People, not proxies - the next frontier in marketing

Transcript

Hi, everyone. Today, I want to talk to you about why people, and not proxies, are the next frontier in marketing as a whole.

And to start with, I have a quick question – and there’s a wonderful prize. We have some dulce de leche truffles, from a supermarket brand that sounds like Dark’s & Tenser, and the question…Please, shout out. The question is: who can tell me what this is?

Yes, correct, it’s a newspaper clipping, but, why is it so special?

First adverts!

Advertisers used to buy entire audiences

This is so special because it’s the first ever publication that carried paid-for advertising. And in the 160 years since the publication of this, advertisers have happily planned, in terms of campaigning, around media selection. So, they used media, or did do for a 160 years, as a proxy for their audience; selecting media partners where they felt their audience, whether it be viewers, readers or listeners were aligned to their target audience.

They accepted that when they bought an advert in something like a newspaper that they were buying the entire audience, meaning that they knew that a great deal of that audience were not necessarily their target audience, and there was wastage involved in their investment. That state of play existed from this moment here for 160 years, and it did so until the event of digital media.

Digital allowed advertisers to refine targeting

Digital media changed everything, and we’re still dealing with the ramifications of it today. In our industry right now across the whole supply chain, from brands, agencies, and media owners, we’re experiencing the greatest disruption we have ever seen in our industry. And that’s because digital media enabled advertisers to target audiences at such a precise level. Even in the early days, you could target people based upon the intent of the keyword they were using in their search query. And you could do this at quite some scale.

If you combine that with the accountability that digital put on the table, you can see why the rise and the rise of digital took place, to its current position today, where it takes the lions share of the media budget.

Media buying needs to be people based

Gone are the days when clients are happy to buy a piece of media and buy all of the audience associated with it. And that’s why we, in digital, are sharpening our approach; enabling the industry to move away from a place of proxies and towards a place of audience or people-based planning.

When we talk about digital marketing, our preferred proxy is undoubtedly the cookie, so let’s have a look at how we use that in our marketing.

How we use cookies

On the advertiser side, you have a data management platform. Obviously the DMP can handle vast amounts of unstructured data, like CRM and analytics, making great sense of it but for the purpose of this talk, I’m purely talking about cookies.

The DMP can handle a lot of first-party cookies – people who have visited the client website – and it can start to segment them based upon the propensity of that cookie to do business with them – the potential value of them informing their bidding strategy.

Out in the marketplace, you have a universe of potential customers, browsing the web, some of whom will visit media owner websites, where in relevance to the advertiser, a third-party cookie is generated. This is the moment when that third-party cookie is up for grabs, it’s out in the market, and you can buy that impression, you can advertise to them.

So, the advertiser assesses that cookie, understands the value of it, plugs it into third-party data providers, takes great learnings from it, and builds out this big picture – asking themselves “should I bid for this impression and by how much?” – and then potentially a bid is placed, and an advert is shown.

Using cookies as a proxy is smart but not perfect

Now, if you contrast this approach to that of buying an advert in a newspaper, and advertising to the entire audience, this is highly sophisticated, but actually the use of cookies alone is really quite a blunt approach. I’m going give you a few reasons as to why:

• We all clear our cookies. We all buy new hardware, from time to time. That puts a complete road block on the data that you’re able to collect and base your planning decisions around.
• Users share machines. We’re using Adam’s laptop at the moment, this evening his girlfriend may use it. Her behaviour online will be distinctly different, so she’s creating a different pattern of behaviour that we’ll be basing decisions upon. Advertisers may choose to advertise to Adam’s girlfriend, thinking that it’s him, so that’s not very smart.
• They’re also not future-proof. We’ve seen recently, with the latest update from Safari, they are auto-blocking third-party cookies. And with GDPR on the horizon early next year, we’re going to see a dilution in the volume of data that we can base decisions upon.
• And finally, very importantly, cookies create a duplication of reach. This is something I really want to dig into and explain to you.

Cookies create duplicated reach

I’m one person. I have a smartphone, I have a tablet, I have a desktop, I have a laptop; I have multiple browsers on those machines as well. Every time I do that I’m creating another cookie. That creates a real problem if you’re just using cookies, because you may think this one person – me – is several people, and that’s going to make you draw down some of the wrong conclusions in your planning.

Most notably, we have duplicated reach. So, an advertiser may look at their audience thinking they have a bigger audience than they actually do, and they can’t distinguish the fact that this is one person. If they think they have a bigger audience, and if they advertise to everybody in it, you have inflated costs, at which point, you have a sub-optimal return upon investment. And, just from a consumer experience with a brand, if you don’t understand that this is me on different devices at different times, you’re going to potentially spam me, giving me a poor overall experience of your brand.

The move from cookies to people

That’s why we, in digital, are moving from an audience of cookies to an audience of people. If you simply add a richer data set to that of cookies, you can correctly predict who you’re targeting 8 out of 10 times. And this is how it’s done:

Using a partner, like we’re investigating working with Ignition AI, you can collect data around IP addresses, device models, screen resolutions, and user agents; at which point you’re building a far, far broader picture, becoming laser-like in your targeting and you’re understanding through all devices. And even if you remove cookies from this portfolio of data points, you will still correctly identify that user 7 out of 10 times. This is so, so meaningful to advertisers.

Let me show you how this works when you go back to my example of duplicated reach -me as one person creating multiple cookies. Using that technology, deploying it well, you’ll start to understand this is not four people, this is one person. You’ll get a view through all devices, all of my behaviour, you’ll know it’s me, and at that point you can start to be really smart. You can know I’m the right person, base your bidding strategy around it, and target me at an optimal moment, regardless of device, regardless of media.

This enables personalisation, which we all know enriches the experience a consumer has with a brand. From there, because we’ve de-duped the overall cookie portfolio, we’re now decreasing the overall volume of waste, improving the return on investment. We’re also helping future-proof this, because we’re relying on a vast data set, not simply cookies. And this is what brands want from their marketing, it’s targeted, it’s personalised, and it’s effective.

TV is now enabling people based planning

That’s why other channels are now following digital media in enabling advertisers to target their audiences on a nano basis. And the one notable medium that’s making great strides in this is television.

TV is moving from a place where advertisers planned campaigns based around programming, where they used programming as their proxy to the audience, predicting who was likely to watch what and buying the entire audience behind a programme, accepting the wastage. TV is moving from that world to a place where it enables advertisers to advertise on a household-by-household basis, in what we call addressable television.

This is television’s play to take share from digital. And it’s specifically their play to challenge the duopoly of Google and of Facebook. Now there are limitations within this, just simply around the inventory available to us to advertise in at the moment, it’s not big enough. But, if you read the Mindshare Report, Video Eats the World, they predict by 2022 one-third of all television inventory will be addressable. So, its en route, and for me this is so potent.

Think about what it combines; the emotive creative that you can execute on television, the targeting of digital and the sophistication of the technology that you can deploy, and finally, the reach of direct marketing. So, for me, this is a weapon that every marketer is going to want in their arsenal over time.

Digital’s influence is spreading

What this is doing is it’s allowing us to use the skills we’ve honed in digital, around data-driven performance marketing, to enable brands to activate campaigns across all media based around data, and anchored very much in people-based planning, not proxies.

Thank you for listening.