I know it’s been some time since my last blog but I’ve been pushing down on workload in my full time job at Y; here’s something to keep your thoughts going.
The lifecycle of butterfly stems from a moth – this is what my friends three year old child told me; she went on to draw the cycle. It looked rather like a Jackson Pollock painting. Actually it reminded me that advertising world is morphing. Agencies are now becoming ad networks and now ad networks are becoming DSPs – it’s like the threat of extinction is leading to a new revolution.
This means those long established barricades between the buying side and sell side parties in display are now diminishing and leading to an open-ended solution. This has many connotations and allows efficiency to flourish. Whilst it does that it allows the players to start spending time defining their services. We’ve seen ad exchanges come into the market since 2007, then we’ve seen agencies spend money in building their own ad networks (B3, Vivaki etc), ad networks have started to fear the encroachment of agencies and have differentiated on their offering and are now morphing into DSPs. Now the mouse has become the cat and ad networks are threatening the agency business model. So the game has changed the players changed it and now the loss is disintermediation out of the value chain.
The game has also become a media play to a trading play where the prize is huge arbitrage margins. The growth of online coupled with the new markets waking up to new hardware means the game is so large that everyone wants a piece including traditional hardware companies like Cisco! We are ushering in a new era of creative technology in advertising and not all players will survive.
The new trading game is now Data. Data rules the advertising world and if you don’t see it, you will very soon. Data leads to the ROI every client wants to strive for. In Asia we don’t have a real data play here yet but the heavy weights are coming; audience science set up in Japan, Bluekai has strong relationship with key ad networks in Australia so the wave is coming.
The amount of hiring in APAC has tripled according to close sources and it’s only just started. Agencies here are recruiting internally and externally for the new technology evolution. Publishers are now building their own ad network strategy in order to stay in the game and protect their interests. This is leading to innovative strategies in differentiating premium inventory and indeed starting the pouring process of inventory into ad exchanges. Monetization routes are now being efficiently optimized and remnant inventory is moving away from the concept of ‘unsold’ and is starting to trade as efficient inventory or premium performance.
Just recently I went to see an agency about the evolution of advertising and the messaging has started to hit the streets in Singapore and it looks like the planning for 2011 is encompassing the technology pipe cost for agencies. I don’t even mean the cost of the technology but the cost of the opportunity, the cost of re-training, new hiring etc. It’s an exciting time in the industry and one where each market is pushing further along into performance advertising.
This time last year I was professing to Vietnamese clients that we’re entering a change and that Vietnamese market had hardly any performance advertising then and now they are roughly spending 15% of their budget in performance. Technology is driving a push from premium to performance and the hardware market is driving adoption of internet users; this makes for an exploding large market for advertising.