PERSONALIZED MARKETING ACTIONS AND THE CHANGING ECOSYSTEM FOR ADVERTISING

This new market introduces a new set of organizations into the marketing ecosystem. We discussed in chapter 4 the new players in digital advertising (see figure 4.1) . A DMP provides observations on viewership and past advertising; a demand-side platform (DSP) participates in auctions on behalf of the marketers or their advertising agencies; and analytics engines mine the data to create advanced audience attributions. The publishers either directly conduct auctions or use supply-side platforms (SSPs). The market forces are establishing a new ecosystem, in which DSPs protect the interests of the marketers, and SSPs protect and optimize the interest of the publishers. These optimizations are encoded in a set of algorithms, which are executed at silicon speeds to deliver the advertisements in real time (currently around 36 milliseconds).

If I know the specific audience to whom to deliver an advertisement, I can also optimize based on past purchases. As I showcased in my description of Linda’s smartphone purchasing in chapter 5 , a new prospect who has not purchased my products should receive a different advertisement, as compared to the customer who already purchased my product last week. To deliver these integrated capabilities, the media department must be tied to the hip with marketing research, which creates the unified customer profile. While some of the marketing spend may be directed to auctions, the rest may be done via directed contracts (for example, covering outdoor displays or traditional media), but must be optimized across the channels to deliver an orchestrated campaign.

How would the marketing organization be designed to effectively manage this changing ecosystem? The Association of National Advertisers, together with the World Federation of Advertisers and EffectiveBrands, a global marketing strategy consulting firm, has been conducting an ongoing global study—including a quantitative and qualitative survey—of senior marketing leaders over the past several months that is unprecedented in size and scope. The study, named Marketing 2020, has postulated that the winning companies will have highly integrated organizations—that is, hub-and-spoke structures, in which the CMO is in the middle, with roles akin to product manager, marketing strategies manager, advertising director, public relations (PR) manager, market-research director, and promotion director representing the spokes and the rim of the wheel. The integration and interconnectedness of this new model enable full coordination of all the constituents.9

 
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