The Case for Sustainable Optimization

By Thought Leaders Archives
Cover image for  article: The Case for Sustainable Optimization

The advertising media marketplace is at a crossroads: As an industry, we can commit to sustainable, authentic optimization or we can perpetuate the predatory version we’ve seen mushroom in recent years.

Now is the most disruptive and least stable period in the history of media consumption. The explosion of technological development over the past five years (most notably cloud computing, machine learning and connected devices) along with a rapidly increasing focus on “User-First” media platforms has fundamentally changed the face of global media habits -- and therefore how advertisers should approach media opportunities.

In the face of this disruption we’re witnessing multiple, simultaneous phenomena. The influence of the CMO is at an all-time high as companies focus on capturing topline growth and market share. Procurement departments continue to have an increasing influence on marketing, as CFOs look to control costs. Data is increasingly a critical asset (and battleground) for ad buyers, sellers and brands. And finally, there’s the rapid expansion in methods of purchasing ads (guaranteed/non-guaranteed, bulk/impression-by-impression, fixed pricing/auction) and who purchases the media (agency/client-side marketer/ad-tech firm).

If you’re not comfortable with change, you won’t like hearing that it’s only going to accelerate from here. History has taught us that in periods of revolution, the meek and the slow don’t do well. Power shifts hands rapidly. Opportunities seem everywhere --  often too much from which to choose. Trust gives way to opportunism. As much as our industry swooned over Mad Men during its seven-year run, there are more timely lessons to be learned from Game of Thrones. Anyone who watches the show knows that what might seem like a tight grip on power one moment is most often only fleeting.

When everyone is looking for an edge -- the absolute best ROI, the absolute most insightful audience insights, the absolute right moment to connect with potential customers -- we should remind ourselves that we work in an advertising ecosystem, not a vacuum. Your agency/business/ad-tech firm/media company certainly needs to examine broadly and deeply where to optimize revenue and profits to achieve your business goals.

The problem is, there are too many examples today of ecosystem players acting greedy, selfish and short-sighted in their quest to hit quarterly business goals, deliver the appearance of savings or achieve an edge over competitors. And that’s poisoning the trust, partnership and win-together mentality of our business.

So what’s the alternative? Here are four ideas to create better habits:

1. Regardless of where you sit, choose your media, client or agency partners as you’d choose a relationship partner, not a one-night stand.

2. Don’t buy on price. Buy on value. Ad inventory is not a commodity, so stop treating it that way. The well-documented $25 billion in media reviews currently in motion threatens to devolve into a game of musical chairs, mostly because reviews are too often won on promises of cheap rates, which often results in a shell game of hidden profits. Sadly, most media agencies who get hired based on the promise of lower rates likely won’t have much time to prove their merit, which undermines agency-client relationships.

3. Think of optimizing for success in terms of your ecosystem. Yes, all sides of our business should seek to maximize profit in the near-term. But did your business maximize near-term profits while not depleting resources (including partners) that, in the future, could grow into even greater value? That’s what matters most.

4. If we don’t have honesty (which, increasingly, means transparency) we cannot have a sustainable relationship. This is true regardless of where you sit in the advertising ecosystem.

So, by all means, send your best analysts, auditors and data scientists forward at full speed to uncover hidden value, new growth opportunities and untapped areas of savings. Just think long-term about how you will use that information and what you are asking of your partners, vendors and the people who, like you, will likely be part of this ecosystem for a long time.

We’ve all learned that environmental sustainability within our communities requires foresight and restraint. Let’s practice the same level of sustainability in our advertising-industry relationships.

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