Sponsor Content Above the Clutter with Pete Krainik
Episode Four: St. Louis Cardinals
Brought to you by: IBM
In 1987, when I was an account supervisor, someone from operations plopped a Macintosh computer on my desk. Back then, the Mac wasn't much more than a glorified word processor that enabled me to type my own documents and correspondence and print them out without dictating to an assistant.
Back then, art directors used X-acto knives to splice art and copy, and it wasn't at all unusual for most of them to be missing at least a piece of some finger. Mechanicals were pieced together by hand so they could be photocopied as proofs for other departments and agency clients.
These memories came back to me during a recent discussion with some colleagues about automation in the advertising industry. The Mac, the dot-matrix printer and the copy machine were the earliest forms of automation I could think of in my ad career besides the creation of databases for mailing lists used by direct-mail companies.
It's hard to believe that as recently as about five years ago, insertion orders (the contracts between media buyers and a media property) were handled manually. That is, they were written out and faxed between entities for the purpose of having documents with actual signatures on them. Young, eager entry-level media-agency staffers often handled this task.
I repeat: Young, eager staffers were relegated to faxing documents back and forth as one of their primary responsibilities.
Let's stop and think about that for a moment. In an age when our industry must compete harder than ever for young talent, against the likes of Facebook, Google and myriad tech startups where the skills and imaginations of bright, educated 20-somethings are activated every moment of every day, was the promise of handling insertion orders the best we could do?
Of course it wasn't and isn't, and we all know it.
Thankfully, insertion orders and many of the mundane tasks associated with media buying and selling have become automated in the last few years. First, we moved from faxing to electronic invoicing. Now, we are moving into automated audience planning and buying. Good for the publishers, good for the agencies, good for the marketers.
$46.8B Record U.S. agency revenue in 2015
Within the next five years, a substantial amount of media buying will be fully automated, and I'm all for it. While the word "automation" often evokes fears about massive job losses, here's why advertising practitioners should embrace it:
1. Talent acquisition and retention. Why should people be burdened with menial tasks that a computer could do more efficiently? Automating such tasks frees up people to apply their actual talents to bigger, more challenging client issues. It allows for broader thinking and more strategic cross-platform utilization, especially during tent-pole events like the Super Bowl and the Olympics. If you manage to hire the best and the brightest, you don't want to have them sit in a corner doing spreadsheets.
2. Agency margins. Agencies have gotten especially squeezed on profits over the past five years. The largest expense an agency has is human capital, which is a good thing. Automation in media helps you do more with less, thus improving agency operating margins.
3. Accuracy. Automation enables sellers to home in on available media space that may have gone unnoticed -- and unsold -- before. If a brand wants to reach moms who have babies in diapers, AOL has tons of properties that algorithms now uncover to help you find the right placement.
4. Efficiency. Automation these days, more often than not, refers to programmatic buying, and it refines the digital buying process in a way that enables agencies to fully utilize the data. The client's money is being spent with minimal waste. With automation, "intelligent" databases find target audiences, and media inventory more granularly matches those audiences via real-time bidding to get the best placement at the best price for that audience.
As media agencies are now "grown up" and serving a more strategic role with their clients, entry level jobs will be more like account executive positions where young talent will be taught strategy at a much earlier age, and that's a good thing.
The arrival of Macs 25 years ago didn't eliminate the need for executive assistants who now serve a much different and broader function from what they used to do -- typing, taking dictation and answering the phone. Now, they have to be experts in arranging long-term and up-to-the-minute travel, in creating spreadsheets, and in many cases, presentations.
As with any upheaval in ad-industry functions, issues and challenges change. One of the biggest for the 4A's is to establish best practices regarding arbitrage and transparency. Different agencies define transparency differently, and the 4A's is working with them to arrive at a consensus.
The "robots" aren't taking over any time soon. Human discernment in areas such as creative and new business development, analytics and the deep custom partnerships among agencies, brands, and media properties is still needed and always will be.
Automation can help marketing-communications practitioners up the game in the art of these other disciplines.