The future of media currencies part two: chaos replaces order
GfK's Stefan Heremans concludes his investigation into the future of UK media currencies in the second part of our special report
The future of media currencies is a hot topic, and following an in-depth review among industry stakeholders, GfK has outlined how they might change over the next five years. In my previous Mediatel column we looked at the case for a new order to prevail in 'The rise of the Super JICs'.
In this companion piece, we look at a very different future scenario, driven by competition, where there is no standard or centralised measurement. In such a world, will chaos replace order in the form of the competing players, each providing their own metrics?
Keeping up with consumer change: publishers and platforms need to plug the data gap
Developments in tech continue to drive massive change in the industry and this is only likely to accelerate in the next five years.
That means the gap between what JICs can measure and the data trail being created by consumers is likely to get even wider, leading to a more prominent role for the publishers and platforms in plugging that data gap.
We are already seeing traditional trading systems being replaced by automated bidding. Zenith’s Programmatic Marketing Forecast predicts two thirds of the world’s digital display advertising (67%) will be traded programmatically by 2019 (rising to 90% in the UK).
In five years there is a genuine concern that traditional media planning and the currencies that support it will be replaced by the algorithm.
We are also likely to see continued developments in micro-targeting and one-to-one marketing. Consumer “identity graphs” depicting demographics, interests, locations, purchasing history and more will be used for targeting and machine learning models will become more effective in interrogating such rich consumer data sets.
In this scenario Adtech and Martech would converge and we can finally serve personalised content across all digital touchpoints - at a micro level. This would be based on datasets from the walled gardens but also propriety data from advertisers, retailers and media companies. Data which is not accessible by the current JICs.
While we currently focus on “reach” metrics, advertisers will be also be demanding metrics that demonstrate “impact”. In the future we will be looking at campaign impact, how it drives brand or sales uplift. And it is the digital platforms that are in position to provide the data that sits behind this.
JICs find it challenging to keep pace with rapid tech changes
Many would argue that JICs were never designed to keep pace with rapid tech changes. For example digital players will be best placed to track growing in-app activity and developments in search. Take voice activation; if consumers are asking Alexa to make the majority of their purchasing decisions how do we incorporate this into the future of media planning?
Finally, the way people consume and pay for content is likely to change. Publishers are looking for more flexibility in growing their readership, so might choose “metered access” models to replace subscription. For example, this could take the form of micro-payments for content based on the amount of words or articles customers choose to read.
Consumers could also connect more directly with brands as advertisers seek to cut out publishers, and even agencies. This will create new challenges around the data stream between brand and consumers and how that data is safeguarded.
What does “chaos” look like?
In a scenario where JICs are unable to tap into these data streams, publishers and platforms will provide their own measurement with their walled garden. There would be a proliferation of “walled gardens” which would co-exist and compete, accelerated by new tech and start-ups entering the market.
Competing publishers are already forming partnerships; for example, The Verified Marketplace in the UK helps to provide more certainty and consistency around brand safety and viewability.
This means there would be no industry standard measures and no general agreement about which KPIs to use. Each walled garden would control their own proprietary metrics and KPIs. These could even be specific to a particular advertiser or campaign.
This will obviously lead to a great deal of confusion for advertisers struggling to find consistency, which ironically might create a new role for agency planners in helping advertisers navigate such a world.
With so many different metrics available there will be a need to link campaigns to whichever walled garden has the most relevant KPIs to achieve success.
Alternatively some walled gardens will be large enough to become a “one-stop-shop” for advertisers, a trend that is to some extent already taking place with Facebook and Google.
Competition may also drive consolidation. Publishers offering the most useful KPIs will themselves become more successful, leading to other players to adopt similar models which may lead to some standard approaches to measurement.
Walled gardens might become more open to share measures or protocols that can form the basis of a standard currency or at least a standardised approach.
Collaboration between the walled gardens might at first seem unlikely, but if issues of trust and transparency continue to blight the market, some kind of shared best practice could well prove to be the best way to move forward. Although walled gardens are always likely to keep some of their USP metrics for competitive advantage.
Bridging the walled gardens
This view of the future is based on a highly competitive, decentralised and less regulated market place. Many of the counter arguments to this can be found in our first article of this series: 'The rise of the Super JICs'.
But, as we look to the future, it is worth posing the question - if we could start again as an industry, would we have the media currencies we have now as our standard measures? And, if not, what might they look like?
This is something we are all grappling with. As the industry continues its transformation, it seems we are trying to sustain a traditional media planning world alongside an increasingly programmatic one. And this poses some key challenges to companies like GfK.
Firstly there is the challenge of combining these worlds: connecting currency data to programmatic. And secondly, there is a need to act as an independent player, providing a bridge between parts of the walled garden and the currency systems. At the same time, there is an ongoing need to continually improve the quality of the data.
Moving forward, perhaps only independent third parties could truly be trusted guardians of shared data. Super JIC anyone?
Stefan Heremans is product head media measurement currencies at GfK