IS YOUR ADVERTISING BUSINESS DIGITALLY FIT?
By Carlo Iacoboni, Accenture Digital Video
In May, Univision announced that it would join Fox, NBC Universal, Turner, and Viacom in a consortium designed to broaden reach and maximize value for advertisers. Not so many years ago, this sort of close collaboration between entertainment industry rivals would have been unthinkable. Today, it’s just the latest example of the bold moves that more mature players in the market are willing to make to succeed in a digital world.
Digital disruptors have blazed a trail in advertising, bringing innovation and precision to the industry. Advertising dollars have followed, forcing media companies to re-evaluate their advertising products.
The immediate priority for media companies accepting this challenge must be to make the engine behind their core advertising business digitally fit. The people buying adverts have migrated to online platforms to take advantage of advanced targeting, audience size, process automation and transparency of results. To be competitive, all players in the market must meet these criteria, and more.
We recommend three carefully coordinated waves of transformation that we call the “S-curve”. First, they take a data-driven approach to transform their core business by investing in automation-powered efficiencies. This recovers the traditional business and makes sure it’s working effectively. This is what we call a “no regret” investment, as it will simultaneously power the existing business, and provide the foundations to drive new advertising products. Second, they invest in strategically-selected initiatives to grow that core. Third, they incubate disruption to find and deliver the Next Big Thing.
By building on the desirable attributes of their existing products – editorial trust, halo-effect, emotional immediacy – with new digital capabilities, established media companies can advance the experience, efficiency and effectiveness of their advertising. Of course, it’s a juggling act. Companies need to maximise the potential of their existing advertising business as they experiment with new digital products.
One example of a no regret move often made to kick these transformations off is the use of artificial intelligence in audience forecasting. Accurate audience forecasting is foundational to achieving the best advertising price for the linear TV inventory. Typically, forecasting has been the preserve of a few highly-skilled specialists, but this is ripe for transformation. The task is data-rich, highly-repetitive, and ideal for statistical modelling. Accenture has been working with ad sales organizations to develop and refine a proprietary machine-learning audience forecasting algorithm.
It’s proven effective at improving accuracy by up to 20%, and at delivering high single-digit revenue increases. Media companies have a longer track record of strategically placed advertising than the disruptors do. They know that they need to reach the right person at the right time, but also within the right context. Efficient data management puts audiences and relevant content together, creating fertile ground for effective, high-performing ad campaigns. Deploying ad tech within a horizontal, data-driven operating model will give media companies a new edge.
HOW DO YOU GET YOUR ADVERTISING BUSINESS DIGITALLY FIT?
Projects we’re working on right now to help media companies get there include:
IMPROVING MICRO-SEGMENT TARGETING: Packaging and selling highly-qualified audiences (micro-segments) across media properties at a higher price.
INCREASING MICRO-SEGMENT REACH: Supporting media companies as they set up consortiums where audiences can be jointly offered to buyers in standardized micro-segments
OPTIMIZING PREMIUM PROGRAMMATIC SALES: Increasing sales effectiveness and reducing the cost of sales for premium inventories (TV, radio, print and digital media) by creating an automated marketplace to directly connect data-driven buyers with sellers:
INCREASING QUALITY OF SERVICE THROUGH OMNI-CHANNEL: Packaging and selling ad products through multiple automated sales channels through a single ad sales platform, where business can be optimized
INCREASING INVENTORY YIELDS: Accurately predicting what to sell, how to sell it, and at what price by applying machine learning to better match audience targeting with advertiser demand.
Digital disruptors offer distinctive advantages to advertisers and will continue to do so. But they’re not the only game in town. There is considerable scope for traditional ad businesses to be more value-driven. But they’ll need to transform, so they have a better understanding of audiences across all channels and digital touch points. Then, they can apply those insights to design and deliver relevant and personalized content, and services, both for consumers and for advertisers.
Media companies remain a force, and with new levels of digital fitness and innovative market strategies, they can reinvent their products for the digital advertising age.