Convergence will bring programmatic to all media

As advertisers increasingly act in real time, budgets will have to change out of all recognition to keep up.

‘Convergence’ is a hot topic right now – by which I mean every channel is becoming, in its own way, that little bit digital. The internet has become a single unifying medium across TV (thanks to OTT and BVOD), digital radio, OOH, online print and so on.

As people have access to digital media everywhere, whether at home, outdoors or even in their car, it’s shifting how advertisers and agencies move their money around. Committing to campaigns weeks or even months ahead has been replaced by more immediate activations. ITV’s deal with Amobee and waiver of late booking fees are just symptoms of a changing market.

On any channel, even TV, advertisers are expecting to act in real time or as close as they can get – and that means their budgets need to retain an unprecedented level of liquidity.

A more fluid media market

Even just a couple of years ago, digital largely meant the buying metrics such as clicks or viewability – simple measurement of KPIs using the wealth of available online data. It was that much harder, however, to link activations to offline sales, which remain the largest part of most brands’ customer strategies.

When they did use econometrics to track offline activity, it took a couple of months to garner the data and that meant brands were always looking into the past.

But now things have changed. Feedback loops driven by this digital convergence allow brands to use nigh-instant modelled data to see how channels are performing – and that means they can allocate and shift budgets to match.

Till-based connections can even allow a platform like Facebook to swiftly attribute the sale of those skis you just bought to the ad for skis that you saw on your feed the day before. That then enables the platform to quickly create and target lookalike audiences.

Right here, right now

When brands and agencies can understand the performance of different channels in real time, thanks to machine learning and regression modelling, it allows them to optimise and allocate their spend in real time as well.

Media owners are going to have to be more flexible in their own approach as the ad market becomes more programmatic and more like the stock market. Advertisers will be able to look at the total ROI of their media plan and move money around to where it will have the most impact, thus making them less willing to commit to specific channels weeks ahead of time.

It’s winter now, so a particularly cold day means brands will be able to dial down their digital OOH for a few hours and dial up their BVOD spend instead – targeting all those people who’ve chosen to stay indoors. A cough medicine brand might be particularly keen. 

And with machine learning, brands can also use publicly available data. Virgin Trains famously did this a couple of years ago, using real-time geo data to identify drivers stuck in traffic and show them how much faster it would be to take the train. Advertisers will be able to optimise budgets and then optimise creative to make a powerful combination.

Alternatively, a fast-food brand could advertise coffee on its digital OOH boards in the morning and sandwiches at lunchtime – and shift budget away from its high street location at 8am and into the six-sheets near its retail park branch instead, if the data shows that’s where all the morning coffee buyers are going to be.

Transformation of media budgets

In the light of such a liquid media landscape, media budgets will have to change out of all recognition to match it. We’re going to see convergence driving a programmatic approach to every channel and brands able to push the button on ads the day, or even the minute, when they’re most valuable.

I suspect we’ll soon see budgets where the specific channels are the last thing the marketing team thinks of, rather than the first. Agencies, media owners and advertisers alike are going to have to get used to an entirely new way of buying inventory.

Lawrence Dodds is client director at media agency UM

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