The Future of Advertising: How Technology Is Transforming Consumer Engagement

  |  October 18, 2010   |  Comments

A Q&A with Adam Cahill, EVP co-media director, Hill Holliday and Jon Verna, managing director, Run Inc.

The media business is undergoing a sea-change. The passive consumer of analog media has rapidly evolved into an active creator of content moving across multiple digital media channels. But the pace of change is much slower in the advertising industry.

There is a growing recognition that advertising success in the era of "native digital" media requires a shift in thinking, personnel, business models, and assets, including supporting technologies that learn, execute, and adapt at the pace of life.

To get some insight into the future of the agency industry, I recently spoke with two visionary executives leading change initiatives: Adam Cahill, EVP co-media director, responsible for digital strategy and media across all Hill Holliday clients and Jon Verna, (formerly of Black Bag Advertising) managing director at Run Inc., a newly launched exchange-based trading desk.

Mike Baker: How is consumer behavior changing in an always-on, always connected, digital world?

Adam Cahill: Lots of ways, but if I had to boil it down to three key consumer behavior changes they'd be: more mobile, more simultaneous consumption, and more social.

Jon Verna: Consumers are spending more time with digital media overall, due in large part to the mainstream adoption of broadband and smartphones, but they seem to be spending less time with each individual piece of digital content.

MB: How is this changed behavior affecting your advertising strategies and tactics?

AC: All three changes (more mobile, more simultaneous consumption, and more social) mean that our approach to communications has to be much more extensive than ever before. Brands need to think about what experiences connected consumers are likely to expect in any given situation, and try to meet those expectations.

JV: A media agency's job is to put their clients' messages in front of the right people, at the right time, and of course the ads have to register in the audience's mind in order to make an impact. More and more, I find the best way to get optimal reach, frequency, and impact is to target audiences across as many digital touchpoints as possible with high frequency, rather than to target in the traditional, contextual way.

MB: How are you addressing the importance of data derived from digital campaigns?

JV: Data can have a lot of value for a media buyer, if used properly. More data isn't necessarily better, but more valuable data and proper analysis of it is. Data analysis requires lots of human logic and a touch of skepticism in order to be applied successfully. Data won't help you change consumer behavior, but it sure can tell you what consumers want or don't want.

AC: In the past, digital campaign data tended to be used simply to optimize digital programs. Search data improved search, display improved display, and so on. These days we are using all of that data to inform strategy at the outset, and not just for digital programs. The insights we uncover from search, from social listening, from the ways that people interact with digital content, all of these things are being used as key inputs for program strategy across all channels.

MB: How significant a role do you see technology playing now and in the future?

JV: Technology is the central theme of our industry. Consumers are increasingly tech-savvy, flocking to new sites, applications, and devices. The digital ad industry is filled with positive-thinking, innovative minds, not to mention huge pools of investor dollars that develop new technologies to help us keep up with the digital consumer. With consumer technology fueling fragmentation, advertising technology is increasingly about aggregation, bringing together siloed digital channels for improved advertising performance.

AC: Technology is already having a very real impact on the way digital media is bought and sold. In the next couple of years I'd expect to see that trend continue, and that some large portion of digital media will be bought through platforms, as opposed to a traditional RFP process. There is still a fair amount of manual, repetitive work involved in setting up, launching, and managing digital marketing programs. In the hopefully near future technology can solve for this, and let agencies spend their time exclusively on activities that add real value.

MB: How do you see the agency business model evolving to keep pace with the new digital consumer?

JV: Staffing-wise, digital agencies must strike a balance between generalists and specialists. Higher level strategists should set the agenda based on current knowledge of all aspects of digital, while lower level tacticians should be trained to master disciplines such as SEM, social, and DSP/trading desk. Who knows what new disciplines will emerge five years from now, but it's pretty certain that agencies will constantly have to evolve to keep up with consumers, and to keep their clients happy.

AC: I think the most successful agencies will be the ones that develop collaboration as a core competency. Both technology and consumers are changing so fast, and continually, that it really isn't possible for any one agency to be expert at everything. At the same time, I do think that for many clients the best solution is to have a lead agency that, while they may not do everything, is responsible for connecting everything.

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ABOUT THE AUTHOR

Mike Baker

Mike Baker is president and CEO of DataXu. He has been pioneering digital media platforms for 20 years and is a widely recognized thought leader in interactive advertising. Before cofounding DataXu, he was vice president at Nokia, where he created and ran Nokia Interactive. Baker came to Nokia through its acquisition of mobile advertising leader Enpocket in 2007, where he was the founding investor and CEO. Baker was previously a partner at venture capital firm GrandBanks Capital. He has also been executive vice president at CMGI and Engage Technologies, an innovator in online advertising and behavioral targeting. Baker holds degrees in law and telecommunications management.

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