CMO Today: Digital This, Digital That




DIGITAL ADVICE: In the media and advertising worlds, having a “digital” strategy for the “digital” future with your “digital” products is everything nowadays. Listen to any agency exec, network chief or publisher and it’s digital this, digital that (even if they don’t always know exactly what they’re talking about)–it’s at the core of how companies are planning, whether it’s over-the-top television or programmatic ads. But companies in many other industries are also looking to adopt a digital ethos by setting up advisory boards to help them “stay atop trends in social media, big data and digital commerce,” reports The Wall Street Journal. Some 50 Fortune 500 companies have done this, from GE to American Express to Target. GE’s advisors, who include participants from fields like gaming, digital communities and data visualization, created the GE SoundPack, which contains sounds of the conglomerate’s industrial machines at work.

DIGITAL COUNTING: Regarding the desire to become as digitally-oriented as you can, does that include embracing some aggressive accounting principles? Maybe not for the likes of GE and American Express. But technology startups have a history of using nontraditional measurements like “bookings” to give clues on their performance rather than going with straightforward revenue. People in tech circles say traditional accounting isn’t a good measure of what really matters in Silicon Valley–growth potential. But critics say the result is a picture that’s rosier than reality, and that’s a sign of an industry in bubble mode, reports WSJ. Take the advertising technology firm Rubicon Project, which in 2010 posted on its blog that it was profitable and would hit $200 million in revenue by 2011. By the time it went public last year it was clear that Rubicon was losing money and that revenue was far short of that projection. That’s because Rubicon had been citing all revenue that its customers pass through its digital ad booking systems, not revenue it directly earns. The company has since worked with the SEC to better account for growth. Nobody is accused of any wrongdoing here, but this should give investors and companies who partner with hot tech startups pause the next time they hear a stratospheric revenue estimate.

DIGITAL UPHEAVAL: Speaking of digital being at the heart of the ad business…It’s not  worries that agencies are not transparent enough, or the drive to simply save money that is leading marketers to put accounts up for review. No, instead the culprit is the general disruption caused by the growth of digital media. At least, that’s according to Philip Lader, chairman of WPP, who spoke yesterday on the ad holding company’s earnings call, reports CMO Today.The reason that so many big clients, like Procter and Gamble and Unilever, are mulling agency switches is a broader desire to “optimize their media spending in an increasingly digital media environment,” said Mr. Lader, who was also cautious in his outlook for 2015. Still, it’s hard not to read the recent spate of headlines in the ad business, particularly all the anecdotal evidence and public comments by marketers about the lack of trust between advertisers and clients, and wonder whether some bigger rethinking of marketer-agency relationships is taking place.

APPLE OFFERING: As publishers consider which tech companies should be conduits to distribute their content, Apple may wind up being a less threatening option than Facebook. The big fears that many media companies have with regards to Facebook don’t really apply to Apple, at least not yet, as CMO Today reports. First of all, many Web publishers already rely heavily on Facebook as a crucial daily traffic source. Increasing that dependence doesn’t sit well with a lot of folks. Apple’s new News app won’t even arrive until this fall, so essentially whatever it delivers will be found traffic for websites. Plus, Apple’s hardly the “taking over the ad world bit by bit” threat that Facebook is right now. The reason many media companies are nervous about giving Facebook more power in the ad ecosystem is that Facebook already has so much. Apple’s still a bit ad player (it’s iAds business has never really taken off). As many have noted, Apple’s News app is replacing Newsstand, which many magazine companies were very excited about, only to be very disappointed and left wondering if Apple really gets media companies’ concerns, reports Digiday.




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