Automated ads home in on individuals
Real-time adverts aim to target people with tailored messages, writes Emily Steel
THE lights went out at the Super Bowl in the US and, minutes later, Oreo posted a message to Twitter with a picture that said: “You can still dunk in the dark.” The single tweet generated social media buzz during one of the biggest advertising events of the year and has been lauded as an example of the future of marketing. Twitter, which unveiled plans for an initial public offering last week, has announced acquisitions and partnerships during the past year aimed at preparing the company for this new era.
But efforts such as the Super Bowl tweet are only the beginning of a revolution in advertising, says Bonin Bough, vice-president of global media and consumer engagement at Mondelez, the maker of Oreo biscuits and Trident chewing gum. He envisions a future where such an event occurs and, within moments, the marketer not only posts a culturally relevant message to social media but also buys a TV spot and fills it with an advertisement created on the fly. Real-time ads simultaneously would appear across a proliferation of screens, from a mobile app to a billboard, with each message personalised to the viewer. Within hours, the marketer could track whether people who saw the ads bought the product, and tweak its campaigns.
“It becomes increasingly more difficult to break through consumers’ lives when they are inundated with messaging,” says Bough. “How do you become a part of what is culturally relevant at the moment that it’s in the zeitgeist?”
The advertising and technology industries are now trying to build the next generation of automated advertising systems to make such visions a reality. The ultimate goal is to automatically show the right advertising message to the right person at the right time — no matter whether a person is surfing social media, watching TV, checking their cellphone or walking into a shop.
This means that an executive shopping for a luxury car would see entirely different messages from a university student who needs to buy shampoo.
Jonathan Nelson, CEO of Omnicom Digital, says: “This is really, really complex stuff. We are seeing a million opportunities to put a tailored message in front of an individual per second. These new technologies are starting to take off big, and the implications are profound to the business. It really will reinvent media.”
How do you become a part of what is culturally relevant at the moment that it’s in the zeitgeist?
The rise of digital media has already ushered in a new era. Media companies used to wine and dine marketers, selling them advertising time months in advance. Today, so-called programmatic technologies created by actual rocket scientists are being deployed for the selling and buying of ads across a wide range of media.
This first started gaining traction a couple of years ago, when so-called online ad exchanges offered by internet companies such as Google allowed marketers to buy cheap ads across thousands of websites rather than negotiating deals directly with publishers. About a fifth of marketing dollars spent on online display ads now pass through such systems, according to eMarketer.
Much remains to be proven. While the spending remains a fraction of the total $516bn global ad business, marketers increasingly are tapping these systems for buying ads on the web, social media, radio, outdoor, digital video and TV.
Last month, advertising group Interpublic said it was working with several media companies to create programmatic systems for buying TV and radio ads. Interpublic expects its clients will spend about half of their ad budgets through automated systems by the end of 2016. John Wren, CEO of Omnicom, forecasts that most ads will be bought and sold through technology-driven systems.
The new technology places a huge emphasis on building more robust profiles about consumers. The data also help marketers to track the returns on their advertising and connect with consumers after they have purchased a product.
Brian Lesser, CEO of WPP’s Xaxis digital advertising group, says: “Advertisers need to stop thinking about the distinction between the actual devices and start thinking about reaching the right audience, wherever they may be.”
As new technologies extend their tentacles further into the business, several challenges arise. Media companies that used to be able to charge top dollar for their ad inventory, face price erosion. Some highly sought-after ad inventory, such as ads during live sporting events, are unlikely to be included in the digital buying systems. Meanwhile, the industry is coming under regulatory scrutiny for privacy issues that arise tied to the vast collection of consumer data.
Bob Lord, CEO of AOL Networks, the company’s advertising business, says: “The biggest challenge right now is defining what these new technologies are and what the promise is. Now the ad-tech space has to evolve.”
Twitter has spent the past year snapping up a series of advertising technology companies and brokering partnerships with media and advertising groups. The goal: to define Twitter not as a competitor to traditional media but rather a link to the new world of advertising.
“Twitter is a bridge, not an island. It is a bridge to things that appear on many screens,” Adam Bain, Twitter’s president of global revenue, said in May. At the core of its pitch is the notion that not only is Twitter in a prime place for delivering ads, but also to provide valuable insights for broader marketing campaigns.
Twitter’s largest acquisition to date came last week, with the purchase of mobile ad-tech group MoPub for about $300m$400m. MoPub helps marketers target mobile ads across a large network of sites in real time. Twitter has also acquired analytics companies Bluefin Labs and Trendrr, and struck partnerships with TV networks, magazine publishers and music groups. Partnerships with the advertising industry include a deal with Mondelez, the maker of Oreo biscuits, and a broader advertising partnership with Starcom MediaVest Group, part of Publicis, worth hundreds of millions of dollars.
Twitter is expected to generate $582.8m in global ad revenue this year, according to eMarketer, up from $288m last year.