Advanced Advertising: Reality vs. Hype

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Howard K. Bass, EY Global Media & Entertainment Advisory Leader

Advanced, data-driven advertising is a hot-button topic for the media industry these days, but many people are missing the point of what it really means. Too many experts are focused on technical platforms like programmatic buying or the logistical exercise of organizing data. As a result, they are ignoring the bigger picture and the opportunities that it presents.

Advanced advertising is about a lot more than just how ads are purchased. It’s not simply about targeting or automation. Ultimately, it’s about leveraging data to create the next generation of advertising experiences that people want to engage with. Advertising, when done right, is content. So, if we maximize personal relevance through advanced advertising, we win by creating more powerful experiences that truly engage consumers.

There are several myths around the concept of advanced advertising. Most are easily dispelled if you look through the lens of the marketing functionand the CMOs who are trying to get the highest return on investment (ROI) for their advertising dollars and the most powerful level of engagement from consumers.

Myth #1: Advanced advertising means programmatic buying, hyper-targeting and data-optimized digital and TV media plans.

Reality #1: These don’t allow enough one-to-one interaction with audiences and don’t provide substantial data about the actions that consumers take after viewing the ad. Instead, a wider array of tools and platforms must be taken into account, including multi-platform viewing, and getting the right ad for each screen, as well as interactive TV. is the key is enhanced data about consumer actions and reactions coming from the broad range of sensors that make up the Internet of Things today.

Myth #2: Data is going to overtake creative in the advertising world as marketers can just use algorithms to cherry-pick the audience they want.

Reality #2: Creative and content are actually going to become even more important. At the same time, new and better data sets will specifically enhance the value of media as they will enable cross-platform planning and the right message to be placed at the right time, on the right screen, at scale. Marketers still need to achieve reach with continuity. The best marketers will use the wealth of data being generated to create even better content in lots of different formats that will enrich the audience experience across screens. More and more information is now available about who's watching, along with their interests and profile. These include third-party data sources, such as geolocation data, travel and entertainment data, transaction data from credit card and other payment data sources, as well as household, ethnographic and demographic data.

Myth #3: Advanced advertising will further marginalize the value of media agencies because it will be done “automatically” and bypass advertising agencies.

Reality #3: We think it’s quite the opposite. In addition to the impact on TV and cable broadcasters, advanced advertising also creates important opportunities for media agencies to use their advanced data and analytics platforms. Combined with optimized cross-platform creative, media agencies can continue to move toward new ways of contracting and partnering with advertisers to deliver value and a higher ROI using outcome-based campaigns, fixed-price deals and shared risk/reward agreements.

Myth #4: Privacy concerns will make it harder to tap into personal data.

Reality #4: Concerns over data privacy vary by generation and ease as the audience gets younger. Millennials and Generation Z want content to be targeted to them and are willing to share data more freely than older generations to ascertain what’s relevant to them. For today’s teenagers, that trade-off is worth it because it means getting the type of customized, relevant, immersive experiences they enjoy and expect.

Myth #5: Advanced advertising is only about making the process of buying ads easier and lowering the cost.

Reality #5: Advanced advertising may challenge the supply and demand equation; focusing on generating greater value for the viewer within the ad makes it less likely that customers will block ads. The result may be less frequent and more engaging advertisements that can enhance the audience experience. In other words, advanced advertising may mean less advertising with more meaning.

Myth #6: The “Holy Grail” is advertising that is developed and targeted to every single individual.

Reality #6: Audience targeting will still need to be delivered and measured at scale. Marketing spend and ROI will continue to be based on convening larger audiences, not individual viewers.

With the myths dispelled, what comes next?

We are still two to three years away from advanced advertising taking a larger share of total digital ad spending. In television, critical work is underway to build an ecosystem that facilitates the full promise of advanced advertising as the old silos between linear and digital TV ad sales break down.

Dynamic advertising, with its content that changes automatically based on user information, is the next logical revenue model to engage audiences as they consume content when they want — 3, 7 or 60 days after it first airs. TV and cable networks will be able to deliver enhanced brand value to advertisers based on enriched data sets over a longer period of time.

We are already seeing improved attribution of TV media investment to actual sales. New data will be fed into the planning and buying processes to give confidence for future planning and enable highly effective (and more automated) optimization. Indeed, programmatic advertising will play a role in some portion of dynamic ad insertion, but distributors will decide how they control, package and best monetize these immersive experiences cross platform.

Some of the largest advertising agencies are already demonstrating the strongest understanding of what advanced advertising is by partnering with cable companies for access to set-top box data — both TV and online viewing information. This is truly interactive data about what is being watched, when and by whom. The secret sauce is the linkage to consumer actions.

To get the most out of the data, media, agencies and publishers need to work together — not just to gather but to understand customer data from across the media ecosystem. They need to prove the ROI and efficacy of audience engagement to create this holistic, 360-degree view of the customer, in particular as mobile and OTT continue to grow.

The end goal is to create powerful, immersive experiences that keep consumers tuning in and asking for more. You can’t automate that.

The views reflected in this article are the views of the author and do not necessarily reflect the views of the global EY organization or its member firms.