"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 Tony Effik Managing Director, Media & Connections, R/GA.
It’s difficult to think about the multibillion-dollar world of real-time media auctions as a game, but auctions have winners and losers, like any other game. Media markets are changing drastically, and it’s when we think of them as a game that we can prosper from the changes that are taking place by instituting strategies that play to these changes. To understand this evolution, we can take a look at one of the world’s oldest and seemingly most static games -- chess, which underwent changes similar to those we see in media markets today.
In the 1980s a man named Frederic Friedel convinced the Russian chess authorities, after a protracted campaign, to computerize the highly prized and secretive books of the Moscow Central Chess Club’s library. The digital compendium created from the library held tens of thousands of professional games, move by move, giving anyone access to the data. Prior to the database’s creation, only a handful of elite Russian players could study this collected knowledge, creating a huge competitive advantage. But as a result of this digitization and democratization, anyone could now study and master these “in-book” strategies -- memorizing games, player styles and closing strategies. To be successful on the international chess stage, one now had to play “out of book,” finding unique ways to beat the competition.
Much like chess during the 1980s, the media markets are undergoing a major shift. What was once an illiquid, stable and opaque market now has become an increasingly liquid, volatile and transparent system, with both buy- and sell-side strategists using data to make more informed decisions. But as in chess, just using the data is no longer a competitive advantage. The best players are the ones who know the “book” but also know how to play with novelty when they encounter “out-of-book” situations.
In-book strategies like bidding for the most obvious segments in real-time markets won’t work anymore. If you are a car brand and you bid for car buyers through a demand-side platform, you are going to perform at or below market levels. The obvious thing is now the worst thing, but the obvious steps are the ones that we have seen proliferate across the media markets. To overcome this challenge, agencies and advertisers must rely on a combination of media and creative to experiment and evolve a new book of strategies for the world we are moving into. Below are some of the overarching out-of-book tactics that should guide your decisions.
Move fast and align disciplines:
People are not cookies; they react to ideas and stimuli. The real and overriding out-of-book strategy is to be smart at matching creative and media together with input from research, account planning and analytics. This will allow you to target multiple creative ideas at multiple segments and experiment at the speed of markets.
Follow the trends:
More and more media inventory is coming to the market and making its way onto exchanges, which means the market will become more liquid and volatile. Small changes in the “real world” will now drive changes in online auction prices and segment sizes. Brands need to identify these trends and ride the wave and then scale. Brands need to better understand and connect what’s happening “out there” to their media. How might it impact the people and media you are interested in? Track this and then capitalize on arbitrage opportunities.
Avoid overdependence on the cookie pool:
Your cookie pool is a key asset, but it’s a snapshot capturing demand at a particular moment in time. It looks backward, not forward. Use your cookie pool, but experiment constantly to refine and validate your targeting strategy.
Assemble underused segments:
The most popular targets are the highest-cost targets. It’s simple supply and demand. Buy-side strategists are using instinct to make decisions about these groups at the top of the table. The real gold needs to be mined at the lower depths of the table. Identify underused segments and assemble them to gather scale and opportunity.