Commentary

Media Buying's Biggest Threat: Status Quo

In 1975, my father was the executive in charge of sales at IBM in northeast Ohio, then a thriving business epicenter. The world still considered the electric typewriter the greatest advancement in word processing, and IBM was preparing to deliver its second generation Selectric model. The Selectric II had a Dual Pitch option to allow it to be switched between 10 and 12 characters per inch. This was an exciting differentiation for Dad's sales team to exploit while on sales calls to Goodyear Tire & Rubber, LTV Steel, General Tire, Goodrich and Smucker's.

Some 700 miles east, a Harvard student named Bill Gates was skipping his pre-law classes, thinking about the keystroke as an instrument in a symphony of functionality, rather than an end to itself. He saw computing power as a way to unleash human creativity and productivity. Soon after dropping out of college, he joined Paul Allen to test his dream. I find an analogy to today's world: In September 2008, the media planning and buying industry finds itself in a similar situation: Are we in the manual typewriter mode, the Selectric II phase, or that fuzzy point in-between when few grasp what the next level looks like?

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Working in the advertising and media buying industries for almost a quarter-century, I have experienced all phases, and am excited we ourselves in a time of enlightenment. In my current work at MediaBank, I am witnessing first-hand the industry's rapid adoption of new technologies and digital tools, such as our media-buying platform, which makes daily operations better and more efficient.

People are beginning to depart from the legacy platforms that can no longer achieve the best results. But I worry that many are held back by the false satisfaction of steady but incremental progress that sustained Selectric II loyalists. The status quo is our industry's biggest threat.

What's critical to digest: Small steps are no longer sufficient. It's time to understand fully what a dearth of innovation can do to your business -- and your future. When MediaBank entered this industry, we took very meticulous notice. We found a few monolithic and archaic software platforms that nearly the entire media planning and buying industry used. We saw progress in the business of media buying crippled by these legacy platforms. We saw the investment, maturity,and growth of digital advertising being affected by systems not designed for this exciting, targeted, data-filled medium. While nearly every other industry in this country has focused on enhanced efficiency and information-centric decision making, media buying has failed to keep up. The legacy platform and its 40-year-old technology inhibited knowledge and innovation.

How could this occur? How does an industry that handles more than $350 billion of annual media spend in the U.S., generates daily coverage day in The Wall Street Journal and shapes the tastes and desires of consumers worldwide, constrained itself?

Software should enable innovation, not inhibit it. Consider the radical progress underway in nearly every corner of the media planning and buying landscape. There's Google. Its continuous flow of new tools and software to buy and plan all forms of digital media seeks to harness digital media data with innovations that let buyers employ its clicks and measure performance ever more precisely and accurately. There's Comscore, Quantcast, Nielsen and countless other companies spending hundreds of millions to better quantify who consumes what media where and how. Sure, these companies stand to gain handsomely if they are successful at changing the status quo, but that's the very way industries are disrupted!

Ad exchanges seem to be popping up every week and adding elements of auction and barter to the ad network concept. Savvy companies like Acxiom, Navic and Experian are doing their part to get in the game by adding behavioral, demographic and predictive data to traditional viewership data. They're offering previously unavailable visibility to the personality of viewers.

Broadcasters and publishers, too, are attempting to bundle media, e.g. Yahoo! Intel recently announced plans to bring Web content to your television; it also seeks to develop multiple strategies (sponsorship and product placement) to drive higher revenues from the same content. The mobile device is becoming a staple in the hands of consumers worldwide, and marketers are ready to take advantage.

Consider the overarching question: What enables media buyers to make sense of this innovation? Further, how do they use the innovations in the marketplace, as well as become innovators? Without flexible, transparent and modern technology tools to power the operations of media planning and buying, no efficient way exists for a buyer to access the spectrum of innovative tools introduced into the marketplace. Without media buying operations technology that allows buyers and advertisers to see all data all the time, buyers will drown in a sea of data that has no meaning, or worse, lose all interest in cultivating this innovation.

Consider that in 1975, the average media spend per transaction stood in the thousands range as only three major TV networks existed. It then slid to the hundreds of dollars range when the long tail of cable matured in the 1980s. Now, it rests in the tens (or ones) of dollars range as digital media assumes a predominant role on the media landscape.

The result?

Infinitely more transactions for the same amount of media spend, less dollars per transaction, and a tidal wave of data. If your technology platform does not make you the master of your data, allowing you to harness it for leverage and efficiency, then you are dangerously close to going the way of the Selectric II.

Consider that the legacy media buying operations technology requires a weekend to produce management-level reporting. Are you a manager who decides on Monday afternoon that you need a summary report? Sorry, you must wait until next Monday morning because that report can't be run until the weekend! Even worse, you can't run a report across all media types because the legacy technology separates media on different databases. The print report is on island A; the spot TV report is on island B.

We at MediaBank know the industry does not want to tolerate this state of affairs. Our largest reports take just seconds to run, at any time, and can be run across every media type in one report. We propose that it is self-defeating to run a multimillion dollar or multibillion dollar business without such tools.

We believe the vision for the future of media buying and planning integrates all current and future media tools, all current and future innovation in data and targeting, and all current and future advances in the buy-and-sell transaction into a consolidated platform.

Financial professionals spend their days on Bloomberg, which integrates all available data in real time and provides its own analytics platform for financial professionals to make sense of data. Similarly, we believe media planning and buying professionals need one platform that integrates all available data in real time, provides its own analytical platform for continuous insight and intelligence, and allows media buyers to make informed, intelligent decisions.

How does this transition take place? How does the revolution happen? Right before your eyes, it's happening now -- and the decision that media buyers and agencies must make is whether they are satisfied with their version of the Selectric II or whether ready for breakthrough technology.

A great operations and analytics platform delivers integration to all available forms of viewership, targeting and demographic information. It is built on modern, flexible technology to accommodate its operational efficiency. It has its own analytics platform that allows your buyers to make smarter, more data-informed decisions, and then allows them to provide more intelligence and value-add to their clients. It also provides intuitive interfaces that allows the evolution of buyer-seller efficiency (be it ad exchanges, auctions, or something else) to find the buyer at the point of decision making.

In essence, if a buyer is doing the job right and researching ratings to target, say, males ages 17-25 in Atlanta, shouldn't the operational platform provide, in real time, all offers from all publishers and broadcasters across all media types? Why should the buyer have to hunt these down on a variety of ad exchanges and auctions? And, why wouldn't the operations platform have the capability to bring these opportunities to the buyer without foregoing the screen? We believe a media-buying operations platform should do all of this - and more. And you shouldn't be satisfied with anything less.

So where does this lead? Is there an end to innovation? Obviously, in the case of media buying technology, if you are satisfied with legacy technology, you may want to throw out your computer and buying yourself a Selectric II. But if you understand that your clients will be examining your efficiency, information transparency and choice of operational technology platforms in your next business review, you may want to re-consider the ties that bind all innovation to your operations. That tie is your operational platform. It's your business' central nervous system. It matters. It is the key to your future efficiency, flexibility, profitability and innovation. A wise Buddhist monk once said: "The best time to plant a tree is 20 years ago. The second best time is right now." For your technology platform, the time is now.

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