The advertising industry is changing rapidly. Publicis Groupe, Google, Microsoft, WPP Group, and AOL have all bought advertising companies, namely, Digitas, DoubleClick, aQuantive, 24/7 Real Media, and Tacoda, respectively. Their goal? Eliminate poor targeting and target each consumer at the right time with the right ad, whether online, via cell phones, or on television.
Today, companies run about 4,000 versions of an ad for a brand, compared with just 3–5 versions ten years ago. For the future, Digitas is building a global network with thousands of versions of ads that will be shown to customers based on specific computer algorithms applied to match them to consumer data.
To achieve this massive undertaking, Digitas is using offshore labor inChina,India,Russia, andBraziland thus gaining access to a low-cost, technically talented labor pool. It is also among the first to situate in these less developed countries with enormous growth potential. However, Publicis Groupe simultaneously is growing at 20% per year compared with the industry average of 5% annually.
Now that Internet content and advertising companies are joining forces, the intelligence behind the ads customers view likely will be even more carefully considered. Ads will vary depending on the individual customer’s age, location, and previous ad exposure. Thus, customers see different ads every time they look—before they purchase, after their first purchase, and when its time for them to buy again.
1. Even as advertising changes to target each customer perfectly, will widespread DVR and TiVo usage mean consumers actually become unreachable?
Louise Story, “It’s an Ad, Ad, Ad, Ad World,” The New York Times, August 6, 2007.