An explosion of data solutions in ad tech has enabled advertisers to target video through the entire marketing funnel, a strategy embraced by Direct Line over the past couple of years, whose investments in data capabilities have enabled the insurance company to target existing customers and high-value prospects with various forms of video advertising.
But Sam Taylor, former Marketing Director at Direct Line Group, observes that buy-side adoption of these capabilities remains low. Where two years ago this was a case of marketers being ready to implement strategies that the industry was yet to fully build, Taylor says the industry is now ready – but the marketers are not.
The loneliness of the long-distance CMO
This is partly due to the changing role of the brand CMO. As a head marketer for more than 20 years, including roles at T-Mobile, Gumtree and most recently Direct Line, Taylor says he spent most of his career having to influence his CFO in order to secure budgets for technological investment. But the rise of data-driven advertising (and its associated regulation) means the role now also means dealing with the Chief Investment Officer, Chief Data Officer and Chief Information Security Officer. In this new climate, he says the CFO is “a walk in the park.”
At the same time, CMOs have the shortest average tenure in the C-suite, and full-funnel data strategies are long-term investments; it took Taylor two years to go from presenting the strategy to execution, via collaborations with Snowflake and LiveRamp – a timeframe liable to put off many CMOs. “Do I want to spend two years of my life battling internally, when I may not even be here to see the fruits of my labour?” says Taylor. The issue is exacerbated during challenging economic periods, when brand spend is often shifted over to performance. “In that dynamic, would I say let’s take another million out of brand spend and put into martech? Not going to happen.”
But Taylor argues that in this economic climate, where budgets are under pressure, marketers need to look beyond the old ‘Long and Short of It’ debate to focus on the customer. By identifying high-value customers and targeting them with campaigns for new products, while building lookalike audiences and targeting similar prospects, video becomes “the best use of paid media using data” that is available to marketers. “So the long and short of it is gone,” comments Taylor. “It’s the long, short and growing profit from your customer base.”
Rethinking video
This paradigm shift requires rethinking advertising’s approach to TV and video. Taylor says wastage on linear TV became the norm because it was cheap and guaranteed a certain amount of reach – even if it meant over-serving audiences outside the target market. But as more data becomes available to marketers, “the more you will justify paying a premium for targeting, the more you will justify the technology to run that activity, the more effective that will become, and the more ineffective TV will look.”
That is not to say TV becomes obselete; on the contrary, Taylor believes TV will become more powerful when used to effectively drive outcomes – particularly when Origin, the cross-media measurement solution from ISBA (where Taylor chairs the TV Steering Group), is capable of measuring unduplicated reach and frequency across campaigns, and eventually also attention. “At that point global advertisers will look at the UK and go, ‘we should adopt that way of thinking.'”
With attention running through media measurement, marketers can evaluate spend based on what Taylor calls a “cost per attentive reach point”, enabling fair comparison of the cost-effectiveness of an ad across channels – whether that’s linear TV, social media, cinema or DOOH. “If your ad works brilliantly in six seconds, a 30-second ad would be a waste of money,” he argues. “And why would you do a mass campaign to everyone when you only want to talk to 10,000 customers?”
Follow the FMCGs
But there are factors accelerating that shift, especially retail media networks investing in CTV products. Taylor suggests the availability of retail data from Dunnhumby or Nectar360 will enable FMCG companies to drive targeted advertising in CTV, prompting the rest of the industry to follow suit. “If you want to move adoption of any media platform or thinking in the UK market, then the FMCGs need to be on board,” he comments. “And then all advertisers go, ‘hang on a minute, the FMCGs are doing it and they don’t even have their own data!'”
Meanwhile the discourse around AI is also helping move the dial, according to Taylor, even if the technology in question isn’t actually using AI. “But every boardroom is talking about AI,” he remarks. “So if I go out and say, ‘we can do this campaign using AI,’ they’ll go, ‘how much money do you want?'”
And where AI actually becomes involved is in enabling personalisation at scale, as more campaigns are run to target smaller audiences. “I need to make the creative work, and I need to be able to measure and optimise every campaign,” says Taylor. “And I can’t do that manually, because I could be running 1,000 campaigns a week, rather than one campaign a week. Because the direction we’re heading in, the whole video world will become addressable. And then I’d be able to show my ad if 50 percent or more of those people sitting in the cinema down the road, based on credit card payment details, are in my target audience. Or on a digital screen in Waterloo station if 25 percent or more of the people in the proximity of that screen are in my audience.”
But to secure that future, he says ad tech companies need to educate media agencies on their technical capabilities, who can in turn educate their clients, rather than simply compete with each other technologically. “Tech companies can’t understand the marketing strategies of every business they’re selling to,” he argues. “We’ve got all these tech companies coming out with their own solutions, technologies, AI sales narratives, IDs. It’s becoming so complicated and inward looking; it’s no wonder that many advertisers are going, ‘we’ll wait until the dust settles, thank you very much.'”
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