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jerryking : ad-tech   9

Technology has upended the world’s advertising giants - Mad men adrift
March 31st, 2018 | The Economist |

The world’s advertising giants are struggling to adapt to a landscape suddenly dominated by the duopoly of Google and Facebook. Some of their biggest clients, such as Procter & Gamble (P&G) and Unilever, are also being disrupted, in their case by smaller online brands and by Amazon. They are cutting spending on advertising services, and also building more capabilities in-house. Consultancies with digital expertise such as Deloitte and Accenture are competing with agencies, arguing that they know how to connect with consumers better, and more cheaply, using data, machine learning and app design.......This month Marc Pritchard, chief brand officer of P&G, criticised their (i.e. the ad giants) model as a “Mad Men” operation that is “archaic” and overly complex in an era when campaigns and ads need to be designed and refined quickly across lots of platforms.

Technological forces are buffeting this model.

(1) The first big challenge is disintermediation. Despite the growing backlash against the tech giants, Google and Facebook make it easy for firms big and small to advertise on their platforms and across the internet via their powerful ad networks.
(2) The second headache is the rise of ad-free content for consumers, especially on Netflix, and the corresponding disruption of ad-supported television, which has declining viewership globally.
(3) Third, Amazon’s e-commerce might, and the growing clout of internet-era direct-to-consumer upstarts, have weakened the distribution muscle and pricing power of the advertising giants’ biggest clients.....cost discipline among clients is driven partly by the influence of thrifty private-equity investors like 3G, the Brazilian owner of AB InBev, the world’s largest brewer......Sir Martin argues that the budgetary pressures that have forced his clients to cut back on advertising are a cyclical problem, not like the structural challenges posed by technological disruption.

In private, however, a senior executive at a rival ad-holding firm rejects much of this optimism. Technological disruption and disintermediation, he says, will only deepen. The efficiency of targeted digital ads means companies can spend less for the same outcome in branding. ....The advertising firms are responding by hiring away talent, acquiring businesses (in 2015 Publicis bought Sapient, a digital consultancy, for $3.7bn) and gradually changing how they make money. Their plans mostly boil down to two things: investing in digital services and consolidating their collections of businesses so that they can provide a range of services to one client more cheaply under one account.
advertising  economics  marketing  advertising_agencies  Martin_Sorrell  digital_strategies  WPP  Google  Facebook  Amazon  competitive_landscape  P&G  Unilever  disruption  Deloitte  Accenture  Publicis  Omnicom  via:sparkey  ad-tech  programmatic  direct-to-consumer 
april 2018 by jerryking
Time Inc. Decides Not to Sell Itself
APRIL 28, 2017 | The New York Times | By SYDNEY EMBER.

Time Inc. (home to Sports Illustrated, People and Time,) has decided to go it alone (e.g. remain independent and not sell itself), choosing a path filled with challenges that no legacy publisher has completely mastered.

Instead, the company said it would pursue the strategic plan its new management team had laid out, which includes increasing its digital audience and pursuing new opportunities for revenue growth......Print advertising and circulation revenues continue to fall, starving magazine companies of the lifeblood that long sustained them. Most publishers have shifted their focus to increasing non-print revenue, but new revenue sources have yet to make up the shortfall. To compensate, publishers continue to slash costs, transforming themselves into leaner companies with fewer employees and diminished resources.... As a publisher of magazines that highlighted stellar photography and weekly updates on news, sports and celebrities, Time Inc. was an empire that left an indelible mark on American culture.

But like many magazine publishers, Time Inc. has struggled to adapt to a digital age. The brutal economics of the publishing industry have made that challenge more daunting. In the last decade, Time Inc.’s revenue and operating profit have fallen sharply. Its work force has dropped from 11,000 to just over 7,000......[Time] has embarked on an aggressive strategy to increase Time Inc.’s digital revenue, including enhancing advertising technology abilities and offering customers paid services, such as a food-and-wine club. Last year, advertising revenue increased 3 percent, driven by substantial growth in digital advertising. Executives project that digital advertising revenue will increase to more than $600 million this year and $1 billion in the coming years.

But Time Inc.’s overall financial results have yet to improve, in large part because the company is still tied to its declining print business. About two-thirds of its annual revenue is still derived from magazines.

The company will report its first-quarter earnings on May 10.

Time Inc. is aiming to make $100 million in cost cuts this year, and Mr. Battista said the company would continue to be aggressive about cost management, particularly in its print business.
magazines  digital_media  ad-tech  CEOs  print_journalism  TIME_Inc.  cost-cutting  layoffs  newsstand_circulation  Meredith  structural_decline 
april 2017 by jerryking
Machine learning, algorithms drive this advertising company’s growth - The Globe and Mail
MARK BUNTING
Special to The Globe and Mail
Published Wednesday, Mar. 08, 2017

What is programmatic advertising?

Canadian company AcuityAds Holdings Inc. (AT-X) is at the forefront of that transformation. It specializes in what’s called programmatic advertising where algorithms are used to allow advertisers to target, connect with, and accumulate data about their campaigns and their audiences. One of AcuityAds’ co-founders has a PhD in machine learning and algorithms. It’s one of the reasons the company believes its patented technology stands out from its peers.....
A happy advertiser spends more money

“The whole idea was build the algorithm in a way that delivers a positive ROI for clients,” Mr. Hayek says. “As long as they get a positive ROI, they’re going to spend more with us. And that’s proven itself to be a very good concept because we deal with advertisers. When they make money using our system, they’re very happy and they spend more money on our systems.”

Risks

Is Mr. Hayek concerned that in the fast-growing, rapidly changing sector in which AcuityAds operates, a new technology or unforeseen competitor could emerge to disrupt its model?

“Digital advertising is an $83-billion (U.S.) market place. $51-billion out of that is already programmatic,” Mr. Hayek explains. “All the pipes are already built, it was a fundamental shift that this is how we do this kind of business.”
machine_learning  algorithms  ad-tech  advertising  programmatic  risks 
march 2017 by jerryking
Leaner and meaner; Advertising agencies
Technology has made life harder for admen, but they will not disappear

GAUGING THE STATE of health of the advertising industry is easy: just stroll along the waterfront in Cannes when the admen hol...
advertising_agencies  WPP  Martin_Sorrell  Publicis  ad-tech  Omnicom 
february 2017 by jerryking
Little Brother
Sep 11th 2014 | The Economist | Alexandra Suich.

In 1963 David Ogilvy, the father of Madison Avenue and author of a classic business book, “Confessions of an Advertising Man”, wrote: “An advertisement is like a radar sweep, constantly hunting new prospects as they come into the market. Get a good radar, and keep it sweeping.”.....Behavioural profiling has gone viral across the internet, enabling firms to reach users with specific messages based on their location, interests, browsing history and demographic group......Extreme personalisation in advertising has been slow to come... online advertising space is unlimited and prices are low, so making money is not as easy as it was in the offline world,.....Digital advertising is being buoyed by three important trends. The first is the rise of mobile devices, such as smartphones....The second, related trend is the rise of social networks such as Facebook, Twitter and Pinterest, which have become an important navigation system for people looking for content across the web. ......The third big development has been the rise of real-time bidding, or “programmatic buying”, a new system for targeting consumers precisely and swiftly with online adverts. Publishers, advertisers and intermediaries can now bid for digital ads electronically and direct them to specific consumers at lightning speed.....The lines between established media businesses are becoming blurred. Richard Edelman, the boss of Edelman, a public-relations firm, describes the media and advertising business as a “mosh pit”. .... clients’ biggest question is whether people will even notice their ads. ...This special report will show that technology is profoundly changing the dynamics of advertising. Building on the vast amount of data produced by consumers’ digital lives, it is giving more power to media companies that have a direct relationship with their customers and can track them across different devices. ....Consumers may gain from advertising tailored to their particular needs, and so far most of them seem content to accept the ensuing loss of privacy. But companies are sensitive to the potential costs of overstepping the mark. As the head of one British advertising firm puts it: “Once people realise what’s happening, I can’t imagine there won’t be pushback.”
Facebook  Twitter  Pinterest  Ogilvy_&_Mather  David_Ogilvy  behavioural_targeting  pushback  books  effectiveness  haystacks  privacy  native_advertising  ad-tech  Conversant  Kraft  personalization  trends  mobile_phones  smartphones  social_media  real-time  auctions  programmatic  advertising  online_advertising  Omnicom 
february 2017 by jerryking
Buy, buy, baby
Sep 13th 2014 | The Economist

The advertising industry is going through something akin to the automation of the financial markets in the 1980s. This has helped to make advertising much more precise and personalised. Some advertising agencies and media companies have told their executives to read “Flash Boys” by Michael Lewis, a book about Wall Street’s high-speed traders, to make quite sure they get the message......Real-time bidding sounds high-tech but straightforward. When a consumer visits a website, his browser communicates with an ad server. The server sends a message to an exchange to provide data about that user, such as his IP address, his location and the website he is visiting. Potential ad buyers send their bids to the exchange. The highest one wins and an ad is served when the website loads. All this typically takes about 150 milliseconds.

In reality, though, the ad-tech ecosystem is stupefyingly complex. Luma Partners, an investment bank, has put together the "Lumascape", a bafflingly crowded organisational chart showing several hundred firms competing in this market. Sellers of advertising space often go through technology firms: a "supply-side platform" (SSP) helps publishers sell their inventory, and a "demand-side platform" (DSP) gives access to buyers. Many choose a data-management platform (DMP) to store and buy information about users.

Advanced behavioural targeting, which uses technology to reach specific users with the desired characteristics, helped advertisers increase their return on investment by 30-50%. One popular tactic is "retargeting", which allows advertisers to look for people who have visited their website before and show them an ad related to an item they were looking for but did not buy.
online_advertising  programmatic  advertising  advertising_agencies  LBMA  behavioural_targeting  location_based_services  automation  real-time  algorithms  ad-tech  auctions  ROI 
february 2017 by jerryking
The $100M Revenue Club: Adknowledge Weaves Web Of Ads
July 29, 2010 | Wall Street Journal | By Ty McMahan.
Adknowledge provides performance, or cost-per-action, advertising for
companies looking beyond traditional search engines such as Google and
Yahoo. Earlier days of online advertising attracted marketing messages
that didn’t require much targeting, such as those for mortgages or
credit cards. Lynn believes online advertising provides an ideal
platform to tailor messages to Internet users. Today, more than 50,000
advertisers use the Adknowledge network to promote their offers.

The company has also managed to find a way to target ads without relying
on keywords, which is what drives search advertising platforms like
Google’s AdSense.

Using Adknowledge, marketers can bid on such ads as they can through the
AdSense system. Adknowledge, however, has carved itself a niche by
applying its technology across multiple advertising channels – from
email to search to social networks.
advertising  search  ad-tech  advertising_networks 
july 2010 by jerryking

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