Do you think that digital advertising is serving its purpose of communicating on the behalf of brands?
“What we see that is interesting is that the brand element is a big part of the advertising budget. But despite the significant amounts of money being paid for brand advertising, it is still something that is very hard to measure in terms of how effective it is.
From a data science perspective, even Marketing Mix Modelling (MMM) surveys that should be indicating the returns on each dollar spent on advertising fail at capturing the brand element.
Therefore it’s hard to answer whether advertising is communicating the brand properly because the data to back this up is not really there at the moment – although there is a lot of work being done to look at how an effectiveness measurement for brand advertising can be included.
This is especially true when we look at building brands over the long run and not just relying on TV to do that.
So, in answer to the question, today it is really hard to know [whether digital advertising is serving its purpose of communicating on behalf of brands], but if we don’t have the right measurement in place, we’re probably not doing as great job at it as we could do…”
Do you think there are any sectors that are doing digital advertising particularly well?
“First, it’s important to look at why data is not being widely adopted at scale, with one of the main barriers being an issue of timings. For any transformation, organisations need to plan ahead, taking two, three or four years to train the right people, adopt new processes, etc – but the data landscape is changing every year, making it hard to adapt fast enough.
That said, tech companies themselves are doing well. Samsung for example is very good at this because managing data and digital is in its DNA. Then we have the travel industry – hotel companies and car hire enterprises, for example; facing strong competition online they have had to change very fast to adapt their organisations for this new landscape. After that, consumer packaged goods (CPG) organisations are progressing, with other major sectors such as heavy industry, pharmaceuticals and banking on a slower transformation journey.”
What are the conversations you are having about best practice around data use?
“This is a wide topic that goes beyond advertising…. However, the ‘must haves’, such as the push for a cookie-less world, are usually set by the technology companies themselves, with the understanding that everyone needs to comply.
Best practice needs to be addressed in terms of compliance from both a tech and privacy perspective in line with the different regulations that are in place. Then there is what organisations need do proactively themselves, with one of the main elements being that everything is based around data governance; this is now a big consideration in all organisations, with the growth in its prominence illustrated by heads of data governance being appointed to the board, rather than just being responsible for advertising.
One of the things with data today is that people are often afraid of it; and when they are afraid, they don’t want to know what’s happening, and go as far as trying to hide it. Data governance is there to say, ‘don’t hide anything, know what is happening each time your data is used and transformed’. This requires documenting everything to do with your data – where it comes from, where it’s stored, how you use it and how it’s processed.
Once everything is documented and compliant, the final step of best practice is to ensure that data is useful; if a lot is being collected, it’s important to do a lot with it, and understand why you are doing this.
This means that advertising should become more of a service than simply pushing out information – understanding a bit more about your customers and then personalising audience segments. Rather than data just being a pipeline, it’s about using it to do something that delivers customer value.”
Are we now at a place where transparency is a given, that we need to be as transparent as possible – or is there a perverse disincentive to cloak what we do in a bit of secrecy?
“There are probably two sides to the transparency issue; one for the end customer, who has been targeted by the ad, and then also in terms of the advertiser, particularly around costs and where and how their money is spent. We’re seeing an increase in transparency for the customer, who is getting more information, such as how their data is being used to make an ad more personalised, which is really positive.
Where we are not so good in terms of transparency, in my opinion, is with the media platforms, which are more of a black box, with control taken away from the advertiser and put in the hands of the platform, which makes decisions based on algorithms. On the one hand this is great, as they more data you have, the more you can understand what’s happening. However, the results of algorithms are not always explainable.
There’s a whole initiative now around transparent AI and ethics in AI which is about understanding what the algorithm is actually doing; it could be that this is not fair or unbiased, but this is hidden in the ‘black box’. With technology becoming creative in its use of AI, I think there’s a big risk of losing transparency.”
What are you most excited about in the future of digital advertising?
“It’s a difficult question! But what I like is that the current trends in digital advertising have taken it from ‘mad men’ to ‘math men’, making it a world for people that bring logic, science and intelligence into what they are doing.
This stems from the recent integration with the AI and data science elements and is leading to a lot of new things. One instance of this is causality, which is becoming a big topic in advertising because it’s important to understand the direct and indirect effects of one channel over the other. Causality is not very advanced in other fields, but its progress in marketing means that advertising is now leading the way in scientific areas – which is very exciting.”
Coggia was joined on The Drum Podcast by Jason Hartley at full service agency, PMG, and Alice Jennifer Moore from design-agency Foolproof. The full version is available to listen to here.