Interview Transcript

Does this mean that with this shift to personalised marketing, these media-buying platforms will be auction-based?

Yes, I believe so. Number one is if you have an auction-based platform, you can ultimately make more money. That might sound strange when I have just said TV is expensive and at risk of a price implosion. But in reality, if you think about the value in ad TV serving to someone who will never buy a product, you've just wasted your money. If you serve an ad to someone who can afford your products, is open to your brand, and is likely to buy in the near future, you've just hit the nail on the head. If you can, as a publisher, get 100% of ads to be well-targeted, you will generate the highest CPMs because, ultimately, the advertisers will be prepared to pay more. Therefore, all platforms will or at least should be auction-based, and the ones that are not will end up being discounted in terms of pricing because of all the waste.

How do you think advertisers will change their team composition or organizational structure? Will they bring media planning or buying in-house?

It’s tricky. The question on almost every CMO’s mind is, what should I do in-house versus what should I outsource? I think at a generic level, the stuff that is very strategic and needed day-in day-out and potentially sensitive should be in house. The one-off activities, the ones requiring specialist skills that you do not think you can build should be outsourced. Your brand strategy should be in-house, but maybe when you want to redefine your brand, you use an agency to help you do that. Your data strategy and data management should be in-house. You might licence software. That’s fine, but in terms of working out where all the data sources are, how you gather them, how you organise them, that should be in-house.

Do you mean the CRM or marketing services?

Exactly. The customer database is the brain of marketing in the future. That cannot be outsourced. You can get consultants to help you with your strategy, but ultimately, employees of the company will and should own management of the data.

In terms of creative, it depends on what you want to do. There's still room for some big, bold breakthrough ads that cost a million dollars. You will probably still use agencies for those. There's also a lot of day to day activity, making thousands of different ads for all those different customer segments. That could be done from an agency if it's very well plugged in, probably embedded in your organization. Or it could be done in house. You could also licence software and do it in house, but that needs to be so embedded in the marketing routines that it cannot be an arm's length relationship.

Regarding media buying, different companies have different strategies. Most companies these days run things like search media buying in-house, and generally outsource most other stuff. Obviously, various performance advertisers will do more in house. The CPG brands, government, and banking often outsource an awful lot more.

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