Programmatic, changing consumers and viewability: Future challenges for media planners and media agencies
Joseph Clift
Warc
Overall adspend in the UK is set to increase at a rate of +5.5% this year, according to Warc's own data. And, within that total, internet spending will be the fastest-growing segment.
But media agencies, who are responsible for buying much of that advertising, are facing significant questions over their role in this fast-growth sector. The rise of programmatic media buying has been disruptive, leading to questions over the role of the media planner. And the associated issues of viewability and the ability of brands to buy media space that effectively reaches the rapidly-changing consumer marketplace are also increasingly pressing.
These questions were all addressed – if not answered – at a panel session at The Future of Media Research, a conference organised by Mediatel, the online media industry information source, and held in London in March 2015.
Planning vs programmatic?
With around 50% of display ads already being bought programmatically in the UK, the media planner could be forgiven for seeing him or herself as an endangered species. But the agency-side planners on the panel strongly argued for their continued relevance in the buying process.
Rian Shah, a managing partner at OMD UK, one of the nation's largest media agencies, said: "If you came to OMD a couple of years ago, we did all of our programmatic buying externally. It's not the same now. We found that, for programmatic, you need a planner there – someone who knows how people move across channels – if you're going to execute properly."
The human touch is also needed for research. "You can get the whats but you need the whys, too," Denise Turner, chief insight officer at Havas Media, added. "Don't just rely on digital data – get out there and talk to people – could be by Skype, could be in person. That's the real job of the planner. You need to look at three or four sources of information to give you the whole story. It's not just about looking at one thing."
While the technology offers greater pricing efficiency, there are, of course, big drawbacks to taking a solely programmatic approach. First among these is an over-reliance on direct response metrics rather than a recognition of the potential for long-term brand building. This could, according to Paul Goode, a senior vice president for marketing at digital research firm comScore, lead display down a cul-de-sac of ever-more-obvious direct response calls to action, a neglect of brand-building and a long-term decline in CPMs.
"There's the question of where the data sits alongside the insights of the planning department," he said. "There's a limit here. You need to bring branding in. You need to understand performance indicators that are not instant, and that can't assist machine learning."
Turner also referred to New Models of Marketing Effectiveness, work she had done with colleagues at Havas Media to show the various effects of integrated marketing. In this study, which analysed case studies from the IPA, the UK ad agency trade body, she identified three types of integration – and found that 82% of the cases used one of these integration techniques. The study also argued that "orchestrating" channel choice around a "brand idea" was a particularly potent form of integration.
Source: Applying the models across sectors, budgets and objectives: New models of marketing effectiveness, New Models of Marketing Effectiveness – From Integration to Orchestration, 2011
"It's all about conducting the orchestra well," she added. "And that's the role of the media planner."
Planners also need to recognise display's role in the overall channel mix. Turner agreed with Goode that it should not be used as just a direct response channel, but also for long-term branding. "Display has an upfront role in the consumer journey – and it has the potential to affect how the consumer responds to ads in other channels. We need to be cleverer with our statistical techniques in order to get a truer picture of the role of individual channels."
The role of the media agency
The rise of programmatic also results in a training challenge at agencies used to the traditional way of buying space – through human sales teams. New skills are needed. "The biggest issue on this programmatic tech is that we're trying to run before we can walk," Turner said. "Programmatic saves time and improves efficiency, but can we get the right insights from it? There are huge insights there – if you can get hold of them. At Havas, we've had to learn new skills and processes to try to do this."
Shah agreed, adding: "Planners at agencies are like sponges. If there's a new source of information, we welcome it. But it takes time to get good insights out of a new source. I agree that we go too fast on pursuing the new thing and use the insights from it tactically. But we're desperate to get the skills necessary to unlock good insights out of the new sources."
Large media shops have over recent years in-housed many of their programmatic media buying capabilities, where they were previously relying on third-party providers. Shah defended this practice against charges of conflict of interest – that the agency did not necessarily have its client interests in mind in finding the lowest possible prices when buying programmatically. "It's unfortunate there's a conversation about trading desk transparency," he added. "It should never have got to that situation in the first place."
Goode added: "The nature of auditing here is key. The challenge is in the rates we're seeing for low-quality inventory. Right now, auditors don't audit digital enough. And there's a pressure on agencies to make short-term returns that are not in the interests of clients."
Viewability and fraud
Another controversial topic around media buying lately is the question of how many people are seeing digital ads at all.
Goode cited statistics suggesting that 38% of display ad impressions in the UK hit their intended target audience, while just 37% of these are viewable. To address the problem, he suggested, clients and agencies need to be more realistic in their measurement – and not simply rely on gross impressions. "Put better data in your model to get better results," he added.
"There seems to be too much interest in the biggest possible number of impressions. We need more rigorous standardisation, but at the same time, especially in Europe, we are not used to the dull work of standards-setting and attention to detail. You can't just measure fraud by tech alone – you need to add in massive census networks and panels as well as tags."
By contrast, the US is well ahead, having recently launched 3MS, a cross-industry initiative that aims to make digital media more hospitable to brands by changing how the value of interactive advertising is measured.
While publishers might be assumed to be hostile to such a change – which would reduce the number of impressions measured – Goode argued that there was actually pressure from sellers of premium inventory in the UK to introduce a 3MS-style scheme on this side of the Atlantic. "By bringing something like this in, we introduce more scarcity. So those selling dodgy inventory at a mark-up – those who have been making hay these last couple of years – are going to have a problem."
Agencies also have a role in this process by being more picky in who they work with, Shah added. As a New York-headquartered company, OMD has already introduced more stringent controls. "We vet the people we work with," he said. "We follow the US approach."
Changing consumers
Another major headache for planners is the ever-changing consumer environment, with media usage patterns, and demographics, shifting all the time. A presentation from John Bremer, global chief research and strategy officer at surveys firm Toluna, laid bare the scale of the challenge.
Research from Toluna shows, unsurprisingly, that younger consumers are moving away from traditional media. On average 18-34-year-olds in the UK watch TV for 1.89 hours per day, while over-35s watch for 3.15 hours. More worryingly, 18-34 year olds only recognise 76% of the TV ad content their over-35 peers recognise. For online ads, the ratio is 81%. "They just don't see the ads to the same extent," Bremer said.
Source: Real-Time Marketing Meets Real-Time Research, Toluna, 2015
Moreover, 29.3% of younger consumers are potentially "psychologically addicted" to tech devices, which falls to 14.5% of over-35s. "There's a generational difference in how people are interacting with these devices," Bremer added. "They're simply engaging at a different level."
But some media agencies are making a concerted effort to recognise and reflect the changing consumer marketplace. Shah pointed to OMD research on the future of Britain, tracked in terms of household media habits.
"It wasn't just media research, it was looking at what media did to family dynamics," he said. "The research revealed different 'shapes' of households than what we were expecting. Single-person and ethnic households, in particular, were using media in different ways."
As an example, Shah pointed to South Asian families' seamless switching between India and UK-based TV channels each day. "Brands are now only just starting to find a tasteful way of conveying brand messages in new cultural contexts such as Eid and Diwali," Shah added.
"Do you really have the right layers of communications strategy to reach your audience? Society is fluid and it's changing. The 2.4 kid family is long gone."
Source: The Future of Families, OMD UK and Time Inc. UK, 2014
Indeed, the OMD research shows that White British, Indian and Pakistani households show an average of 2.1, 3.3, and 4.1 members respectively – very different household sizes for different ethnic groups.
Turner added: "I'm conscious that my family life is very different to the lives of others. Just don't assume, as a planner, that everyone else is like you. They're not."
Joseph Clift is a Product Manager for Warc.
