The Drum Awards for Marketing - Extended Deadline

-d -h -min -sec

Predictions Bob Lord

'Advertising will fall in love with automation' - AOL Networks CEO Bob Lord offers his predictions for 2014

Author

By Jennifer Faull, Deputy Editor

December 19, 2013 | 9 min read

Bob Lord, former CEO of Publicis-owned digital firm Razorfish, took up his post as CEO of AOL Network less than three months ago, admitting at the time that he had a lot to get to grips with. Recently, The Drum caught up with Lord to look back on the big changes of 2013 and find out what he expects the world of programmatic advertising to look like in the year ahead.

Looking back at 2013, what are the major changes you’ve seen in the space?

2013 was when I left the agency world and I think behind that I was frustrated with the lack of automation and the lack of technology that’s being applied to this major marketing problem. And the major marketing problem is that as things become more digital and as more consumers go online, there’s an apparent ineffiency that exists. And what I found from the ad tech community was that they’re confusing the brand agencies and the brand clients, because they’re basically not telling us about reach and I full heartedly believe that there is this technology path that is in existence where for every dollar a brand advertiser spends, only about 25 cents of it gets to the publisher. In the TV world it’s the opposite, the reach is greater. So the reason why I came to this organisation it that it's a technology company trying to solve that problem. So my proposition is to basically come in here and use the AOL stack to make that dollar work a lot harder than brand advertisers have been able to do before because the ad tech community has now really come together to make it efficient and I believe there are only a few players in the, one of them will be AOL, and the other one clearly is Google, and we’re going to make that work.

What are your predictions for the programmatic advertising sector in 2014?

Advertising will fall in love with automation. Marketers will embrace the idea that automation is going to help then. And the reason why they’re going to embrace the idea is primarily that we’re going to be giving the money back, so that they can spend more time on the content creative development, so that they can actually create effective messages. If you think about the ad agency business, you have a series of companies that look at creativity, a series of companies that focus on media and then you have a series of companies that look at digital. And what’s happened in the last few years is that the media companies have taken a bigger share of the dollar that brand advertisers spend, and what I’m saying is automation will make that media buying process more efficient. So now they can spend their dollars differently, put less money into media and more money into digital and brand creative to break through all the noise and actually get to the consumer. So that’s the first obvious prediction.

The second one is less obvious. The second one is about the technology company embracing an open echosystem. This one’s a little controversial in the marketplace right now, because you have companies whither its Google or Yahoo, who have the predatory systems, or Facebook where they don’t want to share information. AOL is going to take a very different stance around this. We have a platform that we have to offer but clearly we’re going to have the ability of tapping into your existing systems. So if you think about the world from a CMO, CTO. or a chief information officer standpoint and those technologies, like Adobe or IBM or Axium, they’ve invested a lot of money into those in the last 10 years and our approach at AOL is to tap into those and link those things together through APIs so that you don’t lose your investment in your customer relationship marketing databases. We’re going to leverage those out into our community. So the world will understand the power of an open echosystem in 2014, and those people that adopt the open echosystem are going to win.

My third prediction comes from my experience at Razorfish. I think that mobile will drive the transaction. Everybody talks about mobile advertising and how important it is. I actually believe we’re not giving mobile the credit it deserves. What I believe it’s going to do is create advertising units, or interaction untis, that are more commerce based so that you are actually interacting with an ad or content in a way that you never have before. And I think you’re going to see a huge shift here where you’re not only getting advertising dollars from brands, but you’re getting retail dollars from brands. So the whole line of people spending on promotions to drive commerce I think are going to be coming online and that’s going to be a huge opportunity for media companies to go after those dollars also.

And the fourth prediction is about consumers, who will now appreciate targeting. There is all this nonsense out there about how going after personalised information is a bad thing. The reality is, as an advertiser if I’m able to give them a really great value exchange people are going to want me to target them. If I am a Starbucks consumer, I don’t mind giving them all my information because then we’re going to have a value exchange that’s going to be helpful to me in my daily life through my mobile device or the community I’m involved with. So we’re going to see a shift, with people saying “hey, I’m willing to give you my information cause I love your brand. But don’t violate my trust.”

You spoke to Stephen Lepitak [online editor, The Drum] earlier this year and said that, at the moment, CMOs are confused. How do you think their roles will change into 2014?

Good question. I’m actually seeing a lot of CMOs that are actually being replaced or hired at large brand agencies, like the International Hotel Groups or Delta Airlines, that are coming in with a technology background. Which is really interesting as the kind of conversations we start off having with these CMOs is less about brand access, brand purpose and the values of the brand, and much more about 'how am I driving my business through technology' and 'what kind of insight can I get before, for example, I go for my TV buy'. So what kind of audience is out there, not from a demographic standpoint but from a behavioural standpoint. And you can imagine how the conversations are starting to shift. So for those CMOs that are progressive and talking about audience behaviours and predictive segments and simulations around 'if I do X, Y, Z what is the return I’m going to get based on past history' that is a very different conversation that those we were having just 18 months ago with CMOs who were all about brand reach and frequency. So the analytical skillset that’s coming into the CMO suite is making the job transform before our eyes. Let me put it this way, Steve Jobs had his principle that everybody should be able to understand HTML coding. What he meant was that having this basis of that thinking makes you a better manager or leader. It’s about the way you approach it. So it’s not that CMOs now have to be legacy technologists, but they have to have an understanding of what it means and the value of understanding analytical thinking.

The language of Keith Weed, the CMO of Unilever, has also changed in the last year about what he believes the power of technology can be. Keith writes about how important technology is in his marketing plan and he’s not the most technical person but he clearly recognises that technology is changing his craft in ways that he would never have through about before.

So what about the role of the agency, how do you see that changing?

So the agency world is going through its own evolution on this. We talk about them as three different entities: the creative agency, the media agency and the digital agency. I think what’s going to happen is that middle bucket, those media agencies, are going to have to embrace technologies and not try to develop them themselves. I think in the past when they’ve tried to develop technology…well they’re not technology companies. What they need to do is figure out how to embrace technology tools, targeting, and do it more efficiently than they have before. So today I’m able to buy on TV and reach an audience, but how am I going to do it in a new world when everyone is not on TV anymore. What other tools to I bring. When you look at GroupM and the work that they’re doing with Adap.tv, what that’s going to do though is put pressure on those other two groups to grow faster. And the creative agencies are going to have to come up with better, more unique, creative ideas like they’ve never been able to do before. It’s not just about the one brand campaign. It’s about multiple brand campaigns. It’s about curating ideas, not just coming up with them. And digital agencies have the opportunity to go into the commerce space deeper than they have because of the technology. You see these guys {agencies} getting deeper into the technology stacks because ultimately the interaction that happens with technology is the consumer experiencing the brand, and the consumer experience is really an expression of the brand. I think that they’re never going to go away, it’s just their roles and emphasis is going to be much different than they are today.

Predictions Bob Lord

Content created with:

More from Predictions

View all

Trending

Industry insights

View all
Add your own content +