> COVER STORY ‘
The digital world is famously accountable and when you move into a world where you calculate a return on investment for ad spend, it actually is an investment because there is a return’
works, roughly 20pc of the world’s population. “Yes, we still relate to each other on the street and office but
that’s been forever changed through digital overlay. The final impact is how we connect meaningfully is changing the stuff we care about.” Rayport says the idea of social networks becoming the new
broadcast networks and channels of distribution is compelling: people with a lot of connections online are valuable to brands because they influence a lot of people. “This is what inspired me to write that viral marketing article. The Social Graph Facebook talks about, our social connections are now becoming channels for content distribution – that again is an impressive impact when you talk about hundreds of millions and billions of human beings. “That, by the way, presents a happy footnote from an advertis-
ing perspective. It means there are new channels of distribution, some are more valuable than others. And boy if your media brand can be one of those mega nodes, then all of a sudden advertising becomes powerful again.”
‘Like’ this “If I just threw an ad up on Facebook with the idea that its art would attract clicks, that would be dumb in this new world,” explains Rayport. “But if I did something non-obtrusive, clever and authentic because I have a brand, that’s very powerful.” He sweeps his hand around the empty Aviva Stadium. “If I was
a Foursquare user and came here often enough I could be the mayor of Aviva Stadium. For brands and content creators that’s a lure. Geotagging of consumers is fascinating because physical retailers can engage. “In the past you would have expected a 20pc discount when Starbucks is empty but you as an individual may derive a 20pc premium when the Starbucks is crammed full. You, because you are the influencer, you are the mega node, but why would I offer your 5,000 followers on Twitter a 5pc discount? I want you because you bring a lot of people who represent premium traffic.” Rayport says the monster that is mass media in the US is falling
over itself to understand niche media, or marketing to the individ- ual based on analytics and accuracy. “One of the areas where there is a huge amount of venture capital spent in the US is in the ecosystem for serving ad messages online, supply platforms, ad
exchanges – it just goes on and on. “Google bought DoubleClick and released an upgraded version
of DoubleClick Ad Exchange; what does it do – two things, real- time bidding and individual targeting. “Philip Kotler is a fascinating man who talks about tribes of
influencers, but now you are talking about ad networks that inside the maximum allowed time of 250 milliseconds serve an ad when you show up on a website and I have an ad to fill, or in a physical place, geo-tracking. If I want to make sure I have the right message at the right time for you as an individual, I can serve an ad to you individually in 75 to 100 milliseconds, and also figure out how much that is worth. I need to know who you are as an individual and bid real-time. “The processing power behind that, which is of course enabled
by the cloud computing, is phenomenal. It is all moving too fast for anyone I know to feel like they have understanding or mastery. That is the challenge. How do you see things conceptually for the simple reason that if we really are operating real-time bidding, DoubleClick Ad Exchange can process half a million ad calls per second, its closest competitor can do 25,000 ad calls per second. “I don’t care how smart you are, nobody can understand what
it means to process 500,000 ad calls per second, that’s 30m ad calls per minute, gross that up to a single day – no human mind can comprehend this! We need to move to a meta-level of under- standing – and this defies the smartest people in the world.” I tell Rayport about an article I read recently on the website of
the Nieman Foundation for Journalism at Harvard about how Pearson’s Financial Times newspaper has used analytics to turn its fortunes around and thrive while many news outlets are struggling. “The problem with most newspapers, PR firms and every media company in the world is they are filled with brilliant people but they are not technology people,” he replies. “The question is who will rule the future of content – the content guys or the guys who own the pipes and analytic engines? Neither will, unless you create some brand alliance between the two. “Hopefully that is going to be the answer for where media is
going and creating viable business models to underpin viable world class media organisations,” Rayport concludes. “With the right understanding, the future for media and marketing could be brighter than it ever was.”
26 Marketing Age Volume 4 Issue 3 2010
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