Good morning all – First – thanks to SIS, MediaPost, the programming committee for allowing me a few minutes to riff on this unique space. Its always great to be a part of the SIS constellation – such a great collection of folks.
Now – Agency Transformation – something that I have seen through the my experiences Based on being on the client side, the agency side, and now most recently at the technology side, Search Agencies have had a hard time transforming. The past five years I have witnessed the following: 2007 – 2009 – SEMs fighting to sit at the table (any table) 2009 – 2011 – SEMs integrating with other agencies 2011……… SEMs transforming to Digital Agencies Why are SEMs transforming now? Data and Technology…….
As we entered the 20th Century 83% of the work force in the US was focused on agriculture and today that number is down to 2%. What happened? The disruption of technology fundamentally shifted the need of that workforce and the value. We have seen this concept continue over history. Think the industrial revolution. Not just in agriculture, but manufacturing, etc. A disruptive force came in and changed the landscape and livelihood of the world forever, and it is happening again. Maybe I am being dramatic, but we can apply this to the Agency world in many way
Technology. And who is the best to leverage all that tech? SEMs and digitally minded agencies. As Scott Brinker has said at SIS before, our industry needs more Chief Marketing Technologists. This is because we need team members who are equipped to handle and digest all the data……
This go around the disruption is digital, and it is impacting us in a number of ways. 1. Computing Power (moore's law) – computing power doubling every two years. The wonderful iMac being crushed by the iPhone 4. These factors have quickly changed the way people live their lives entirely, but the above specifically the are the delivery components that make it possible.
Mary meeker Feb 2011 slides – the iPhone and androids, and bberrys are feeding that curve!
Openesss – ubiquity to data – storage, and the freeness to share it……
Hardly any to way too many choices for consumers.
Choices online expand – to provide more data to mine – from reading, to buying, to participating, to constantly conversing (just like we are right now – with a twitter stream, and an video stream of this.
Exabyte – 1 billion gigs. Zettabyte – 1 sextillion bytes (in 2008 – US consumers consumer 3.8 zettabytes of info) On top of that is the sheer amount of data that is being delivered. All the info in the world from the beginning of time to 1989 doubled by 2K. It will double again by 2020. Zeta Bytes, to Xabytes (sp) and so on. These two things: delivery and data (content) will be the strongest influencers of people in the world which is naturally going to disrupt advertising. We all know this, but its good to step back and think of how it is going to affect us. So now, we can dive in to some specific pieces of this:
We all collectively need to stop talking about digital being a channel, and being a plethora of choices. It’ s a platform….
Just like back when the message was the same for each consumer
And fast forward to our multi-choice world where we all can decide what we want to converse with, take part in, or share
Hyper targeted relevant messaging
But even with that hyper segmentation - How do we reach the new consumer nowadays? Many of you have seen a variant of this slide – but the consumer bounces around a lot now…..and how can we better tailor or match our relevant marketing or services to them?
Evolution of this over time. Martini’s – as some of you know – I take mine dirty with blue cheese olives and bacon too! if you want to know - handshakes, sports tickets, etc. In time there have been incremental elements of sophistication that have come in to play but the recent digital explosion will revolutionize this. Take display as an example: On its way to being a $100B industry.
Technology is creeping in and how the exchange concept is on the horizon making the buying smarter, but more importantly revolutionizing what the media buyers do. It will be about data, number crunching, not phone calls to networks, concert tickets. Sorry to say this could happen. To be clear, there will always be that relationship element in media. Most of the dollars are there today, but things will shift. In display we see the divide coming between premium, which will continue to be a rapport play negotiation, but more and more inventory pools will come together via a technology/data driven auction. Think search. The days of purely buying search by hand are going
That just made my head hurt – and that is only at the display ecosystem - The Scream………imagine all the logos for search, analytics, video, etc. That would really turn the sky red..
Lets think about creative: Its about the ideas. The big, cool ideas. How could technology mess that up? Well, it will be an evolution based on what is relative to the audience, and that audience is drastically changing their lives. The cool ideas are in large part going to be cool because of how they are delivered and the insights built on that technology/data. Real time is what we saw with Isaiah Mustafa and Old Spice is the obvious example here but has a great back story here. Coke snowglobe. Kids literally shift from playing with a snow globe to playing with their phone. It allows for some really cool ideas and campaigns based on real sentiments and insights.
There is literally a ton of data that exists now, and what that relationship means for the offline or non-digital realms. Search, display and other digital media shapes the research that consumers have before they enter a store. The only real impulse buy left now is purely online – do I buy that wine deal on lot18, or that sweet skirt for my wife on hautelook? That is the impulse buy now……
Lets talk about planning and attribution: The tools are getting better and better. Data is becoming close to and eventually real time shifting the role of planners will to. Nimbleness, greater intelligence. Great power on the buy. etc, etc. Much like this shot of a cockpit, our optimizers and planners need to get “instrument rated” so they can get much more data and insights – much like pilots who move up from private pilot licenses to instrument ratedpilots. It allows them to go higher, and be prepared for more …..The analogy – allowing our marketers to get into the data more, and distinguish between the marketers who are doing things that “seem” right versus those that are highly measurable. Which is why you see more and more agencies taking on PHDs and quant jocks who are skilled at looking at data sets to find insights. As well, that is why we will continue to see new firms and consultancies pop up that can help on data, or even attribution…..
Attribution – It really is like the long lost and comedic chase for the Holy Grail, where we continually meet the Knights who say NI! But it is coming…..the holy grail of media buying is coming. Not sure when, but it is Attribution. We are starting to see it online. Search to Display. Social will follow quickly. TV experiments are under way (GoogleTV) and others. The touch points are increasing rapidly as a result of digital and eventually all will be powered by digital As a result, the end game of attribution is coming.
So beyond staffing up agencies and marketing groups with PHDs and quant jocks, its pushing the collective search marketing industry to own strategy – And this room can help do that by pushing the search team to own more – don’ t dabble in display, own it – jump on mobile, jump on technology usage as a company!
“ The ability to take data - to be able to understand it, to process it, to extract value from it, to visualize it, to communicate it: that's going to be a hugely important skill in the next decades” Hal Varian, Google Chief Economist (2008)
If a Pontiac convertible solstice can convert to Jazz, the cool autobot transformer, SEMs can transform to be the lead too!
Agencies have always been about building relationships, but now we all need to do a great job of weaving data and technology into the relationships. That will make it even stronger and relevant.
So this is very big picture. Some applies today, some applies tomorrow, but the shift is coming. The status quo of being an advertising professional and in the Agency game will go the way of the farmer in the 20th century. However, fear not. It doesn't mean as with agriculture that jobs will shrink 80% any time soon, but it does mean what it takes to do the job will. It means embracing digital, living digital and understanding it deeply. Moreover, it means data, it means people that can digest it in mass, can crunch it and make decisions in real time based on it. And if we all get that right, that means that there is a bunch of money that we all can play with……
Re-Inventing the Agency in a Complex World Transformative Change - 2011
Three major shifts happening – 3. Openness Ubiquitous broadband Democratized tools of production Falling cost of storage
Add in the fragmenting media marketplace Cable TV Personal Computer Video Games DVR Satellite TV 3D TV Online Radio Online TV Blogs Podcasts Blogs Portals Ad Networks MMORP Games Instant Messengers Social Networks Mobile Gaming Mobile Video Mobile Computers Email Search eBooks Digital Billboards Newspapers Broadcast TV Magazines Broadcast Radio Billboards Movies 2010
More Context 2006 1B 2003 500M 1994 Users 77M 1998 Distribution & Commerce 2000 400M Information Communication 2010 1.9B “ Buy ” “ Read ” “ Converse ” The Constant Conversation
. Digital information in the world – videos, photos, music, texts, etc. 800 exabytes 2010 2020 53 zettabytes Internet users worldwide 2010 1.9 B 2020 5 B Mobile subscribers 2010 5 B 2020 10 B 2010 2020 2020 2010 2010 2020
Reaching The New Consumer Awareness Connect Inform Interact Share TV Video Radio OOH Blogs Social Media Widget Rating Sites IP TV Call Center Search Email Print Banner Direct Mail Virtual Worlds Mobile Games Lead Gen In-Store UGC Consumer
Marketing research and Data . Source: Longitudinal Economic Study Series, IRI Attitude Link, n = 1,000+ shoppers. CPG Purchase Decisions. IRI, 2009. 83% of shoppers have decided what to buy BEFORE entering a store The new e-commerce Digital Impact Breaches Digital Borders
Who’s best suited to take this transformation head on? Search Marketers Who live Data and breath Optimizations and Relevancy
“ The ability to take data - to be able to understand it, to process it, to extract value from it, to visualize it, to communicate it: that's going to be a hugely important skill in the next decades” Hal Varian, Google Chief Economist