Why AOL’s David Shing wants to see a brand’s “experimentation” budget equal that of the ROI-driven spend

Offering Coca-Cola as an example he explained: “[It] divides its budget 70-20-10. 70 per cent goes to ROI driven stuff that gets nobody fired. 20 per cent goes to they “think it’s going to work but don’t know” and 10 per cent of the budget goes to stuff where they’re like, “we don’t want to know until you’ve done it.

“But that 10 per cent is what creatives talk about, it’s what wins awards, and those awards can move products,” he said. “We’re spending on the 70 because it’s what we’re used to.”

When asked how he would like to see the media mix ratio look in the future, he responded: “If the mobile publisher experiences allow for more authenticity and where we can do it at scale for brands then I’d like to see it look like 50/50. So 50 per cent with programmatic and tonnage, which is really important as it gives you the saturation you do need as a brand, but the other 50 percent should be about experimentation.”

Expanding on the importance of authenticity, Shing said that the major issue for advertisers at the moment is involving themselves in digital environments – in the places where consumers are – in a way that doesn’t feel contrived.

“There’s a lot of places consumers can hang out and brands believe that they want to hang out there too. So everyone is a little confused at the moment, but that’s what is exciting. They need to actually set up their organisations to try it all. They need to create a remix culture, meaning they divide their budget up in a way that says I’m going to create an environment that allows me to get ROI driven marketing. No one is going to get fired that way. Everyone is happy. But a component of their budget has to go for experimentation.”

He added the brands that he is speaking to continue to spend heavily on television “because it’s safe”, but added that there the young CMOs coming into businesses are looking at the medium and saying ‘no’. They are now looking at what it means to act authentically and offer an experience.

“When was the last time you shared an ad? I haven’t shared any. But experiences – I share and brag about them.”

However, he continued: “We in the mobile industry have given bad experiences. Brands are still figuring out what it means to be authentic in that area. They just want to do what they do on desktop. It’s so much easier to do IAB standard ads and just run them and hope they work. And what do you get in return? A 0.02 per cent cut through.

“Brands don’t understand it. They have these platforms today to become an expression engine as opposed to an advertiser. Advertising drives awareness, expression engines drive advocacy.”

Shing also predicted that people would begin to cull who they follow on social media, and said that any brand that finds itself left on a person's list would have to work hard to make that person feel engaged.

“When I do reengage I want to make sure that it’s with a brand that is useful and with a brand that I enjoy,” he said, citing Burberry as one such example that he believed went out of its way to make its followers feel like ‘VIPs’.

He praised Tweetwalk, an initiative where Burberry tweeted out pictures of its models before they walked down the catwalk, for really engaging with fans during that particular fashion week and making them feel just as important as the people sat in the front row of the show.

“That’s a brand love.”

Shing was speaking at this year's Festival of Media in Rome.