The debate about human touch vs. automated efficiency is something that will never cease. And although some of us may empathise with Dwight when it comes to automation in advertising, the numbers speak for themselves. According to the Market Research Future (MRFR) report, the ‘programmatic advertising market is expected to reach USD 137.1 billion at a 13.7% CAGR by 2030’. However, programmatic advertising comes with its own set of problems. Problems that need to be addressed in a world where contextual advertising and consumer data privacy are gaining significance.
In this week’s newsletter, we share our thoughts on direct sales and what it means for the world of advertising today. We also look at how Big Tech is reinventing itself and what more we can expect from the Musk-Twitter saga. Read on.
In uncertain times, is direct selling better than going to the open market? Nick Waters, CEO of Ebiquity, believes so. An article by DIGIDAY quoted him, saying, “There’s a growing recognition among some marketers that it’s better to buy off premium publishers than just from the open web.” Data suggests the same. According to Ebiquity, 35% of the total ad spent globally on programmatic came from private marketplaces and programmatic guaranteed. Even publishers like Athletic and Minute Media are opting for ad dollars through direct sales. So, what does the future hold?
Direct sales is one of the tried and tested methods of maximising your ad spend. It is a method that is evolving and has become far more valued in today’s world of remote working. And with contextual advertising becoming increasingly important, it is crucial to ascertain the direction and the places where these ad dollars are being spent globally, so brands get the right return on their ad spend.
Initially, everyone thought programmatic would be the new way of working as a set-it-and-forget-it kind of business. But soon, people realised that solution-based advertising programs were far more giving. For people to even buy a product, there must be an emotional connection with the brand, which can’t be achieved through programmatic.
The Internet has enabled a direct relationship between the brand and its audience, where over the course of multiple campaigns, brands get their story across and build a great transactional experience with consumers.
With direct sales, media organisations can build direct relationships with agencies or brands to drive sustained ad spend to solve a problem, not just deploying or giving returns on an item. Direct sales can help drive a certain type of spend and give advertisers a deeper relationship with consumers.
According to a report by Wall Street Journal, Meta is planning to cut costs by ten percent in the immediate future. And part of its strategy is to reduce staff and reorganise resources. Google’s Sundar Pichai has also sent a similar message to its employees by telling them “not to equate fun with money.” With the slowdown in growth and looming recession, Big Tech is taking steps to mitigate impact.
There are shifting winds in the world of Big Tech. The pressure on these companies to survive and grow over the next 12 to 15 months, given the impending recession we are already in or are about to get into, has seen them announcing many drastic measures. From Netflix announcing an ad-supported model to Meta and Google announcing a hiring freeze, Big Tech is taking steps to reinvent itself. We will have to see how well they monetise, advertise and run their ships to come out through the choppy seas. One thing is certain, whatever steps they take now will have a significant impact on the rest of the industry for the foreseeable future.
The ‘will he, won’t he’ Musk and Twitter saga continues with the Tesla chief expressing interest in acquiring the social media giant after all. According to reports, Elon plans to go through with his initial offer to buy Twitter, ‘provided the trial between the two did not take place.’
The truth is that Elon can’t just back out of this deal because he signed a legal agreement saying that he would buy Twitter. Through all of this drama, Elon’s message is clear. He believes Twitter is a great product and is culturally very relevant. But monetisation of the product wasn’t done right and he believes he can do it better. Whether he manages to accomplish that remains to be seen, but if and when he acquires the social media platform, he will have to finish the job.