On Digital Marketing

On Digital Marketing

Most readers will know the proverb  ‘you can lead a horse to water, but you can't make it drink'. This is perhaps one of the oldest English proverbs still in use today, the first citing of its usage goes back to the 12th century. Extending this proverb to today’s commercial world, the product/service is the water, and the consumer the horse. The role of marketing is to identify the thirsty horses and invite them to drink your water when there are multiple similar water sources. This is no simple challenge.

All products/services compete in a market economy. Identifying consumers with potential interest in your product/service is only the first step. Once these consumers have been identified then the hard work of converting that prospect into a customer begins. Marketing is all about identifying, attracting and converting these prospects into customers. 

As the marketing world has evolved from a primarily broadcast/print medium to digital, marketing has become dependent on data-driven programmatic techniques that promise advertisers views, clicks and conversions. Global behemoths who have pioneered these programmatic techniques claim that they can deliver the right message to the right people at the right time with unprecedented precision within a measurable world. Digital marketing has become dependent on the self-proclaimed “all-knowing” capabilities of these monolithic advertising platforms who promise to lead consumers to water forgetting the fundamental fact that you cannot make the horse drink that particular water.

Popular belief centres around the ability of intelligent marketers who can predict and exploit human behaviour by analysing vast repositories of personal data that they have compiled based on historical activities. The reality is far different.

To deliver real and sustainable value from digital marketing, the marketer needs to be able to distinguish between two key aspects of effectiveness: The Selection Effect and The Advertising Effect.

The Selection Effect

Any advertisement presented is served after the consumer has identified a potential interest, need or intention.

In a typical use case, the first step in any selection effect is for a consumer to type “shoes” into their Google search engine. The search engine presents the search results, at the top of which is an ad from eBay. Such a result is delivered by Search Engine Optimization (SEO) methods, in this case, Google AdWords. The consumer may click on the ad and be taken directly to an eBay webpage where shoes are available online. The search engine provider is compensated by eBay for tagging “shoes” within specified keyword search parameters. 

Any experienced consumer is aware that eBay sells shoes, amongst many other things, and that they could have gone directly to eBay and skipped this intermediate step.

If for a moment, we ignore the fact that the consumer could have gone directly to eBay, effectively resulting in the same outcome, it will appear that it was Google AdWords that generated the click. This is a classic example of how selection effect data can be interpreted to prove the effectiveness of digital marketing.

Further, this consumer search request is captured, stored and subsequently re-monetised again and again. Once a consumer's interest/intention has been stated, that consumer will likely be bombarded with multiple ads related to that interest/intention although they may have already completed a purchase.

The Advertising Effect

On the other hand, imagine that a consumer is first presented with an ad, in their browser or app, about a product/service in which they have a previously identified interest. Because of that interest, they elect to click on the ad.

It is only when the consumer clicks (not simply views)) the ad, that your intentions become known.

Engagement with any ad is determined by the consumers prevailing interest/intention, the timeliness of the ad, the effectiveness of the creative, the specific deal or offer, and any related perceived brand value. The context in which an ad is presented also plays an important role in subsequent consumer engagement.

While exploiting the ‘selection effect’, crucial to search engine monetisation, makes sense for some non-established brands, the ‘advertising effect’ represents the soul of digital marketing and is critical to the key stakeholders, the publishers and the advertisers.

The ability to consistently engage and choreograph consumer response after an ad has been served to either a browser or an app requires creativity, customization and process. 

Unfortunately, the one-size-fits-all auction dependent paradigm of the programmatic world provides extraordinarily little room to exploit the ‘advertising effect’. Advertisers who use the programmatic process are acutely aware of the inherent risks that include ad-fraud, wastage, and brand safety. Publishers have lost control over the pricing of their ad inventory and are handicapped by their inability to convince advertisers of the value of their masthead and its audience. Furthermore, consumers, advertisers, and publishers have little control over consumer data exploitation by the major programmatic platform providers. This is emerging as a key geopolitical and sociopolitical issue.

In most cases, leading digital publishers understand the context of any web/app visitor engagement scenario, but these large publishers currently have limited opportunity to directly engage and interact with advertisers to deliver customized performance-based campaigns

In the programmatic model, the advertiser is being charged based on performance and the publishers, in the main, are being paid based on display advertising. This fundamental disconnect can only be addressed if publishers engage with advertisers directly offering a channel to deliver custom performance-based campaigns. There is much talk across the advertising industry about ‘consumer knowledge’ and the ability to deliver ‘the right ad, at the right time, to the right person’ leading to the ever-increasing import of first-party data. Now that Google and Apple have announced that they plan to limit the application of third-party cookies in consumer targeting, it is the right time for publishers to focus on their first-party data strategy, engage advertisers directly, and regain pricing control over their ad inventories.

The Role of Telecom Operators

The emerging focus on first-party data provides an opportunity for innovative telecom operators to play a central role within their national digital marketing ecosystem. Currently, telecom operators provide expensive infrastructure crucial to digital advertising but obtain no recompense. Telecom operators, for legal and compliance purposes, capture and store highly valued first-party data about their subscribers. 

Thus, Telecom operators can provide leading digital publishers comprehensive capabilities to work with advertisers to deliver customized performance-based campaigns while improving consumer communication, interaction, and engagement. This can be achieved by providing a fully hosted offering and legitimately consolidating its rich first-party data producing unique consumer insights thus enabling the industry to transform from within.

A managed service provider working on behalf of telecom carriers can assist both publishers and advertisers to activate this much-needed transformation. A managed service solution designed on these lines will:

  • Enable advertisers to fully focus on and exploit the ‘advertising effect’ without worrying about ad-fraud, wastage, or brand safety.
  • Enable publishers to regain control over the pricing of their ad inventory and not be dependent on the ever-diminishing returns from the programmatic methods.
  • Enables telecom operators to assume a pivotal and rewarding role in their national digital advertising ecosystems.

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