As media consumption habits continue to change, so too does the digital media opportunities and formats available to brands. But the change is only just beginning, writes Rob Reid.
After many years of uncertainty and weariness around the effectiveness of traditional ATL media, the arrival of digital's visibility and transparency did wonders for the media industry. However there is no let up when it comes to the actual rate of change in digital media. Today's media environment is about to go through a significant paradigm shift.
The digital media buy was a simple exercise a couple of years ago. A number of local publishers dominated the top 10 Irish websites and demanded a premium for display media placement. Search was the other option and Google was the only player in town. In many ways it's no wonder that digital was seen as a relatively easy add-on to the traditional media plan. However the increase in broadband penetration and the digitalisation of all media, combined with the explosion of video, social and mobile, is about to change media planning and buying beyond recognition.
The display advertising market now has a massive oversupply of inventory. The importance of local publishers has been diluted as our media consumption habits become increasingly globalised and fragmented. The proliferation of global (but locally targeted) networks and aggregators has reduced the actual cost of display inventory. Networks deliver a relatively easy and performance-based purchasing route to the huge volumes of quality traffic now available. Effective media buying of display these days tends to be through buying exchanges that package inventory based on content channels and audience segmentation. Even more sophisticated networks have recently started to use a behavioural layer to message and re-message consumers based on purchasing cycle stages.
Internationally, we are beginning to see the disintermediation of media sales. Buying (and planning to a degree) is becoming an increasingly technology led discipline. Google are leading the way with its self service platform, delivering massive efficiencies for both publishers and agencies. In the future, we will see these digital innovations being used across all forms of media. The ball is already rolling here with Google offering TV as part of its platform in North America through the launch last month of Google TV. This technology looks like it will eventually facilitate the inevitable convergence of the web and TV as homes go fully digital and the TV becomes another Internet access device.
The growth in smart phone penetration is stimulating the potential for location based media targeting which in turn will drive a new level of mobile opportunities for brands. comScore, the global panel based audience research tool, is investing heavily to measure mobile usage in Ireland. It plans to roll out ‘unified digital measurement' which will effectively allow media planners to measure traffic from the full range of ‘on the go' devices. The options around mobile advertising formats and buys are already immense - ranging from mobile search to advertising on iPhone applications.
Search is also changing. Paid search is the dominant force and has been for many years but planning and buying require a specialism in their own right. Many agencies fail in their approach but this can go unnoticed because of a lack of client education in the area. Although traditional media agencies have made progress in this area, the critical problem here is that paid search has become so competitive with actual ROI output decreasing.
The resulting opportunity is to look at organic (free) search. Search engine optimisation (SEO) was all the rage six or seven years ago but, since then, the use of paid search has been justified as a traditional media buying route with high ROI. However the role of SEO is set to become increasingly important again over the next two to three years in tandem with the growth of video and social media. The likes of universal search (integration of maps, videos, localised content etc ), real time results (fresh, dynamic content for search terms that suddenly get a sharp increase in volume) and personalised search results (based on a consumer's previous searches and social media preference) are all helping to drive a new focus and commitment to organic results by using mature SEO techniques.
The prevailing SEO opportunity is also a challenge to the traditional approach towards media planning and buying. SEO drives ‘earned media' which results in actual branding, traffic and sales without an associated publisher media cost. The skills required are entirely different to paid search. In fact, SEO itself has changed significantly over the last couple of years and is now about working closely and in a collaborative nature with digital PR and social media specialists.
Perhaps the most critical change of all facing the media industry is the need to strategically address and tactically engage with social media in all its forms. Opening an honest dialogue with consumers in a social environment, on their terms, is the ultimate objective towards driving successful earned media. Clients will start to demand change and results but the question of skill set and culture is probably the most critical barrier that traditional media agencies have to overcome. Digital PR and community management are core offerings in the new earned media space - not just for blogger relations but also to help understand the important role consumers now fill as guardians and custodians of a brand. Any approach will require a detailed understanding of relationship marketing - a very real challenge to the way traditional media houses think.
The dramatic shift over the last year means paid and earned media now need to sit alongside each other when it comes to effective media planning. There is a strong argument to say earned media, with support from owned media (Facebook applications, iPhone applications etc), will become the dominant force over the next two years. This will be driven by the increased socialisation of the web, changing search patterns and usage of mobile applications. On the other side, this is compounded by what seems like a relentless commoditisation of paid media in the digital environment.
All of this begs the question of how the media agency of the future will look or operate? It is fair to assume that digital will have an increasing influence and dominance in traditional media platforms and execution. Of course this means the thought process will need to shift dramatically - the key point being around agency structure and skill set. The strategic planning function will become more critical than ever - perhaps with an even greater focus on social psychology. Eventually, behavioural psychologists will start popping up and playing leading roles in digital centric agencies. Then, on the far side of the creative and production process, actual media delivery will require a whole range of channel specialists under the earned, paid and owned media spaces.
The remuneration model that traditional media agencies demand will also have to change. Paid digital media can now be bought almost exclusively on a performance basis so this has a far reaching impact on old models. However the requirement for an increased investment in man hours will signal a major shift away from ‘business as usual'. The planning and implementation of earned media is not a commissionable game at any level. It will become imperative that a large percentage of media budgets be moved from paid to earned in accordance with new consumption habits and the new media landscape. The change is only beginning.
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