“Data-Driven Thinking" is written by members of the media community and contains fresh ideas on the digital revolution in media.
Today’s column is written by Chris O’Hara, co-founder and chief revenue officer at Bionic Advertising Systems.
The Digital Marketing Association honored data legend Charles Stryker at its recent awards dinner. After accepting his award, he told a famous story about data that every digital marketer should know.
A long time ago, the US Postal Service discovered it was paying a ton of money to deliver mail to deceased people. USPS hired Stryker to help get a handle on its records and create a sort of “Do Not Mail” list. Part of doing the work involved considerable A/B testing to ensure he made the correct assumptions about the data. Direct-response mailers were sent to two groups: dead people and the folks who were still alive. Something astonishing happened when the results came in.
The dead people responded at nearly twice the rate of the living.
Of course the hundred or so senior direct marketing executives at the dinner laughed uproariously because they’ve seen all kinds of unpredictable results with direct marketing. But in today’s digital age, marketing is moving faster than ever. As the velocity of data increases in orders of magnitude, attribution is going to get even trickier.
What happened with the “dead” people was pretty interesting. It turns out that the successful mailers went to households where the husband of the family died, and the elderly spouses were taking great care to go through and read the mail of their deceased partners. The wives wanted to make sure there was nothing important in those letters – and probably were connecting with their husbands through that simple daily task. Those widows made a great mailing list “select” since they actually opened and read the mail.
In today’s digital marketing, where we seem increasingly dependent on algorithms and attribution models for targeting and measurement, I wonder if we are too deep in the weeds. Are we forgetting the real, human element of marketing? Do we really understand how success and failure happen with our campaigns? There was a lot of the talk at a recent iMedia agency conference about trying not to forget that advertising is first and foremost about storytelling. Leading with emotion is so important. The marketer has to make an emotional connection with his audience and get them to care.
I remembered this when watching a workshop about dynamic creative. Yes, changing the background color or “call to action” on a 300x250 ad in real time can bump the lift of a campaign incrementally, but are we tweaking a broken process?
Can we really tell great stories on standardized banner ads?
With the rapid rise of programmatic, a lot of platforms and data companies are fully committed to a standardized industry where scale is king. Display, video and mobile - biddable and accessible at full scale – is the mandate. Kellogg’s wants inexpensive access to a large electronic palette where Frosted Flakes ads can be constantly tweaked to get optimal performance. There’s nothing wrong with that. American Express recently announced an aspirational “100% programmatic” push for digital marketing. Why not? Both companies spend tons of money on TV, and optimizing the bottom of the funnel makes complete and utter sense.
But that’s all we are talking about: optimizing the bottom of the funnel with standardized ads. Sorry, but we are not creating new customers with dynamic 300x250 ads that get a .05% click-through rate. If you are in this business, working for a venture-backed startup or newly public ad tech company whose value proposition involves driving audience targeting at scale, then you are not “creating stories” online.
As an industry, we need to create digital campaigns that get people to open the mail. This is incredibly hard to do with standard display banners, today’s woeful native executions and interruptive social ads. Video has promise, but scale still eludes marketers, and low video completion rates erode available reach considerably.
So, how do you leverage programmatic technology to get great creative out at scale? The only real answer is to automate the workflow behind securing premium inventory and custom programs. That’s where the promise of programmatic direct comes in. Marketers want great ideas from publishers, access to the best inventory they have and nonstandardized units. They just don’t want to pay 10% of their media budgets for planners to cut and paste data into spreadsheets.
Innovation in the space is not just limited to programmatic direct companies with API connections into the publisher side, such as iSocket, ShinyAds and AdSlot, and workflow automation players like Centro, MediaOcean and Bionic (full disclosure: my company), but also includes RTB firms like Rubicon and MediaMath, which are building new automation capabilities to augment their RTB stacks. In other words, it’s all about automating the deal right now.
Do marketers want access to evergreen programmatic campaigns that drive their most likely customers through the bottom of the sales funnel? Of course, and that’s a great job for programmatic RTB. But it does not, cannot and will never replace the kind of media you can secure through a guaranteed transaction. Also, speaking of dead people responding better, that kind of sounds familiar. In programmatic RTB, some of the best click-through rates come from the dead — fake visitors created by robots.
That said, I think more digital advertising will go programmatic, with programmatic RTB commanding the lion’s share of performance budgets. But, when it comes to building brands, bringing automation to the process of securing quality inventory will win.