opportunities inherent in this future. Hopefully, the dialogue that we begin will better position all of us to actually execute strong ideas in a substantive manner that improves our clients’ position. And I can tell you now that in order to achieve any kind of success, we—meaning media agencies and creative agencies—are going to have to cooperate and collaborate more effectively than we have in the past. I’ll talk more about that later, but let me just say that a new spirit of collaboration is going to play a key role in any success we might achieve.
But first, let’s examine the technological shifts I mentioned. The ramifications of these shifts are enormous, but in many ways they are also simplifying and will cause us to re-evaluate some of the definitions we’ve been using for many years. Here are seven key points that we need to consider as we move forward:
ONE: It is time to stop referring to traditional media versus new media. The new media isn’t that new any more. And, the old media is reinventing itself as it inexorably embraces and develops digital capabilities.
TWO: Today’s definitions for media become irrelevant. TV, print and others will have broadly similar functionality. If you’re streaming your radio on your computer, you’re probably consuming video. And in a few years when your print is delivered to a digital reading tablet, that still shot that you used to see in your newspaper will likely be a full color video. Is that print or is it television – or do the definitions simply become outdated and irrelevant? Devices that were previously un-joined will now be joined in a common ecosystem with data streams that can be consolidated.
THREE: What will be relevant is the form of media consumption, and there will be three variations: lean forward, lean back and mobile. Lean forward – the way you do into a keyboard with a computer screen and keyboard. Lean back – the way you do when you sit on a couch and watch a large screen TV. And mobile, which is self-explanatory.
FOUR: Each of these forms of interactivity will have both linear and non-linear consumption modes. Linear, where content is programmed by a broadcaster, or non-linear, where consumers will pull specific pieces of content from a DVR or an interactive website. And don’t assume that it will be entirely one or the other – it will be a combination of both, and different individuals will use varying degrees of each.
FIVE: Targeting will move from predicting behavior to reacting to intent.
SIX: It should not be about reach or engagement. It must be about reach and engagement. It isn’t one at the expense of the other. We have a mandate to deliver both.
SEVEN: And finally, every form of communication will have the ability for individual addressability, telescoping, device or census level data reporting, response gathering, and even transaction capability.
I’m going to repeat that. Every form of communication will have addressability where, for example, every home -- and even every TV in every home – will have the ability to display different messages in the same pod. We have addressability now on the web and we are about to have it in all media. Telescoping is the ability to request additional information – an RFI, if you like – in the form of a video or a web site link or whatever. We will have census level data, not the sample based data that we’ve all grown up with. And we will count responses and monetize transactions. We will have to consider every aspect of the purchase funnel – the top, middle and bottom – for every opportunity.
So, that’s it. There are just seven things to remember. But, what are the implications, issues and opportunities?
Let’s start with the issues. The conventional wisdom is that technology empowers the consumer and enables commercial avoidance. Our role is to ensure that technology, instead, improves relevance and engagement and mitigates commercial avoidance. How? Let’s talk about engagement vs. interruption, frequency capping, segmentation and versioning, serialization or chaptering, and how addressability enables all these capabilities.
Let’s dispense with engagement as opposed to interruption. It’s an incredible opportunity but I’m going to pass over it quickly because it is talked about constantly at various forums. I’m going to spend our time today on the other issues.
Addressability allows us to deliver specific messages to specific consumers or households. Data will guide us so that we deliver specific messages to individuals who we already know are interested in seeing those messages. It provides our agencies and our clients with more precision targeting than ever before in history.
We’ve been talking about this kind of capability for a while, but the reality is now here. GroupM late last year, made a substantial investment in a company called Invidi Technologies Corporation, which is the leader in addressable advertising for digital television, and, as you know, there are now more than 65 million digital set top boxes deployed in the US.
One of the most important things it does for us is to put television advertising on more of an even footing with online advertising in terms of targeting, measurability, and accountability. It’s certainly no secret that online media has been taking an increasing share of advertiser dollars principally because of its targeting capabilities, accountability, and the way that data on consumer behavior is exploited.
But that capability presents us with a unique challenge, particularly for ad agencies that specialize in the development and creation of traditional 30-second TV spots. In essence, the audience segmentation and targeting ability that addressability provides has sparked a need for new form of coordinated creative work to match its capabilities. After all, what’s the point of having technology that allows us to slice and dice an audience into segments if everyone still sees the same message? We run into this issue constantly on the web, and this is an area where the work of media agencies and creative agencies must be in lockstep all the way. There is never enough tailored creative to match the specific individuals and behavior that we can identify. By continuing to feed the same message into the pipeline we are exposing consumers to the same message over and over, and we have to question the value and wisdom of that strategy.
I’d like each of you to think for a moment about some of the terrific theatrical movies you’ve seen in the last few years. How many of these movies did you, as individuals, see more than once? How many of you can think of a single movie that you watched five, ten or twenty times? Isn’t it a peculiar conceit that we expect our consumers to watch the same message over and over again? Let’s call this the frequency capping issue.
How about versioning and segmentation?
Here’s a simple example of versioning. You’re a retailer with national geography. In cold climates, you run snow blowers, in warm climates you run lawn mowers, and when you’re not sure there’s always a power drill to push.
Segmentation: take toothpaste, for example.
- For the youngest group of users, we needed to target moms because the moms purchase the toothpaste and they teach the kids how to brush.
- As the kids grew older you sell on the basis of flavor. Kids don’t care about the esoterics of oral hygiene.
- For teenagers, it’s about improved potential for romance.
- We pretty much stay with that message until the consumers reach their mid-30s and realize that no matter how fresh their breath is, no one wants to kiss them anyway. Then you sell on long term oral care and tartar control.
Now, obviously, this isn’t entirely new. I’ve worked on lots of toothpastes over the span of my career, and I’ve seen segmentation work done. But it is rare. My point is obvious, though: commercial messages for a single product need to change from one demographic group to another. And in an addressable world, advertising for almost every kind of product and service is going to have to take that approach. If addressability provides you with the kind of information that lets you know who is receiving the ad, then we need to deliver the relevant creative execution.
This approach can work for most product and service categories. After all, if you can do segmented creative for toothpaste, think about what you might be able to do for a more considered purchase decision like the automotive and financial categories -- which brings me to the topic of serialization and sequencing.
Addressability can allow us to deliver messages to consumers based on our knowledge that the consumer already has a foundation of awareness. Today we run 30-second TV spots and pack a generic set of sales points into them. But in the future, if we can track ads to a specific consumer, we can start with an awareness-building ad a couple of times and then follow it with something more specific. If the category is automotive, the second round of ads can focus on the car’s attributes. If it’s a male, the next round will highlight performance. If it’s a female we’ll concentrate on the car’s comfort and interior luxury attributes. Along with addressability, we will have the ability to telescope our ads – the ability to provide additional information or longer form ads at the viewers request.
We will soon need chapters of communication that cross multiple media types. If the prospect has seen the TV ad, the print or web ad can focus on more detailed attributes. Awareness can be assumed.
As I see it, here is the real challenge.
We all know that marketing budgets are not rapidly increasing. Ad agencies have become particularly adept at creating fantastic executions on a large scale and have produced some truly wonderful work. But the challenge going forward will be to create multiple executions to fit a segmented marketplace that demands multiple chapter story telling. And we know that budgets will not grow in proportion to the work.
My GroupM colleague, Rob Norman, refers to this as a manufacturing problem – in fact, an evolution of just in time processes and delivery. Today we need to make more material, make it more quickly and in more rapidly changing formats. We need to distribute it in more channels, measure infinitely greater and more timely data streams, negotiate with more partners for different kinds of inventory, and support all that with an ever growing arsenal of technology and talent. A failure in any part of the ecosystem will crash the entire process, and as I said before, it’s crucial that creative agencies and media agencies work in lockstep every step of the way.
All these challenges will no doubt put a strain on all our organizations. We’ll all be reengineering and reinventing ad nauseum. But the end result will be a positive one because the opportunities associated with refined targeting and addressability make all of our roles that much broader and increase the scope of work for all our companies.
The prerequisite for all this, however, is the absolute need for a more collaborative partnership between ad agencies and media agencies. I know that the relationships between media agencies and creative agencies have had a few bumps over the years, but we really have to get on with it. We’re not talking about technology and capability that will evolve in some abstract future. We have to get on with it now -- not just because it will allow us to become significantly more valuable to our clients, but because we will also be helping ourselves. In the coming age the scope of work will grow significantly and we will all have our hands full getting the work done. That’s far more productive than engaging in strident turf battles.
None of us can get there in isolation. We share a proud heritage and tradition in which we have always complemented each others work. The future holds great opportunities for both of us, so let’s do our best together to capitalize on what that future has to offer.