Musing from GroupM: Data Proliferation Will Force Agencies to Change Their Operations - Neeraj Kochhar - MediaBizBloggers

Digital media agencies today collect, process, analyze, and utilize vast amounts of data. Moreover, the data originates from an ever-growing number of sources that include campaign management systems, third-party ad-servers, rich-media providers, search engines, data and research companies, and financial management platforms.

Add to this complicated digital media mix the need for holistic cross-channel analysis and weighted attribution models and you have a data-driven opportunity – or disaster – on your hands. Regardless of the different potential individual outcomes, the industry in general, clearly, has a data “problem” that needs attention.

Strategically, from a big picture perspective, proper data utilization is essential if we hope to deliver on the promise of digital advertising: highly-relevant, targeted, channel-aware, and compelling consumer experiences. The fragmentation of the digital landscape and fluid nature of media consumption from one channel to another means agencies must enhance current capabilities to mobilize quickly and effectively to reach and engage target audiences.

A consumer who is deemed to be in-market for a product or service will be valued differently across different channels at each point during the consideration cycle. These valuation decisions will be informed by a variety of data sources. On the creative front, we can expect an unprecedented level of dynamic message fine-tuning.

This inevitable shift in approach is beyond the scope of manual “after the fact” paradigms of data management, analysis, and optimization. Operationally, it is extremely challenging given the requirement for the real-time and dynamic integration of multiple partners and platforms in the value chain.

Ultimately, technology and automation will have to coexist alongside planning and buying capabilities given the volume, fragmentation, and immediacy characteristics at play here. And, the applicability of such data-driven scenarios, while clear for direct-response and reach-based campaign initiatives, isn’t limited to those approaches. There are ample opportunities for the utilization of data for the enrichment of consumer experiences in the context of highly custom and integrated brand programs.

However, to succeed on the strategic front, we must first succeed on the operational front. The explosive growth of digital media drove rapid innovation and forced adaptation at the cost of operational efficiency and standardization. The current framework is not sustainable.

The IAB E-Business Interactive Standards and Impression Exchange initiative are much-needed steps in the right direction. They aim to establish a core framework that will introduce a shift towards technology and automation – vs. manual processes – for the exchange of business information between publishers and agencies. This is of vital importance. The cost associated with conducting business in the digital media space, relative to traditional media channels, remains high.

The future – if you will – is dressed in data. As we partner to address a vast array of current data-related problems, we must brace ourselves for emerging and future challenges such as real-time bid-based media buying, complex video cost-per-engagement (CPE) pricing models, ad verification services, and complex data overlays. However, before we get ahead of ourselves, it is critical that we focus on the basic operational building blocks that will be necessary for the efficient management of future data volume and complexity.

Neeraj Kochhar is the Director of Operations of GroupM Interaction in North America. Neeraj can be reached at neeraj.kochhar@mindshareworld.com.