Response issue 19 by Ebiquity

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INTERNATIONAL

MARCOMMS INSIGHTS FROM EBIQUITY

CMO RESEARCH HERALDS

‘DATA DAWN’ IN EUROPE

Inside: Advertiser and agency partnership advice

Client interview: InterContinental Hotels Group

The digital life of a teenager in 2015

The media agency improvement plan

France: changes to the Loi Sapin

Turkey: media pool update

Issue No.19: Q2 2015

“The demands placed on today’s CMOs are intense, and the biggest challenges center on capturing, harnessing, and managing consumer and customer data.”

ISSUE 19 Q2 2015 RESPONSE RESPONSEMAGAZINE MAGAZINEFROM FROMEBIQUITY EBIQUITY

RESEARCH

COVER STORY

CMO research heralds ‘data dawn’ in Europe What keeps the modern/today’s CMOs awake at night? What resources and skills do they need to enable them to thrive in the always-on world of digital and social media? What talent and external consultancy are they looking for to help their brands to grow? Ebiquity’s Group Head of Marketing, Richard Hemming, shares the findings of a new study of CMOs worldwide. The research shows that, while concerns are similar the world over, CMOs in postrecession Europe are now actively tackling the issues and challenges of harnessing and exploiting digital data and new channel choices, to some extent following the lead of their North American counterparts.

he CMO of 2015 is required to be a very different animal from the CMO of even just five years ago. The demands placed on today’s CMOs are intense, and the biggest challenges center on capturing, harnessing, and managing consumer and customer data. The CMO who can become the master of Big Data to personalize and tailor individual customer experience – combining both logic and magic, in the words of Marc Mathieu, Unilever’s Global SVP of Marketing – is the CMO who Richard Hemming is Group Head of Marketing

View more insights at blog.ebiquity.com

will thrive. As IBM Europe’s CMO Caroline Taylor recently said, Big Data is “marketing heaven,” adding that “the biggest challenge as a marketer in the current marketplace is trying to achieve the transformation of being a ‘digital CMO’ with the speed at which digital is evolving.”

3. Exploiting new consumer channel and device choices

1. Managing the explosion in consumer data

72 percent of our global sample ranked managing the explosion in consumer data as one of their three leading challenges, compared – for instance – with social media management, which just 4 percent ranked in their top three concerns. Indeed, CMOs appear to be reaping the benefits of investment of time, resources, and personnel in social media management, an area that has historically been a major area of concern. Moreover, today’s focus on data and tech contrasts strongly with a 2007 study from Forrester that found fewer than 15 percent of CMOs ranked tech-savviness as important to their success.

2. Analyzing and exploiting consumer data to automate and/or personalize marcomms

What this new research demonstrates is that CMOs today find it difficult to deal with and

Global research findings The Ebiquity/CMO Council study asked CMOs to rank 12 challenges on a scale from most to least challenging. Across the world, the top three challenges were consistently agreed to be centered on Big Data and multi-channel analytics, specifically:

RESEARCH

“77 percent say they feel fairly or very well-equipped to manage the explosion in consumer data – 69 percent feel they are fairly or very well-equipped to automate and personalize marketing communications.” CMOs’ concerns, ranked in priority order

PRIORITY

Managing the explosion in consumer data

Analyzing and exploiting this data to automate or personalize marcomms

Exploiting new channel and device choices

Privacy concerns around customer data

Generating content marketing

Overcoming financial constraints and demonstrating ROI

Decreasing brand loyalty

Corporate transparency and reputation management

Consumer collaboration and influence online

Realizing the potential in growth markets

Social media management

Shifting consumer demographics

harness the benefits from the smog of data that digital and social media assets generate. They’re aware that digital analytics – in essence, understanding how their customers experience their brand across multiple channels and devices – offers the prospect of automated, personalized, and highly-targeted marketing communications, but they are also honest enough to admit this is still relatively uncharted territory. Our findings echo a recent study conducted by IBM which showed that 79 percent of CMOs feel underprepared to manage the impact of key changes in marketing, particularly the data explosion, and growth of channel and device choices. Moreover, although globally CMOs are most concerned about how to manage, analyze, and exploit consumer data across channels and platforms, they are nevertheless confident that they will succeed. 77 percent say they

feel fairly or very well-equipped to manage the explosion in consumer data – 69 percent feel they are fairly or very well-equipped to automate and personalize marketing communications. But it’s clear they won’t be doing this alone or using solely in-house resource. One of the consequences of the rapid drive to digital analytics is a global talent squeeze, and seven in ten global CMOs plan to recruit external consultancy help to manage consumer data, and almost eight in ten plan to work with external partners to automate and personalize marcomms. Our finding that managing and exploiting consumer data is a pain point for CMOs specifically and not for marketing executives in general is backed up by a recent article in DM News. This showed that while 64 percent of CMOs have marketing analytics as a responsibility, by contrast only 31 percent

of marketing executives say that harnessing insights from Big Data is a pain point. The onus of data-into-insights rests with the top women and men in the marketing world.

The European ‘data dawn’ It is generally agreed that North American businesses lead the world in the application of digital analytics to grow their businesses, tailoring marcomms at the individual customer level. During the recessionary years around the end of the first decade of the new millennium, many European businesses stalled investment here just as customer data was exploding and new opportunities for more effective and measurable targeting became possible. The responses in the CMO Council’s research for Ebiquity from CMOs based in Europe

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RESEARCH

Managing the explosion in consumer data is in top 3 challenges

All CMOs

Euro CMOs

72%

79%

Will recruit external partner to address this challenge

All CMOs

Euro CMOs

70%

82%

“Like their North American counterparts, European CMOs say they are confident they will be able to address this challenge, with 78 percent saying they are fairly or very well-equipped to tackle it.” suggest that the continent’s marketers are at a critical inflection point in the history of commerce managing digital customer data to automate and personalize marketing. Europe’s pause in developing solutions in this space means that European CMOs see managing the explosion in consumer data as even more of a priority than their peers in North America or elsewhere (79 percent rank this concern as among their top three challenges against 72 percent globally). Morag Blazey, CEO of Ebiquity UK, commented: “Consumer data analytics features in more and more of our client briefs. It is clear that marketers across Europe have realized that embracing multichannel analytics – a new skillset for many – is critical to the future success of their business.”

Like their North American counterparts, European CMOs say they are confident they will be able to address this challenge, with 78 percent saying they are fairly or very well-equipped to tackle it, but they will be even more dependent on external consultancy help in managing the explosion of consumer data. 82 percent in Europe – compared with just 58 percent of CMOs in the USA/Canada, and 70 percent worldwide – will turn to external help, suggesting that the talent crunch is even more pronounced in Europe. Dietmar Kruse, CEO Continental Europe at Ebiquity, added: “Our experience helping US brands in this area (see sidebar) is leading to deeper conversations with their European counterparts. What is clear is that Europe’s ‘data dawn’ is very definitely upon us, and we’re ready for the challenge.” *Ebiquity/CMO Council research 2014/15

View more insights at blog.ebiquity.com

Transforming business through digital analytics Stratigent, Ebiquity’s North American Multi-Channel Analytics subsidiary, has an established track record in helping businesses to manage, analyze, and harness the power of digital data from across the customer journey to commercial advantage. For InterContinental Hotels Group – operating 4,800 hotels across 100 countries and nine brands – Stratigent has helped the hotel operator innovate at scale, from effective tag management to global web analytics. See the interview with IHG’s Garrod Gibb also in this issue (page 10). For a major FMCG player, Stratigent implemented an evidence- and behaviorbased redesign of the client’s webpage, enhanced the shopping cart experience and functionality, and maximized cross-sell and upsell opportunities. And for a leading airline, Stratigent has improved the customer journey at every step to deliver an additional $30m in annual revenue.

About our research The CMO Council is a knowledge-sharing, by-invitation network of thousands of seniorlevel marketers from across the world. In early 2015, Ebiquity commissioned the Council to poll a representative sample of 224 of its members to help us understand CMOs’ biggest concerns and challenges. While four in ten of the sample polled are based in North America, three in ten work in Europe, and two in ten in Asia. Their most common job titles were SVP/EVP Marketing, Head of Marketing, CMO, Marketing Director, and VP of Marketing. Respondents came equally from B2C, B2B, and B2C-B2B hybrid businesses, with a third in each group. They work in a broad crosssection of categories, with entertainment and leisure (18 percent), retail (17), and consumer electronics (12) the bestrepresented. Respondents ranged from Adidas to Mondelez, Burberry to Samsung, Yum! to Jaguar Land Rover, with 60 percent of their companies having revenues in excess of $1bn. A third of those polled have media budgets greater than $50m.

ADVERTISER / AGENCY RELATIONSHIPS

FEATURE

Like marriage, great clientagency relationships need constant vigilance Two years ago, we published an article1 on the secrets of great partnerships between advertisers and media agencies. Since then, plenty has changed in the dynamics of this critical relationship, so now is a good time for Stephen Broderick – Global CEO of FirmDecisions, Ebiquity’s compliance auditing business – to update our advice.

ver recent years, it is clear that trust between media agencies and advertisers has eroded. Across the world, the onward march of programmatic buying and decreased transparency have done nothing to help. Recent examples of the causes behind the erosion in trust include:

•

The current controversies in Australia (see commentary over) and media rebates in the US have kept the topic of accountability high on advertisers’ concerns. A former senior agency finance executive has suggested that, despite the common view that the market is relatively transparent, kick-backs have been an established part of the market for many years. Following further, very recent revelations, it is expected that this will be a hotly-debated subject at the ANA Financial Management Conference at the end of April 2015.

The advent and growing dominance of Automated Trading Desks (ATDs) had made agency paper trails more opaque than ever,

and, with Ebiquity CEOs estimating2 that between 12 and 15 percent of all advertising inventory will be traded programmatically by the end of 2015, the odds are stacked increasingly against harmonious clientagency relationships. On one level, clients only have themselves to blame, as agencies enticed them into signing up for apparently keenly-priced digital deals on the proviso that the clients signed away their audit rights, excluding specified media from audit. True transparency requires a full audit of the composition of media pricing and the rebate chain at agency and group level, yet Ebiquity data suggests that today as much as 50 percent of digital revenue remains in agency groups as revenue and/or via markups during the purchase. While some of this is necessary – for adserving and technical costs – a lack of insight into the purchasing trail has meant many advertisers are fundamentally unclear how their money is being spent and managed by agencies; agencies are doing little to clear muddy waters. Consolidation in the agency world into fewer, bigger, and – critically – listed groups has created an oligarchy of media agency powerplayers who have their own shareholders to

satisfy and targets to meet. The net result of consolidation is that even major advertisers like multi-brand FMCGs are only a small part of a GroupM or Vivaki portfolio. So at a time when agency margins have increased as much as they have as a result of non-transparent media trading and agency rebates, it’s time advertisers asserted themselves. Here’s our six-point plan for better clientagency relationships:

• • •

Have a fair and clear contract – based on your own and not your agency’s template – and enforce it, with regular checks Work with industry bodies including the WFA and ISBA to write better contracts Insist on 100 percent visibility of an audit

Stephen Broderick is Global CEO of FirmDecisions

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The view from Australia Eric Faulkner, Chairman of Ebiquity Asia Pacific, gives his perspective on the value pots issue in Australia. I loved the line in a recent blog article4 from a hypothetical CMO, when talking about agency pitches: “Meanwhile, for anyone wondering about the race to the bottom, I reckon you hit it about three years ago. Not that anyone seemed to notice.”

“The advent and growing dominance of Automated Trading Desks (ATDs) had made agency paper trails more opaque than ever.” • Pay your agency a fair fee, with clear KPIs • Don’t make your relationship about the cheapest media • Consider doing deals direct with media owners, as well as with the major platforms such as Google or Facebook

In 2012, we talked about client-agency relationships as arranged marriages needing a good marriage contract. As negotiations have got tougher in the intervening period, it’s become increasingly important for advertisers and agencies to sign and enforce the equivalent of pre-nuptial agreements, and indeed that exact language is starting to be used in pitches; clients are now routinely encouraged to get agency agreement on legal and commercial terms as a precondition of agencies getting on the pitch list.

And while what’s happening in Asia, Australia, and the Americas is top of mind right now, it’s important to remember that these issues aren’t new – they’re just manifesting themselves in new ways because of the emerging trading ecosystem that programmatic brings with it. There were similar issues around IPG as long ago as 2005, as reported in Advertising Age.3 In the intervening time, global advertisers who have invested the time and effort to craft, sign, and have agencies stick to fair, clear, and binding contracts – often working in partnership with third parties such as FirmDecisions – are those that have not been affected.

Our hypothetical CMO might have added that “… this year’s media buy is 20 percent cheaper than last year’s, and that was 20 percent cheaper than the year before. So next year’s will be free. And the agency has dropped their fee to nothing already, so they’ll be paying us to handle the business next year. Not that there’s much to handle, as all the ads have appeared after midnight, and no one knows our brands or buys our products anymore. Which is just as well because the retailers take 110 percent of what we earn anyway. I wonder what the surf’s like today?” Clients don’t want to distrust or hate their media agencies. They entrust them with much confidential information about their business. They want a constructive, collaborative, and professional working relationship. But pressure is created from the beginning of the relationship. Tough and competitive price negotiations take place. Both the fee price and the media cost price are pushed to the limit, and sometimes beyond. And this creates the opportunity for the events that occurred at MediaCom Australia during the past two years. The behavior in the Australian market was not picked up earlier because of the assumption of apparent honesty. Nobody wants to assume that a key supplier will not tell you the truth. But most of us carry out spot checks to reassure ourselves. So, it might help to clarify the difference between what Ebiquity’s media consultants and what FirmDecisions’ experts do. The principal role for Ebiquity’s media consultants is to help clients and their agencies drive continual improvement. It is based on benchmarking and comparisons, not auditing. The principal role of FirmDecisions is to ensure that contractual agreements, particularly as to the financial terms, have been honored. I offer you a three-point plan for continual improvement: 1. Take an active interest in the benchmarking sessions. If they don’t cover what you need, or they are not clear enough, please say so.

References 1. Nick Manning & Stephen Broderick (2012). A matter of trust. Response. http://blog. ebiquity.com/2012/09/a-matter-of-trust-3 2. Ebiquity CEOs on 2014 and 2015. Response, 18, pp.4-5. http://blog.ebiquity.com/

2. Ask tough questions – of your agency, of your consultant, and of your marketing team. 3. If in doubt, ask a genuinely independent media consultant any advertising or media-related question.

wp-content/uploads/2014/12/Ebq_CEOs_on_2014-15.pdf 3. Bradley Johnson (2005). IPG Offers Details Behind $550 Million Restatement. Advertising Age, 4 October 2005. http://adage.com/article/news/interpublic-offersdetails-550-million-restatement/46973/ 4. Nic Christensen (2015). What your client might not be telling you. mUmBRELLA. http://mumbrella.com.au/client-might-telling-256300

View more insights at blog.ebiquity.com

Eric Faulkner is Chairman of Ebiquity Asia Pacific

MEDIA AGENCY MANAGEMENT

FEATURE

The media agency improvement plan Media agencies have long-held aspirations to be more present in the C-suite, to become their clients’ trusted advisors and strategic partners. If they are to achieve this, they need to invest in technology and analytics, enhance their ROI and effectiveness practice, and fundamentally change their approach to transparency in the media buying chain. Here Nick Manning summarizes how media agencies must evolve for the omni-channel media age.

art 1. Becoming technology and data partners

Media agencies and their groups are not top of mind in the C-suite; they don’t receive the recognition they crave and are often seen as serviceproviders rather than trusted advisors. This limits the influence they can exert and the direct and overt fees they can command. One of the main reasons for this is that agencies have tended to under-invest in the software and analytics tools they need to harness the power of Big Data. Not just data generated by advertising and marketing, but all of the trackable and targetable steps along the customer journey.

Nick Manning is Chief Strategy Officer at Ebiquity

Ebiquity recently asked the CMO Council to determine CMOs’ concerns. The survey showed that capturing, harnessing, and using Big Data is what keeps senior marketers awake. And analyzing and exploiting data to automate and personalize marcomms is the number one as-yet-unsolved priority. Media agencies have the opportunity to be serious players here, but they are currently not high on the consideration list. Big systems integration houses, providers of cloudbased marketing suites, and management consultancies with strong analytics capabilities are all edging media agencies out, and may push them out altogether if agencies fail to evolve. To get back into the consideration set, media agencies need to up their tech game, broaden the definition of ‘advertising’ to cover all aspects of PESO (Paid, Earned, Shared, and Owned) media, and – indeed – get back to the future. Media agencies used to be all about delivering the right message in the right channel to the right customer at the right time. Big Data analytics allows this to happen like never before, but, in a multi-channel, multidevice world, agencies need to build analytics

and programmatic targeting into their core suite of services – or risk remaining undervalued.

Part 2. Becoming effectiveness and ROI partners Today’s media agencies are not sufficiently focused on business outcomes, nor do they speak the language of the C-suite. Cost savings and engagement are necessary but not sufficient, and, if they’re all that agencies are valued for, CMOs will look elsewhere for support in top-table discussions. The C-suite deals in sales, turnover, margin, EPS, and EBITDA. The purpose of marketing is to have a positive impact on hard financial metrics, and media agencies need to embrace the disruptive power of emerging technology to map channel and content strategies to business outcomes. Econometrics, modeling, and testing are important, but modeling that demonstrates causation and not mere correlation is what will attract attention and credibility from the C-suite. To thrive, agencies need to become a client’s effectiveness and ROI partner, first and foremost.

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“If media agencies are to become serious C-suite trusted advisors, they need to become accountable and transparent.” Part 3. Accountability, transparency, and trust If media agencies are to become serious C-suite trusted advisors, they need to become accountable and transparent. The drive to programmatic media buying has done little to help the media agencies’ reputation for lack of transparency. Black boxes are appearing everywhere. The industry has consolidated into a few big groups, each of which has enormous purchasing power. Most are publicly-owned and under pressure to improve margin and profit. Many have used the rapid growth of digital media transactions to throw a smokescreen over how they transact media, and contracts for programmatic buying frequently require clients to waive audit rights. It is ironic that it is the most measurable – the digital – media channels that are actually the most opaque and unaccountable. Not only do clients have little idea how their budgets are being spent; half of online advertising is not viewable. In addition, many ads are only viewed by non-human (bot) traffic, and there are frequent cases

View more insights at blog.ebiquity.com

of fraud emerging, with many ads never actually served to real people. None of the justifications for the prevailing lack of transparency are acceptable – it’s a complex eco-system, the pressures exerted by procurement, or the fact that Automated Trading Desks enrich data.

Part 4. A different model and a new name The media environment has fundamentally changed and digitalized, and it’s certain that commercial communication will move everfurther online. Media agencies have changed how they do business –particularly how they transact media – but these changes have done nothing to enhance the C-suite’s trust in and partnership with agencies. Quite the opposite. And if media agencies don’t invest in data and analytics, ROI and effectiveness, accountability and transparency, they run the risk of becoming increasingly irrelevant. Tech companies, marketing suite providers, and independent consultancies such as Ebiquity are better placed than today’s agency groups to deliver the impartiality

and independence that clients crave. For their part, advertisers are likely to increase the scope and reach of the deals they do direct with platforms including Google and Facebook. The agency model is not dead, and if media agencies recast themselves – perhaps as Channel Optimization Agencies – they can play their trump card: insight. Technology cannot deliver insights – skilled and knowledgeable humans do. And those who can analyze data to demonstrate bottom-line effectiveness, transparently and accountably, will be highly-prized by those who serve clients best. Nick Manning has expanded on the four themes summarized in this article – data and technology, effectiveness and ROI, accountability and transparency, and different models and names – in a series of blog articles at http://blog.ebiquity.com. Visit the site to discover more.

INTERVIEW

CLIENT INSIGHTS

How multi-channel analytics helps IHG understand its customers InterContinental Hotels Group is one of the world’s largest leisure businesses* managing 4,800 hotels and 710,000 guest rooms in nearly 100 countries. Over 350,000 people work across IHG’s hotels and corporate offices worldwide. Over the past four years, IHG has invested significantly in multi-channel digital analytics, turning what was a Cinderella discipline into the beating heart of the global business.

ased out of the company’s Atlanta HQ, Garrod Gibb leads a global digital analytics group of 16, with teams in Atlanta – Georgia, Salt Lake City – Utah, Charleston – South Carolina, and Manila – Philippines. He is responsible for the online voice of the customer, AB testing, digital analytics, and call center analytics. Here, Garrod explains how intelligent and timely interrogation of digital data has transformed IHG’s ability to understand and serve its customers better.

What challenges did you face when you took on this role? When I arrived at IHG in 2011, the company was using an older software implementation managed by a pretty small team. The management were understandably cautious as they were not sure how much, or if, they could trust apparent trends in the data. We saw a great opportunity to help create a new way of thinking. In the past four years, our use and application of digital media analytics has shifted in some pretty significant ways. We have made smart

structural decisions, are confident in the insights and implications we get from our data, and are now a digital-first business that’s got new and powerful reach into its digital properties.

and after their stay. The way we develop a relationship with customers – online as much as in person – is a key driver of satisfaction, repeat business, and creating preference for our brands. So we use digital analytics to gain insights into who our customers are, what they want, and what they prefer.

“We need the analytics talent pool to catch up… it’s a challenge for all businesses and organizations across the world.”

For example, we analyze the text of all calls we receive at our call centers to understand what may be missing or confusing about the web experience, and then use this information to take the right actions to solve it. Also, our call center staff can see what a customer has seen online immediately before calling, so we can serve them better. In both cases, we’ve created a feedback loop between our digital and voice channels, and this has enhanced overall customer experience.

What are the particular challenges in the hotel sector that you look to solve with digital analytics? We’re in the hospitality business, which continues to evolve and shift with our customers’ expectations before, during,

And how about the challenges of trying to institute multi-channel analytics across multiple brands, markets, and languages? It’s true that each brand within each market behaves differently, and we do have a very large number of market/brand/language combinations, as our 9 brands are present in

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audiences – such as the impact of messages about urgency of available hotel rooms for people traveling tomorrow – and tailor more impactful promotions accordingly. Like everything our team does, AB testing allows us to understand different customers better and segment our targeting with more impact.

How do you balance in-house resource with external support?

Garrod Gibb - Director, Digital Analytics & Site Optimization at InterContinental Hotels Group

almost 100 countries. While it can be difficult to understand all of the local nuances, with our team and structure in place, over the past four years we’ve demonstrated that it can be done, successfully.

What is the scale of return on investment you get from digital analytics? Multi-channel analytics significantly reduces the guesswork from design, waste in process and time, and better enables our commercial teams to focus on the right things. We’ve learned, for example, through urgency message testing “Book now – just four rooms left at this price!” has little impact on people traveling tonight or tomorrow, but a major influence on those traveling a week from today. These insights allow us to understand our customers’ motivations like never before. Generally speaking, we can see returns in the order of 600-800 percent for single tests in terms of ROI. And we can tell we’re doing things right when our annual results reports are full of digital success stories about the outcomes of our campaigns.

Tell us about how you use AB and multivariate testing to optimize the performance of your digital properties. AB testing is probably the most valuable and powerful tool we have. While knowing what has happened historically allows us to predict the future based on historical customer behavior, AB testing allows us to isolate and control for particular variables among specific

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Over the past four years, our team has grown from four to sixteen, and now reaches across four sites and three time zones so we function around the clock. We’ve grown our capabilities and capacity to enable us to innovate and serve our multiple brands and geographies at scale. In addition, we’ve partnered with Stratigent – Ebiquity’s US-based multi-channel analytics company – since 2011. Because they’re solution-agnostic, they give us unbiased advice about the tools we should recruit and deploy. They’ve evolved to become a strategic partner for us due to their understanding of both technology and the digital analytics space. This combination of in-house and consultancy expertise means we continue to advance on our strategic goals.

“Multi-channel analytics significantly reduces the guesswork from design, waste in process and time, and better enables our commercial teams to focus on the right things.”

And finally, what do you see as the biggest challenges in the coming years? If I had to choose, I would say two: data and people. With the explosion of data sources and data types – particularly from mobile – we need to apply the same rigor to the new data we’re acquiring as a business, and integrate it with what we’ve already got. But to do that, we need to expand to include more high-quality analysts across our business. This is not just a challenge for IHG or the hospitality industry; it’s a challenge for all businesses and organizations across the world. *IHG’s (InterContinental Hotels Group) portfolio of hotel brands includes InterContinental® Hotels & Resorts, HUALUXE® Hotels and Resorts, Crowne Plaza® Hotels & Resorts, Hotel Indigo®, EVEN™ Hotels, Holiday Inn® Hotels & Resorts, Holiday Inn Express®, Staybridge Suites®, and Candlewood Suites®. In January 2015, IHG acquired Kimpton Hotels & Restaurants, the world’s leading boutique hotel business.

COMMUNICATIONS INSIGHT

ADVERTISING TRENDS

The digital life of teens in 2015

Today’s teenagers have never lived a purely analog existence. Ebiquity’s Senior Insight Analyst Martin Broad explores the consequences of their always-on, hyper-connected lives and how brands should approach and interact with them.

rands often talk about the need to target digital natives: the generation of youngsters who have grown up always surrounded by digital technologies. However, the lack of common ground between marketers and young people makes targeting this demographic effectively particularly difficult. So what is life like for an adolescent today and what trends should marketers follow and avoid? It would be tempting when considering this issue to romanticize the past, but in many ways the world before the rise of digital was a ‘golden age’ of childhood play. School days were shorter, children had less homework, and – perhaps critically in terms of play and early development – the sense of innocence that comes with less access to media still existed. Anyone with children will tell you it’s different today. Children are under intense pressure to perform well at school – indeed, the stress of government inspections and ratings has led many teachers to train students for exams, rather than allow them to explore the love of learning – and this emphasis on work can stifle creativity. Most importantly, children have a very different understanding of ‘play’ today. The days of being turned out to play in the streets until dinner are over. Moreover, the figure of an

adult is never far away. Scores of parents drop their kids off at playdates and pick them up with military precision, with the child always under the watchful eye of a guardian.

Justin Timberlake or Britney Spears would have headed the charts, but the top five celebrities named were exclusively YouTube stars like PewDiePie (an online comedian, for those readers older than 14) and cross-media sitcom creators, The Fine Bros.

“76 percent of millennials have their own smartphone, and US youths spend on average 7.5 hours a day consuming media.”

The power of the smartphone also means how teens actively engage with the world is different, too. Any parent with a teenage child knows that they are effectively addicted to their mobiles. In fact, a recent study from CTIA Harris and Interactive found that 47 percent of US teens say their social lives “would end or be dramatically worsened” without their mobile phone. For this generation, the mobile phone goes hand-in-hand with the selfie.

Generation smartphone When they’re not busy with school or with play, teens and tweens are busy with media. 76 percent of millennials have their own smartphone, and US youths spend on average 7.5 hours a day consuming media. No other generation has been exposed to information so continuously, and it’s changing their worldview. In 2014, Variety magazine asked 13-18-year-olds who they rated as the most influential contemporary celebrities. Only a few years ago, mainstream figures such as

Today’s children spend more time online being rated by their peers than any other generation in history, through likes, retweets, shares, pins, fans, and followers. The selfie invites opinions to be registered and for the child posting to be positively evaluated, and therefore ‘popular.’ Yet wherever there is a popular child, there is one who is equally unpopular, and it is here that the pressures of digital life for young people can have profound consequences. Cyberbullying is a well-publicized phenomenon, and no demographic feels this more acutely than teenagers. Ask.FM is a ‘Q&A’ social network with around 150 million monthly users (particularly young people) who are able to send questions and answers

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to each other. The relatively unfiltered nature of the site led to several extreme cases of cyberbullying in 2013, ending in the suicides of a number of teenagers. Despite being under immense pressure from parents to shut down, Ask.FM remained live and instead focused on trying to provide a safer and more responsible forum for people to communicate. Laudable as that may be, the clear lesson here is that young people are invested in their digital lives to such a degree that criticism from their peers can have tragic outcomes.

Finding a voice on social and digital media So given the particular and often intense dynamics of teenagers’ digital existence, how should brands and marketers speak to them in digital and social media? The starting point must be to recognize that life for young people is pressured and stressful. The democratization and independence that come with the internet and access to content are double-edged swords, and brands that can alleviate some of the strains of the digital life – and even tackle the issues that lurk in the underbelly of the internet – will prosper. Brands may also need to think about the ambassadors they choose to speak to young people. One of the key takeaways from the Variety poll is that, as new technologies

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emerge and youngsters continue to live in online arenas of which adults are relatively ignorant, newer and more influential figures will continue to take over. The new wave of YouTube stars have a pre-packaged audience of engaged young people, and although they will soon come under restrictions regarding brand promotions – YouTube stars Dan Howell and Phil Lester have already had an ad with Oreos banned under new legislation – transparent partnerships will inevitably reap valuable dividends for brands. There may also be something to be said about the nature of ‘play’ for today’s children. Brands should take note that the notion of play has in some ways perhaps become too structured and authoritarian for children today. Undoubtedly parents are a key gateway

to younger children and should certainly be included to a degree. But brands that can offer fun, exciting, and safe arenas for children to play and interact with each other in meaningful ways will undoubtedly strike a chord with the next generation. What happens when today’s teenage consumers become tomorrow’s marketers is another question altogether.

Martin Broad is a Senior Insight Analyst at Ebiquity

“The new wave of YouTube stars have a prepackaged audience of engaged young people, and although they will soon come under restrictions regarding brand promotions… transparent partnerships will inevitably reap valuable dividends for brands.”

MEDIA Gaelle Simon-Drocourt is Digital Manager at Ebiquity France

SPOTLIGHT ON

French Loi Sapin extended to digital media In 1993, the French government introduced a new anti-corruption law, the Loi Sapin, designed to introduce transparency into media buying.

t required rate card prices to be published and invoices sent to the advertiser, even if payment was made by the agency. Media agencies also lost their status as central media buyers with the right to buy in bulk and resell to advertisers. In January 2015, the French government proposed that the phrase ‘any medium whatsoever’ should be added to the regulation, extending its application to cover online transactions. This is likely to become formally ratified in law this summer. Gaelle Simon-Drocourt, Digital Manager at Ebiquity France, considers the arguments for and against. The French digital advertising market was worth €2.9bn in 2014, a quarter of total advertising spend. Display represents €813m, a quarter of which is bought programmatically. This means €10-15m was received by intermediaries in the programmatic chain, a figure which will grow as digital grows. Moreover, programmatic already covers display, mobile, and so-called ‘private deals,’ and will soon incorporate traditional media too. The proposal to apply the Loi Sapin to all forms of digital media buying has split the industry down the middle in terms of how the law will be applied and to whom, centered on the issue of real-time bidding (RTB). On one side are the media agencies, represented by their trade body, UDECAM. They believe that media agencies are already sufficiently transparent, and argue that RTB – which includes additional services that

transform the advertising space, including injecting audience targeting – should not be subject to the same regulations as other media. This new buying mode is also sold by retargeters, ad networks, and independent trading desks, none of which are subject to the Loi Sapin. Hence, the agencies claim, RTB should have a different status: a status created and technically defined by UDECAM as “space transformer” (transformateur d’espaces).

“In January 2015, the government proposed that the phrase ‘any medium whatsoever’ should be added to the regulation, extending its application to cover online transactions.” And on the other side are the advertisers, led by the UDA (the French affiliate of the World Federation of Advertisers (WFA)), who make it a priority to ensure maximum possible transparency; advertisers want to know where spend goes within the transaction funnel. They reject UDECAM’s claims of special status, arguing that RTB transactions include advertising space, and so the Loi Sapin should apply.

Compromise appears unlikely, especially as advertisers are looking to secure substantial savings across all market segments, including retargeting and programmatic. Advertisers are not willing to pay the requested 20-30 percent agency commission, particularly because of the almost total lack of transparency. To enhance transparency, the UDA is encouraging detailed reporting to measure actual performance and quality of media buying, as well as detailed human and technology costs.

Ebiquity opinion In order to improve transparency for RTB, it is recommended that advertisers ensure that the following clauses, rights, and abilities are included in agency contracts:

• • • • • • •

Check all invoices at all stages of the chain Have access to a consultative account management platform and not just the client interface Split the budget dedicated to media buying with the purchase of third-party data, cost of tools, and trading desk fees Distinguish budgets for acquisition and those for retargeting and their respective results Monitor campaign results by network, site, or ad exchange Institute systematic implementation of a brand safety/fraud tool to check the broadcast environment for all campaigns Apply a visibility tool routinely for branding campaigns, to check the quality of the inventory

ISSUE 19 Q2 2015 RESPONSE MAGAZINE FROM EBIQUITY

MEDIA

ASK AN EXPERT

Threat to media pooling in Turkey Since media auditing was first developed in the UK in 1976, there have been periodic debates between clients, auditors, and the media industry regarding media auditors’ data pools. Ebiquity’s Martin Sambrook, International Practice Leader in Media Audit & Effectiveness, explores the current issue in Turkey.

n 2013, German TV sales owners sought to restrict the pooling of client data by media auditors. This was met by a robust response from advertisers and competition authorities alike, leading to agreement that audit data pools could stay.

“The practice of media auditing has been reviewed in recent years by several national competition regulators within the EU. Regulators have consistently found that media auditors bring transparency to otherwise opaque markets and so are beneficial to competition and free trade.” View more insights at blog.ebiquity.com

2014 also saw an attack on data pooling in Turkey, when the local association of TV broadcasters alleged yurddas + partners and its clients were violating competition laws. yurddas immediately contacted the Turkish Competition Authority to protest and the Turkish association of advertisers to establish a framework in this rapidly-developing media market. Soon afterwards, a WFA conference in Istanbul stressed advertisers’ right to audit.

Interim decision The Competition Authority opened a preliminary investigation and gave an interim decision to the Association. With no justification for its decision expected for several months, this leaves the Turkish market in significant uncertainty. The decision states that yurddas and its clients have not committed any offence or breach of Turkish competition law, and so there is no need for formal investigation. What is remarkable, however, is that it goes on to say there could be future breaches, given that yurddas’ price data pool could expand. On that basis, the Authority recommended cessation of yurddas’ price data pool activity. In January 2015, yurddas received notification requiring them to stop their service immediately.

Ebiquity opinion We must be cautious in commenting on this matter as legal proceedings are ongoing,

including yurddas challenging the decision and cessation order. The practice of media auditing has been reviewed in recent years by several national competition regulators within the EU. Regulators have consistently found that media auditors bring transparency to otherwise opaque markets and so are beneficial to competition and free trade. The interim decision in Turkey runs counter to existing thinking within the EU. Ebiquity believes that all markets should operate freely and openly. In the global media market, those disciplines are enhanced – not threatened – by media auditing.

The future To provide a continuous media audit service to advertisers, yurddas has developed a price benchmarking methodology anticipating the requirements of the Competition Authority, while in no way acknowledging that the current practice is unlawful. Regardless of whether advertisers currently use a price data pool service in Turkey, Ebiquity urges them to lobby local Turkish companies/subsidiaries to put the case for transparency and good business practice. Martin Sambrook is International Practice Leader in Media Audit & Effectiveness

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