post Wednesday January 30, 2013
Continuing with the growing trend of maximizing the value of data available, companies are using complex algorithms and computer to programs to hopefully better understand consumer preferences and behavior. From supermarkets to Hollywood, companies incorporate the glut of information becoming available into their business strategies. Another changing industry that has been greatly affected by the immense amount of data is advertising and marketing. While tv shows like Mad Menportray a romanticized 1960’s version of the industry, the today’s advertising business is evolving quickly. A big driver of change in today’s markets is the real-time data that is available.
Burgeoning companies like Mediabrands and Droga5 are leading the way for innovations within advertising and the leveraging of big data in order to create marketing that is more responsive and hopefully more effective than past methods. The goal is to have personalized ads that are tailored to the perfect consumer at the best time. This formula is likely to produce results that could provide tremendous benefits for suppliers of consumer goods. A big contributor to the evolution of advertising is the amount of technology that is available to so many individuals. Smartphones have led to a digital content reaching more breadth and more depth. Today, consumers are almost constantly connected to media and receiving information, the key today is they are sending information to companies with their activities.
Another force of change is the online ad exchange market. These markets are very similar to stock exchanges, but rather than equity in a company being traded, marketers are purchasing and exchanging ads based on consumer profiles of who sees the ads, rather than the location of the ad. This allows for marketing firms to target their viewer much more directly than in the past. The ad exchanges are a result of the rapidly developing technology that pulls information about consumers in a variety of ways.
While there are considerable benefits to tailoring ads based on real-time data that is available, there are challenges facing these methods going forward. Because of the immense amount of information that is being collected, sorting through it all is time consuming and can be inefficient. Even with the costs of analyzing it, finding trends that will produce tangible results for companies is not always simple or straightforward. Additionally, there are growing concerns amongst consumers regarding the amount of information that is generated from their activities and the potential violations of privacy that could result from utilizing the data. In spite of these challenges, it seems as if the technological advancements will continue to push these methods to the front of advertising strategies.
Source:Financial Times
Image source: Free Digital Photos
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