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Faced with economic headwinds, media companies must embrace automation

By Steve Han | Vice-president of strategy and operations

April 7, 2023 | 6 min read

With high inflation, a publishing landscape facing layoffs, budgets getting tighter and cookie deprecation accelerating signal loss on the open web, it's high time for media players to invest more seriously in automation, argues Frequence‘s Steve Han.

robot hand reaching out for human hand illustration

/ Adobe Stock

Across the economy, companies of all kinds appear to be bracing for a recession. Broad-scale layoffs, recently emanating from tech giants like Meta and Google, have expanded to include legacy fixtures like Dow Chemical and IBM.

Media and advertising companies have had an especially rough go of it. The media industry has faced structural headwinds for years, but just in the past several weeks alone, recognizable names like Adweek, Vox, MSNBC and the Washington Post have all shed staff as a contagion of cost-cutting spreads across the landscape.

High inflation and elevated interest rates are accelerating the sense of macroeconomic foreboding. While the job market remains strong, layoffs across tech and media have spread to other industries, and organizations are cutting back on spending.

So how can media companies weather a potential downturn?

The demands at play

A recent study from the Interactive Advertising Bureau found that 86% of all US digital ad spend is coming from programmatic transactions. In order to manage this volume, ad operations departments at brands, agencies and media companies require significant head count with extensive technical expertise in order to plan, sell, execute and optimize campaigns across channels.

For traditional media companies in local markets, the imperative exists for them to sell their owned and operated inventory as part of a comprehensive package complete with digital extensions. Advertisers are no longer content to pay their local newspaper for space in print – they want it as part of a package that includes Meta platforms, open display and connected TV.

Of the $142.8bn spent on advertising in 2022, 68%, went to digital forms of media advertising, per data from Borrell Associates. The Covid-19 pandemic only accelerated digital media sales, and Borrell expects digital advertising to continue growing, accounting for 74% of local advertising by 2026.

Media companies need to sell more and better comprehensive campaign executions alongside their own inventory if they want to survive the current headwinds, and the only way to do that economically is to increase sales and revenue without offsetting it with increased expenses. So, in order to do more with less, media companies need to embrace automation and efficiency more than ever before.

Automation as an accelerator

Media companies can achieve sustainable, scaled growth by embracing technology that automates campaign execution while optimizing performance across channels, creative executions and the constantly fluctuating metrics they generate.

Studies have suggested that ad operations staff spend three or more hours every day reviewing data to make decisions, and technology alone can automate the complex processes that keep campaigns running while leveraging the data they generate in order to deliver the performance that advertisers have come to expect.

In addition to the inhospitable macroeconomic environment, recent structural changes in digital ad operations have meant that it’s become harder to generate and measure returns using the same methods – such as third-party cookies – that have been relied upon in the past. The change demands that advertisers invest in new, effective approaches.

Ultimately, at this moment of reckoning and retrenchment, media companies should be looking toward more sophisticated technology and automation in order to weather the storm.

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Steve Han is vice-president of strategy and operations at Frequence.

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