An Inconvenient (Marketing) Truth
John Lee, SVP, vertical markets, Merkle
True addressability in many forms has reached critical mass within the digital media platform marketplace. Marketers can now leverage first- and third-party data to drive individual-level targeting decisions at massive scale on audience platforms such as Amazon, AOL, Facebook, Google, and Twitter. This phenomenon will become the single most disruptive force in the past 50 years of marketing, and simultaneously the most value-inducing. To borrow a phrase from former Vice President Al Gore, I would assert that we in digital media are confronted with our own “inconvenient truth.” Today's marketers are faced with enormous disruption and discomfort—translation: fear for one's livelihood. And marketers, for the most part, would prefer that this phenomenon either be a distant eventuality or, better still, a debatable concept altogether.
The truth is, while the onset of addressability at scale (AAS) will deliver unprecedented economic value and competitive advantage, success will require adoption of new, complicated languages, competencies, and technologies. The brutal truth is that finding success as a platform marketer will be extremely complex, requiring a complete marketing transformation and a mastery of the data management, statistical, transactional, and technical aspects of AAS. There are a number of reasons for this complexity:
- Competitive forces are mounting within the audience platform and marketing technology stack markets. To be competitive, companies such as Facebook and Google are constantly creating inventive ways to use first-party data to drive targeting and decisioning on their native platforms. But they're all doing this in unique, proprietary ways, forcing you to master numerous buying and optimization techniques for each platform.
- The effective platform marketer must use data from many places that's difficult to access and integrate into a single view of the consumer. The complexity starts with getting access and cleansing one's own first-party data.
- The planning and buying skills of the platform marketer are constantly evolving. Today's programmatic media buying looks more like the highly technical electronic trading in equity markets. Traditional digital media buying skills now look more like trading in the silk and tea commodities of the 1600s.
- Advanced predictive analytic competencies are required but must be applied to a completely new data set and executional environment. Real-time algorithmic optimization is taking place simultaneously at multiple points of the AAS value chain.
For some, particularly the youngest, brightest talent now entering the world of ad-tech, this is all good news. But it's an inconvenient reality for marketers (and their agencies) who've grown up in a world of persona- and research-based quantitative skills, applied to a media planning and buying world more focused on annual up-fronts, buying clout, and RFM than on advanced computing, big data, and algorithms.
Critics deny the inevitability of platform marketing, preferring to stick with the timeworn approaches that made the most sense before the onset of AAS. They might:
- refute the impact and even existence of AAS
- believe it, but fool themselves into thinking they're “already doing it”
- feel like it doesn't apply in their industry
- take a wait-and-see approach, claiming lack of scale
- see the benefit, but don't feel it's worth the investment
- reject the validity of initial results, believing it's too good to be true
The underlying truth is that human beings are loath to change, and the marketers who resist this news reality are simply trying to avoid the following inconvenient truths:
- For this to work you'll have to make a big investment in rearchitecting your marketing technology stack. Data management platforms (DMPs) can be a single repository of your consumer view, but these tools are only part of your platform marketing infrastructure. You have to integrate all of the pieces from your CRM database, identity management tools, digital data, attribution, and decisioning into one highly rationalized architecture.
- You don't have the programmatic and audience platform skills required to fully take advantage of AAS. Your agency and trading desk don't either—nor do they have motivation to optimize within the DSP platform; and, as BYOA (bring your own algorithm) becomes a reality, this divide will only increase.
- This isn't going to work without true fractional attribution, and it must extend beyond search and display into direct mail, email, mobile, etc. This is going to be highly complex and will require the correct platform marketing skills.
- This is now everyone's job. We all have to learn the scary, incomprehensible ad-tech mumbo jumbo, understand what it means, and apply it at scale to the core marketing problems.
- This isn't going away, and it's not a problem for three years from now. It's here today, and those who don't adapt to it risk their future relevance.
The good news: Unlike the climate change that Al Gore battles, addressability at scale is a change for the better. It forces cutting-edge innovation and will create greater financial outcomes for the leading brands of the world. Further, it will elevate the place and role of the marketing department and CMO within our corporate cultures.
John Lee, SVP, vertical markets, Merkle