While you were going about your day-to-day business over the past year, the world changed, and you didn't realize it. Everything you think you know is simply wrong. I've been predicting this change for years, I've spoken about it at conferences, and I've written articles predicting that this change was coming. But even I didn't realize it had happened.
Last week, at the ad:tech New York conference, keynoter Sir Martin Sorrell, chief executive at WPP, talked about the massive oversupply of manufacturing capacity in every manufacturing category, in every market in the world. And he succinctly pointed out that another way to describe this oversupply of products was a shortage of customers. This hit me hard. Although the whole market has been talking for months about the vast (some even have said unlimited) over-supply of impressions, the reality is that there is a vast shortage of opportunities to expose advertising messages to actual potential customers. The glut of impressions is a glut of low value impressions -- impressions that don't get the message in front of the right person to achieve the campaign objectives. I thought about this for the rest of the day. It was like getting tapped in the nose with a series of quick jabs. Thwap, thwap, thwap.
Later at ad:tech, Quentin George, chief digital officer of Interpublic Group's Mediabrands, sat on the panel "The Rise of the Audience Marketplace." He followed up Sorrell's eye-opening remarks with a few more taps on the nose. Thwap, thwap. He articulated much the same message as Sir Martin, but then added this: "In a world with such massive overcapacity, the only way for companies to differentiate and capture a disproportionate share of dollars is through building a brand." It was the follow-up -- the second half of a one-two punch -- that just about knocked me flat.
What really caught me off-guard with this revelation was something I've understood intuitively, but hadn't crystallized for me yet. These new models are not just about direct response buying of cheap remnant inventory based on CPA calculations. The opportunity is much bigger than this. It's about everything: every methodology, every type of inventory -- every type of objective. We'll be able to measure brand effectiveness, target ads to audiences, and pay for reach as well as for performance. We're witnessing a radical shift in an industry worth hundreds of billions of dollars -- and most people haven't even realized it yet.
On the panel, George spoke mostly about Cadreon, the new-model agency that IPG has rolled out on top of the various ad exchanges -- which competes with Publicis Groupe's VivaKi, among others. He talked about how efficiency and effectiveness has been improved between four and 10 times on campaigns run across the exchanges in this new model, and that the demand among the IPG agencies worldwide was immense. "If I don't roll this out in the next six months in China, I'm going to be in trouble," George said. He also described the complexities of this, given the lack of standards in formats and provisioning across each market.
In a brief conversation with my friend Dave Smith, CEO of San Francisco-based Mediasmith, he talked about his agency's experiences in investing in these new models for buying, and expressed a deep excitement about how quickly and completely this was already changing things. Smith is the original innovator in our space -- he's been applying technology to the problem of media buying in more innovative, sophisticated, and effective ways for longer than anyone else out there. Thwap.
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