How to make sense of the ad tech explosion by creating a single view of the consumer

Posted by Mitch Waters On May 25, 2015
This year advertisers will spend AU$775 billion worldwide . Whilst the U.S., China, Japan, Germany and the U,K, lead the charge across all media this year, Australia continues to punch above its weight. In fact, right now have the highest digital ad spend per internet user – $265.45 (according to eMarketer). Across all media we’re spending $504 per person, rising to $525 by 2018 , a quarter more than the Poms. 
It’s not all plain sailing, however. Whilst the U.S. ad industry expects to grow 14 percent over the next few years and the Brits 9 percent, we’ve forecast to manage little more than 3 percent. How can this be? It seems like we’re missing a trick.

Around the world, digital consumption is driving the growth in advertising. In the U.S. last year internet advertising revenues climbed 17 percent , whereas figures from IAB Australia put local growth at just 7 percent

Why is this? Aussies are certainly not luddites when it comes to digital adoption. Quite the reverse. Fixed broadband penetration is on par with most Western nations and we’re third in the world (behind Finland and Japan) when it comes to mobile broadband (we have 115 percent penetration) . 

The difference is mainly to do with attitude. Our digital ad spend is still driven largely by direct response channels such as search. From a brand perspective, digital still has measurement challenges and, undoubtedly, this is inhibiting further growth. 

Ironically the problem is also an opportunity and a different approach to technology can drive the change. The emergence of a wide variety of ad-tech solutions has seen the implementation of a series of walled gardens, each providing access to a defined set of platforms, inventory and data. It’s made it virtually impossible to track the consumer across a plethora of content and devices. That single view of the customer or prospect has proved elusive, leaving advertisers to navigate a costly, restricted way of doing business. What we need is to know who to target, at what time, with the right message at the optimum reach and frequency, in order to deliver positive returns. It sounds pretty simple and it can be.

The crux of the matter is that we need to limit the closed ecosystem approach. It inhibits the effectiveness of marketing and makes it impossible to understand the real reach of campaigns. 

It’s a problem discussed in AOL’s new report, “An Open Platforms Manifesto: Why Walled Gardens Hurt Brands and Open Platforms are the Future”. It explores how open platforms empower marketers to capitalise on flexible data integrations, inventory, creative optimisation and attribution methodologies. 

Downloading a copy of AOL’s Open Platform Manifesto is a first step in understanding how the digital industry will change over the next few years. The report looks at:

•What should brands look for in a platform
•What do marketers lose by using a closed platform
•How does an open approach to advertising solve for a rapidly evolving media landscape and changing consumer behaviours

The efficiencies open platforms provide will be great news for brands, but it could also be the impetus for change in Australia’s adoption of advertising technology, as we sidestep the issues inherent in today’s platforms. 

If we can overcome the technology hurdle, there’s no reason why the number crunchers who downplayed the growth in Australian digital advertising growth will be forced to eat their own statistics. It wouldn’t be the first time Australians have proven the naysayers wrong.
By Mitch Waters, Managing Director of AOL Platforms Australia

Mitch Waters