It's easy to question whether Invite Media, a company that helps
advertisers and agencies buy media in real-time marketplaces was
worth the $70m paid by Google or whether Admeld, another Google
acquisition that helps publishers sell into such marketplaces, will
justify the reported $400m price tag. Is there reason to this
rhyme? Yes! Welcome to the age of mass individualization.
Dotcom 2.0 skeptics still wonder whether Facebook is worth its
latest $100bn valuation. And whether those that operate in the
Facebook ecosystem, such as Buddy Media, recently valued at $150m,
will also prove their value.
However, those who believe these price tags could be justified
insist upon the common idea behind all these highly valued
companies. What all these businesses promise is one-to-one
marketing at scale.
True, it was promised - but not delivered - in the 1990s. This
time it seems that marketers' dreams of technology that allow them
to greet each consumer with a customized offer and message, aligned
with their needs and interests, could be reality.
Customer Relationship Management and the Internet have given us
the tools to segment users and send targeted messages - but those
segments are still very large. Very often customization hasn't gone
much further than being addressed by the correct name.
The technology was simply not able to generate enough
understanding about each consumer to build micro-segments and
approach each consumer with a customized offer.
In 2011, however, we seem to have reached critical mass. As
consumers spend more and more time online, they allow marketers to
learn more about their interests via anonymous profiles,
facilitated by advances in technology and algorithmic modelling.
Facebook has sparked a sense of consumer freedom with people
telling the world more about their interests than most marketers
would ever dream they'd use. Similarly research companies are
finding more and more data in the digital space.
This allows media planning to be replaced by audience planning,
where the message seen is determined by the profile of the person
watching, not the channel or content they are viewing.
Technology determines the most relevant campaign for that user
and dynamic creative, which assembles messages from dozens of
components, delivers a personalized ad that has millions of
potential iterations.
Across Europe, Dell is already using such dynamic creative to
change 10s of different elements in its online ads to ensure that
the offer relates to a consumer's previous browsing history at the
Dell site, driving massively improved performance.
Part of the basis of the valuations being put on platforms such
as Groupon or Facebook Places is due to their ability to customize
location-based offers.
The idea of individualization is not new. A good salesman could
always pitch the right product for each customer by selecting the
most relevant sales offer. Technologies such as call-centers or
configurators on websites allow brands to build mass-offers for
large groups.
What the new platforms and technologies are finally delivering
is mass-individualization. This allows us to reach millions of
people at low cost of mass media while also giving them the
customized message of the good salesman. The effect is to drive up
ROI by more than 100% in many cases and potentially decrease the
costs of marketing.
The million or billion dollar price tags being cited are a
demonstration of the belief that investors have in these
technologies and the companies that build them.
The good news for marketers is that they can access such
technology through agencies like MediaCom at low cost. In fact the
only investment they need to make is to put in the time and effort
to understand the opportunity, to test and learn and to utilize
technologies of mass-individualization.
Not only will they benefit but so too will their consumers. The
massive increase in uptake from messaging that exploits all the
potential of mass individualization shows how highly consumers also
value these kind of relevant and targeted offers.
First published here on MediaBizBloggers.com.