Tech turns advertising’s ‘Mad Men’ into maths men
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An online advertising campaign last year by Kronenbourg, a French brewer, adopted an innovative tactic: it used real-time temperature data to target only those people it calculated would be most susceptible to the temptation of a refreshing beer.
To execute the campaign, Kronenbourg worked with Infectious Media, a UK-based agency that specialises in the fast-growing area of “programmatic” advertising, or using automated computer systems to deliver ads across the internet.
The 350-year-old brewery had long known that people prefer to drink beer in warm weather. It had also found that people in the north of France consider it warm when the temperature is above 20°C, while people in the south have a threshold of 25°C.
Using these insights, Infectious created an algorithm that only delivered adverts to internet users who were in the right location at the right temperature and at the right time of day for a cool beer.
The Kronenbourg campaign is one example of how data and technology are changing the way ads are delivered — and with it the skills required of practitioners in the $500bn worldwide advertising industry.
“People working in this area now need to be comfortable with technology and be incredibly data-literate,” says Martin Kelly, chief executive of Infectious Media.
The company employs people with skills in maths, engineering and analytics in order to set the parameters for its programmatic campaigns. Once these parameters are set, the computers take over, buying ad space on websites via real-time auctions on so-called ad exchanges.
“The days of faxing over an insertion order and presenting results a month later are over,” Mr Kelly says, making a dig at the techniques that agencies have traditionally used to buy ad space from mass media providers such as the traditional press and television.
Most media are still traded the old-fashioned way. However, according to eMarketer, a research company, 55 per cent of all online display ads in the US will be bought programmatically this year, in a market worth almost $15bn. Two years ago, US advertisers spent only about $4bn using programmatic techniques.
Brian Lesser, chief executive of Xaxis, a programmatic media company that is part of WPP, the world’s biggest advertising group, has predicted that ultimately, “all advertising will be digital and all digital advertising will be programmatic”.
Sir Martin Sorrell, WPP’s chief executive has described this shift as one from “Mad Men to maths men”, referring to the popular television series depicting life at the fictional Sterling Cooper advertising agency on Madison Avenue in New York in the 1960s.
For some people in the advertising industry, this shift is something to be feared. They worry that computers will progressively take over jobs that were once the preserve of human beings. Another fear is that programmatic technologies will kill creativity.
But agency executives say such concerns are misplaced. While the most menial jobs in advertising will be automated, the thinking goes, this will only free time for people to work on more creative aspects.
Indeed, the number of specialist roles in advertising agencies has surged in recent years, as has demand for strategists who are able to understand the complexity of modern media.
Pippa Glucklich, UK co-chief executive of Starcom MediaVest Group, part of Publicis and one of the world’s biggest media-buying agencies, says that the company has doubled its headcount in London in the past five years alone in order to cater to growing demand from brands for digital specialists.
“There’s a very different mix of [job] titles now,” she says. “What’s really important is having people who can look at data and extract a story from it.”
Until recently, media agencies such as Ms Glucklich’s focused on planning the best way to spend a client’s advertising budget and negotiating on price with media owners. The process of actually designing the ads would be left to creative agencies.
But the growing complexity of online advertising has prompted some media agencies to start hiring “creatives” and designing ads themselves. This new breed of creatives includes data-driven content producers who are able to optimise the appearance of an ad campaign on the fly.
As Ms Glucklich puts it: “Technology and creativity have to sit hand in hand.”
Programmatic advertising campaigns can feature thousands of versions of the same commercial, each of them tailored for a specific target audience.
Designing such micro-targeted content is a very different activity from that honed by traditional creative agencies, which are geared towards a small number of polished ads for TV, radio and the press.
But as brands such as Kronenbourg shift more and more of their advertising budgets online, agencies may find that they have little choice but to adapt.