The following is a transcript from Brian Monahan’s keynote presentation, “Success In the Post-Audience Era,” presented at the Sonoma Publisher Forum.
I love coming to AdMonster’s events, I really do. I feel like it’s where all the breathless hype and hot air in our industry gets made real. Knowing that is why I have the confidence to spew a bunch of hot air at you, trusting that there are some smart people in the room who will actually make it real.
I’ll get the breathless hype out of the way. As a guy who did his first online media buy in 1994 and has kind of been round in this industry since it began, I can tell you that there has never been a more exciting time to be in our industry. There’s never been a more exciting time to be in the digital media marketing industry. Back then, we didn’t really know what we were doing. We didn’t realize the stakes were so high. Now we do. Now we know how big of an industry, how pervasive of a business this really is, and the stakes are incredibly high.
I’ve never seen a more confused market, certainly on the buy side. How do you bring a campaign to bear, to market? If you asked me, “If it was your money, Brian, how would you do it?” I’d go, “Geez. Confusion.” Confusion abounds on the sell side. It’s all this data, programmatic, native, mobile, and it’s just confusion abounds. The stakes are incredibly high and I believe that the decisions companies make in the next 3 years are going to define, they’re going to be the biggest indicators of how successful these companies will be over the rest of our careers, so truly exciting time to be in the industry.
I wanted to share a point of view this morning about how to achieve success as a publisher, in what we’re calling the ‘post-audience era’. You can sit there and say, “Brian, what are you talking about? You buyers, you’ve been pounding it into our head for the last 2 years that it’s all about audience, all you want is audience, audience, audience. You don’t care about context. How can you say it’s the post-audience era?” Clearly it’s not, it’s audience plus, and I want to share a point of view about what that means, and what the buyers are looking for and how to succeed as a publisher.
“Consumers Went and Got Fully Mediated”
Once upon a time, we had an idea of how consumers wanted their news and entertainment. We had a good idea how to provision it to them. Advertisers had a good idea about how to harness that to meet sales objectives and it was a sort of understandable ecosystem. Then the world went and got fully mediated. Consumers went and got fully mediated. The average consumer’s now seeing 1,100 ad exposures a day, and it’s really being fueled by this incredible growth in time spent with media. In the last 20 years, the average American’s daily media consumption is up 70%. It’s staggering.
Monahan at the 29th Publisher Forum in Sonoma (Photo: Donna Alberico)
Knowing that for as long as Magna has been tracking ad spending, which goes back to the ’50s, advertising to sales ratios are basically fixed. The amount of money that’s in the advertising industry is basically a function of GDP. That pie is fixed. All of us who have a stake and sort of an economic interest in that pie, we now have more competition because the advertising dollars are relatively fixed and they’re spread over a significantly great pool of inventory.
I would argue we ain’t seen nothing yet when it comes to consumer mediation because we have not felt the impact of tablets, in how people live their lives, in terms of time spent with media and content. Tablets, which you can’t really read from this screen, but it’s the little rocketing bar to the left; fastest growing media device to sell 50 million units. We’re starting to get our head around how this device gets used. Obviously, there’s a lot of use at home, on the couch, in the evenings, in front of the TV set. I think there’s more going on there.
Our hypothesis is that the tablet just ate family time, and I’m curious to know if there’s anybody out there who wants to partner with us on this. We’d love to actually try to document how much of time in the household is actually spent with your face buried in a tablet. I don’t think we’ve seen anything yet, in terms of how mediated consumers lives at going to be. We actually, at Magna, as we forecast time spent with media, we think almost all of the growth in time spent with media is going to come from mobile devices. It’s just filling nooks and crannies of our lives that didn’t used to be connected to information.
Against this backdrop, more stuff, more choices, more fragmentation. From a buyer, programatic buying is a coping mechanism. I can’t possibly figure this out; let the machines figure it out. Let’s just turn the machines loose on it. That’s why we think programatic is a rapidly growing industry. This was our forecast from last year, which we’re in the process of updating. I don’t yet have a sneak peek of what that’s going to look like, but we think programatic is already over a $3 billion industry in the US, and we’re projecting it to grow quickly.
Again, I would argue we ain’t seen nothing yet because we’ve yet to really feel mobile come into the programatic ecosystem. If there was ever a medium that needed programatic buying, it’s mobile: It’s hyperfragmented, it’s very hard to plan. As soon as somebody cracks this mobile identity thing through device, fingerprinting, behavioral fingerprinting, persistent login, or any of these things, it’s going to really be a big deal and it’s going to help marketers finally take advantage of mobile.
By the way, I hate this metric, but of all the media that we track, the delta between time-spend and ad-spend on mobile is the greatest. It’s the most lopsided; it’s the most upside-down one. Cracking programatic for mobile is a huge deal, and it will also help fuel the growth of programatic buying.
“Neither Polite nor Rude”
Great, our solution to fame and fortune is going to be cracking programatic and we’re done, and let’s all just go have some wine. There’s an inconvenient truth that’s the flip-side of total mediation. Total mediation doesn’t just make it hard for us to conduct business, for brands to go to market. Total mediation is impacting consumer receptivity to advertising. The average consumer’s exposed to 2.3 ads per waking minute. If you paid attention to every ad you were exposed to, you would be catatonic. Ad avoidance is a coping mechanism for consumers.
We spend a lot of time at MAGNA with our colleagues in the media lab. We spend a lot of time doing primary consumer research to try to understand all of these different ways we can connect with users: Which one of these ad things really capture and hold attention? What drives an emotional response? What actually leads to a business outcome on behalf of our clients?
We’ve done a lot of stuff. We look at how people have watched TV, listened to radio, and all sorts of digital video scenarios. We’ve wired people with biometric bracelets and gone shopping with them, all sorts of stuff. One of the big things that we’ve learned is that neither polite nor rude ads have much value because people ignore them.
We’ve looked at so much eye tracking in all sorts of different ads, and you can literally watch the eye come down and hit an ad, take a left, go around, pick it right back up again. This was some work that we did with our friends at USA Today on their old site. Their new site actually performed much better with how they integrated the ads into the experience, but this is not uncommon. Polite ads on the side of the page that preserve the user experience have no value because nobody looks at them. Viewability aside, this is just, “Do people even notice it?”
Not to pick on digital, TV’s probably got the biggest challenge. When we look at minute-by-minute consumption of television viewing, and you sort of line up when the ads come. Are people looking at the screen, and you sort of look at their biometric emotional engagement and whatnot. Moving your thumb to avoid an ad is the least of our problems.
That maybe erases 10% of ad stock. We think 60% of television ad stock is avoided not by moving your thumb, but by moving your head, mostly right into that handy little mobile device, and that’s with an intrusive ad unit; so thrusting an ad in somebody’s face, interrupting their content, which leads us to the point of view that the greatest loss of value for our clients, for our advertisers when we go to market, the greatest loss of value is not that we delivered and ad to somebody who’s not in the target audience or we delivered an ad to somebody that creative didn’t necessarily connect with them, or we didn’t string together.
The greatest loss of value is paying for stuff that nobody notices; paying for trees that fall in the woods. That’s not just a problem for advertisers; it’s a problem for publishers too, because it does erode the user experience. Finding the right balance of what the ad experience is, is of significant economic value to all stakeholders in the industry.
“The Path to Success”
Okay. Enough of the doom and gloom. What’s the path to success? How do we win? How does the smart businesses win, given the current environment? The first thing is, and this is why we characterize it as the post-audience era: Audience quality for a publisher is no longer a unique selling proposition. I came up as a media buyer. I’ve been a media buyer my whole career, and every pitch from a media owner begins the same way, which is, “We have the most amazing audience. We have people with discretionary income and they want to buy your product,” and it’s always about the audience that we have.
That’s not unique anymore. I’m not saying that different publishers do not have a unique audience. They do, and frankly, they probably do more so than ever because another thing that’s going on is purchasing power is definitely bifurcating in America and around the world, by the way. There are really fewer consumers for cars and stuff like that that our clients are really looking for. The people who do have, people with purchasing power, it’s more value than it’s ever been. The problem is everybody walks through the door and says the same thing.
Everybody walks through the door and says, “We have this amazing audience and we have 5 million . . .” and you can’t make sense of it. We also are making big bets on the buy side about being able to buy audience programmatically. I imagine this is going to be a big topic of debate about premium programatic. I believe it exists; we’ve seen it exist. Just from a direct sales point of view, coming in and leading with who your audience is is not unique, so we’ve got to sell something else.
The other thing is banners and boxes are an invasive species from the newspaper industry. Anybody from the south? Recognize the Kudzu? Yes, Kudzu is a Japanese vine that has sort of taken over parts of the south. Banners and boxes are a great way, in a broad sheet, to announce a sale, to announce an offer. It was an easy sort of design principle, and a table-based sort of HTML 1.0 layout, and we’ve incorporated it. As I’ve showed you from some of the heat mapping, you push those things to the extremities and they don’t necessarily get noticed.
Everyone buys that these days, so we’re all off saying, “Native, native, native. We have to build native ads,” and I think we’ve bastardized that concept as an industry and we think about native as disguising ads to look like content, which again, from studies we’ve shown, you might sort of get people in, but the depth of that engagement will vary.
I would argue that native is not a design principle, that native is a state of mind. What’s native to your environment is going to vary, and I would argue that what buyers are looking for when they’re asking for native . . . so they want audience but they want more, they want plus, is they’re looking for; what’s the emotional connection? What does this publisher offer in terms of an emotional connection to its users, not just access, not just the ability to drop something in, but to really benefit from that emotional connection?
I’ll give you an example. Some of the work that we’re doing, we do a lot of work not just to benchmark different types of ad effectiveness, experiences, but also increasingly to link arms with publishers to develop new ads, new ad experiences so that we can unlock some of this potential arm-in-arm, rather than try to guess at each other’s desires and capabilities. Emotional connections, we think is a really interesting way to get a premium price point for your relationship with your audience.
We’re doing some work now with Good Morning America that really looks at, ‘great, they deliver the news in the morning, but really it’s the news as told by one of their cast members that the audience has a relationship with’. That’s an emotional connection that’s different from news. You could argue that news has become comodified. Finding that emotional connection is a way to get a premium price point out of that product.
The Daily Ritual
The other thing that we think is differentiated and unique in a fully-mediated world is the place that a publisher, a piece of content, a brand plays in a user’s ritual; a daily ritual or how they just go about consuming content. I’ll give you another example: One of the things that we’ve seen is . . . the reason why sports franchises have this incredible value is because the ratings are doing well, consumption is exploding across platform, and it ads work, they work great.
Demand is up through the roof. We’ve realized that it’s not just televised coverage of these tent pole events but there’s actually a different activity that happens around live events, be them sports, Grammys, or Oscars, that happens online. We’ve been doing some work with our partners at Yahoo! to try to understand, how does digital fit into the ritual of locking into Monday Night Football or any sort of tent pole event? How can we connect to users in that environment in a differentiated way? Emotional connection, rituals, are all ways to differentiate a relationship with an audience.
Here’s why this is such an exciting time to be in the industry, because like it or not, we all have to redesign our content. We have to figure out how to provision content for all these different devices. A lot of publishers will tell me that, “Yeah, whatever. My audience wants my site on their mobile device but our CPMs are so low, why bother.” It’s like, “What else are you going to do? They’re going there so you’ve got to publish.” Responsive design is, I think, creating this really exciting moment in our industry where we’re rethinking how we’re going to provision content, and it’s the perfect opportunity to rethink how ads fit in the context of that emotional connection, in the context of that daily ritual.
Complexity is the enemy, so that doesn’t mean that we have to go off and create unique things. The beautiful thing about the banners and boxes was that they scaled, they continue to scale. I think our challenge, collectively, over the next few years as we’re all trying to think about redesign provision, all trying to figure out the right interception point, the balance between a commercial message and access to content user experience, is it still needs to scale. We all know this in this room. That’s going to be a real challenge that we’re going to work through together.
As a parting thought, I just wanted to share one more thing, which is what gets measured gets done. If we’re embarking on a new way of selling ads and we’re selling it based on emotional connection and habitual usage, we got to measure it. That’s cool because guess what, web cams are everywhere. Web cams can measure just about anything, and we have this incredibly new toolkit. There’s no reason we should be stuck with measuring server side, when a file gets served. We have more things that we can measure. It’s much easier to get a panel. There’s more inputs we can get.
I think the creative way to actually use data, to command a premium price point in the market is to understand the emotional connection, understand the daily ritual, understand the audience of course, but then also find a way to put data underneath to substantiate the business case that you’re delivering on what you’re saying you’re delivering. That’s why I really do think this is the greatest time to be in our industry. It’s a time of incredible creativity for people who lean into it. Think about sort of the user experience on the other side of the glass. Think about how they can use data to make the business case and get creative.