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How the advertising industry is imitating the City

The City of London is one of the worlds financial capitals, and Europes primary banking hub. As such, its trading firms and financial institutions are known for hiring the smartest mathematicians and computer scientists in the world.

These geniuses develop complex algorithms and use the most advanced technologies to make instant investment decisions based on vast amounts of data. Every day, billions of pounds are traded using predictive analytics that enable a high degree of accuracy and results.

This real-time, analytics-intensive model is now moving beyond the high finance of the City to herald the future of marketing.

The marketing landscape itself has grown incredibly complex, with the rise of social networks, apps, and mobile adding to the number of technologies marketers need to consider in their efforts to reach target audiences. These new technologies unlock tremendous opportunities for highly personalised and targeted marketing, while driving the need for more advanced algorithms and the ability to crunch massive amounts of data quickly to deliver the right message to the right person at exactly the right time.

Adding to the complexity, marketers and developers are now looking for ways to market to consumers in physical stores, or other places, via mobile devices in real-time based on their exact locations.

For example, a consumer products company might send a voucher to a consumers smartphone as she walks through a certain aisle in a shop, or a vendor might send a special offer to a traveller as he makes his way through an airport. This is all based on their behaviour during that visit.

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We have reached the tipping point in marketing where speed and precision will win out over traditional approaches. Success or failure of marketing campaigns will be measured in milliseconds. Companies that reach the consumer at just the right time and ahead of the competition will win out. At the same time, marketers must crunch ever-increasing amounts of data to make those decisions.

Recent comments by executives at Netflix and Kellogg’s, as reported by Advertising Age, provide a clear indication of where marketing is headed. At a recent digital marketing event, both companies explained how programmatic advertising is a vital component in their overall marketing strategy, allowing them to act on complex consumer data instantaneously.

This means that, like City firms, chief marketing officers (CMO) and chief technical officers will need to think a lot more about real-time analytics and reducing latency in their digital supply chain.

In real-time marketing, latency can mean the difference between reaching the consumer at just the right time, being preempted by a competitor who got there a fraction quicker, or getting a digital ad placement at an optimum price. Spread across all your marketing efforts, shaving or gaining a few pence here and there can quickly add up to substantial winnings or losses.

Although, latency is not purely about having the fastest computers and the most elegant algorithms automating marketing decisions: Latency needs to be wrung out of every step in the digital marketing supply chain. This becomes increasingly critical as the amount of data that needs to be analysed skyrockets.

Financial firms, by far the most sophisticated companies when it comes to analysing data quickly and reducing latency, place data centres close to the action in order to reduce the time it takes to send data between point A and point B. They situate their computers as close as possible to partners and customers, and they use the fastest, most advanced networking technologies to connect. Every aspect of their infrastructure is optimised to gain extra milliseconds in making decisions and then executing them.

Likewise, in the new order of marketing, computer systems will need to be both close to where their customers are and even closer to partners and systems with which they need to exchange data or information in order to carry out aspects of the campaign (such as combining demographic data from a third party provider with a companys own proprietary customer data, or pulling discount pricing information from a product manufacturer).

Welcome to the age of real-time marketing. Soon, CMOs will be using many of the same techniques the City has used for years to get a leg up on the competition and extract every bit of value from their marketing efforts. Not only will this intensify competition for the best mathematicians and data scientists, it will also mean intense competition for the most coveted data centre locations.

Ricky Cooper is VP of Digital Realty.



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