The Science Behind Modern Advertising: How Technology And Big Data Are Reshaping The Industry
Take a whirlwind tour of the dramatic changes in the advertising industry.
The art of persuasion that marketers used to use has been replaced by a science-like approach, as a result of advances in technology and big data.
In recent years, marketing and advertising have become incredibly complex.
Ad agencies now make money differently, clients measure success differently, and the way people perceive advertisements has changed completely.
These new forces have only been strengthened over time, leading to more data-driven processes that are personalized and precise, rather than relying on a singular big idea.
Moreover, internet giants have gained unprecedented access to consumer’s personal information through their ads.
Finally, these changes in advertisement consumption have had an incredible impact on politics – proven by Donald Trump’s 2016 presidential win against Hillary Clinton who lacked necessary knowledge about modern advertising strategies.
The Necessity And Evolution Of Advertising In A Highly Competitive World
The modern marketing professional is a jack-of-all-trades, and they understand how important the smartphone is for advertising.
The world has come a long way from the days of writing on rocks or painting ads on walls – now, thanks to smartphones, the opportunities for reaching customers have never been greater.
Smartphones offer incredible potential for marketers; over six billion people across the world use mobiles, and with this many users comes an ever increasing range of capabilities as technology advances.
For example, a single iPhone 8 can hold more computing power than was used in the first space shuttle!
Because of this powerful hardware and software combination, smartphone advertising enables marketers to track their customers and interact with them in real time.
A good example of this is Chinese tech giant Tencent, which allows its 800 million worldwide users to shop at 300,000 stores online while also engaging in 500 million different interactions every day, all through their platform – often paying with one of 300 million registered credit cards.
The sheer amount of information available through these channels provides marketers with insight into customer trends and buying habits that would otherwise remain hidden.
Ultimately, it’s clear why today’s marketing experts focus much energy on mastering the mystery of smartphone advertising: it brings unparalleled reach and target accuracy to their campaigns – something few other mediums can match.
How The 2008 Financial Crisis Made Don Draper And Mid-20Th Century Ad Executives Obsolete
Advertising executives in the mid-twentieth century used to have it very good.
After all, they were collecting commissions from both the buyers and sellers of advertising space, as well as reimbursements for ad-production costs.
This system helped secure a steady income stream for many advertising agencies and their executives.
However, things have changed recently as marketing budgets are being scrutinized more closely than ever before.
CEO’s began demanding closer attention to marketing expenditure in the early twenty-first century; primarily after the 2008 financial crisis which put a strain on companies’ finances.
As a result, finance directors are forced to tighten their belts when it comes to ad dollars and those big fat commission checks have dwindled significantly.
Nowadays, the Don Drapers of today aren’t nearly as secure financially and professionally as they once were due to shifting company cultures and tightening budgets forcing them to be more mindful when it comes to spending money on ads.
The Power Of Big Data Is Reshaping The Role Of Media Agencies In Advertising
Big data has disrupted the advertising industry and rewritten the role of traditional creative agencies as well as media agencies.
As marketers have become able to track our online behavior, digital cookies have enabled them to aim their ads at relevant individuals who may be more likely to buy a certain product.
What’s more, this has allowed advertisers to measure the success of an advertisement campaign, rather than simply taking their reach for granted.
The key change is that tracking of this data has fallen into the hands of media agencies – providing them with an opportunity to encroach on the traditionally creative territory of these same advertising agencies.
With access to huge amounts of data, and by employing people with the ability to analyze it – media companies can now craft customized campaigns targeting smaller segments of users.
An example is Revlon’s very successful ‘Love Is On’ campaign run entirely by a media agency in contrast with a creative one.
In simpler times where catchy ideas were what made or broke a brand – creative advertising agencies had a large foothold and thrived off big ideas.
However, in this era where messages are tailor-made for target audiences, there is no longer need for such traditional firms leading to an increased focus on specialized media agencies instead who are investing in data scientists and engineers left right and center.
How Big Data Is Collected And Used In Advertising And Marketing
Big data is a valuable resource that can be mined from various sources, but getting your hands on the truly valuable stuff is not easy.
For example, first-party data, which comes directly from customers like department stores and credit card companies, is highly valuable because it’s gleaned directly from the customers themselves.
This type of data cannot be shared or sold due to privacy laws, but it can nevertheless provide an invaluable source of insight into what your customers want and need.
Second-party data is anonymous information that businesses can buy or sell among each other – such as Nielsen and comScore – while third-party data is bought from stores and catalogues.
However, these may yield limited insights due to anonymisation.
Media agencies also find it difficult to gather big data from tech giants like Google or Facebook, who are often reluctant to share their first-party user information.
Mobile phones present another obstacle for marketers to overcome as certain ads won’t display if users’ devices don’t support Flash technology.
The shortage of talent within the industry reinforces these challenges further; there simply aren’t enough experienced data engineers and analysts out there to go around!
Clearly, big data comes in a variety of different forms – however some of the most valuable information is hard to come by.
Are The Benefits Of Big Data Worth The Corporate Intrusion Into Our Private Lives?
As internet giants such as Facebook, Google, and Amazon grow in size and influence, the amount of data they have collected from individuals have increased tremendously.
This data can be used to target specific audiences with ads or even to profile people based on their likes and dislikes without their explicit permission or consent.
This relentless data collection has caused many people to become concerned about their right to privacy.
How much information should companies like Facebook, Google, and Amazon be allowed to collect on individuals? What limits should be placed on how this data is used? These are questions that must be answered if we are to protect our right to privacy in the digital age.
These internet giants now possess some of the most personal details of human lives –votes cast, credit card purchases, frequently visited websites, location coordinates etc .
In addition, Alexa is able to follow your every move around what you eat ,read , watch or ask for .
All these powerful tools inherently violate any individual’s freedom of thought that was previously generally taken for granted as part of modern-day life.
It is clear that the benefits of big data are widely recognized by stakeholders all round but it appears that no matter how many safety measures organizations take , the ever increasing demand for more data will always put a constraint on individual privacy rights and ultimately make all these giants frenemies for humanity .
Donald Trump’s Unexpected Win Shows That Traditional Advertising Is Now A Relic Of The Past
Donald Trump’s victory in the 2016 Presidential race proved something to those working in marketing and advertising; namely, that technology-assisted targeting was the key to successful modern campaigns.
While his opponents spent millions on traditional ads, Trump focused his attention on data-driven digital communications which enabled him to reach out directly to potential supporters.
Rather than relying on the mainstream press, who were largely opposed to his election, Trump engaged a private firm – Cambridge Analytica – who compiled around 4,000 data points from those with the potential to support him.
He then invested money into social-media campaigns specifically targeting these individuals.
This strategy bypassed the limitations of traditional advertising: Big spending doesn’t lead to big results anymore because consumers are so used to seeing and hearing these ads that they become ‘white noise.’
With this acknowledgment of a new framework for getting people’s attention, Donald Trump won against all odds.
By understanding and using modern digital tactics that put his message directly in front of people who were open to it instead of trying desperately (and failing) to buy everyone over with flashy 30-second ad spots, he achieved a stunning electoral victory which has had an immense impact on how future candidates conduct their campaigns.
Frenemies provides a clear and concise summary of the changes that have occurred in the advertising and marketing industry since the advent of the internet.
Clients now expect more customized and cost-effective campaigns that are built on personal data and can demonstrate tangible results.
These changes also affect how media agencies interact with each other, which is why establishing relationships based on trust and collaboration is so important.
In short – this book provides a good overview of the new landscape and why it’s important to stay competitive in the media market.