Digital identity in the future looks very different to how we understand it right now. And that change will be driven not by privacy regulations, or the death of the cookie, but by the rise of the Internet of Things (IOT).
The idea of one or two personal devices giving us access to individual consumers will disappear, to be replaced with a range of potential devices – from mobile to voice-activated speakers to connected TV to fridges.
Across those devices a range of different digital identities will exist – some individual (like now), some family/household, some work/B2B, and some more generic.
It’s a paradigm shift – and it’s why the idea the cookie is crumbling as the web shuts down consumer tracking, isn’t actually that big a deal. The medium-to-long term view of how we deliver and measure marketing in an increasingly automated and digital world looks very different, whatever happens to cookie based targeting right now.
Global ad tech company IPONWEB (the super smart guys who built most of the programmatic infrastructure the industry relies on today) has set up a TV Solutions division to capitalise on the opportunities in the rapidly-growing digital TV sector. PwC predicts that one-third of the more than $200 billion global TV market will be traded programmatically by 2021. OTT and CTV (among other acronyms) are a huge focus in the entertainment industry right now, and where the biggest VC bets are being made, from Netflix to Hotstar. Digital in Asia took time to chat to Moritz Wuttke – newly appointed to lead the IPONWEB TV solutions division in the region – about all things Video, OTT and TV in APAC.
Digital in Asia: First off, WTF is OTT?!
Moritz Wuttke: OTT joins the long list of seemingly ubiquitous three-letter acronyms prevalent in digital media. Coming under the ‘advanced TV’ umbrella, it refers to video content that is streamed over the internet without the need for a paid-for cable or satellite subscription – it is delivered ‘over the top’ (OTT) of the traditional closed TV structure.
Content is viewed on any device connected to the internet – smartphones, tablets and laptops, as well as connected TV (or CTV to reinforce the acronym point).
Internet-based TV is now part of daily life for many people and the increasing consumption of internet video content on mobile devices is further driving this trend.
Consequently, the convergence of the digital media and television industries is now an ever-present fact that broadcasters and content providers must take into account.
DIA: Why is TV over the internet important for broadcasters?
MW: Traditionally, broadcasters were the masters of what people viewed and when they did so; the digital age has, of course, turned this on its head. Today’s YouTube and Netflix ethos sees users create vast swathes of free video content that anyone online can watch. Meanwhile, people expect to view what they want, at a time to suit them on the device that is to hand at that moment.
The increasing uptake of streamed video, paid and free, is tipping the balance back again. Broadcasters have developed additional platforms to attract and entertain their audiences, as well as offer them viewing flexibility, whether that is accessing programmes via catch-up or on-demand or binge-watching their favourite shows.
TV over the internet provides commercial broadcasters with additional advertising channels, and with that, new sources of revenue, while programmatic technology enables media trading to be fast efficient and, in some markets, more targeted.
DIA: Why does TV have such an ongoing appeal for advertisers, and do you see this changing?
MW: TV has always appealed to advertisers as the most cost-effective way to reach the mass market. While the broadcast media trading industry is seeing unprecedented changes, the inherent advantages offered by OTT television help the transition.
The various YouTube and Facebook ad placement scandals have shone a spotlight on the need for brand safety – and how difficult it can be to orchestrate in the digital arena. Broadcast TV available over the internet however lets advertisers control where their budget is spent so that it is non-damaging.
At the same time, it is also effective thanks to high-quality audiences and ads that can’t be skipped or fast-forwarded. This has resulted in strong growth of OTT advertising, particularly in the US market where Magna Global estimates that OTT grew 40% to $2 billion in 2018.
Addressable TV raises the bar still further, allowing different ads to be shown to different people, depending on their profile. Advertisers only need to spend where they want the ad to be seen, driving return on investment without the wastage that is typically found in broad-spectrum ad placement. In the UK, Sky leads the addressable TV space, reaching more than 40% of all households.
DIA: What types of brands or verticals are investing in advanced TV advertising, and why?
MW: Direct to consumer, or DTC, brands by their very nature will flock to advanced TV advertising. This will include addressable TV on linear (real-time) TV, where the audience is targeted with ads most relevant to them, and OTT advertising with its pre-roll and mid-roll options as well as relevant ad placement.
Advanced TV advertising is ideal for brands wanting to reach very distinct audiences, whether by geography, behaviour or demography. SMEs may want focus on the very specific locations in which they operate, while a brand that is available nationwide will have a large catchment area but may only be relevant to a particular audience (an air conditioning supplier is most likely to appeal to homeowners and new house-buyers for example.)
At the other end of the scale, TV advertising is now a reality for luxury brands, for whom ‘mass appeal’ has never been an issue. Luxury car-maker McLaren launched its first-ever TV advertising campaign via addressable TV because addressable advertising enabled it to target the right niche audience and deliver ROI.
DIA: How fast is internet TV being adopted in Asia?
MW: In China the majority of TV content is delivered OTT because of the high internet bandwidth available (more than 2.1billion devices are IP connected and can receive video content), while Thailand’s 4G rollout allows good quality internet TV via mobile screens. Overall, 16.3% of Asia Pacific internet users are current OTT subscribers, with show strong growth forecast over the next few years. This is underpinned by investment in the region by a number of large OTT players; we’ve seen the launch of HBO Go Asia and HOOQ, an OTT streaming solution backed by large content providers and local contributors including SingTel.
This shift to OTT services also reflects the ‘mobile first’ preference of consumers; at the end of 2018, more than 61% of webpage views in Asia were on mobile (compared to a global average of 48.2%).
DIA: Why is the shift to OTT happening now?
MW: Television has always held mass appeal – to audiences and therefore to advertisers. What we are witnessing now is the power of TV being made available over wireless networks (i.e. mobile phones and robust home internet connections). As hardware, software and connectivity continue to improve, audiences are increasingly able and willing to watch TV content online.
But it’s not without its significant challenges. Aligning and measuring TV audiences over different channels, non-integrated platforms and transparency are all issues on which IPONWEB is focused, with the goal of balancing investment in OTT with subsequent revenues.
There is certainly both appetite and talent to drive innovation in the television market – and the pace of change is fast, with Amazon and Netflix adding highly attractive content to make the space even more dynamic. Watch this space.
What are the biggest changes you have seen in digital technology across APAC over the past 10 years?
There is greater customer demand for first-rate user experiences compared to a decade ago. Brands have to evolve their strategies to keep up with the customer, providing seamless interactions and a consistent experience across a wide range of platforms. This is resulting in marketers shifting their focus from the transaction to the experience, where the customer and their lifetime engagement with the brand are at the centre of every marketing strategy.
From a technological viewpoint, this customer-centric focus requires marketers to bring together the vast number of digital solutions used to optimize the customer journey over the last few years into a more manageable stack. It is also leading to an increased focus on granular first-party data to help understand the customer and their needs through detailed profiles. Where brands may once have acted on instinct, or what they felt was right, they now use data to ensure they are making the best decisions.
How has regulation such as GDPR impacted businesses in APAC and their ability to manage and use consumer data?
GDPR covers any organization that handles the data of EU citizens — and in today’s global economy, this means it impacts most companies; including those in APAC. Yet attitudes towards the regulation remain mixed. On the one hand, there is an appreciation that complying with the new rules brings many advantages: by giving individuals power over data and more visibility into usage, the GDPR can reduce privacy concerns, increase trust, and build lasting customer relationships. But on the other, following legislation that goes beyond regional law is difficult. Ahead of enforcement, more than half of firms in Singapore weren’t ready and one month later, only a quarter of Japanese companies had met fundamental rules.
Businesses must keep working towards compliance and recognize that the GDPR doesn’t necessarily require a total internal overhaul – a common misconception. Companies will often find they can make existing systems adherent by connecting them, instead of replacing them.
What can businesses do to better leverage the explosion of customer data we’ve seen as a result of the digital age?
In short, it means putting the data created by greater connectivity into action. As adoption of smartphones, tablets and wearable technology has grown — with 8.6 billion devices set to be in use across Asia by 2020 — the quantity of data produced by consumers has exploded. So, brands now have a larger pool of transactional, demographic, and behavioural information to draw upon than ever. But before they can harness this data as a basis for tailoring customer experiences, companies need to translate it into cohesive and usable insight. And this is no simple task; in fact, 34% of marketers state that the difficulty of unifying data sources is the greatest barrier to better understanding customer journeys.
The evolution from brands talking about DMPs to CDPs as their primary consumer data tool has been very apparent over the past few years in marketing. What’s the difference between these platforms from your perspective?
The answer to this lies in the history of both tools. DMPs were originally designed to gather information about online activity, categorize it and build audience segments, which then fed into other systems such as DSPs. As the complexity of consumer journeys increased, DMPs tried to meet the need for a persistent view of individuals. But because they were only able to store third-party cookies, it was difficult to effectively resolve the many identifiers created by different channels and devices. And this is where CDPs come in. CDPs can collate, synchronize, and activate data from varied sources: generating one centralized store of insight marketers can use to understand and trace individuals across touchpoints. This results in the capability to take consistent and relevant action in real time across an organization’s entire tech stack from a universal data foundation.
This isn’t, however, to say CDPs supersede DMPs; the two can be effective when used in partnership. For example, a CDP can give marketers a ‘single source of truth’ and a complete picture of customer journeys. This insight can then be shared with DMPs to produce better audience segments that ultimately boost ad targeting precision and results.
What can brands do to get closer to the holy grail of a true 360-degree view of their customers in real time?
If brands want to obtain a real-time 360-degree customer view, they must ensure data is well orchestrated. And this means following several core stages that aim to continuously harmonize data. To start, customer interaction data must be collected from every possible source — such as apps, sites, and stores — combined into a single layer, standardized, and cleansed. Simultaneously, this information should also be stitched and enriched; with smart tools used to assess incoming data and transform it into individual profiles that are linked with data from particular devices, once owners are identified.
Because all of this is done in real time, the end product is a complete up-to-date customer profile. Exactly the insight marketers need to understand customers and deliver engaging experiences across channels. Though it’s worth noting that to accommodate ever-evolving individual preferences and habits, they must also check that their orchestration platform integrates with other systems and constantly ingests new data.
How are AI and machine learning changing the way brands engage with their customers?
AI and subsets such as machine learning are already beginning to broaden the horizons of customer interaction by adding new channels to the mix. The best-known examples of this are chatbots — used to provide instant 24/7 services by major brands from Starbucks to MasterCard — and the growing presence of digital tools in physical stores. As recently seenwith the Guess and AlibabaFashionAIstore, which trialled blending real shopping and a range of intelligent tech; facial recognition, smart touchscreen mirrors, RFID-tagged items.
But it’s also important to highlight the applications that are making a sizeable difference to customer experience behind the scenes. Machine learning, in particular, is fuelling advances in data processing; giving brands the means to collect and analyze customer information at scale, and extract valuable insight. This in turn, means data can be quickly harnessed toimprove interactions by enhancing contextual relevance and personal resonance. So long as marketers are taking adequate measures to keep quality and accuracy high, including avoiding bias among the human teams driving AI and data fragmentation.
What are the biggest challenges you see with brands getting to grips with big data in APAC?
One of the most significant challenges is providing communications that keep pace with omnichannel activity. According to a Google study, the majority of APAC consumers prefer to research online and buy in store; with 70% doing so while browsing real shelves. But activity varies by market; Australia and Japan, for example, have large numbers of digital shoppers – especially Japan, where e-commerce revenue is currently more than $80 million.
So, there is no room for archetypes; marketers need all-inclusive insight into the behaviour of specific target audiences. Only by identifying which devices, shopping environments, and ad types work best for individuals can they provide personalized experiences that flow as part of a seamless cross-channel conversation. And that necessitates agile integrated tech, which can be problematic in certain markets that have historically relied on legacy systems. Despite its forward-looking approach to mobile, Japan still tends to use CRM databases that don’t necessarily have the capacity to work with other systems and therefore can’t share data easily.
Finally, how can brands intelligently pull all their data together to build a better, more personalised and more holistic customer experience for 2019 and beyond?
The role intelligent data plays in customer experience will continue to grow as more brands recognize the value of building communications around individuals. Forrester research has shown brands focused on customer experience achieve an annual growth rate of 23% and twice as much return on ad spend — and data is an integral element of this.
But to get every interaction right, brands mustn’t overlook the basics. Constructing a strong foundation of compliant, accurate, objective and perfectly orchestrated data is critical for communications to make a positive impact.
With the continued explosion of data from a wealth of connected devices, there is more focus than ever on the way companies collect, manage, and use their data. The last 12 months have seen some big names under the spotlight, but as we shift our attention to the year ahead, what lies in store for digital marketers?
There’s no denying, 2018 was probably one of the most significant years to date in terms of shaping the data landscape. In a year where more than 3.6million Asian Facebook users may have had personal information inappropriately shared with Cambridge Analytica, data has never been more prominent in the headlines.
And data isn’t set to fade into the background any time soon. Rightly, the world has woken up to the importance of data in our everyday lives and, for companies, the ability to mobilise insights from data to drive decisions across all areas of the business is firmly on the radar.
So, amid the introduction of stronger legislation and increasing opportunity – and responsibility – to harness the power of data, plus the potential lure of artificial intelligence (AI) and machine learning, what will the data landscape look like in 2019?
Customer-centricity is priority
In light of new privacy regulations – led by the EU’s General Data Protection Regulation (GDPR) launched in May 2018 – there’s been greater awareness from consumers regarding the use of their personal data. In a world where technology has fuelled rapid advances in all areas of life – from e-commerce to financial services – legislation has been somewhat slower to keep up.
But, thanks to high-profile breaches and changing laws, we’re transitioning to an era where the importance of personal data is much higher on the agenda. In turn, this is forcing companies to ensure they have a customer-centric strategy in place, which clearly places the user’s experience at the heart of all business decisions, with the power back in the hands of the individual.
Build a data foundation first
It’s tempting for companies to get caught up in an exciting digital future – we have already seen AI adoption rates across Southeast Asia grow from 8% in 2017 to 14% in 2018. And while some countries, like Singapore, are storming ahead in terms of innovations – with start-up companies such as CashShield creating noise on a global scale – the picture varies from country-to-country. Most are still working to get the data basics in place first; after all, even the most advanced of machine-learning algorithms are only as good as the data that fuels them. So, it follows that companies must concentrate on building a strong data foundation before implementing any ‘must-have’ technologies.
Many businesses throughout Southeast Asia are still facing challenges with relying on legacy back-end systems, and their priorities at the moment are focused on connecting disparate data silos. In 2018 we saw the premise of Customer Data Platforms gather pace, as companies switched on to the need for a tool to help them collate, enrich, and manage the high volume of event-level data across multiple channels – both online and offline – to create a comprehensive view of the consumer. Putting these building blocks in place is fundamental to delivering a first-class customer experience, and it’s the point from which every other business decision should pivot.
Now is the time to talk about ethics
And what about the appeal of AI, with initiatives such as facial recognition, voice-activated search, and online chatbots? There’s no denying its potential and – while companies ready their datasets with clean and accurate data to get to a point where they can successfully adopt these technologies – now is the time to talk about the guidelines we need to ensure machine learning algorithms are unbiased and ethical – rather than waiting until mistakes have been made. It’s our responsibility, as an industry, to get this right.
We have already seen the creation of theSingapore Advisory Council on the Ethical Use of Artificial Intelligence (AI) and Data, set up with representatives from Google, Microsoft and Alibaba – designed to develop a trusted and vibrant AI ecosystem in Singapore. And with India releasing an AI strategy discussion paper, the UK creating a Centre for Data Ethics and Innovation, and worldwide issues being monitored through the AI Global Governance Commission, there are signs of a shift across the globe which will continue in 2019.
While this reflects the need for new and updated regulations that are relevant to today’s digital landscape, it also addresses a changing approach from companies about how they view consumers’ data. No longer just an ‘asset’, we are starting to see a real understanding and respect for its true value, with focus returned to the individual – rather than a collective audience segment.
The data landscape in 2019 may follow a theme of regulation – but at its heart will be a strong emphasis on the customer – regardless of what new tech may be dominating the headlines.
Ever need data to help you understand the latest digital trends and audience behaviours? Good news: DataReportal is a complete online collection of all the reports published by We Are Social and Hootsuite over the past 7 years, and it’s just launched.
The collection already includes more than 7,500 charts covering people’s use of the internet, social media, mobile, and e-commerce in 230+ countries and territories around the world, and they’re promising to add thousands more insights over the coming weeks as they publish their Digital 2019 reports.
In addition to the reports, the site also includes all the analysis articles published since 2011, from extensive global overviews, right down to commentary on individual data points.
Best of all, they’re making all of these resources available for free, so if you have colleagues, clients, or friends who might find them useful, you only need one URL:
Digital in Asia asked Jason Fairchild, Co-Founder of OpenX, one of the largest global sell-side platforms, to tell us about the state of programmatic advertising in Japan.
Digital in Asia: How is the Japanese market approaching programmatic advertising? Is Japan ahead, behind, or just different compared to other global programmatic markets?
Jason Fairchild: Programmatic is taking off in Japan, however, the market is still in its nascent stages, and spend is lower than other markets, such as the US and China. Despite this, more marketers than ever are using the technology to boost reach, relevance and impact, and a recent study from PwC predicts that the increasing demand for programmatic technology is set to push Japan’s media market to US$170 billion by 2020.
It’s not surprising that programmatic is growing as the technology streamlines the buying and selling of online ad space, allowing publishers to efficiently monetize their online content and brands to execute audience-based buying at scale – that is, putting the right message in front of the right user at the right time at massive scale. With investment in online ads expected to increase by more than US$3 billion, marketers will benefit from leveraging this technology to make their advertising more efficient.
DIA: How is OpenX addressing the issue of quality in digital advertising?
JF: As programmatic grows in Japan, it’s important to ensure the advertising ecosystem remains a clean and safe place in which to do business. In 2018 alone, OpenX is investing US$25 million in different quality-assurance measures, and we’re making sure we comply with industry recognised quality standards and have received independent certification for our efforts.
It’s important to note, however, that there are steps that everybody can take to take to stamp out bad practices and tackle fraud. Technology companies, marketers, publishers and every other part of the supply chain all play a role in solving for the quality issues across the industry.
With the recent emergence of new industry standards and initiatives, marketers are now at a point where they can make informed decisions about their technology partners, based on the partners’ commitment to quality.
One example is the IAB’s ads.txt initiative, which has nearly stamped out the threat of domain spoofing, also known as misrepresented domains, and dramatically increased clarity in the supply chain by public record of who is authorized to sell a publisher’s inventory. Another is third-party certification with Trustworthy Accountability Group (TAG), a cross-industry accountability program to create transparency in the business relationships and transactions in digital advertising. Technology companies who meet the stringent standards for certification outlined by TAG earn a seal of approval, and because these demonstrate good practice among vendors, these standards can help buyers and sellers make better decisions on technology partnerships. But it’s important to note that these quality controls are not automatic – they require proactive choice by buyers.
DIA: Mobile now accounts for half of all digital ad spend in Japan. What does this mean for advertisers?
JF: More Japanese consumers own smartphones than ever before, so it’s not surprising to see users spend more time on mobile devices, which in turn drives a marked shift in content consumption towards mobile. Advertisers and publishers have picked up on this trend and now understand that mobile has become the place where consumers spend a majority of their time, and they must adjust their digital strategies accordingly.
To effectively take advantage of this growing channel, advertisers will need to incorporate a range of mobile-specific ad formats and move aggressively away from the desktop-first mentality that most of them have been using. This includes building creative that considers the smaller screen sizes and leveraging rich location data to add more context to their campaigns. On the other hand, publishers must also think about screen size and the user experience to ensure that users aren’t bombarded with too many ads or ones that impede a users’ ability to see or read the content they want.
DIA: Speaking about mobile, what is the future of in-app advertising in Japan and globally?
JF: Quite simply, in-app advertising is the future of mobile advertising. Japanese adults spend three hours and three minutes every day consuming digital media, and in 2017, mobile accounted for more than half of all time spent on digital, so the opportunity is huge.
Studies reveal that the most lucrative in-app ad opportunity is a new innovation called opt-in video, where the consumer is given something of value in exchange for engaging with a video ad. This type of video advertising has proven to be the most consumer-friendly ad format in mobile, and in fact, consumers like it three times more than a non-skippable pre-roll. Completion, viewability and engagement rates are significantly better with opt-in video than other types of mobile video, and the consumer-friendly nature of the ad format makes it a great option for publishers and app developers trying to monetize their content as well.
DIA: What are OpenX’s plans for the wider Asia Pacific region?
JF: Both our Japan and APAC business are continuing to grow. In fact, early this year we announced record new revenue growth in Japan of 52% year-on-year and have signed more than 40 new clients in 2018 alone. The growth derives from us being the largest independent advertising exchange in the country (second only to Google) at a time when programmatic is gaining traction in Japan.
As a result, last quarter we announced that we will be opening our Singapore hub, and plan to move into Australia by the end of Q1 2019. To complement our expansion, we’re committed to growing our team in the Asia Pacific region. We appointed Satoru Yauchi as the director of partner services in the region, who has already played a key leadership role on the team since joining late 2017 and will continue to support us in delivering on our ambitious plans for growth across the region.
There’s been a lot of scepticism recently about where advertising is headed. Online advertising has seen massive growth over the past decade thanks to its flexibility, transparency and measurability—not to mention the ROI. But with this growth comes a new challenge: more than before, marketers must fight to break through the clutter and connect with their target audiences. The rise of obtrusive and irrelevant ads on the web has led to a concurrent surge in ad-blocking software as consumers become frustrated with or indifferent to the content bombarding them. In response, some of advertising’s biggest spenders have started to shift their focus back to real-world tactics such as experiential marketing. This leaves advertising at a tricky crossroads, and got me thinking: Will digital advertising always remain an important instrument in a company’s marketing toolbox? And as an advertising company, how can and should we push advertising to adapt if we believe it to be the way forward?
Xaxis wholeheartedly believes that digital advertising needs to deliver tangible results to continue to be relevant, and as such has repositioned to focus its entire offering on client outcomes. The best way to do this was to understand the client’s advertising goal that ties as closely as possible to the true business outcomes they are trying to drive. So what do marketers need to think about and do differently to truly engage consumers and drive measurable business results?
Artificial intelligence (AI) has completely changed what we can achieve in advertising, from media buying and planning, how to achieve set targets, and the metrics used to understand success. As my colleague Sara Robertson, VP of Product Engineering for Xaxis once said: “AI is like a spreadsheet on steroids”. The potential of AI lies in its ability to see the bigger picture. We’ve made AI and machine learning an integral part of our offerings, used to find and define audiences, refine our creative messaging, generate audience personas, and develop bidding strategies, all of which can transform a digital advertising strategy to drive remarkably improved results for clients.
And while it is true that consumers hate interruption, it’s never a bad thing when advertisers are forced to adapt by creating content that consumers enjoy. One example is a creative new type of ad that has emerged in China to play in breaks of TV dramas online. These ads utilize the TV shows’ original content and narrative arcs, and feature the same actors in their on-screen costumes, making the ad almost indistinguishable from the original content to hold the audience’s attention and pique their interest. This type of advertising is expected to surpass 2 billion yuan (US$311 million) in sales revenue this year, up from 800 million yuan in 2016.
Advertising with influencers also holds increasing importance in the marketing mix as a way for brands to create trust and credibility with consumers. Over the last few years, influencer marketing has skyrocketed to the point that it has become a category of its own. The premise for this is that consumers trust people they already follow rather than an obvious advertiser. Brands are therefore working to get attention from consumers by channelling their message through people with extensive and trusting networks, commissioning influencers to co-create ‘native’ content that advertisers can then amplify. All of this shows that content needs to mimic what consumers already enjoy in order to engage, but advertising itself won’t disappear.
At the end of the day, approaches such as experiential marketing can be a highly valuable way for many companies to increase brand exposure and customer loyalty. But they shouldn’t necessarily replace advertising altogether. Marketers need to look at the bigger picture and focus on reaching business objectives by quantifying success with real metrics and conversions—regardless of the marketing tactics they choose to convey their messages. That means connecting with your customers authentically and holistically, wherever they happen to be – though as we know, people are spending more time online now than ever.
For Xaxis, repositioning our offering to focus on client outcomes was the most logical move. To align with a client’s true marketing and business objectives—and deliver results to hit those objectives and maximize ROI—should be the goal of any marketing tactic. What really sets digital advertising apart is its ability to do exactly that, with more transparency, efficiency and measurability than any other approach. For this reason, we don’t see it dying out anytime soon.
Mobile growth continues to hit record highs in 2018, built on a foundation of programmatic delivery. And that makes it more important than ever to get mobile innovation right, says Itamar Benedy, CEO, Glispa. In this Q&A with Digital in Asia, he talks about GDPR, Mobile Network Operators (MNOs), playables and performance marketing on mobile.
How important are Mobile Network Operators and their data in the mobile first era?
Mobile Network Operators (MNOs) are the sleeping giants of ad tech, but as proven by the recent AT&T AppNexus deal, these titans are waking from their slumber. MNOs will be incredibly powerful in the mobile advertising industry due largely to the vast scale of user data they hold which, if utilised correctly, places them in an extremely strong position to challenge the Facebook and Google duopoly.
What puts MNOs at an advantage is the opportunity for value-added services, delivering engaging content to users and creating additional revenue. They provide an exciting alternative to the limited in-app inventory currently available for mobile advertising. The most important part of mobile advertising is having a direct line of communication with the audience, and MNOs can provide the channels necessary to interact with users through multiple touch points, consequently maximising their potential.
To date, MNOs have done little to harness the power of the data they hold, but we expect to see others follow AT&T’s lead through commercial acquisitions. Hong Kong conglomerate CK Hutchison is one company that has noticed the potential of MNOs and, despite the European competition commissioner blocking its acquisition of the UK’s O2 network, it recently bought a 50% stake in Italy’s Wind Tre in a $2.45bn deal.
How is GDPR impacting Glispa and the wider industry around data?
In spite of the confusion that still surrounds the GDPR, its introduction is largely positive. GDPR is forcing the industry to be transparent and deal with data responsibly, and will ultimately minimise the number of unethical vendors. This will enhance the user experience and pave the way for more open and honest relationships between brands and consumers.
GDPR has also compelled advertisers to think more creatively about campaigns to encourage users to opt-in. We’ve seen an increase in the creation of playable ads because they include an opt-in element that incentivises users to consent to data collection so they can play the game, without forcing them to do so.
As a German-founded company, Glispa has followed strict data usage regulations from the outset, so the introduction of GDPR is having minimal impact on our business operations. We view the GDPR regulations as an exciting means of expanding our creative potential by finding new, fun ways of encouraging user opt-in.
Tell us about playables – how do they work, what are advertisers doing with them?
Playables are entertaining and rewarding mini games that provide a more meaningful and interactive experience than traditional ads. They are most commonly used in the gaming sector where the concept is much the same as test driving a car; allowing the consumer to ‘try before they buy.’ Playables are highly successful in this sector as users who go on to install the full app already know what the game is like and are highly likely to play it regularly.
But playables aren’t just limited to the gaming sector, any brand can create a fun and interactive game ad that will entertain and engage its target audience. Giving users the ability to interact with content leads to better brand recall and enjoyment, thus reaping positive conversion rates and ROI. Interactive ad formats also have map tracking so even if a user does not take the required action, advertisers can see where interactions are happening and derive insights to improve future consumer communications.
Playables are the most effective way to increase creativity within mobile advertising and, as demonstrated in a study by AdColony, are consistently voted as a favourite ad unit, but so far adoption remains relatively slow.
Why are more advertisers not using the playables format?
There are a number of explanations for the slow adoption of playables, all of which will be made redundant in the future. Firstly, brands outside the gaming market don’t always understand the relevance of playables, after all, why make a mini-game when they don’t have a full game to sell? But it is becoming increasingly clear this is an outdated viewpoint and many non-gaming brands, such as Burger King, are making good use of playable ads to boost user engagement.
Complexity is another hindrance to playable adoption. As a new format, there are no proven templates advertisers can use to design and build ads, making playables time consuming and expensive to create. With limited playable case studies in most verticals, advertisers are understandably reluctant to take the risk of investing in the format but this will change as a defined playbook emerges and the complexity and cost of production decreases.
What are your thoughts on the Facebook and Google duopoly?
A noticeable theme of Cannes Lions this year was that companies are ready and willing to challenge the duopoly. The AT&T Appnexus deal and OATH’s acquisition of Yahoo demonstrate the huge leaps telcos are taking and how they are gearing up for battle. These telcos now have the data, user-base and scale, as well as the funds to really pose a threat. Moreover, with Facebook’s well-publicised lack of transparency, it may not take much for companies to start asserting their dominance over the giant.
How do you see the evolution of performance marketing and the role of mobile as a channel?
Performance marketing has evolved from its affiliate roots to play an ever-increasing role in marketing strategies. The main reason for the growth of performance marketing is its unique measurability, which is vital at a time when the pressure on marketers to justify digital spend is increasing and transparency is highly valued.
Mobile is a particular driver of performance marketing. Consumers spend huge amounts of time on mobile devices and we see exceptionally high levels of engagement but mobile advertising is difficult to measure so marketers are turning to performance marketing, which can achieve specific KPIs such as app downloads and re-engagement.
As it becomes a more trusted and widely used tactic, performance marketing is moving beyond traditional monetisation metrics such as clicks and downloads toward more meaningful goals such as user engagement and lifetime value. In fact, performance marketing is proving so effective at driving these outcomes, marketers are beginning to take best practices from this technique to use in brand campaigns.
The report surveyed 129 professionals working in programmatic media at marketing agencies across APAC, EMEA, and North America (NA). It explores the challenges and opportunities the shift to programmatic media trading is creating for agencies, the impact this has on their relationships with clients and publishers, and how they are leveraging technology to create differentiation and provide new value to partners.
Despite programmatic’s ability to drive greater ROI for brands, APAC agencies have yet to take the plunge into owning and operating their own programmatic stack; 66% use either third-party technology exclusively or a combination of third and first party technologies, considerably higher than their EMEA (42%) and NA (44%) counterparts. But building their own ad tech stack is a top priority in the next 12 months for 46% of APAC agencies. So what is driving this change?
Building Bridges to Publishers
Surprisingly, agency respondents from APAC claimed that increased use in programmatic buying technology has resulted in improved relationships with both publishers (75%) and brand clients (85%). In fact, 33% of APAC agencies cited a more direct relationship with publishers as one of the major benefits of programmatic, along with access to a greater total number of publishers (45%). Building strong partnerships with relevant publishers is seen as critical to ensuring that clients get a disproportionate advantage in the marketplace, beyond pricing. Interestingly, and probably helping cement better relations between publishers and agencies, only 12% of respondents cite lower CPMs as an expectation from brands for moving more spend to programmatic channels.
Whereas programmatic has been blamed for the rapid rise of ads appearing in brand unsafe environments in NA and Europe, the story in APAC is different. 39% of agency respondents in APAC cited brand safety as one of the major benefits of programmatic technology, and 35% touted strong fraud and brand safety rates as one of their core differentiators, more than any other region.
This could be due to fraud being directly proportionate to media CPMs. With the exception of Australia and Japan, some of APAC’s largest media markets have a significant supply skew, leading to reduced CPMs and from there lower fraud rates than in other parts of the world where it is harder to balance scale, quality and value.
Despite the increased use of automated technology for media buying and reporting, there remains a transparency disconnect for APAC agencies; 67% of respondents say transparency around programmatic ROI is a major benefit to their clients, but 64% still cite a lack of transparency around media execution as their biggest challenge. To compound the issue, 58% of respondents say the growth in programmatic is causing brand clients to demand still greater transparency from them.
What’s on the Horizon?
The shift to digital, and more recently to programmatic, has enabled brands and their agency partners to pull off ever more impressive marketing feats and tactics. However, perceived shortcomings in data activation and audience segmentation are compelling many agencies to turn inward to assess how they can fill gaps through proprietary technology solutions and capabilities. According to the research, priorities for APAC agencies over the next year focus on driving even stronger ROI and delivering real business outcomes through furthering omnichannel capabilities, securing and ring-fencing client data, and building out data science teams and custom buying algorithms. But understanding cost implications and having the build vs buy conversation is critical, as 62% of APAC agencies cite cost of maintenance as the number one criteria for evaluating tech ownership decisions.
In an industry and region where things shift rapidly, one thing feels certain: growth in digital will continue unhindered. And what goes digital eventually goes programmatic. The agency that adopts tools, strategies, and mindsets today that maximize programmatic’s strengths and solve its challenges will be well positioned to deliver greater value to brands and create strategic moats for their own businesses for the foreseeable the future.
Today, consumers are constantly bombarded with messages from every platform available on a daily basis. However, as marketers, we need to ask the question, is this truly effective?
Content marketing in the age of data often focuses on understanding what people are doing rather than how they are feeling. Consumer decisions rely heavily on emotions they experience too.
With that in mind, it is important for advertising and marketing executives to understand the importance of the change that is happening in the industry.
The wind of change is here
With today’s Generation Z defining what is mainstream, brands need to open to change and one way of doing that is embracing the fact that we are addressing a new market; a new generation. In addition to that, brands need to be open on exploring the various platforms and modes of advertising.
In the advertising world, 2017 can be seen as a transitional year for publishers and platforms. Print media’s shift to digital is nearly complete, and it is predicted that budget allocated to traditional media will see another huge drop this year. Keeping up with the similar trend, television advertising has accelerated its shift to digital, favoring premium video apps like Hulu and mass-reach platforms like Facebook, YouTube and Snapchat.
Web publishers that don’t offer a differentiated experience will potentially lose consumer attention – and associated advertisers – to scaled platforms. And finally, radio is still early in its shift and is expected to ultimately transition to digital audio platforms over time. As technology continues to evolve, brands and marketers need to be highly attuned to their customers’ journey; ensuring that it is relevant and efficient.
Engage, connect & understand; the only way forward for advertisers
Consumers are looking for content that would complement and represent moments that are relevant in their lives. By reaching audiences during moments that matter to them, brands can now leverage their content with personalized messages to their user, based on the user’s state of mind.
These moments which matter to consumers should matter to brands too as they present a remarkable opportunity for brands to connect with consumers on a deeper level. Unlike demographics or device IDs which are often used to approximate a target audience, moments reveal profound insights about consumers, giving brands the possibility to truly achieve perceptive advertising.
The unique ability of micro-moments to flex to consumers’ need, makes it an especially powerful marketing tool, as brands reach their audience when they’re most engaged, with personalized content that matches their moment.
Although there is a shift, digital ads are still far from living up to their potential, often interrupting the consumer’s favorite content instead of adding value to the experience. Brands tend to fall into the trap of marketing to machines, and not to the consumer directly. Traditional method of using a cookie to profile a shopper and retargeting them may be seen as effective when compared to blind targeting.
Another point of consideration that many miss out is the viewability (or positioning) of their advertisement; above or below the fold? As a rule of thumb, what appears at the top of the page as compared to what is hidden will influence the consumer’s experience, regardless of the screen size.
Personalization must move beyond “targeting”
P&G’s Marc Pritchard has spoken at length about the problems that marketers have identified about programmatic ad placement. Knowing when and where to serve an ad is as important as who and what to serve.
For example, don’t ask a consumer to click an ad if they are driving in a car, or target a “fitness enthusiast” to fill out a form while in the middle of an intense workout. Understanding consumer context and mood are incredibly important and increasingly possible with everything becoming connected. According to IHS, the number of connected devices will grow to 30.7 billion in 2020.
As people increasingly consume media across devices, the marketing landscape is shifting towards people- based marketing.
“People-based marketing represents an industry shift from targeting devices to connecting with the right people at the right time, with the right message. Rather than targeting ads to devices based on cookies, which is fraught with inadequacies, marketers can now reach people across the many devices they use, thanks to persistent identity.” – Danielle Lee, VP, Global Head of Partner Solutions at Spotify
According to Nielsen, 79% of audio is consumed while people are engaged in activities where visual media can’t reach them, whether it’s hitting the treadmill after work, or even channelling your inner rock star in the shower.
Today the priority is about having access to content, rather than owning content. For example, Spotify users spend at least 148 minutes a day listening to music through the Spotify platform. Music streaming is definitely growing and is more prevalent than TV or movie streaming in almost every moment of the day. Music is 5 times more likely to be streamed than TV or movie content, working out (3.5 times more likely) or focusing (3 times more likely); with 60% of music streamers listening on mobile, compared to 40% of TV and movie streamers.
Understanding people through music and why it matters
Savvy marketers will quickly embrace the consumer shift, and audio advertising will be reimagined through the lens of native experiences as opposed to terrestrial radio adaptations. Through streaming intelligence, we build audience experiences that fuel engagement and trust; one way Spotify is able to do that is by understanding people through music.
Understanding people through music, a Spotify led research has become a key part of our data mission. The theory behind the work: because music listening is so uniquely emotional, universal and, now, addressable thanks to streaming, it can uncover deeper insights than consumption of other kinds of content like movies and TV. Music as we know it, is weaved into our everyday lives. There is a song (or a playlist) to represent each moment of our lives.
These moments can be as simple as having a shower before heading to work or preparing for a night out in town. Music reflects who we are, what we are doing and how we are feeling in any given moment. And thanks to music streaming services, people are listening to music and amplifying these moments more than ever.
What does this mean for brands?
Streaming opens up an entirely new set of addressable moments for marketers. The music streaming ad revenue opportunity is worth $1.5 billion today, and it’s expected to reach at least $7 billion by 2030. Audio’s unique ability to flex to consumers’ needs makes it an especially powerful marketing tool. The mobile moments “at work” and “working out” alone have opened up $220M in ad revenue opportunity. With that in mind, brands should leverage audio to reach out to their audience when they are most engaged, coupled with the right message that matches that moment in time.
It is really is about reaching out to the right people at the right moment. How are you doing that?