You might think you know how media buying is done but hold on to your seats because this is changing fast, writes Jarred Cinman.
Media, I’ve realised, is an area of marketing that few people, even in the industry, really understand. Beyond the industry – in the so-called general public – media strategy, planning and buying are career choices as exotic as being a particle physicist.
In digital marketing, this is even more pronounced.
The truth is, media is the fuel that powers the entire marketing business. All that amazing creative work that wins awards and has clients high-fiving their agencies means nothing if no one ever sees it.
The traditional media model
In so-called traditional media, which includes early web banner advertising, an advertiser works with a strategist to define whom the advertising needs to reach. The ‘who’ in this equation could get sophisticated, relying on audience research data and media consumption habits to figure out, for example, what kind of person was watching a particular TV show or reading a particular magazine.
Using specialised software, the planner produces a proposed media schedule, which sets out what ad should be placed in what medium and when. It becomes the buyer’s job to secure those placements at the best price. Shenanigans involving wheeling, dealing and rebates commence.
Much of traditional media planning (TV, radio, print, outdoor) still happens like this. And it works fairly well, provided there is audience research data and one trusts the data.
In digital, things have started to veer dramatically away from this picture.
The digital media madhouse
Some digital inventory – let’s just use banner ads as a common reference – is still sold in the same old way. In fact, the Internet Advertising Bureau (IAB), working closely with Telmar, recently announced that it was bringing digital audience data into traditional media planning tools. That means planners can segment audiences the same way and push out a digital media schedule that looks and feels the same as one for any other medium.
And that might well be how a lot of banners are bought and sold for a long time. It has the benefit of making it clear which ads are appearing on which sites and allows for agencies and media owners to negotiate both the right rates and potential clever media buys – think the I&J ad where the scrollbar of the site was purchased and turned into an image of fried eggs.
But a revolution is taking place parallel to this, and it’s called programmatic or algorithmic media. Programmatic media is everywhere and it’s the next big thing. But it’s poorly understood and mind-boggling.
There are a few key concepts that make programmatic less impenetrable.
First, you’re targeting people, not properties. What programmatic is trying to do, at its core, is take your ad and show it to the right people, no matter which website (or app) they happen to be on. This requires a database (of sorts) of all the people out there, so they can be targeted.
Second, the software is the planner and the buyer. Instead of a person figuring out which inventory to buy on which site, and negotiating the price to buy it at, a software programme does this. And it does it quickly – in fact in milliseconds as the page loads for a particular person. At that moment, the software understands who the person is and which advertisers are vying to reach that person. The software, through an automated auction, agrees on a price and runs the ad.
Third, is the idea that advertising inventory is sold in an exchange or marketplace. In effect, media owners contribute some, or all, of their inventory (the place where banners appear) to a marketplace, where it is sold to highest bidder. Typically, this has been reserved for so-called remnant inventory (the stuff you couldn’t sell with the traditional method) but that’s changing as publishers start to see programmatic as a way to sell their inventory at better, not worse, margins.
Of course, these three ideas are interlinked and there are many blurred lines. But that’s the basic idea. This has major implications for the media business – but it also has big implications for publishers, agencies and advertisers.
We are moving from a world in which a brand would buy an ad, via a human being in an agency, on a particular TV station or web page, to one in which an ad finds an audience, wherever it is. Some systems even dynamically resize or restructure the ad for the device, screen or person seeing it – with no human intervention. And this kind of buying model is started to creep into other media too – with ‘programmatic TV buying’ on the horizon.
There are many sceptics. Critics argue that this is devaluing inventory and that it’s decontextualising advertising. Believers argue that it’s extremely efficient, effective and makes waste a thing of the past.
Whatever the reality, there is no doubt that this new way of buying and selling media is the true digital advertising revolution. Are you ready for it?
Jarred Cinman (@jarredcinman) is chairman of the IAB SA and managing director of Native VML.
This post was first published in the May 2015 issue of The Media magazine.
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