Rethinking Digital Advertising

Brands are most often at the mercy of Silicon Valley and Madison Avenue in digital advertising, beholden to the major agencies and advertising technology companies to build their brands online as well as to provide the measurement of their campaigns’ success. Yet brands are frequently unsatisfied with the performance of their advertising technology solutions as well as their inability to make big ideas blend seamlessly with the ever-growing volume of big data. Although brands are steadily increasing their investments in online advertising and in existing advertising technology tools, a significant number of

Major brand CMOs have in recent studies stated that digital advertising still presented many barriers to deeper investment, such as uncertain measurement standards, the complexity of the media-buying process and the inability to customize solutions easily to meet brand objectives. A radical solution is to create a training ground for new, untested ideas in digital marketing and put them through their paces, allowing startups in advertising technology and digital marketing to compete on the basis of performance and long-term merit. PepsiCo10 attempts to do just that, expanding PepsiCo’s two-year-old technology startup incubator program from the U.S. and then Europe to Brazil and India this year. While this approach is a novel turn for a major brand such as PepsiCo, the relevance to advertising technology as a whole is a much larger story .

Silicon Valley’s sheen as the world’s largest incubator of bright ideas will endure in perpetuity, but the idea of brands building their own advertising technology providers from the startup stage is a new one. It is perhaps a future challenge to the old order, which has allowed major agencies and the caprice of Silicon Valley’s biggest investors to prescribe the course and the speed of brand-focused advertising technology development. Brands would naturally, if given the chance, develop advertising technology that is performance and branding-oriented. The ability to carve nascent technology to best serve brand objectives is a concept that goes to the heart of what digital advertising is supposed to do; drive results and foster connections between the brand and the consumer, while providing data-rich insights.

Joshua Karpf, PepsiCo’s Director of Digital Media, believes that the company’s PepsiCo10 project is significant for the digital advertising landscape as a whole, as it is an attempt to bring the brand closer to the best new ideas before they hit a cluttered landscape. “What if PepsiCo had spotted Facebook earlier than anyone?,” asked Mr. Karpf in an interview with The Advertising Technology Review. “We want to be the place where new technologies come to breakthrough.” Mr. Karpf stated that being present at the creation of cutting-edge technologies is a competitive advantage that PepsiCo is committed to pursuing globally. The company isn’t attempting to rile either Silicon Valley or Madison Avenue, but rather create a role for itself that perhaps a brand might perform best; as curator of the advertising technology and digital marketing solutions that it might need in the future.

There are several factors that make PepsiCo10 more than a revisiting of that 90′s favorite, FirstTuesday, a venture capital free-for-all which famously help fund some of the decade’s biggest flops and successes. PepsiCo, as a powerful global brand, has the inherent power to turn a plucky startup into a viable competitor in the advertising technology space virtually overnight. The company has a wealth of brands, vast amounts of consumer data to utilize along with the ability to single-handedly launch any new advertising format, for example, that bright-eyed startup crew could imagine, to a world audience. PepsiCo’s digital strategy has been alternately heralded and questioned over the past several years, yet this year the company is boosting its overall advertising budget by more than $600 million, with a particular emphasis on digital marketing. PepsiCo is taking its ad spending seriously, and as a part of that push, it is actively looking for new ways of driving ad performance, optimizing its social media efforts and connecting with new audiences online, globally.

This entails a subtle rethinking of PepsiCo’s role as a brand in digital. Although PepsiCo’s core business is certainly not shifting to technology, the company views itself now as a catalyst for practical innovation in marketing and consumer connections. This requires a deeper look at the way those connections are formed, the way advertising is delivered, and new ways of looking at online marketing. Those future-focused new ideas are percolating in places like Brazil and India, as they are in Silicon Valley and Europe. The significance of PepsiCo’s role as a driver of digital marketing ideation is that it offers a third way, between submission to the shiny new tools of Silicon Valley or the reticence of Madison Avenue to plunge further into the shocking of the new.

Brands don’t necessarily need to be protected or coddled in exploring the digital universe. Advertising technology, as a landscape may indeed be cluttered with mediocrity, but brands savvy enough to create an open door for new ideas to compete based on merit may have found a way to make the landscape evolve into a performance, not PR-driven system out of necessity. PepsiCo, by finding their own new ideas and letting them compete on the world stage can effectively force older, more established companies to think more seriously about performance and innovation simply by default.

Rethinking Business Intelligence

IBM, according to Interbrands Best Global Brands report, is the world’s second most powerful brand, behind Apple. Yuchun Lee, former founder and CEO at Unica, is vice president and general manager of IBM’s Enterprise Marketing Management Group, which consists of the combined Coremetrics and Unica businesses. Mr. Lee spoke with The Advertising Technology Review about the challenges of looking at Big Data not as a size problem, but as a complexity challenge.

There seems to be an element of hysteria to the Big Data conversation– what are CMOs really talking about?
The number one take away from our last CMO study was that CMOs are certainly talking about big data, but it’s not the quantity of the data, but rather its complexity. If you think about traditional databases, such as purchase record transactions, call center records, these are very simple database frameworks compared to data from social networks and social media– this entire web of data that has to be handled differently. This is the data that marketers have to deal with if they want to attain marketing goals. A company’s fight for relevancy is really its fight for survival going forward. Big Data is key to maintaining relevant communications to clients and relevant service to clients. There needs to be a change of resources and strategy to incorporate research and that “left brain” — analytics– into marketing as much as possible

So what is the first step in tackling Big Data?
What we have seen work well is partnerships– the CMO truly partnering with the CIO. The fundamental competencies for CMOs going forward are analytics and the innovation in the creation of content. On the creative side for the longest time marketers have relied on agencies as partners. On the tech side they need to work with their technology partners. The biggest progress that we have made recently is the industry acknowledging the need for a technology knowledge partner, they realize that they can’t keep buying a low-level point product from some technology vendor somewhere; those CMOs would be fired if they continue doing that. There are problems that cannot be solved within individual channels. Critical data is integrated within multiple aspects of the strategy and must be dealt with holistically. When there’s a problem, you can’t just rely on a mobile technology vendor that deals with only that technology. When you try to examine what every vendor that you used to rely on for working with a siloed channel has to offer outside of that singular channel, in terms of data solutions, you find it’s very light. We think that the vendor space will decrease from several hundred to a handful, when CMOs begin to rethink what is really available.

How will Big Data continue to impact the advertising technology and data management space?
The space is complex because there is no consistent way of pulling together, for example Twitter data, point of sale data, web browsing behavior- each data type has a different schema, a different structure. If you think about some of these data sources some of them are so huge that you can’t solve the problem by just downloading that data to your database- you can’t download the entire internet to get a 360 view. You are starting to see emergent technology that is looking at that. There will be a series of applications coming out that deal with this question of  ”how do we use machines to link together deep level complexity when the core technologies are no longer viable?” These core technologies are, for example, the traditional way of looking at data, as in “I have this nice table and let me download it and look at reports.” We are talking about massive volume and very complex web data with interlinking relationships- data for which you have to write algorithms just to cut through the processing of it. We need to be able to deal with the volume, complexity and the pace that is coming down the pipeline. What we have to do is harness all of the power of the cloud. The traditional way is to take a machine, put it behind a firewall and analyze the data. What we’ve found is that because most of this data lives in the cloud , for both economic reasons and complexity reasons, we needed to build a hybrid technology that harnesses both a traditional software and software that lives in the cloud. By in the cloud I mean not just infrastructure, but software-as-a-service in the cloud- and that will be a link to the on-premises software. We want to stop the madness of having to stitch together 150 different applications to solve a problem. IBM, for example, is assembling a suite of best of breed applications and pre-integrating them into our service. Newest Movies APK

How are CMOs approaching  some of the most complex data, social data?
CMO’s want to figure out the brand sentiment in social conversations. As in any technology there is generational change. The last generation fundamentally is not able to deal with the type of complexity and the volume that’s coming out of social and big data. If you reflect back on the space of web analytics, you would think that it would be a natural space for business intelligence vendors. You would think that these guys should be in the upper right quadrant of the web analytics space. Except none of them are. That’s the effect that you see and the different effect that big data has on technology- the type of technology that’s needed is different. The technology is different and the tastes of the industry for methods of solving these problems is different. In order to know your customer you have to be able to leverage all of the data that you have on them effectively.

Yuchun Lee, formerly founder and CEO at Unica, is vice president and general manager of IBM’s Enterprise Marketing Management Group

Copyright The AdTech Review 2017