Tuesday, September 29, 2015

How Many Ads Do You See Each Day? Fewer Than It Seems (I Think)

My cliché detector starts chirping as soon as anyone says today’s marketers face more competition than ever before. Sepia-toned glasses notwithstanding, marketers have had competitors at least since the railroads (or maybe canals) made it practical for customers to shop outside the local village – and for even longer if you lived in a city. So competition has been tough for as long as anyone now living can remember.

I thought I’d found a legitimate exception when writing a recent paper for QuickPivot (available here) about the continued value of direct mail marketing. My core argument was that direct mail is needed to cut through the clutter created by the increase in advertising messages. Surely it’s self-evident that people get more advertising today than ever before, right?

Well, I certainly thought so when I wrote the paper. But I recently searched for some validation of the claim about more clutter.  Turns out that shockingly little research has been published on the question of how many ads people actually receive. The most authoritative-looking study I found was from Media Dynamics in 2014, which found almost no change since 1945 in ads people were exposed to, despite a near-doubling in the time spent with media (defined as TV, radio, Internet, newspapers and magazines).

Really? Just 362 ads per day? That certainly seemed low to me, even after recognizing that the study reports on paid advertising, as opposed to the brand logos you see on everything from football stadiums to a biker’s tattoo. The 362 is nowhere near the widely cited figure of 5,000 per day, although the origins of that are mysterious at best.

I looked further but couldn’t find any better data. Now I was really frustrated and pondered what it would take to make a crude estimate of my own as a simple sanity check. This ultimately led to the bright idea of using total ad spending and cost per thousand impressions to calculate total ad impressions per year. Once you have that number, it can easily be converted to ad impressions per person per day. What I like about this method is avoids any need to estimate how many ads an individual sees per minute of media time or how many ads are theoretically available to be viewed. On the other hand, it assumes that advertisers get exactly the impressions they pay for, neither more nor less.  This is certainly not true in an absolute sense, but I'm willing to trust that the correlation between actual and purchased impressions is close enough to give an answer that's approximately correct.

The table below shows my results. Figures for advertising are easy: eMarketer publishes them all the time.  CPMs are harder to find.  I ended up using figures from sources including INFOACRS (which itself quotes eMarketer, although from 2008) and MonetizePros. There’s a bit of body English in there as well.  I do think the results are either reasonable or low – another widely quoted authority, Augustine Fou, shows generally higher CPM figures than the ones I used, which would result in estimating even fewer impressions from the same spending.

Bottom line, my numbers show 264 impressions per person per day.  That's a little lower than Media Dynamics, but in the same ballpark. Interesting.

I will admit that I’m inordinately pleased with this methodology, which I suspect is roughly correct despite many flaws in the details. One virtue is it sheds some light on the original question of whether people are seeing more ads: since we know that total media spending is rising slightly and the mix is shifting towards the low-CPM digital channel, the number of impressions is almost certainly on the rise. You'd have to adjust any trend calculations for changes in population and in channel CPMs to know for sure. 

On the other hand, the shifts are fairly gradual so it's probably wrong to claim that we're facing a sudden flood of increased advertising.  I don't have the necessary data readily available to do more detailed calculations, but if anyone out there does have the data and the time to do the math, I’d love to see your results.

(And if you're wondering: there will be about 80 billion pieces of advertising mail delivered this year, which comes to about 0.7 per person per day.)

Thursday, September 10, 2015

Data Plus MarTech: HubSpot and Demandbase Join the Race

There were two industry announcements this week that were unexpectedly related. The first was HubSpot’s announcement yesterday that its CRM offerings would now include access to a 19 million account prospecting database. The second was Demandbase’s acquisition of data-as-a-service vendor WhoToo, which offers its own set of 250 million profiles relating to 70 million business professionals.

The WhoToo acquisition marks a big step in the continued evolution of Demandbase, since it's a change from targeting companies to targeting individuals (although DemandBase still won’t sell you their names). More precisely, WhoToo aggregates audience data from multiple sources and makes it available for selections based on company and individual attributes. The company does know the identity of some individuals and will use these to target email and Web advertising to names you provide. It will also let you market to audiences in those channels without providing their names. This is a nice extension of Demandbase’s existing account-based marketing capabilities. What makes WhoToo really special is it has the technology to access its data with the split-second speed needed to purchase display and mobile ads in real time.

The addition of individual-level targeting puts Demandbase on a more even plane with LinkedIn, which of course already sells advertising to its own huge database of more than 350 million profiles. The WhoToo deal won’t fully close that gap, but it does help to keep Demandbase competitive. (I’m sure Demandbase would argue it has its own advantages over LinkedIn.)

In this context, the HubSpot announcement is interesting mostly because it too recognizes the importance of giving marketers audience lists without acquiring the names for themselves. You could argue this makes HubSpot a player in the super-hot Account Based Marketing category, although they didn't use the term.  If they are, it's ABM-lite, in the sense that HubSpot will give CRM users basic profile information, usually including a phone number, but doesn't offer contact names or email addresses. It also pulls recent news stories.  This is pretty consistent with HubSpot's historic aversion to unsolicited outbound contacts.  The company does approach the line by giving enterprise users an option to find other people in their company who have a contact at target accounts and ask for a warm introduction.

On the other hand, HubSpot also announced integration with LinkedIn for paid ad campaigns and said a Google AdWords integration is in beta, which are definitely in outbound territory. Naturally, HubSpot says its LinkedIn and Google campaigns will be giving potential buyers information they want, so they are not at all like that bad old interruptive advertising that HubSpot has always opposed. No, not one bit.

Anyway, the point here is that both HubSpot and Demandbase are adding data to their marketing technology, something we’ve seen in other deals like Oracle buying Datalogix. There are still plenty of stand-alone data vendors, especially when it comes to B2B prospecting lists. And there are plenty of vendors who combine prospect data with predictive – including LinkedIn itself since its recent FlipTop acquisition. But I think we can add “data plus tech” to the tote board of martech horse races.