Have a Plan for Adding New Services? We’ve Got One For You

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There’s been a steady drumbeat of technology IPOs this year, with staggering valuations of software stocks. Recent IPOs are up an average of 28% in the last month alone versus the entire software market that’s up 13% in the same period, according to Investor’s Business Daily.

If you’re an advertising agency, you’ve contributed to the success of these software stocks by recommending various products to your clients or investing in multiple SaaS solutions. But how many of those solutions are making money for you? Agencies shouldn’t put money toward more tools that could potentially have zero ROI. You really need to invest in technology that easily allows you to add new services so that you can be more competitive and profitable. These new services should benefit your clients so much so that they can be billed directly, helping you cover the tech investment.

CHALLENGE THE STATUS QUO

It’s already an incredibly challenging market for all ad agencies. For small to mid-size agencies, you’re facing competition from large shops that have tremendous scale, service providers like Google and Facebook are trying to cut you out of media planning, vendor solutions are going brand direct, and consulting firms like Deloitte are building competitive practices. You’re also dealing with having to choose from a growing number of tech solutions for executing digital and mobile strategies.

But what we’ve noticed over the last few years is a disconnect in how agencies standardize their practices for clients. You’re limited by the technology you’ve already invested in and by the ability of that technology to create multiple avenues of excellence.

Traditionally, if you wanted a programmatic solution, you used a DSP. If you wanted a way to access third-party data, you or your client licensed a DMP. If you wanted to understand the people visiting your client’s site, you leveraged another combination of three letter acronyms, from TMS to GTM to CDP.  We need to break the cycle of disconnected technology and data if agencies are going to succeed.

MAKE DATA YOUR KING

You should be making the transformation to the agency of the future by weaving deep consumer insights into all aspects of what you do. Data-aware and data conversant are table stakes. There’s a recurring theme around how customer data will keep transforming marketing, according to AdAge. Brands will need a data strategy and the right technology to allow them to analyze and draw insights from data to better inform their overall marketing strategy and drive more effective engagement through activation or other channels.

Agencies have the ability to adapt.  We’ve seen smaller and independent shops successfully taking business from larger firms as clients want faster innovation and more focus on one-to-one marketing and less focus on massive scale media plans that have looked the same for the last five years. This is good news but you still need to deliver value.

Agencies need to rethink the way they’re using technology to help clients as brands demand more data-driven solutions for their advertising and messaging. You should be investing in technology that isn’t just a SaaS product that checks off a box, but actually gives you a way to offer something new to your clients like “outcomes as a service,” “persona development as a service,” “audience insights and reporting as a service.”

START SEEING INCREMENTAL DOLLARS

Based on this “as a service” model, we’ve been urging our agency clients to treat the Resonate consumer intelligence platform as a client-funded initiative. We’re leaving it up to you to build the price points for these “as a service” offerings. This allows you to sell outside your current scope of work for incremental dollars.

Did you catch that? Incremental dollars? You can add value to the work you do for your clients by offering deeper, richer analytics and insights while seeing the ROI of your tech investment much faster.

Want to learn more about how Resonate can help you grow revenue? Reach out and we’ll tell you!

 

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Is it time for an agency uprising?

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The answer is yes. Advertising and media agencies have been taking a beating. Ad Age and AdWeek are filled with stories about competition from completely new players, outdated agency models, a lack of talent and creativity and big firms losing their sway to smaller players.

Sounds like it’s time for agencies to wake up and start leading the disruption the industry so badly needs. Agencies need to stand out in a creative way and provide more insightful and long-term client solutions. Those ready to embrace the future need consumer insights to give new life to how they communicate with existing and potential clients’ consumers.

How the agency competition has changed

We all know that many brands are ditching their big agencies for smaller teams that can offer something a little more creative and targeted. One recent example was Popchips, which had been using Palisades, a $350M media agency. It moved to PK4 Media, a 10-person firm because, like many other companies, Popchips is more interested in who they are reaching rather than just reaching large masses of people. Popchips CEO Marc Seguin told Digiday that the discount rates on impressions Popchips used to get from the large agencies didn’t help the company fulfill its goals. Now the snack company is trying to make an emotional connection with its target audience of health-conscious women. So, who is reached is more important than the number of platforms used, or the total number of impressions achieved.

And we all know the threat from consulting firms like Deloitte and Accenture now offering agency services is very real. Accenture Interactive grew 35% in 2017 and reached $6.5 billion in revenue, making it the biggest digital agency in the world. Expect that to continue as the percentage of marketers who say they would hire one of these consulting firms for agency work has almost doubled from 44% in 2016 to 77% in 2017, according to Forrester.

The new way to compete

Agencies need to compete on their ability to be data aware, data conversant and data relevant. This is where consumer insights are essential. But only if those consumer insights provide the why behind a consumer’s buying decisions. We call this the Human Element, which is a deep understanding of the consumer through the lens of their core values and motivations. In other words, it’s getting to the “what” that drives the emotional “why.” With several thousand attributes in our platform, describing more than 175 million US consumers, Resonate’s intelligence distills the Human Element.

Imagine the cut-throat competition among coffee shops out there. They’re all trying to understand the lure of one coffee place over another for caffeine-craving consumers. We can help develop in-depth personas of coffee consumers across the US. For example, Resonate’s insights show that people who get their coffee at Caribou Coffee, Pete’s and Starbucks are 81% more likely than the average consumer to volunteer for a cause.

When making purchases, this same group of coffee lovers considers these top three psychological drivers: social and professional status, living an exciting life and getting recognition from their peers. Their top reasons for visiting these coffee shops: for a treat, it’s convenient and it’s just their usual spot to grab coffee. We can also pull from our insights that they spend 20-40 hours online per week and their top social media consumption is with Tumblr, Snapchat and Reddit.

We can now build the persona of an individual who after a morning spent working on a charitable cause heads to the local coffee shop with like-minded friends for a treat as a personal reward. Having deeper insight like this can help creatives produce more relevant messaging that truly resonates more quickly with a target audience. Rather than reaching a larger swath of people, these deep consumer insights provide better messaging to the people who matter most to the brand because we know what they care about and the media they consume.

Consumer insights change the game

Resonate’s insights come from two powerful types of data: consumer surveys and streams of online consumer activity. Resonate runs continuous waves of long-form surveys throughout the year that yield hundreds of thousands of responses from people who have double opted-in to participate. The goal of these surveys is to get not only basic demographic variables, purchasing and political preferences but also to understand why they made those decisions and the values that guide those decisions.

We then turn to online activity to complete the story at scale. Resonate analyzes tens of billions of web events each day linked to the survey respondents. These events and activities are anonymous and compliant with all consumer privacy principals. Our platform analyzes the anonymous web traffic processed through our natural language processing and looks for keywords to understand the page that the person visited. Then machine learning takes their survey responses and their web activity to create predictive models that help marketers understand and connect with their target audiences. Typically, by the time research like this gets to the marketer, it’s several months old. Our proprietary data is updated daily, so it’s the most up-to-date in the industry.

Consumer insights should also be accurate, and agencies will need to address this with their clients. We estimate that 20% of survey data is bad based on what happens when human beings sit down to take a survey. A lot can go wrong. Resonate uses a proprietary “fraud score” to find that bad data in our own surveys so we can ensure that the insights we’re providing are the closest measure of consumers. With more accuracy comes better targeting, which is top of mind for brands. Being able to deliver messages that resonate will be key for turning campaigns into CLV for agency clients.

Agencies, the uprising is upon you. Take this opportunity to give brands what they really want – creativity, personalization, innovation, accuracy and transparency. Consumer insights that show the “why” behind consumer behaviors are key. Resonate’s SaaS platform will help agency clients connect with their targets more accurately and quickly and make the job of agency creatives more efficient with better consumer insights.

Want to learn more? Let us show you how quickly and easily Resonate’s consumer insights platform will transform your work.

 

How Advertising and Subscriptions Win Together

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As subscription revenue growth across print and digital audiences has become the new norm in the media industry, publishers can no longer rely solely on advertising revenue while charting a path to profitability.

But how can publishers win by identifying audiences most likely to buy as digital subscriptions are in the spotlight?

There is a winning formula evident in the current revolution in the industry that solves this challenge.

Here is how it works:

1. Adopting the Wave of Paywalls

Over the past eight years, local news publishers have increasingly adopted paywalls as a means of growing and retaining subscriber revenue. This shift was propelled by success at the Wall Street Journal, New York Times and Washington Post in growing digital subscriptions.

This rise of digital subscription revenue promotes value for both publishers and readers. For publishers, new revenue streams are fostered. This is key to helping sustain or offset business pressures facing newsrooms due to changing news consumption habits.

Readers have a more appealing experience because of fewer ads on publisher websites. This gives them cleaner experiences, faster page load times and overall less clutter.

While digital subscription paywalls may limit the ad revenue opportunity from ads served on a publisher’s site, they do provide publishers with an opportunity to refine their advertising revenue strategy.

2. Gaining Stronger Consumer Insights

As consumers move from desktop to mobile and paywalls limit the number of visitors reading content, a good sales strategy requires selling digital inventory in more concrete ways. This starts with emphasizing quality of content and audience, while moving away from impression-based selling.

To do both successfully, the publisher must have audience insights platforms that validate both content and audience values. This requires insights that go beyond basic demographics. Publishers will need to highlight their audience’s psychographics: consumer preferences, affinities and likelihood to buy.

3. Adopting the Shift to Sponsorships

Publishers and advertisers benefit from the ensuing strategy shift that emphasizes sponsorships.  Instead of offering or chasing impressions on a publisher’s site with better insights to validate an environment, sponsorships are the prevailing opportunity on the site.

An advertiser can invest in fixed blocks of advertising or shares of voice of certain types of content. An example of this could be 50 percent of advertising adjacent to all football content for one week or 100 percent of the pre-roll ad placements within video content for a day.

The benefits of this strategy are obvious:

  • Advertisers get more visibility in the environments they want the most
  • Fewer competitors or other advertisers run at the same time making the ad message more likely to get noticed
  • Publishers typically get higher revenue per page view (RPM) and are no longer focused on trying to deliver impressions at all costs
  • Readers see a cleaner environment and the sponsorships (when promoted) tell them that advertising partners value the opportunity

4. Providing Digital Marketing Services

Finally, as digital advertising requires more sophistication by advertisers to manage their platforms and campaigns, media publishers who meet those needs become essential partners.

The trend for digital marketing services expansion by media companies is well documented. Virtually every media company with direct sales teams now offers digital marketing services in some form and a growing number have either acquired digital agencies or service companies or built their own.

Publishers offering digital marketing services redeploy sales operations to include search engine marketing, data / campaign analysis, programmatic ad buying, email marketing, custom content, social media management and website building.

Offered in addition to their traditional owned inventory, publishers needed to build stories on how the services and audience reach complemented their core offering. Publishers find themselves now competing with traditional digital agencies. Ensuring their core competencies and platforms are leading edge is a constant challenge and puts even more emphasis on having the right strategy, partners and operational structure.

Hope for the Future

Today absolutely anyone can become a publisher and audience impressions are overly abundant. Given the commoditized environment media publishers find themselves in now, it’s imperative for media companies to maximize and accentuate the distinct value of their audience and content.

Publishers that adopt these strategies are well positioned to connect with their readers and advertisers will view them as a strategic partner in delivering vitally important marketing services and insights. Winning is possible when you understand your consumer better, pair that with your distinct value and then deliver it at scale.

Learn more about how Resonate can help your media company gain stronger consumer insights. Get in touch below and we’d love to show you how!

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Clicks, Unicorns, and Magic Fairy Dust Part 1

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Collective put out an interesting study on the profile of clickers. To quote a colleague, this horse can’t possibly stand another beating.

Unfortunately it can. If you’ve run campaigns, you’ve probably seen advertisers use click metrics as a measure of driving traffic to a client’s site to raise awareness. Last year, Collective surveyed advertiser and agency executives and found 64% still use CTR to evaluate ad network performance! No wonder brand dollars haven’t moved online. The horse is still under threat of more pain. We need to stop the abuse now.

Studies from Lotame and Collective suggest you may be hurting the performance of campaigns by focusing on clicks. To illustrate, you need to understand who’s clicking on your ads.

Walk through this with me:

  • Collective says:
    • 18% of clicks are from accidental clickers.
    • 1% of all unique cookies account for 100% of clicks. A portion of that 1% is made up of serial clickers – people that, for reasons unknown, click on ads A LOT.
  • Say you get 0.1% CTR on 1,000,000 impressions. That’s 1,000 clicks.
  • Combine the previous three bullet points. Think for a second. “Performance” is a misnomer:
    • Say 5% of the 1000 are clicks from “good traffic”. The ones that care about your message. I think I’m being generous with 5% given the amount of accidental clickers and serial clickers, but if in doubt, use 25%. Use any number up to 50%. Won’t matter.
    • I’m calling these clicks “unicorns” because that’s what you’re chasing – “good traffic” embedded in clicks that may or may not be fantasy.
  • So here’s where we stand in looking at the “good traffic” in the 1000 clicks you got:
    • Unicorns at Ratio of 5%: 50
    • Unicorns at Ratio of 25%: 250
    • Unicorns at Ratio of 50%: Fantasy – not with 18% accidental clickers and a disproportionate amount of clickers being serial clickers.

But it doesn’t end there.

Look at those numbers. If you optimize against clicks, you may be letting 750 to 950 actions out of 1000 you don’t care about overwhelmingly represent the 50 to 250 actions you may care about. Then what happens through optimization?

You increase the probability of someone clicking an ad with no information about that person. Exceedingly, the larger population of serial clickers and accidental clickers take over. The inmates are running the asylum:

  • A placement with high clutter with an ad in the middle of a navigation area increases accidental clicks. Your optimization methodology sees more clicks, so heavy up on that site.
  • A placement with a high concentration of serial clickers shows higher click performance. So heavy up on that site.
  • 99% of unique cookies NEVER click on an ad. You have no way of optimizing towards your audience in that pool if you look at clicks alone. Your unicorns can’t find reinforcements.
  • Vicious cycle goes on as your ROI goes down the tubes. However, your CTR looks fantastic as it increases. Unfortunately, you haven’t raised awareness because the clicks you’ve brought on don’t care and the ones that do have been “optimized” out.

This is why I believe the two studies both showed no correlation between clicks and brand lift. You can use a higher ratio than 25% to start if you’d like, but that ratio won’t hold long term. You’re just delaying the inevitable – you shrink the Unicorn Ratio down through “optimization” and ultimately all you have are a bunch of dead unicorns (PETA Disclaimer: no equines mythical or otherwise were hurt in the writing of this post).

Absent a brand lift study, there’s no single good way to know you’re reaching the right people, but there ARE ways to optimize to better metrics than clicks. If you’re optimizing against the wrong metric, you’re actually reducing value and getting zero ROI. Doing that heavy lifting is better than wasting your ad spend. I’ll focus on some of the other options for metrics in upcoming posts. I’d do it here, but I’m out of space and the horses and unicorns need some rest…