It is estimated that digital advertising grew 12% over the last year, as many people were at home more during the pandemic. With billions being spent on trying to reach people as they watch videos, it only makes sense that marketers turn to new technology to advance key messaging to targeted consumers.
Jeff Wilhoite, chief revenue officer at Source Digital, discusses this trend with In Business Magazine.
In Business Magazine: How is digital advertising changing the way marketing is done?
Jeff Wilhoite: In the simplest of terms, it really hasn’t up to now. While the evolution of programmatic ad buying and digital ad servers filled with demographic data has certainly filled up our screens with flashing banners, most marketing teams were merely adapting the skills and tools they had already cultivated and then repurposed them in the digital world.
While they might be clickable, a banner ad is really just one step removed from a billboard with a phone number or email address. This has forced most companies to adopt a “shotgun” approach with their digital advertising, where they attempt to capture every possible impression and conversion by simply spreading their clickable banner to as many people as possible. While this has led to a better understanding of data and its value when approaching digital advertising, the technology itself has stagnated, with many believing that more and more data is necessary to achieve higher conversion rates.
In Business Magazine: What is driving its popularity?
Wilhoite: The reason for the popularity of programmatic ad buying becomes very clear when you put it into the framing of traditional print advertising. In years past, you might put an ad for oil in a car magazine because you know that car enthusiasts would be interested in purchasing better quality oil for their car. With programmatic ad buys, you can list out an even more specific set of demographic data, beyond “likes cars,” to attempt to zero in on the true market for your product through a process that requires far less lift. If you can type in the demographics of the people you would like to engage and provide assets, an algorithm will serve your message out to those people based on the price you are willing to pay for each ad slot.
In Business Magazine: What is driving its effectiveness?
Wilhoite: The addition of things like search engine optimization to websites and content has given companies a substantial amount of power in terms of targeting their ads in ways they never could previously. This, combined with the ubiquitous nature of the internet in modern daily life, means there are more ways than ever to reach consumers. Digital content can be functionally labeled for advertising through SEO, and the consumers using those sites are innately creating groups to be targeted simply by engaging with content that they enjoy consuming.
In Business Magazine: What technological advances are impacting the use/application of digital advertising?
Wilhoite: There are a handful of technological leaps and complications that are impacting the industry. The shift to mobile consumption over the past decade has changed the way in which the ad industry must approach not only their serving of ads, but also the messaging, aesthetic and the marketing assets themselves. If your ad doesn’t read well in portrait mode on the new iPhone, you need to go back to the drawing board. This is a simple example, but it points to the next big shift that is now occurring in advertising: contextual commerce and advertising.
For years, digital ad content was stuffed into the corners of webpages and video players, often ignored unless it was obtrusive. However, with contextual commerce, you have the ability to put the opportunity for engagement or conversion right in front of the customers as they are consuming. If they are reading something about a kind of potting soil, why not let them buy it for their garden right there on the page rather than force someone down a clickhole?
This is the general aim of contextual commerce — to place the opportunity for conversion in front of the consumer at just the right time so that not only will it be unobtrusive and convenient, but the conversion itself is also so easy that it increases a consumer’s willingness to pay.
In Business Magazine: Where does Source Digital fit into the evolution of this marketing strategy?
Wilhoite: Source Digital aims to solve for two clear needs in digital advertising. The first is the opportunity to easily and efficiently insert contextual advertising into content, or rather, over the top of content in the case of Source. With Source Digital’s overlay technology, they are opening the third dimension when it comes to digital advertising. For years, digital content has been approached from a two-dimensional perspective. There was only an X and a Y axis, and any messaging or experience needed to lie within those borders. Source Digital’s technology allows for layers of additional content to be placed over the top of the original content, whether it is advertising, contextual commerce opportunities, games, trivia and sweepstakes, or simply just letting users know some information about an actor on screen. Source offers the users the ability to curate these experiences so they are tailored specifically to the content and the consumer of that content.
This points to the next pain point that Source Digital is working to alleviate: the world of “targeting.” While programmatic ad buys brought a new scale of data into the world of advertising, the core tenet of demographic targeting requires that shotgun approach. You may know that a certain demographic subset seems to be purchasing your products, but that does not tell the whole story. Relying on demographic data when doing targeting leaves a lot to be desired when you are trying to learn who your customers actually are. Knowing their age ranges may be helpful, but at a certain point this value breaks down when trying to explain purchasing patterns and interests.
Source aims to create a more intelligent way of serving content to consumers, by understanding them through an AI designed to look at links beyond age, gender and race. If you know someone likes to cook on their grill, it does not matter if they are 28 or 53. They like to grill food. If we can intelligently serve the opportunity to buy a fancy set of tongs, that 28-year-old and 53-year-old may both be interested.
By building an intelligent neural network to help serve ads that are linked more to likes and dislikes, past interactions and behavior, or even sentiment analysis over less descriptive data like age, you can create an environment where ads become less intrusive and more endemic to the content they are laid against — essentially, the two things that consumers have been asking for from advertisers for years.
