Andrew Frank

A member of the Gartner Blog Network

Andrew Frank
Research VP
5 years at Gartner
30 years IT industry

Andrew Frank specializes in best practices for data-driven marketing, including how organizations can use data to drive sales, loyalty, innovation and other business goals. Andrew also specializes in marketing and advertising technology and business trends …Read Full Bio

60 Minutes Takes On Data Brokers

by Andrew Frank  |  March 11, 2014  |  5 Comments

Steve Kroft’s segment on CBS’s March 9 installment of 60 Minutes, “The Data Brokers: Selling your personal information,” was a noteworthy chapter in the escalating confrontation between the data-driven marketing industry and popular press initiatives to expose the alarming aspects of our emerging surveillance society.  (Also see the Direct Marketing Association’s response.)

The introduction framed the problem with a hint of irony:

“Over the past six months or so, a huge amount of attention has been paid to government snooping, and the bulk collection and storage of vast amounts of raw data in the name of national security. What most of you don’t know, or are just beginning to realize, is that a much greater and more immediate threat to your privacy is coming from thousands of companies you’ve probably never heard of, in the name of commerce.”

The exposé format demands a clear moral indictment of the culprits – and Steve isn’t shy about naming names – but there’s irony in the suggestion that new government regulations are needed to reign in these companies – despite the reference to “government snooping” and other evidence that Americans trust their government even less than commercial enterprise. Epsilon President Bryan Kennedy tries to play this point but seems to fall into an apologist trap:

“Steve Kroft: You’re saying that any kind of regulation on this could cripple the economy?

Bryan Kennedy: I am.

Steve Kroft: And this should be left to industry groups? To self-enforce?

Bryan Kennedy: We think that self-regulation has been very effective. What we’re hearing today is a lot of discussion in Washington. We’re not hearing a lot of discussion, frankly, from consumers. It’s one of the odd things. So, consumers are rushing to the Internet to provide more information about themselves than, you know, we would’ve ever imagined.”

Kroft briefly references the proposed legislation of Senate Commerce Committee chairman Jay Rockefeller, but avoids the snarls of discussing the technical and political challenges of regulatory remedies, except near the end when he refers to the Direct Marketing Association as “one of the most powerful lobbying groups in Washington.”

I will say that, to an outsider, there was plenty of highly damning testimony. The worst came from Tim Sparapani, identified as a former privacy lawyer for the American Civil Liberties Union, then Facebook’s first director of public policy. (This, too, might seem ironic, although Facebook and Google were both spared direct indictment in this segment, “because they don’t sell the information they gather about us. They keep it all to themselves.” Try to parse the irony in that.)

“Steve Kroft: What about medications?

Tim Sparapani: Certainly. You can buy from any number of data brokers, by malady, the lists of individuals in America who are afflicted with a particular disease or condition.”

Anyone who has heard of HIPAA should know this is illegal in the U.S., as are most of the other practices Sparapani mentions. That doesn’t mean they don’t happen – although their alleged prevalence would seem to be as much an indictment of law enforcement as anything, given the claim that “the evidence is there if you know where to look.” More insidious, however, is the implied guilt-by-association this assigns to the mainstream data marketing companies the piece identifies. Although Kroft stops short of criminal accusations, there’s no attempt to distinguish among data practices – especially when it comes to the particularly sensitive area of personally identifiable information – and he doesn’t hold back on shady insinuations against mainstream data brokers.

Federal Trade Commissioner Julie Brill is a bit more careful about this. Watch her tiptoe around the PII issue:

“Steve Kroft: Are people putting this together and making dossiers?

Julie Brill: Absolutely.

Steve Kroft: With names attached to it? With personal identification?

Julie Brill: The dossiers are about individuals. That’s the whole point of these dossiers. It is information that is individually identified to an individual or linked to an individual.”

Any insider will immediately recognize this language as an attempt to avoid getting dragged into a discussion of the technical nuances of PII. But the cost of avoiding that discussion is that we remained trapped at the level of innuendo. Marketers use third-party data of the sort that most “data brokers” provide not so much to identify individuals, but to reach a specific audience. The individuals who comprise that audience don’t need to be uniquely identified…until they reveal themselves to the marketer in the context of a commercial relationship. Otherwise they can remain anonymous. But the segment doesn’t delve into how mainstream marketers use data.

When it comes to identifying the harm inherent in this kind of marketing surveillance, journalists seem to have two choices:

  • Invoke a direct connection with crimes such as identity theft and blackmail
  • Invoke more intangible and sinister consequences such as covert discrimination and subtle forms of coercion and manipulation

Kroft avoids the simplicity of the first and leaves us with the second, which, to my mind, is a real long-term social problem. But it’s not a problem that can be easily addressed by the remedies that reactive legislation can provide.  Nor can the industry unilaterally address it through self-regulation and cryptographic technology – although their extensive attempts to do so might have merited at least a passing mention. Consumers need a partner in this.

“Commissioner Brill is pushing for more oversight and transparency. She says people should be able to see the information the companies have on them, be able to challenge it if it’s incorrect, and opt out of the system if they don’t want personal data collected.”

Amen. Maybe she’s talking about Acxiom’s – or a more-comprehensive future version. In any case, superficial consumer controls and notifications can’t replace an actual understanding of the highly complex forces and technologies at work here. There are certainly better technical solutions to consumer empowerment (think agents), and a number of entities in a position to deploy them (banks, CSPs, the data brokers themselves) but without market demand they will not materialize. The identity theft protection industry struggles to get people to pay for a more concrete value proposition. Privacy is an economic puzzle that most marketers want to solve as much as anyone.

So, maybe just scaring people is the right place to start. If so, I guess Steve Kroft and CBS have done their duty. But I’d watch that line between illumination and vilification.


Category: Advertising Data-Driven Marketing digital marketing Uncategorized     Tags: , ,

The Campaign to End All Campaigns

by Andrew Frank  |  February 28, 2014  |  2 Comments

To campaign or not to campaign, that is the question on a lot of digital marketers’ minds these days. Mike Volpe, CMO of Hubspot, is among those who believe that “the notion of the marketing campaign is dead.” And he’s far from alone.

But for those of us of a certain age – especially if we were raised on Madison Avenue – the idea that “the campaign is dead” is bound to bring a smirk – didn’t Chiat Day run a campaign like that in the early 90s?

And yet we secretly wonder, what if it’s true? What if there really is a better way? This is a crucial question – whose outcome could permanently alter the practice and economics of marketing. A few weeks ago, my colleagues  Jennifer Beck and Jake Sorofman aired a faceoff on the topic. Here’s a quick recap of their debate, with commentary:

Sorofman,Jake 1:01 PM
Campaigns are as good as dead.

Beck,Jennifer 1:01 PM
Well, let’s first define things. What do you mean by a campaign—before you pronounce them dead?

Sorofman,Jake 1:02 PM
I see it as a concentrated, time-bound promotional effort to drive some change in demand or selling motion. To me, it’s an inside-out, brand-centric concept that puts the marketers’ interests first.

Me: Notice how Jake sets up the post-brand-centric communications aesthetic where marketers’ interests take a back seat to addressing customers on their own terms. Point one: people don’t like to be pitched, and now that they have more choices they’ll be more likely to engage with personally relevant messages.

Beck,Jennifer 1:03 PM
I think of campaigns in gaming or military terms—as a connected series of battles, adventures or scenarios. Think of military campaigns. Take that hill, secure the city, push forward on the front—they all feel like marketing maneuvers geared up to open a new market, retain customers or grow revenue. The analogy works, marketers have been using the lingo—guerilla marketing, under the radar, competitive win back, and the like for ages.

Sorofman,Jake 1:03 PM
I agree with that the structural aspect of campaigns remains valid—logical linkages between goals, themes and efforts. But in an age of abundant choice, engagement needs to be centered around what the customer cares about, not what the brand cares about.

Beck,Jennifer 1:04 PM
[...]You know – all this talk about empowered consumers, engagement, experiences, trust, loyalty, affinity—blah, blah, blah—every company I talk to is trying to make money.
So herein lies the challenge of balance.
What brands need, what buyers want.
You need to satisfy both.

Me: When in doubt, follow the money. Counterpoint one: if you completely suppress brand interests, your marketing will be ineffective (no matter how engaging it is). You need balance.

Sorofman,Jake 1:05 PM
Actually, I don’t think these ideas are mutually exclusive, but marketers need to break out of campaign thinking to become better brand storytellers. I don’t see this as the death of sound, focused business practices, where marketing efforts are tied to sales outcomes; but I don’t think campaigns alone are sufficient, particularly when they’re used as the grist for social engagement. I think the best campaigns have more authentic storytelling extensions and storytelling itself also must happen apart from these campaigns.

Me: The sound you hear are the cheers and jeers of the ghosts of soft-sell advertising, who preached the power of storytelling when they walked the Earth decades ago.

Let’s break for an insightful reader comment:

Derek E. Weeks: Jake, you seem to capitulate on the topic … So, campaigns are not dead — they just need to be extended in new ways. A point that we all (you, me, and Jennifer) agree on. I think the point you are trying to make is that marketers can be more effective by stepping out of their traditional campaign comfort zones and adding in new social, storytelling, and content extensions.

Me: “The news of my death is greatly exaggerated…” Point 2: Campaigns might not be completely dead, but they represent a limited way of thinking.

Sorofman,Jake 1:17 PM
[...] …if you focus all of your effort on driving near-term customer behavior through traditional campaign tactics you’ll exhaust your customers. Engagement also needs to be less directly about the CTA; it’s also about building dialogues which influence preference and loyalty through trust and affinity that you nurture over time.

Beck,Jennifer 1:18 PM
Can you have a storytelling campaign? The goal is brand extension perhaps?
It would be like that movie – The Never-ending Story.

Sorofman,Jake 1:20 PM
In a sense, yes, but most content marketers would call these themes, not campaigns. Because campaigns, right or wrong, place the emphasis on the brand, not the audience. Semantics, yes, but I think there’s a real danger of content marketers forgetting to play the longer bet on the customer when they think of what they do as a campaign. But these themes are often time-bound and driven off of a calendar, which makes them campaign-like, I suppose.

 Me: And so we are led to what we’ve taken to referring to as “Two-speed marketing.” In a subsequent blog post I added,

“…when individuals seek to form or modify relationships, clearly their interactions take different forms. A first impression is a one-time opportunity, and people are motivated to make it count. Whether it’s dating, a job interview, a major speech, a big sales presentation, or a marriage proposal, we all strive to make the most of our big moments. Brands are no different: whether it’s a new product launch, a shift in direction, a seasonal special or even an attempt to answer for a disaster, there will always be moments in the life of a brand that call for “campaign thinking” – that is, preparation, orchestration, and careful measurement – and maybe, in the digital world where messages reverberate and take on a life of their own, these moments are more important than ever.”

My colleague Marty Kihn added:

“I think there’s also an economic argument in favor of campaigns. Consumer brands often launch new products, line extensions, etc., and the most efficient way to do so at scale is via mass media (e.g., TV, homepage takeovers, big Facebook campaigns, etc.). Such media are simply too expensive to continue indefinitely (“always on”), so they’re used in bursts, which we call campaigns.”

Counterpoint 2: The scale and impact of a campaign is hard if not impossible to achieve on a continuous basis.

Conclusion: Campaigns may not be dead, but they’ve mutated and now need to co-exist with content marketing in a two-speed system where both modes complement, compete, and play against each other.

Come celebrate the modern campaign with us as we embark on a week of examination of the old king in his new (digital) clothes (subscription required)!


Category: Advertising digital marketing Media Uncategorized     Tags: , ,

The Story of Ad Tech

by Andrew Frank  |  February 26, 2014  |  1 Comment

The announcement of Oracle’s acquisition of BlueKai brought me to the realization that the story of ad tech, and how it went from antagonist to ally of the software megavendors, is not so well known outside the insider’s clique. This has created some challenges in interpreting this event. So here it is – my take, anyway – in suitably condensed form.

It all started when Google’s search engine first struck advertising gold, spawning the ad tech gold rush that’s been picking up steam ever since. As digital ad spending grew, a rift opened in Silicon Valley between the maturing IT-centric software providers and the young digital media rebels. As the IT world focused its gaze and efforts toward the clouds, ad tech proceeded to develop its own sub-culture, complete with a new language and value system, inventing and appropriating terms like “data management platform.” This one in particular confused and irritated many IT leaders who saw data management as settled territory whose relation to advertising – an “application” – was at best obscure. Analysts passionately debated this terminology. But the trade had spoken: DMP became a fixture near the center of the ad tech universe, connecting data and media in a constellation of acronyms from ATD and DSP to RTB and SSP.

It wasn’t just the IT world that was rattled by all this: the traditional media and advertising worlds, as well, were often caught up short by these developments, especially as they started to attract real media budgets and disrupt well-established ad marketplace practices with alternatives like real-time bidding exchanges. In spite of resistance, media budgets follow the eyeballs and the arc of the marketplace bends toward efficiency, and so ad tech continued to attract investors, customers, and talent, to the point where media and advertising had little choice but to embrace and try to direct the movement. Ad tech companies, eager to counter charges of comprising a second dotcom bubble, accommodated them by accepting some of the old ways, such as using television-style metrics to measure media rather than the native digital ones they started with. They invented media-friendly formats like native advertising. Jeff Zucker gradually revised upward his “analog dollars for digital pennies” exchange rate to quarters and rising.

As this was happening, the software megavendors, recognizing that marketing was shaping up to be a key consumer of big data and cloud services, went on a marketing provider shopping spree, buying up marketing automation and social marketing management start-ups at eye-popping valuations. But – with the exception of Adobe – they largely avoided ad tech, to the point where nervous investors started to look to IPOs as the exit strategy for ad tech – with a healthy mix of disappointing and home run results (here’s a nice summary by Luma Partners).

Somewhere along the line, the ad tech vendors made an important discovery. In solving the problem of how to best target and trade display ads in real-time, they’d actually solved a much bigger problem that’s bedeviled marketers for some time: how to effectively apply data to optimize their marketing operations in real-time. They realized the algorithms that could optimize display ads sold on real-time exchanges could also optimize email, the web site, mobile communications, even the call center and direct mail. They also realized that, although they’d focused initially mostly on third-party data collected in cookies, by combining this with their customers’ first party data they could produce even better results. They added better analytics and started to acquire complementary technologies like attribution and tag management (which were also making the same discoveries). This made the software megavendors see them in a new light. They began to realize that ad tech – DMPs in particular – would be a key integration point in the comprehensive marketing solutions they were constructing.

The story doesn’t end here. While we believe that Oracle’s BlueKai acquisition will light the way to a wave of ad tech consolidation into megavendor marketing suites, a few hurdles remain on the way to complete reconciliation. Ad tech is still retains its “Wild West” image, struggling with issues like privacy and fraud. Perhaps as the megavendors bring them on board, they’ll also bring resources and experience to tame these issues and reassure the public more successfully than Google and Facebook. Still, I doubt they’ll ever be comfortable with the idea that a “data management platform” is an ad tech product. Some things are a matter of principle.

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Category: Advertising Applications Cloud Data-Driven Marketing digital marketing Media Uncategorized     Tags: , , , , ,

Getting Closer to Your Customers

by Andrew Frank  |  January 10, 2014  |  2 Comments

Me: Siri, are you “Her”?

Siri: No, but nobody could know you better than I do.

Kudos to Spike Jonez and Apple for nailing the zeitgeist of 2014.

Consider a recent survey called The Rise of the Customer-Led Economy, in which The Economist asked CEOs, “In which of the following ‘value disciplines’ does your organization focus most on excelling? (Customer intimacy, Operational excellence, Product leadership)” Having asked the same question before, they discovered that, over the past three years:

The percent of respondents who answered “Product leadership” dropped from 33% to 18%;

The percent who answered “Operational excellence” shifted slightly from 33% to 37%;

And the percent who answered “Customer intimacy” leaped from 21% to 37% — a rise of 76%.

On one level, this obviously echoes the rise in “customer-centric” thinking as a business trend. But there’s more: customer intimacy is a growing vortex at the intersection of consumer empowerment and big data. The dream of true one-to-one marketing, once thwarted by scalability issues, is now coming into sharper focus through a confluence of technology breakthroughs: connected products, the Internet of Things, the quantified self movement, social marketing, and, of course, advanced analytics enabled by smart machines in the cloud. To be sure, the hype is still ahead of the reality, but now is the time to think about how to navigate an emerging world where more and more organizations seek – and believe they can achieve – customer intimacy through technology. This goal sits right in the center of the nexus of forces: mobile, social, cloud, and information.

To state the obvious, many folks recoil at the word “intimacy” in connection with marketing and commerce. Our collective ambivalence is reflected in our behavior: according to Pew Internet’s research, “86% of internet users have taken steps online to remove or mask their digital footprints—ranging from clearing cookies to encrypting their email.” Yet, we also increasingly trade privacy for convenience, or other seemingly trivial considerations.

This tradeoff will only become more explicit. According Peter Sondergaard, Gartner GVP and Global Head of Research:

“In the second wave of the new digital industrial economy, consumers will shift from being largely ignorant of their data’s value to being highly intelligent, protective and selective about how they collect and manage it.

In this second wave, consumers will be enabled and empowered to own and thereby monetize their own data, effectively wrestling back the control and driving up the value equation for themselves.”

This will open a chasm between winners and losers in the customer intimacy landscape. Clearly, digital marketing strategy and tactics are the keys to determining which side you land on as consumers cull the overabundance of suitors seeking “intimacy.” The first step for many seeking to excel at this will be a realistic assessment of relationship status. It will be difficult to overcome the tendency to assume that intimacy can be won by a superficial combination of more listening and more communication.  Our resolution for 2014 will be to help our customers get to the next level of understanding of how digital marketing, and especially customer experience, can deliver a more empathetic view of relationships. In some cases, this might mean acknowledging when someone’s just not that into you.


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Digital Marketing Agencies Promise Business Transformation

by Andrew Frank  |  December 12, 2013  |  Comments Off

 Is digital marketing leading the digital business revolution, or is it just making the most noise? In support of the former, consider Gartner’s recently-released Magic Quadrant for Digital Marketing Agencies (access it free here). Here we find a gallery of impressive companies, from a wide variety of backgrounds, whose market leaders are distinguished by their business transformation skills.

But how are they at delivering enduring results?

Many disciplines and service provider categories have claims on business transformation besides marketing. Even further: many service providers support marketing besides companies that call themselves “agencies” – a label that, for better or for worse – can’t seem to shake its historical “Mad Men” advertising connotations, despite the inclusion of companies like Accenture, Deloitte, and IBM. But agency culture has many qualities and values that uniquely qualify it for a leading role in today’s digital business transformation story: its reverence for vision and visionaries, its ingrained consumer-centric orientation, its long-standing relationship with data and research, and its commitment to delivering big ideas, to name a few.

There are also areas where that culture causes friction with the real requirements of business transformation. Specifically, there’s the growing importance of the discipline of technology implementation in the digital agency business.

Certainly, the pure-play digital agencies have always had a strong technology story, and even the ones with pure advertising heritage have come a long way in their relationship with technology. The many digital agencies with system integration backgrounds are certainly no strangers to complex implementation. But our interactions with agency clients over the past several months suggest that, as a group, digital agencies still generally do better at the vision part of business transformation than the delivery part. We’ve heard stories of roll-outs described as “catastrophic failures” and “way over budget” with “poor communication” and “inexperienced developers.” To be fair, leading agencies generally do a consistently good job of handling execution. Still, it’s worth noting that it’s much rarer to find complaints about digital agencies failing to deliver great ideas than great results.

Some might take that as a sign that digital agencies should stick to vision and creative execution, and leave complex implementation to the experts. This approach has its success stories; its problem, however, is that it results in difficult hand-offs with accountability problems and generally slows down a process that is already under a great deal of time pressure. Moreover, agile development, which embraces changing requirements even late in a project, requires visionary leadership throughout the process – not just at the outset.

Agencies have a legacy of recognizing and rewarding top talent in the creative sphere; in the technology sphere, talent is in high demand and the call of Silicon Valley can be hard to compete with. Lacking a promise of IPO wealth can be a disadvantage, however agency market leaders are still finding ways to attract and retain this talent, which may become easier as the next wave of consolidation plays out among tech companies. For digital agencies, tech talent – alongside data science – is becoming an increasingly important differentiator. As more companies look for help with their digital business transformation, these companies are positioned to transcend their promotional legacies…but some still need to transform themselves first.

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Category: Advertising Data-Driven Marketing digital marketing Strategic Planning     Tags: , , ,

Campaigns vs. Content Marketing: A Relationship View

by Andrew Frank  |  December 10, 2013  |  1 Comment

Last week my colleague Jake Sorofman wrote of The End of the Marketing Campaign, a view that I’ve since heard echoed in a few places. Here’s another perspective.

I think it’s clear that digital is changing the nature of almost every stalwart of traditional marketing. At the same time the time-honored objectives and language of marketing – customer acquisition, branding, cross-sell and upsell, loyalty and retention, advocacy, and so forth – endure in a world of changing tactics. Which begs the question, what is the new equilibrium of marketing tactics that we’re all approaching in the digital world?

I’d like to propose the hypothesis that the ultimate goal of digital marketing – in fact, of marketing in general – is to establish a more natural relationship between brands and individuals. Yes, the real goal is to sell, but this is best accomplished in the context of a relationship that echoes our primordial instincts to do business with people we know and trust and to be wary of offers from strangers. This forms the impetus for content marketing and brand storytelling: these are efforts to establish a familiar, natural role for brands in the digital marketplace of human interactions.

So does this mean campaigns are becoming outmoded? This depends on how you define “campaign.” If a campaign is any sort of planned, time-bound concerted effort to make or change an impression – at scale - then I doubt they’ll ever go away. Here’s why: when individuals seek to form or modify relationships, clearly their interactions take different forms. A first impression is a one-time opportunity, and people are motivated to make it count. Whether it’s dating, a job interview, a major speech, a big sales presentation, or a marriage proposal, we all strive to make the most of our big moments. Brands are no different: whether it’s a new product launch, a shift in direction, a seasonal special or even an attempt to answer for a disaster, there will always be moments in the life of a brand that call for “campaign thinking” – that is, preparation, orchestration, and careful measurement – and maybe, in the digital world where messages reverberate and take on a life of their own, these moments are more important than ever.

Time in the spotlight has long-term implications – in many cases, defining brand perceptions for years to come. On the other hand, the quotidian world of casual communication is also a key aspect of natural relationships within communities and families. The theme of continuous storytelling supports this long-term analog of natural social relationships (at much smaller scale). To excel at communicating, people need to be adept at both forms of communication, and so do brands. If your branding practice is trying to use the machinery of campaign management to drive your daily dialog, you may well need to rethink your approach. But as you do, don’t allow the burdens of real-time presence to obscure the opportunities to think big. Small talk is no substitute for planning a few special moments for people we care about.

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Category: Advertising Data-Driven Marketing digital marketing Media Strategic Planning     Tags: , , , ,

Real-Time Marketing Gone Wild

by Andrew Frank  |  October 25, 2013  |  3 Comments

One thing about a real-time marketing: it’s a lot more entertaining than the canned stuff. Who doesn’t enjoy watching a venerable brand get mauled by the Twittersphere trying to hijack some news story or social buzz?  These days, even a flop affords the opportunity to boost engagement with a heartfelt mea culpa.

RTM’s Vaudeville nature certainly has its detractors. But, as my colleague, Richard Fouts, points out (subscription required), it’s not as though it’s optional: RTM is an unavoidable consequence of the world we now live in (most of us, anyway): always on, always connected, always trending. If you’re not part of the conversation, you’re not part of the community, so abstain at your peril. Richard also makes the crucial point that real-time marketing is not just about putting out fires or latching on to trends; it’s about defining the processes that empower people to act in a deliberate manner that appears spontaneous in a real-time context  That’s a lot more difficult than it looks. Unfortunately, because success gives the illusion of true spontaneity, it’s become something that’s both easy and tempting to imitate badly.

How can we tell the difference? In many ways, real-time marketing appears filled with contradictions. As part of the digital marketing story, it often seems to defy the story’s themes of efficiency and accountability and attribution. Although we can point to measurable performance tactics like real-time offers and real-time pricing and real-time distribution (oh yes, and real-time bidding for media) – most of the efforts we encounter resemble hit-or-miss attempts at creating impromptu brand impressions, to be superficially measured by likes, shares, followers and retweets. Where is all this going? Is there any science to it?

This leads back to the old question of how to assess indirect marketing activities, with the new twist that real-time dynamics, despite generating more data, are less predictable than ever. The complexity of opinion flows in social networks and their effects on real business metrics like sales and loyalty are still mostly beyond the reach of big data analytics to assess – and maybe they always will be. But that doesn’t mean you shouldn’t try. You may discover something interesting. In the meantime, plan carefully for RTM, but consider the words of Thomas Edison: “Just because something doesn’t do what you planned it to do doesn’t mean it’s useless.”


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Digital Marketing and Advertising’s Brave New World

by Andrew Frank  |  October 23, 2013  |  1 Comment

An old maxim observes that new digital technologies tend to highlight formerly underappreciated qualities of their displaced analog predecessors. CDs and MP3s send audiophiles scrambling after the sound of vinyl; MPEG and JPEG lack the intangible quality of film; eBooks and eZines deprive us of the home-defining presence of their physical counterparts, and so forth. Sometimes, the cost of the sacrifice is high enough to slow down the transition – it’s taking a long time to replace the convenience and anonymity of cash, or even the simple ubiquity of business cards – but in the end, technology has a way of winning.

In the advertising world, programmatic media buying is in the midst of displacing old-style Madison Avenue transactions. The programmatic marketplace, centered on data and audience buying through real-time auctions with algorithmic optimization, delivers large advances in efficiency and precision over the expense-account-lubricated direct sales method. But the sacrifices are high, especially for those who still think branding matters in marketing. When brands give up control of the exact context in which they appear, the results can be upsetting. Consider this exposé by Digiday’s Jack Marshall: “This Beheading Video Is Brought to You By Nissan.” Here we have some very poorly placed pre-rolls, which summarize why many brands are – and should be – reluctant to embrace the brave new world of digital advertising. As Jack points out: “Digital ad sellers often complain that budgets aren’t moving online quickly enough from traditional channels such as TV, but until they do a better job of ensuring the quality of the content they’re serving ads against, they shouldn’t be surprised that they aren’t.”

Native advertising has emerged as an antidote to the hazards of blind placement, and some technology companies are working to reconcile these under the banner of programmatic premium models that offer both transparency and the ability to preview and approve placements before they run. For example, in August Federated Media announced a hybrid approach it called “Content Reachtargeting” (read about it in John Batelle’s blog), and start-ups like Nativo hope to build a business offering convergence solutions to publishers (see AdExchange coverage). But there’s clearly tension between these approaches, which adds to the friction brands are feeling as consumers drag them into digital.

So, while programmatic media technology is bound to revolutionize paid media markets (spoiler alert: Gartner has a prediction coming up addressing its impact on the resilient TV-ad business), one quaint feature of the old analog world is proving unassailable and immune to automation: understanding how people actually experience your brand.

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Digital Marketing Data and Economies of Scale

by Andrew Frank  |  August 1, 2013  |  Comments Off

The recent Omnicom-Publicis merger talks have sparked an intriguing debate: does one’s scale of data and transactions translate into a buying power advantage in digital media? This was certainly the initial take offered by many, such as David Bank, an analyst with RBC Capital Markets who was quoted in the Wall Street Journal article announcing the merger:

“The bigger an ad agency is, the more likely they are to have more access to consumer data and data around the pricing of online ad impressions,” which helps them get the best price when buying from “digital behemoths like Google and Facebook.”

Others, such as Dave Morgan of Simulmedia, disagree (as quoted by Peter Kafka in All Things D):

“I think it’s a total misdirection to think that you can leverage the scale and advantages of big data if you’re bigger. Quite the opposite…Most of [Google et. al.’s] media is auction-based. The fact that you buy more doesn’t let you get a better price.”

So, which is it? Do more data and buying scale translate into a buying power advantage in auction-based digital media or not?

Of course, the answer is not so simple. First, let’s acknowledge that Dave Morgan has a point: the auction systems employed by Google and others are cleverly designed to encourage bidders to issue bids as close as possible to the “true value” they assign to the media they seek: both overbidding and underbidding are suboptimal strategies in a Google-style auction. Buying volume seems to offer no direct leverage when impressions are bid on one-at-a-time. This is one of the wonders of real-time bidding: in principle, it maximizes value for all parties, regardless of scale.

So are there really no advantages to scale in programmatic media? Putting collusion aside, the more historical information you have about marketplace conditions based on aggregate observations, the better you can predict both what an impression’s true value will be relative to underlying marketing objectives, and where relevant market prices are likely headed, leading to superior bidding strategies. This kind of advantage comes not just from data, but also from technology that enables one to capture and analyze large volumes of trading information in near real-time. Such techniques may not necessarily lower prices, but they will result in better value.

There’s also the obvious observation that not all digital media is sold at auction: much more revenue still flows through direct channels, where data and volume continue to deliver negotiating leverage. As approaches like programmatic premium continue to make inroads, these advantages will continue to grow in significance.

So, in conclusion, when it comes to data-driven media operations, size does matter. Naturally, so does expertise. Consider both when evaluating options for data-driven marketing.

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Category: Advertising Data-Driven Marketing digital marketing Uncategorized     Tags: , , , ,

Bad Neighborhoods in the Digital Marketing Metropolis

by Andrew Frank  |  July 8, 2013  |  3 Comments

Reports of rising crime in the ad ops sector, particularly the precincts associated with programmatic media and data exchanges, have been mounting steadily over the past year. Mike Shields, reporting for Adweek, deserves a great deal of credit for tackling the story head-on and naming names. In a typical report, Shields makes the case that “Suspicious Web Domains Cost Online Ad Business $400m per Year.” The problem has attracted the attention of John Battelle and the IAB, but as Battelle notes, “the bad actors are currently ahead of the good guys, and worse, many in our industry are turning a blind eye, hoping the problem goes away in time, without too much publicity.” That hope is becoming less likely.

I’ve been collecting first-hand research on this for a while now, with an eye toward a report and pitch that will be featured at Gartner’s Symposium this fall, but it’s worth relating this to our Digital Marketing Transit Map, to frame the question of how a marketer should deal with this. One could always take the approach of avoiding the programmatic media region altogether (if not digital advertising itself), but for those who still believe in the potential of real-time media markets to reach an elusive audience with well-timed, targeted messages based on demographics, product searches, and other real indications of purchase intent, it pays to know the landscape.

Digital Marketing Transit Map
Digital Marketing Transit Map


In particular, it pays to know where to go for help. The marketing police (I think you know them) are generally found in the marketing ops neighborhood, but their crime lab – which has the tools you need to fight fraud – is in the data ops region, where fraud detection is high on the list of big data use cases in non-marketing domains, and should be no lower in marketing. Using tools such as A/B testing and web analytics, data ops can help detect common fraud patterns such as click fraud in near-real-time, as opposed to the more typical situation in which it’s discovered months later while reviewing invoices. Impression fraud (often generated by botnets like Chameleon) is a bit more difficult but also detectable with the right tools in place.

In addition to media fraud, buyers must beware of fraudulent data from third-party providers. Here, again, data ops can help by applying traffic analysis to weed out bad targeting data. In any event, don’t venture into this area without a clear strategy for monitoring performance, and a plan to react quickly to degradation. Predictive analytics can help, as any deviation from predicted campaign performance should set off an alarm and mobilize your defenses.

There are shady players in any metropolis, but look for a concerted effort in the second half of this year to clean up this digital marketing neighborhood.


Category: Advertising Data-Driven Marketing digital marketing Media Uncategorized     Tags: , , , ,