by Andrew Frank | December 12, 2013 | Submit a Comment
Is digital marketing leading the digital business revolution, or is it just making the most noise? In support of the former, consider Gartner’s just-released Magic Quadrant for Digital Marketing Agencies (clients can access it 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.
Category: Advertising Data-Driven Marketing digital marketing Strategic Planning Tags: Advertising, Agencies, Data-Driven Marketing, digital marketing
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.
Category: Advertising Data-Driven Marketing digital marketing Media Strategic Planning Tags: Advertising, Data-Driven Marketing, digital marketing, Media, Social Media
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.”
Category: Advertising Data-Driven Marketing digital marketing Mobile Tags: Advertising, Data-Driven Marketing, digital marketing, Real-Time Marketing, Social Media
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.
Category: Advertising Cloud Data-Driven Marketing digital marketing Media Tags: Advertising, Data-Driven Marketing, digital marketing
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.
Category: Advertising Data-Driven Marketing digital marketing Uncategorized Tags: Advertising, Agencies, Data-Driven Marketing, digital marketing, Media
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
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: Advertising, Data-Driven Marketing, digital marketing, Marketing, Media
by Andrew Frank | June 19, 2013 | 1 Comment
In the annals of data visualization, Harry Beck holds a special place as the innovator credited with coming up with the first modern transit map, the iconic London Underground Tube Map, in 1931. Beck’s breakthrough was to realize that transit riders were much more concerned with usability than geographical accuracy, so he adopted the diagrammatic principles of an electrical schematic to clearly show the relationships among tracks, stations, and connections and abandoned any fixation on topographical precision. In geographically accurate maps, stations in dense areas appeared clumped together while sparse areas contained no useful information. Beck’s version simplified navigation by only including the information that was important.
Now think about the landscape of digital marketing providers. What’s the first thing that comes to mind? It’s probably a confusing image that attempts to map a dizzying array of logos with complex relationships and plenty of jargon. How do you navigate with such a map?
A transit map inspires us because it makes complexity accessible and invites us to explore. It speaks to our desire to get from point A to point B as efficiently as possible, but also to our curiosity about what lies beyond point C, in less familiar outskirts. Mostly, though, it’s about lines and connections. The structure is apparent.
Today, Gartner is releasing its first public version of its interactive Digital Marketing Transit Map (#dmtransitmap). A more detailed version is available to Gartner for Marketing Leaders clients, in toolkit form. I’ll be running through this Thursday, June 20, at 9am ET and 12pm ET in a free webinar – hope you can join.
Category: Advertising Applications Cloud Data-Driven Marketing digital marketing Disruption EA ERP IT Governance Media Mobile Strategic Planning Uncategorized Vendor Contracts Tags: digital marketing
by Andrew Frank | June 13, 2013 | 1 Comment
In 1849, the year of the gold rush, the city of San Francisco had about 1,000 inhabitants. By the end of 1850, its population had grown to 25,000. To accommodate the massive influx of prospectors, self-contained gold mining towns sprouted up around the region. As the surface gold vanished, deep mining became industrialized and capital-intensive. Rivalries grew and power centers developed. The winners were best equipped, best organized, and knew the territory.
Today, digital marketing seems to be reaching a similar turning point. The days of a thousand point-solution venture-backed vendors are giving way to a period of complex consolidations, in which providers from different regions of marketing are converging on a common terrain of integrated, multichannel, data-driven, cloud-based digital marketing solutions – tied together by a central digital marketing hub. But they are challenged by a diversity of divisional buying centers within organizations struggling to connect the many marketing silos they’ve built while preserving a common sense of brand.
My colleague Bill Gassman and I wrote in a recent report (subscription required):
“There are many worlds of marketing: from online to offline, from inbound to outbound, and from agency to indigenous. Each faction has a role to play in the overall marketing efforts of an organization, but often each works in an isolated world of business goals, functions, metrics, tools and cultures. Even the lingo is different, to the point that discussions are difficult when different constituencies try to communicate or compare performance metrics. This is particularly true of the divide between advertising and marketing operations.”
The ad tech world, which has enjoyed a long run of investment inspired by the lucre of media and the success of Google and Facebook, would now recast itself as marketing tech and apply its programmatic solutions for advertising to a broader range of communications and decision support. Consider this speech, given at AdExchanger’s Programmatic I/O conference in April by John Nardone, CEO of [X+1], titled “The Programmatic CMO,” in which he presents the case for why DMP-like tools will move beyond advertising to marketing.
On the other side of town, in the web ops region tag management has taken root as the natural heir to web analytics, and companies such as Tealium have announced their own Tealium Data Cloud and Tealium Digital Marketing Hub products. In the data ops world, cloud-based providers like Anametrix are challenging big data incumbents with solutions positioned as universal marketing data hubs. And from marketing ops, lead management providers such as Marketo and Neolane have also staked rich claims, launched marketing hubs, and found new homes with buyers such as IBM and Teradata. Finally, social marketing and email marketing players are the latest groups to find favor with large software incumbents like Oracle and Salesforce.com who see gold in the application of their big data to marketing.
All of which begs the question, how do the natives – that is, digital marketers – cope with this influx of gilded fortune-seekers? They need a guide – someone who knows the changing territory. And perhaps some sort of map.
Category: Advertising Cloud Data-Driven Marketing digital marketing Disruption Media Strategic Planning Uncategorized Tags: Advertising, Data-Driven Marketing, digital marketing
by Andrew Frank | May 28, 2013 | 2 Comments
Each year around this time the analysts at Gartner go to work on a series of widely read reports called Hype Cycles that summarize the maturity and velocity of a staggering number of technologies. Spoiler alert: this year, we will introduce a new profile called “data-driven marketing” with a “transformational” benefit rating.
Which is not to say that current expectations don’t suffer from inflated hype, some of which was on parade at last week’s OMMA data-driven marketing event at Internet Week in NYC (see MediaPost’s Big Data Swagga coverage). But it’s not so much the hype we’re interested in as the reality, which is that there are large variations in adoption of data-driven marketing techniques among marketers. Last month Gartner released a survey (highlights available) that showed marketers, on average, allocate 21% of their marketing budgets to marketing analytics. But averages can be deceiving: only about a quarter of the panel reported spending near the average; at the extremes we find 21% spend less than 10% while 15% spend over 40%. That’s a wide range. Similarly, when we asked what percent of the marketing analytics budget was allocated to digital marketing analytics, 24% said less than 10% while 17% said over 40%.
A recent survey from IBM compared the activities of top performing marketers with others, offering some evidence that greater involvement with data-oriented activities was correlated with marketing success. The activities that showed the greatest gaps in involvement between top performers and others happened to be extremely data-driven: “uses optimization technology across all channels” topped the list as top performers were 5.6x more likely to do this than the norm. The next three were “adjusts real-time offers based on context” (2.6x), “applies advanced analytics to determine media spend” (2.2x), and “detects transaction struggles and takes action” (2.2x). Lest you think the activities were all data-centric, least differentiated were “integrates inbound/outbound and online/offline” and “identifies/remedies execution gaps in brand promise” (that may still use data, but presumably not big data).
We’ll be sharing more findings about the true state of data-driven marketing in a webinar on May 30 titled “How Data is Transforming Marketing.”
Category: Data-Driven Marketing digital marketing Tags: Data-Driven Marketing, digital marketing, Market modeling, Marketing
by Andrew Frank | May 7, 2013 | Comments Off
Last week’s Customer 360 conference in San Diego provided a good opportunity to sample what’s on the minds of marketers, and one question I heard a few times was, do you anticipate companies (like ours) shifting their ad budgets to big data initiatives in marketing? In fact, there is plenty of evidence of a long-term value shift from media to data, and earned media is emerging as a disrupter of paid media (see, for instance, VivaKi’s launch of Contagion with Visible Measures). Yet, a number of savvy marketers I spoke with also expressed skepticism that marketing was about to raid the media budget in a big way.
A good deal of ink has been devoted to writing advertising’s obituary of late. One such book project (currently in Kickstarter) comes from Joseph Jaffe and Maarten Albarda and is titled “Z.E.R.O. Zero paid media as the new marketing model” (see MediaPost coverage here). Jaffe’s earlier book, Life after the 30-second spot, took aim in 2005 at TV advertising, which has since stubbornly refused to die, although its future can still launch a healthy debate. But setting the goal post at zero for all paid media is a much more radical proposal. Even Jaffe seems to hedge a bit:
“Z.E.R.O. is proof positive that you don’t need to ‘pay’ for customers or media if you have enough to start off with and/or a core of passionate advocates who would go to bat for you.”
For most companies today that’s a pretty big if. Gartner’s recent marketing spending survey shows that, looking only at digital marketing budgets (which average about 25% of overall marketing budgets), digital advertising still claims the biggest share of spending at 12.5% (followed by content creation and management at 11.6%). (Results are based on a survey of 253 marketers from U.S.-based companies with more than $500 million in annual revenue.)
But predictions are about the future, and at Gartner we’ve often wondered about the future of paid media. Last year, I wrote in our Hype Cycle for Advertising about, “the ‘dark cloud on the horizon’ for ad-supported media as marketers beginning to openly question whether alternatives to paid advertising — earned media and advocacy in social networks, direct data-driven targeting, one-to-one conversational tactics, and branded content and applications, to name a few — might soon lead to substantial secular cuts in media spending across the board.”
Yes, there are plenty of reasons to imagine that paid media faces a rocky future, so lest we all assume its demise is a foregone conclusion, I’d like to offer five counterarguments that suggest otherwise.
- Scarcity of attention. Although always-on access to a glut of media options (including social) is fragmenting audiences and driving down digital ad prices, reaching the right person at the right time in the right context is still both difficult and essential to marketers, which is all that’s really needed to create demand. Media is about the cultivation of attention so, although its form will change, its basic model of aggregating and selling eyeballs will not. New competition from companies like Google and Facebook will raise the bar on just how attention is cultivated, and refined with data (to select the right eyeballs), but these companies depend on advertising for revenue, so they’re in the media business. Just ask Sir Martin Sorrell.
- Scale and Risk. Earned media enthusiasts like to point out how viral content can exceed the reach of paid media across all channels, while generating much more buzz and engagement. This is certainly true, but it fails to account for the fact that virality is rare and highly unpredictable. The industry’s tendency to focus on exceptional success stories can skew perception on this point, but most mature marketing organizations recognize this and still prefer to pay for predictable results rather than gamble against long odds with pure viral content.
- Lack of Perfect Information. An oft-repeated fallacy is that “today’s consumer exists in a world of perfect information.” (Jaffe) There’s no doubt that consumers have access to a lot more information than they used to, but perfect? Gartner estimates that 2-6% of existing ratings are fake or deceptive (subscription content), and an entire industry has sprung up around gaming ratings and recommendations. Most consumers understand that information in social networks is not necessarily dependable, and that advertising, while not the most trustworthy source of information, at least has some public accountability for truthfulness.
- The Ad Tech Revolution. Paid media is hardly standing still. A great deal of monetary and intellectual investment is going into measuring and optimizing the effectiveness and efficiency of advertising, and making it real-time. A comparable market for earned and paid media doesn’t exist. This observation is sometimes used to support the straw man argument that it’s not media but “old media” that’s doomed. And this is surely true, so media companies better figure out ways to be new. It won’t be by tossing out the idea of selling ads.
- Even the revolutionaries wind up buying TV. Not only are Google and Facebook dependent on paid media for revenue, but both of them, along with Apple and Microsoft, have seen fit to heavy-up on old-fashioned TV (see Facebook’s first TV commercial for Home at AdAge). These are companies with more data and high-tech analytic skills than anyone else. ‘Nuff said.
So, yes, media is in for a bumpy ride as big data pushes its way into the marketing picture, but marketers will need to think twice before they raid the ad coffers. And media companies need to find their role in the data picture, which is a plug for upcoming research.
What do you think?
Category: Advertising Data-Driven Marketing digital marketing Disruption Media Tags: Advertising, Data-Driven Marketing, digital marketing