Knowledge is Power

Knowledge is Power


Given the growing complexity of the digital marketing and publishing environment, all players in the value chain must adapt to new technologies and channels and learn how to leverage data effectively to survive and grow.

That was the key message to emerge from the Adfu Symposium in Johannesburg on 15 November, where leading digital publishers, agencies, marketers and technology providers gathered to discuss the latest trends in the fast-changing digital landscape.

Adfu is a new South African online premium display ad network from Kagiso Digital.

An increasingly complex marketplace

Sleekgeek founder Elan Lohmann said that the advertising market started out by being fairly simple with mostly only the publisher standing between the audience and the advertiser.

Now, however, new technologies and new intermediaries such as ad networks or exchanges mean that the picture has become far more complex.

But some fundamentals remain unchanged:

  • Publishers want advertising revenues
  • Advertisers want return on investment
  • Consumers want relevance.

Technology holds the key to each of them achieving their goals, said Lohmann.

Advertising media are evolving

In the past few years we have seen the rapid rise of smartphones and tablets, and along with them the advent of the “multiscreened experience” where consumers interact with content from multiple sources (for example, an iPad and the TV) at the same time. We have also been freed from our desktops by tablets and smartphones.

South Africa is lagging international spend in digital advertising. Here, only 2.5% of total ad spending goes to online display inventory compared to 20% in US, 30% in UK and 5% in many other major emerging markets.

Fierce competition for eyeballs

Mike Luscombe, A&O Lead for South Africa at Microsoft Advertising, said that competition in the attention economy was growing fiercer for marketers and publishers vying for a slice of the consumer’s attention.

For publishers, the major challenge is building a scalable and repeat audience.

Differentiation is key

Publishers need to differentiate themselves through their quality content and the ease of interacting with their user interfaces. Rising costs of content production, technology and sales are making it difficult to do so profitably.

To survive and thrive, publishers need to:

  • Understand the impact of display inventory commoditisation
  • Deliver content formatted for multiple devices
  • Embrace new ad formats and opportunities.

Publishers should segment their audiences and propositions, and work with advertisers to target them with the right experiences and content.

Targeting should be done in a manner that is mindful of users’ privacy.

How to measure value

There used to be only a handful of online environments, said Joanne Scholtz, Chief Warrior at Digital Warrior.

Now there are millions, and advertisers have access to many of them through ad networks or exchanges.

The question for advertisers, is can they track and measure the value they get from different environments.

Older measures such as click-through rates or costs per click might not be as valid as they once were.

Many advertisers chase the lowest possible cost per click, but often their perception of the low value of a click is a result of the fact that they do not measure beyond the click or the brand uplifting of display inventory.

For many advertisers, cost per acquisition might be a more meaningful measure from a performance measurement perspective, but this still does not measure the effects of branding.

Roan Mackintosh, business director, at Acceleration eMarketing also stressed the value and importance of tracking the right metrics.

Who owns the customer?

With the move to a more automated world with media buys being increasingly being governed by bid algorithms, marketers cannot ignore data any longer. One of the major questions, Mackintosh added, is who owns the customer?

Marketers think they do, but publishers, agencies, and networks are all gathering information about marketers’ customers. In some cases, networks or exchanges might even use this data to retarget a marketer’s customer for another brand.

It is imperative for successful companies today to be data kings, who own, protect and understand their data. International data kings include the likes of Amazon and Apple, but South Africa has few similar examples.

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