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Inertia Is Stifling Innovation -- and the 'Tech Tax' is No Myth

From Agency to Ad Tech: Four Reflections on the State of Digital Marketing

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As I reflect upon my first anniversary as global CEO for AOL Platforms, I've gained a unique perspective on the industry after years on the agency side of the business (most recently as global CEO of Razorfish and CEO of Publicis Group's digital technology division), to now being fully immersed in the technical innovations that are powering the rapidly evolving digital ad and publishing ecosystems. AOL has given me new insight into the many challenges and opportunities that marketers encounter when navigating the complex and crowded world of programmatic buying, data analytics, attribution, mobile, online video and more. Here are a few things I have learned in the last year -- both the good and the bad:

1. The "tech tax" is no myth. The words "confusing" and "complex" are used to describe the current ad tech landscape for a reason. A multitude of highly specialized product vendors are all vying for a sliver of the marketing pie. Currently, for every dollar that a brand spends on a digital placement, more than half is siphoned off to a complicated web of trading desks, private exchanges, DSPs (demand-side platforms), SSPs (supply-side platforms), data aggregators, tag management vendors, ad verification vendors, retargeters and more. Having seen the waste inherent in our bloated publishing and advertising ecosystems first-hand, my take is that the industry's No. 1 objective should be to unify and simplify the technologies that automate the planning, buying, execution, optimization and measurement of cross-screen and cross-format campaigns. The innovation exists. Our job is to harness it, simplify it and deploy it to increase the power and reach of every advertising dollar.

2. Inertia is stifling innovation. Things that worked in traditional media -- like "splitting the buy" across broadcast networks and static one-month-ahead planning -- don't make sense in today's data-driven digital world. Today the wealth of data and technology available make it possible to continually analyze behavior and performance data, empowering brands to zero in on the most relevant audiences and inventory in real-time, rather than hedge their bets. We wholeheartedly agree with WPP CEO Sir Martin Sorrell that data experts have an important role to play in this changing agency landscape: "You need to have programmers, engineers, scientists and mathematicians, and it needs different types of agency people working together." Marketers and brand executives that don't evolve from doing things "the way they've always been done" will be left behind. Those that adapt their strategies to the digital age will grow and thrive.

3. The value of data is exponential. Too many marketers lock information in silos (separating mobile, social and desktop analytics for example), which leaves them unable to realize the full potential of their data. Confirmed in a soon-to-be released study on social media marketing conducted by Convertro (the multi-touch attribution vendor acquired this year by AOL), we've long known that consumers don't engage with content in silos -- they move between devices throughout the day. And while a lower number of conversions happen on social, engagement on this channel is important to customer awareness and consideration of products. This will be increasingly important as, according to a study from the ANA and Nielsen, by 2016 nearly half of media campaigns are expected to be multiscreen. The bottom line is that data increases exponentially when it can be integrated, analyzed holistically and used to optimize decisions across all marketing channels. And marketers need to know how campaign performance is impacted by each individual impression, regardless of which screens or types of inventory are engaged.

4. Don't bother with meaningless distinctions. Our industry spends way too much time asking where the dollars are going to go next: TV or video? Mobile or display? Broadcast or digital? All decisions, whether media, creative or format-driven, should focus on reaching the consumer wherever they are, whenever they are ready to engage. And optimizing the allocation of total ad spend successfully depends on automation and data optimization that can tell you what's working, what's not and where improvements should be made, regardless of the channel.

After a year of focusing on how to make advertising technology better, faster, smarter and more efficient, I'm looking forward to a future where advertisers adopt the tools and processes they need to accomplish their most important goal: engage with consumers and move their business forward. Working together, the CMO and CTO will drive business results. Period.

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