Where Is Interactive Marketing Heading?

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1 Trend Report Changhee Han _ Chakyung Bae _ 2013 ad:tech London Where Is Interactive Marketing Heading? ad:tech is an international seminar on interactive marketing and advertising technologies. It is the world s largest global interactive marketing event which tours major countries every year and serves as a venue for networking and idea sharing. A variety of seminars and conferences have sprung up worldwide with the rising profile of digital in the advertising industry. However, ad:tech is the only conference which has been hosted in major countries across the world for more than ten years since the inception of interactive advertising. I visited London, a hub of the European market, to attend ad:tech in September. Key Programs of ad:tech London Ad:tech London was held for two days on September It consisted of eight sessions. But, as those sessions were held in parallel in different places, one should review the subject of each session in advance to decide which session to attend. Along with Multichannel Marketing Summit, Data & Analytics Summit, Video Summit, Contents & Social Summit, Real Time Summit, Mobile Summit, Search Conferences at ad:tech London Summit and Future Media & Technology Summit, ad:tech offered a session for keynote speeches by advertising gurus. A wide array of digital related issues were discussed at ad:tech. Two keywords drawn from ad:tech are the development of ad tech which refers to advertising technologies and changes in media trends which are two keywords Development of Ad Tech Automation, Programmatic, RTB (Real Time Bidding) and Big Data were the most frequently mentioned words during ad:tech. These terms rely on ad tech and are the growing sectors in the world. Teradata's Data- Driven Marketing Survey 2013 indicates that 71% of global marketers plan to use Big Data solutions in 2014 and that 51% of marketers will utilize data analytics in real time decision making for upcoming two years 5

2 Decision making based on Big Data has drawn great attention in line with the development of ad tech. With the development of technologies, the amount of data including the 1st party data which are owned clients, the 2nd party data which refer to data on customer behaviors or demographic data that are owned by media and the are now capable of utilizing such data to make decisions for marketing (e.g., media buying, measurement and optimization) in a linear and real time manner. The aforementioned terms are characterized by two sides of the same coin. They are all related and become effective when they interact with one another. I will show an example which will enable you to understand better. It is Optimising Your RTB Infrastructure presented by Sammy Austin from www. moneysupermarket.com at ad:tech. The project was aimed at finding ways to improve performance (e.g., subscription, re-subscription, service usage, re-usage and etc.), reduce reliance on search ads, avoid the exchangeable were presented as a result. The following Image 1 is the summary of RTB solutions. <Image 1> shows that the solution (Admetry) which is a tool to analyze a campaign was used to analyze the effect of cross channels and perform the optimization of a media mix in an integrated manner to achieve a client s targets. To this end, a variety of consumer analysis data (data on behavior analyses, Image 1 _ Example of Exchangeable RTB Technology demographic information, CRM, search results and etc.) were used, and RTB interworked with DSP (Demand Side Platform) to execute adverts with advertising network media. The case implies that diverse specialized agencies and solutions are needed to appropriately utilize RTB data on actual campaigns and media optimization. Specialized advertising technologies are applied by service in the whole process, and collaboration encompassing all areas is highly required. One must pay attention to exchangeable data. No matter how good data one has - for instance, a client s CRM related customer information data, if there is no connection with actual campaigns, those data are useless. Thus, the presenter of the case insisted in the end that it is necessary to foster related talent and perform endless tests and optimization processes in order to operate the RTB infrastructure. In particular, the fact that specialized human resources, related technologies and data are all important implies a lot to us. <Image 2> explains RTB related issues in a simple manner. <Image 2> helps us understand the structure better. On the side of media buying, agencies and professionals buy media upon the request of clients by using the ad server and the bidder service (RTB requires the bidding system as it is real time buying) whereas the CHEIL ISSUE NO.11 6

3 Image 2 _ Open RTB Ecosystem Image 3 _ Real Time Bidding Takes Over Media media selling side connects the most optimal mixes by using the auction system. As seen from the title of <Image 2>, the open RTB ecosystem, a collaboration entity where all are interconnected and exchangeable, is an ideal model for the RTB structure. The reason why advertising technologies which are characterized by systemization, collaboration and real time buying and selling automization are at the center of attention in marketing ecosystem. Several years ago, RTB was just a concept. But, it has dramatically expanded, and the demand for related talent and technologies is on the rise as well. <Image 3> shows the growth trend of the RTB market. It is expected to take up 30% of the U.S. display might argue that it is too early to adopt RTB in Korea since Naver and other major portal sites are still dominant in the domestic market. Just a couple of years ago, the smartphone did not exist, but it is now widely used by all people. Global media such as YouTube and Facebook were not prominent in the past, but their profile is completely different now. As everything which was not predicted in the past is taken for granted over time, it is certain that the transition of the advertising market toward ad tech which is not yet highly recognized in Korea Ideas Plus Technology = Great Digital Marketing With the development of digital technologies, a wide array of specialized agencies and complicated solutions have emerged. Such a situation is similar to the development of the securities market. In the past, trading was complicated, specialized talent and technologies are highly required. In addition, selling and buying are now automated through program trading to achieve optimal profits, and diverse investment models have been 7

4 Image 4 _ Marketing Artist vs Marketing Scientist in the digital era. As there are diverse jobs such as a fund manager and an analyst in the securities market, it is now essential to diversify roles and responsibilities of professionals for the advertising market. I want to introduce an interesting story in this respect. Andy Mihalop of Mediacom asserted that it is now crucial to have marketing scientists who analyze and utilize data when he explained the terms, marketing artists and marketing scientists, in the session of Examining the Role of Customer Centric Data in Programmatic Media (refer to Image 4). situation as Digital Opportunity. WPP plans to raise the share of digital up to 30% of total revenue by To this end, it will invest in data and analytics and place more emphasis on ad tech. We get agitated as we are inundated with strange technologies and as new technologies and specialized companies spring up overnight. We now have no choice but to live in a complicated world where we cannot play games with just simple ideas. Change of Media Trends The second keyword of ad:tech is the change of media trends. Ad:tech was rife with presentations and contents which not only discussed the technological aspects of digital advertising solutions but also digital media s today and tomorrow. Many presenters and participants competitively mentioned those two keywords that I will share in the following at the conference in which British accents echoed everywhere. Anyone who has a little interest in digital advertising may already recall the two keywords. Those are video and mobile which will be discussed from now on. *As ad:tech was held in London, it was quite tantalizing to see that most of presentations and other contents were confined to the U.K. or Europe. However, the report is still worthwhile to read as the U.K. is the digital powerhouse, ranking first for the number of viewed videos and monthly average view hours per online video viewer. It is also second to Spain among European countries for smartphone subscription. 1. Dawn of the Video Era Firstly, I want to discuss the 2013 UK Video Advertising Report: Dawn of the Video Era which was unveiled by BrightRoll, one of the largest sponsors of the conference and world s largest digital video advertising networks. The report analyzed the current situation of the U.K. digital video advertising market and predicted its future. The report illustrates that video advertising is one of the rapidly growing sectors in the U.K. digital advertising market and that an increasing amount of budget is allocated in video advertising as it allows clients to make sophisticated targeting (Image 5). As such, video advertising not only offer emotional brand experiences such as place, sound and video to viewers like TV commercials but is also capable of performing targeting based on advanced data analyses like digital advertising. The report mentioned that more than 35% of U.K. advertising agencies are interested in context and behavior targeting based on keywords or matters of interest searched by users. The tally is up from the previous year (Image 6). If context and behavior targeting is mixed advertising, extensive target reach is achievable and core consumers can be better understood. As video advertising takes up a growing portion of digital advertising budget, clients increasingly ask for extensive and meaningful data on the preferences and goals of consumers who will see their adverts rather CHEIL ISSUE NO.11 8

5 Image 5 _ Which aspect of video advertising do your clients view as most valuable? Image 6 _ What form of targeting do you find most valuable for digital video advertising? than the measurement of adverting reach among target consumers. More than 27% of U.K clients replied that the most important evaluation criteria for digital video campaigns are brand lift and conversion (the probability of meaningful behaviors such as consumers purchasing certain products by clicking adverts after watching them). The figure is up from the previous year. In the mean time, the importance of the number of views as a means for evaluation declined by 31% against the previous year (Image 7). It implies that U.K. clients rely on digital video advertising for branding as well as sales increase. As digital video advertising is effective for branding and allows diverse and sophisticated targeting, it is likely to be more prevalent. 2. Mobile Everything The second issue to be shared is the trend and new opportunities of the mobile advertising market which was discussed at ad:tech. As I listened to several presentations of the mobile session, I recalled a slogan that I saw from a poster on the street in my early childhood. That was Beware of Fire! Can t Be Stressed Too Much. The slogan now seems to be more suitable to the mobile advertising market. Mobile! Can t Be Stressed Too Much. are appropriately mixed and operated in line with business, budget, campaigns goals and other marketing situations. Image 7 _ What is the most important success metric for your video campaign? Image 8 _ Digital Marketing Channels 9

6 40% 19% RETAIL 6% 5% ENTERTAINMENT & MEDIA SOCIAL & DATING BUSINESS & FINANCE 1% AUTOMOTIVE 22% TECHNOLOGY & TELECOM 7% TRAVEL 6% 3% 1% NEWS & EDUCATION LIFESTYLE & HEALTH STYLE & FASHION Image 10 _ Mobile Ad Spending By Category Image 9 _ Native Winning Over Display Then, where does mobile stand which cannot be stressed too much? As seen from <Image 8>, mobile is no longer viewed as a separate sector but has penetrated into the overall digital marketing realm. Then, what is the most frequently executed advertising formats in the mobile advertising market? According to emarketer, a U.S. digital marketing research firm, the share of display advertising (including banner and video) in mobile advertising revenue for major digital companies such as Facebook and Twitter is likely to decline or not as it is incorporated with a media company s concepts and designs) such as social advertising will replace the falling share of display advertising (Image 9). We can also discover an interesting fact by looking at the share of mobile advertising spending by business. Clients from the entertainment, media, technology and telecommunication sectors which attempt to draw immediate response from advertising rather than brand lift show relatively larger mobile advertising spending (Image 10). Mobile has rapidly grown with a huge expansion of smartphones and tablet PC in recent years. It seems to have contributed to an increase in Internet usage hours. According to Comscore, a U.S. market usage hours, the share of PC and smartphones was 86% (388 billion minutes) and 14% (63 billion minutes), respectively. But, as of February 2013, the total Internet usage hours doubled from three years ago to 890 billion minutes. One should note that Internet usage via smartphones rose by 389% to 308 billion minutes and that tablet PC was newly added as a medium for Internet usage by marking 115 billion minutes. But, PC recorded 467 billion minutes which are not so different from three years ago. To put it differently, overall Internet consumption hours via PC did not fall, but people now use Internet more as they spend more time on smartphones and tablet PC. Likewise, mobile has not only been added to all existing digital marketing realms but also seems to have taken root as a basic concept for all services. However, it further requires continuous investment and development efforts as it is still underestimated despite its diverse potentials. I will briefly summarize two keywords. In order to survive in the digital ecosystem which has become increasingly complicated due to the development of advertising technologies, it is essential to make investment in advance. At the same time, we should make endeavors to identify and respond to changes in the trends of video and mobile advertising. Cheil Worldwide also strives to be fully prepared to encounter the new wave of video and mobile advertising by launching and operating its own DSP service in a partnership with MediaMath and improving its competency on analyzing and translating data. I will now end my article with the following two sentences. Ideas Plus Technology = Great Digital Marketing, Digital or DIE - Mark Read, WPP Digital CEO - CHEIL ISSUE NO.11 10

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