Session 5 : Big Data Analytics…Section A _Group 2_Pavan Kumar Tatineni_13PGP040

Big Data Analytics: Improving the business of advertising agencies in today’s context

Everyone knows that media industry is undergoing a major transition from traditional print and broadcast advertising to digital advertising. It is fact that newspapers cannot charge as much for online ads as they do for print ads, and revenues are dwindling due to this transition.

However, the impact of this shift is not only being felt in the media industry but also in the advertising industry as well. Advertising agencies primarily rely on developing creative ad campaigns for their living. Also, placing the ad at the right place in front of the right people is also important. Today, the advertising agencies are under pressure to make the transition to a ‘digital’ marketplace.

The primary competition comes from Google and Facebook. More precisely, the competition for advertising agencies is coming from companies that use Big Data Analytics.

According to a real time analytics, 22% of ads spent in 2012 were digital in nature. This approximately translates to about $114 billion. Significant amount of money goes through Google, which uses its superior understanding of web and mobile users to place the right advertisements in front of the right eyeballs and at the right time/place. Facebook, whose stock plummeted after its Initial Public Offering because investors had their doubts regarding the company’s mobile advertising strategy, has begun to prove the investors wrong by reporting $1.6 billion in mobile ad revenue last quarter.

This transition from print based advertising to digital advertising has not been a small transition. The primary reason for this being, where advertising traditionally operates on a one-to-many approach, digital advertising in the era of Big Data uses a many-to-many approach. For example: Placing a single full-page ad in the Times of India or The Hindu may reach millions of subscribers (some of whom do not fall in the target segment of the ads). However, companies like Google and Facebook store and analyze user data to identify a more relevant ‘segment’, allowing advertisers to reach precisely the audience they are after. The major advantage with Big Data is that it enables companies to deliver personalized advertisements to their audience.

Amidst all these changes, a traditional advertising agency is turning into an obsolete concept. In order to compete with the giants (Google and Facebook), advertising agencies need to improve their Big Data capabilities. Though ad agencies may not have the advantage of owning the most widely used search engine or social network on planet Earth, it is of paramount importance that they create data-driven ad campaigns, taking into consideration the online and mobile behaviors/preferences of their clients. Many Advertising agencies have also started a collaborative model, where data needed to analyze consumer behavior is borrowed from Google/Facebook at a certain price.

All of this doesn’t suggest that creativity is of no use in the world of advertising. The primary responsibility of the advertisers still remains to be creating connections through compelling, creative and thoughtful content. But creativity must be accompanied with Big Data and data-driven analysis. The shift from traditional to digital advertising provides both promise and peril, for the advertising agencies. Those who adapt will thrive and rest will be lost in the books of history.

References:

http://www.allbusiness.com/marketing/advertising/1415-1.html

http://www.inma.org/blogs/integrated-advertising-sales/post.cfm/did-it-work-how-to-measure-advertising-success-or-why-not-to-use-roi-or-likes

http://wikibon.org/blog/advertising-agencies-must-adapt-to-big-data-or-die-trying/

http://www.jonloomer.com/2013/09/10/facebook-ads-metrics/

 

Thanks… 

Posted by: Pavan Kumar Tatineni_13PGP040

Other Members of Group 2_Section A:  Abhishek Kumar, Sarvesh Singh, Naureen Fatima, Charan Kumar Karra, Pittala Priyanka, Poulomi Paul and Sao Ruchi

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