In our Digital Strategy Sessions there is often a moment when the executive teams realise that digital marketing and media doesn’t come with a rate card that can be negotiated over a good lunch in Soho.
Nowhere is this more true than when reviewing the programmatic auctions that drive modern digital media markets. For executives used to well-thumbed pricing manuals for TV spots, out-of-home billboards or double-page spreads, this new environment can be disorientating.
Traditional media formats benefit from a baked-in sense of value and price. This may be down to an established econometric model, a long-held benchmark, a missive from the procurement department or simply the deal done by the media agency at an away day. Just like the company furniture, executives are comfortable with price and value. In contrast, when entering an auction-driven modern media market, the lack of historical payments to lean back on can be discomforting.
One of the disconcerting aspects of attending an auction – offline or online - for the first time is not having a definitive price for the items you want to buy. The cost is determined by your budget and the value of the auction lot in your own context.
To draw upon a simple example from my family history, long before the digital world, a much-loved uncle of mine...
...started his commercial career at government auctions. There he’d buy massive lots of pyjama bottoms that had been separated from their tops for trivial sums. He’d then wait for the wayward tops to crop up and reunite the garments adding considerable value along the way. In other words, he had a bidding strategy that worked for his specific context.
Todays' executives must do the same and sift through digital lots of consumer data and signals to find the opportunity in the context of their own business models. From there, a bidding strategy can be defined to realise the value for their organisations. In many cases, it’s this ‘soft’ work, not the hard technology that creates the tricky issues in today’s digital media and marketing world.
Where do you start? The answer lies in solid analytical tools, clear online business models and a willingness to continuously iterate and test. However, the realisation that this requires a considerable amount of planning, investment and moving of the corporate furniture can come as something of an unwelcome surprise. Old strategies no longer apply. Arriving at an auction and trying to drive down the prices by bidding at a lower level than everyone else for the entire auction catalogue won’t work.
Unfortunately, digital marketing isn’t simply about ordering a new machine and turning it on. The new kit needs to be carefully instructed and calibrated to ensure it delivers within the company’s specific context.
Only with this soft planning and fine-tuning can the value of a mid-page unit, snap geofilter, custom audience or long tail keyword be accurately determined. This is because the outcomes are likely to be very different by sector, category and brand. Not everyone is in the pyjama-matching business. Only then can the bidding strategy be specified and the rules provided to the algorithm, demand-side platform or other software that ‘sits’ in the auction room carrying out its instructions.
As well as reviewing relevant digital and technical systems, we cover off these ‘softer’ planning issues in our Digital Strategy Sessions, using practical techniques to build financially-focused digital marketing programmes. In modern digital marketing technology is just half the story. There’s no point in having the shiniest kit without a clear commercial plan. Or pyjama tops without pyjama bottoms.
Comments