Our Latest Thinking
“I know half the money I spend on advertising is wasted, but I can never find out which half.”
Many consider Wanamaker to be the father of modern advertising, and so his quote continues to have traction in the ad industry whether in articles, panels or presentations. But does this rule really hold true today? Could the maturity of the advertising market be so slow that an observation made one hundred years ago is still applicable? Traditionally over the past few decades, advertising has pretty much followed the Wanamaker rule, but is this a law of nature? Maybe it’s time that we revised the 50/50 Wanamaker quote to perhaps 70/30 or 80/20. Or could we actually reach 100% – and have a full understanding and allocation of where we spend our advertising budget?
Online advertisers tend to speak about two types of advertising:
1. Brand advertising. Focused on high-in-the-funnel brand awareness, traditionally via TV, where measurement can be difficult and largely based on surveys.
2. Performance advertising. Focused lower in the funnel with specific calls to action via digital channels with measurement based on clicks and conversions.
Online video advertising now sits at the nexus point of performance and brand advertising, and so it’s bringing advertisers closer to breaking the Wanamaker 50/50 rule. There’s a shift away from ‘one-to-many’ to ‘one-to-one’ which allows brand advertisers to create the most relevant possible ad experience.
Personalization is a strong trend that leverages existing signals and profile data about the viewer to not only control ‘what’ you show each consumer, but also ‘how’ you do it.
With Real-Time Bidding (RTB), you also choose ‘when’ to show an ad and ‘where,’ so to engage the consumer where return is maximized. Obviously, by tracking consumer behavior during the ad view and post view (depending on the call to action), one can also capture the true value of each ad view.
Using a control group methodology, the incremental value of each video ad view is measured and performance is optimized over time to deliver the best possible results for each advertising program. Mathematical tools based on machine-learning algorithms project each ad view’s potential value and track the performance to improve the scoring algorithm over time. More about this in tomorrow’s blog by our Chief Architect, Yair Halevi (aka Spock).
With this scientific approach, we are much closer to understanding where 100% of the advertising budget is used. No more settling for unknowns and wasted budget assumptions as a 100-year-old law of nature. With today’s sophisticated tools, brand advertisers know exactly what they get for every advertising dollar spent.