As adland looks further and further into its navel to try to work out whether it actually has a future, it is fair to say that this year more than any other has reinforced the view that the data-driven marketing industry is now at forefront of business.
No longer the poor relation, no longer the purveyors of “shit that folds”, quite simply if your company has not embraced a data-fuelled marketing strategy, you’re as doomed as the Madmen of Soho.
The last bastion of advertising is crumbling
Take what ad agencies regard as the last bastion of brand advertising; the TV commercial. The market, which has been stagnant for years, has suddenly found a new lease of life thanks to – yep, you guessed it – a data-driven approach, with Sky Media publishing a dossier of evidence which shows addressable TV not only works for broadcasters and viewers, it is highly effective for advertisers too.
The research, which is one of the most comprehensive studies into the UK addressable TV market, concluded that addressable TV cuts channel switching by half (48%); boosts ad engagement by more than a third (35%); and can increase purchase intent by as much as 20% for new to TV advertisers and by 7% overall.
And, according to the Rethink TV report, the addressable TV advertising market is set to leap sixfold from $15.6bn (£12.2bn) in total worldwide revenue in 2019 to $85.5bn (£66.6bn) by 2025 as platforms mature and the data-driven medium is better understood by the ad industry.
No wonder all the main commercial broadcasters want a slice of the action.
The new poster boy of data-driven marketing
The outdoor advertising market has seen a similar renaissance. Not that long ago, poster ad space was bought on rudimentary data and for many brands it was a case of slap it up and hope for the best. Thanks to the new era of data-driven campaigns, brands can now target consumers depending on a raft of data, including the weather, the traffic, the time of day, social, mobile, behavioural and transactional information.
There are now 11,024 digital screens across the UK, 51% more than last year, and while digital sites account for only 3% the UK market, they claw in 48% of all outdoor revenues. Brits now see 1.1 billion digital out-of-home ads over the course of a week – up 36% from just a year ago – and funnily enough the outdoor market is now witnessing double digital growth.
In fact, Juniper predicts that the widescale adoption of data-driven targeting techniques will fuel huge growth in global digital advertising spend across the board.
It forecasts the ad market will nearly double in value from $294bn (£231bn) this year to reach $520bn (£409bn) by 2023 – with Amazon set to prise open Facebook and Google’s vice-like grip.
And the “Future Digital Advertising: Artificial Intelligence & Advertising Fraud 2019-2023” report predicts the sector will witness an average annual growth of 15% over the next five years.
The rise of artificial intelligence-based programmatic
This will be driven by the use of AI-based programmatic advertising to deliver highly targeted ads across digital platforms, including online, mobile browsing, in-app, SMS, digital out of home and online subscription TV services.
So where does this leave the direct mail market, the one-time bedrock of the industry, we hear you ask?
Short-term, the discipline is still suffering from GDPR, and according to a report by PwC, there will be a decline of at least 8% until 2020. However, with last year’s launch of Jicmail, the ABC-style measurement scheme, brands finally have access to data which can compare how campaigns work against other media.
There has also been the launch of Partially Addressed Mail, with both Royal Mail and Whistl now offering their own schemes. It is claimed that “PAM” can cut the cost of postage by about 20%, while data costs are slashed as there is no need to purchase personal data, and, according to Royal Mail, it is up to 165 times more targeted than door drops.
Whether PAM will be the saviour of the direct mail industry remains to be seen but, despite the doom-mongers, the discipline remains the third largest medium behind Internet and TV advertising.
Why technology giants are firmly in the frame
Nevertheless, there are still plenty of issues to resolve, including the Facebook and Google duopoly, the privacy concerns over realtime bidding and the mass collection, use and storage of consumer information, with the tech giants firmly in the frame. The UK Information Commissioner’s Office has talked a good fight, but so far has seemed reluctant to act. The next 12 months could be a game-changer, but don’t bet on it…
One thing is certain, however, and that is that data-driven techniques will continue to thrive and evolve through the rise of artificial intelligence, machine learning and countless new technologies which have yet to even be invented. Ultimately, of course, it’s all direct marketing Jim, but not as we know it…
Brands big and small flock to data-led addressable TV
Addressable TV advertising to be worth $85bn by 2025
DOOH impacts soar as brands flock to data-driven sites
Data-driven adspend to hit $520bn as Amazon strikes
Direct mail revival ‘already under way’ – industry chiefs
Direct mail volumes face yet another 12 months of pain
Whistl eyes major boost from partially addressed mail
Direct mail revival ‘already under way’ – industry chiefs
Royal Mail tests new GDPR swerving direct mail scheme
Duopoly braced for new probe of ad market dominance
Turning up the heat: Brussels opens duopoly data probe
Digital ad duopoly threat to human rights, says Amnesty
Google and Facebook swat off threats and tighten grip
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