How does the future look for online market players?
New year, new challenges. Looking beyond the short term, it will be interesting to see what the future will bring. What are the three biggest challenges for publishers, agencies and B2C companies, not just in 2016, but in upcoming years? By Vesna Gordon, board of directors, international sales and marketing director in Gemius.
How the future looks for online JICs (Joint Industry Committees of online publishers)
The dynamic evolution of the digital landscape is inevitable, raising the question of where JICs are heading. For almost two decades, the mission of a JIC has been to choose, develop and monitor the quality of online audience measurement studies. Just like other media committees (TV, print, radio), the online committee’s role has been to support the advertising branch with transparent, trustworthy data about the online landscape, to create standards for market understanding while doing business.
In today’s reality, online media expenditures are still growing, but this growth is often benefiting global players such as Google and Facebook, rather than local companies. Publishers are raising important questions: How should we fight these global challenges, both programmatic and competitive (i.e. the market presence of Google and Facebook)? Shouldn’t the role of JIC be organized more broadly than just around research and market education? How can we monetize the data assets JIC is managing?
If one of Google’s strengths is the fact that it knows so much about local markets from hyper-prevalent Google Analytics scripts, the challenge for JICs is how to monetize the knowledge they have gathered through their online audience research and build a similar call-to-action value for local publishers. Different voices within JICs have coalesced around two distinct ways for their organizations to develop - from developing into a network of publishers, co-owned by publishers directly, to becoming Data Management Platform (DMP) providers, supporting the world of programmatic. No matter what scenario wins out, both possibilities are challenging research companies that cooperate with JICs, as they try to figure out the best strategic approach for the future. Winners will be those who are able to deliver both the data and the technology platforms that support the advertising business directly, such as a DMP platform with the capacity to integrate with the Supply Side Platform (SSP) world or ad placement technology for an individual or network approach.
Not all of these questions have clear answers and not all the visions of today will continue to go in their initial direction, but they are important to address, as they raise very relevant issues about a common future, requiring media business owners to come together and cooperate. Local publishers are facing an extremely harsh global landscape, but a lot of political will will be needed to move the first stone toward the future collective vision. It is important to emphasize how important creating an evolution plan is, but first of all, the publishing market needs leaders to be able to pull the market together and take action. And here I see today’s main block.
The omnichannel approach to business, or how to make sure traditional retailers don’t oversleep on ecommerce!
In just a couple of years, the first generation of digital natives and their significant buying power will be every retailer’s focus. Omnichannel is a new approach to selling products and services which aligns all marketing communication and customer service actions with cross-channel client touchpoints. No longer should companies be considering online-offline divisions; they must breathe as one unit, with their main objective being providing the highest level of customer satisfaction across all customer-relevant channels. Reorganization must be led by the board and the CEO should be the head of the transformation. As the most complex business division to transform is Operations, today’s COO should be tomorrow’s Operations and Omnichannel Director, managing areas such as Logistics, IT (technology and Big Data) and Customer Service. When talking to our CEE clients, I still observe hesitation and an unclear understanding of how to position Omnichannel structures internally. Local and regional offline retailers with strong distribution networks, regardless of business product, are especially rigid, as in most cases they are still underestimating the expectations and future power of digital natives.
The CEE region should observe the West and learn from their experience. A great example of what the future will bring is Amazon in Germany beginning to offer groceries. The company’s 24/7 service and even same-day delivery shows how steadily the bar is rising. The most natural area for current offline retailers to compete with pure online retailers is by providing an exceptional user experience with regards to logistics, by leveraging offline points of sale as outbound shipping hubs for their online sales. Just imagine how enormous the cost would be for pure ecommerce players to build such a strong point-of-sale network. Still, user experience is a complex matter – price, selection and unique value propositions are not to be neglected.
All in all, the motto here is clear: It is all about full symbiosis between online and offline channels.
Where media agencies will enact their unique value proposition
With the rise of auction-based ad exchanges, it is not a surprise to learn about cases where advertisers decided to bypass media agencies brokering ad sales and start using an external technology independently, or even building an internal technology to do the work. The latest in this line was L’Oréal, which mentioned building its own trading desk for Programmatic. What does it mean for media agencies?
For years, the biggest media agencies have invested in building their own DMPs, as data has become gold in advertising business. Acquiring or partnering with social networks and ecommerce platforms, building their own mobile panels to learn about the habits of internet users and target them, and buying programmatic platforms are mentioned daily in industry news. What a complex world it has become!
So what future is ahead for media agencies? It seems to me that in times where mainstream technology is a commodity, being a leader in technological niche innovations that serve new channels (like mobile) or cross channels is one option, though a rather expensive one. The second is a return to their roots, using their power to offer better discounts on bulk buys of ad space.