By Donald Hamilton, Managing Director, Zodiak Advertising
If someone mentions algorithms to me again I am going to yell very loudly! People are using algorithms like they’re going out of fashion. In the world of programmatic buying they seem to be seen as the panacea for everything.
For publishers they’re apparently the answer to maximising revenue and for advertisers they are alleged to bring in the numbers in terms of response. And yet when those numbers are actually response rates of 0.5-0.6% aren’t people seriously over-egging how effective their algorithms are?!
Sure, they are a good start – they provide a baseline on which to start building your digital advertising but, as mathematical problem solving tools, they assume that there is only one right answer. Media just doesn’t work like that. It’s not just about placing an ad on the page, it’s about people. As David Ogilvy said, the function of advertising is to sell. Getting an ad in front of someone five or six times is not enough; the ads need to ultimately create a sale and to do this they need to be relevant to the people you want to engage with – either for buying now or to aspire to buy in the future.
To create this relevancy, algorithms are simply not enough on their own. The essential ingredient required if you want to start achieving response rates that are above the sickly standards that seem to be the norm is – insight. Without the input of human intelligence, algorithms are little better than billboards; you hope that if enough people see the ad then something will stick. However, funnel data down into an analytic engine, then add some brain power and you can start to learn creatively and intelligently about what factors make a real difference to response. After all, you need to be human to understand human nature.
Real Time Bidding (RTB)
Also, however good your algorithm is, one size will not fit all in Real Time Bidding (RTB). Every brand and campaign is different and human input and instinct can make the subtle changes that will create a big impact on campaigns. There’s more to advertising than ever before – a myriad of brands, different screens, on and offline data, transactional data, credit data, unique users, repeat purchasers. All these elements need to be understood as they have an impact on driving acquisition and the brand. Simply putting them into a machine and expecting the right answer to come out the other end is madness.
Especially when the algorithms being used are often based on US data. We may have a special relationship with America, but we think and behave in a different enough way to our US friends for this to be a significant issue in digital advertising. There are probably enough differences between North Londoners and South Londoners to impact on campaigns – let alone across different continents!
It’s time to stop following the American RTB trail blindly and create our own programmatic path in Great Britain. The UK has started to change the way it sees things and that is having an effect on how our cousins look at product development. We do need algorithms (although these need to be based on relevant UK data) but we need these as our starting point. We then need to add on our own human interpretation to what the numbers are telling us if we want to raise the bar in terms of response and conversion.
The technology is already available to drive cars without human input. But do we really think that will make the roads safer?