The complexity of planning by ad product dramatically raises expertise requirements
The rise of retail media means we need to plan by ad product, which is a major departure for the advertising industrial complex.
Over four decades we’ve evolved from planning by medium when awareness was paramount to channel planning so we could capture new audiences (e.g., paid social, SEM, digital out of home) programmatically and calculate ROI. Suddenly, we’re a giant step behind the complexity of today’s customer experience. Customers are more accurately defined by their stage in the purchase cycle than by demographics, and they engage with a multitude of advertising types on any given platform.
Consider how Amazon works. If you’re after incremental growth, it’s nowhere near enough to simply buy product ads on the platform. You need to use Amazon’s DSP to target by interest and gain awareness, sponsor core search keywords to fuel consideration and purchase and buy retargeting ads to boost basket size and loyalty. That’s a journey across two ad products and four ad types for distinct use cases.
Whether media meets the performance objectives is no longer governed by the medium (digital) or the publisher (Amazon); it’s determined by the ad product. On Instacart, you might sponsor search to get hand raisers interested in your specific product (e.g., Lays potato chips), but you need the new shoppable video ads to romance a new product launch, and the add-to-cart functionality to prompt buying.
Planning by ad product will bring three essential changes. It will force planners to specify investment by KPI, so media that propels the business can be more clearly proven. It will stop media from being excluded because of one product (e.g., “YouTube isn’t working” may really mean non-skippable ads aren’t performing for the brand). And it will align creative formats and messages to the right place in the purchase cycle.
The complexity of planning by ad product raises expertise requirements dramatically. Overall, the advertising industrial complex can’t meet the new bar yet. But everyone needs to get there fast.
Currently, traditional planners dominate advertising. They’re like Sally, the 27-year-old media supervisor at an agency. She oversees a $100 million media budget for a Fortune 500 company. To spend it, she creates one general plan per quarter, then fills in specific gaps with promotional plans. She plans by medium and channel for easy approval. Neither she, her team, her manager nor her client can understand or navigate the nuances of how each ad product works across the landscape of publishers.
To make the leap to planning by ad product, we need to:
Teach media principles, not just math
We train people to use complex media software that spits out planning scenarios based on audience and channel, but these were designed before e-commerce went mainstream. We need to teach people what the numbers in different ad products mean on a granular level so they can think strategically, evaluate software output and adjust plans to fit nuances in customer development.
Establish free-range budgets
Amazon and competitors involve all three advertising types—awareness, performance and e-commerce—yet most advertisers plan by channel and put e-commerce teams in charge. And they have only one budget to apply. We need to free up budgets to move interchangeably across customer stages and ad products.
Appoint an investment chief
Somebody needs to run quality control in ad product planning, and it’s not the chief marketing officer. Either a chief media officer or media investment advisor is needed to ensure the ad product mix motivates the right customers at the right stages.
Science tends to march toward atomic solutions. Generalist medicine gave way to specialization and now we’re entering the era of designer therapies. Food evolved from garden to cobb to specialty salads, and now people want the location of the farm where Uncle Ruppert planted the arugula and niece Stephanie harvested it.
Similarly, the seismic shifts in media and how people engage with it all make it essential to adapt. Planning by ad product will open up a new era of media buying. When we get it right, we will increase the efficiency and power of marketing exponentially.
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This article first appeared in adage.com
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