Marketing Will Become Central to Business

Agencies can morph back into full-service mode in order to more competently leverage the new information-rich environment. A typical agency holding company can continue to have multiple brands so as to work for clients who compete with one another. In an increasing number of cases, an agency brand will exist for one specific advertiser, becoming more like an inhouse agency. Integrated marketing communications can be manifested once creative and media are put back together within agencies as they always have been within the experience of human beings at the receiving and interacting end.

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Within such a superagency the greatest efficiency and effectiveness would be realized by having a centralized databank able to cross-communicate across the entire enterprise, with Chinese walls separating competing accounts. Interoperability with client databanks would feature Chinese walls defining the delimited information the advertiser wishes to make available to the agency and vice versa. Agency systems will be connected to media systems and research systems via a combination of Chinese walls and clean rooms. The clean rooms will enable all valid utilitarian functionalities involving households and/or persons databases, without revealing information prohibited by confidentiality and/or privacy considerations.

Agency data scientist insight analysts will operate at two levels: account level and supra-account level. At the supra-account level, analysts will be able to share general principles learned by one account to all other accounts, but, for example, the problems we have had with intermediary companies learning about individual households from a brand X campaign, and using that information to improve results for competing brand Y campaign, cannot occur.

Machine learning AIs will complement human analysts to bring up overlooked patterns in the data for consideration by human minds.

Marketers will continuously observe what consumers appear to want both out of life as well as in the specific product category. Such data will include behavioral data (for example return path data indicating the content being consumed by specific households, compared with purchase patterns in the specific households) and content coding data such as RMT DriverTags, Need States and Motivational Types, which reveal the life motivations and product interests of specific reachable but privacy protected IDs, derived passively from the content being consumed. Questionnaire-based motivation data and neuro research linking specific biophysical data will be integrated at high aggregate levels for enhancement of understanding.

A marketer will create communication strategy for a brand by starting with an analysis of current users vs. users of competing brands in terms of what they want out of life and in the product category. This will reveal which competing brands' users contain large sectors of people motivated similarly to the marketer's own brand users. These could be the brands from which to acquire new users for the marketer's own brand. Alternatively, the marketer could consider developing new ads specifically for motivational cohorts differing from the marketer's brand's core and directing those ads to the users of competing brands fitting those motivational patterns. In a third approach, the ads of competitors and one's own can be compared through the lens of life motivations and product motivations. Many other approaches will be tested and the best of them combined based on results. Marketers will understand their customers better once they have linked product motivations to the underlying life motivations which cause the product motivations.

After the communication and targeting strategy have been condensed into a creative and media brief for the agency, the agency is empowered to create draft creative executions and media plans for client consideration. Likely that the agency will include a forecast of ROI and branding effects for each alternative creative execution and media strategy presented. That forecast will be the product of the optimization system that will be used to develop the media strategy based on the previous purchase behavior, motivation targets and the actual motivations within the creative executions.

Today the two pioneers in the use of these motivational measurement-based approaches are RMT and Semasio, who are partners in the ID-based offering, while on the video context effects side RMT provides that service on its own. RMT already contains a creative-sensitive forecasting system in its work. You all recall that I'm a co-founder of RMT and can adjust for my self-interest. I help create new organizations I judge to have a chance to improve things.

Once the client has greenlighted the first flight of activation, the agency presses the button and ads are inserted into optimal contexts and sent to optimal targets. Feedback starts immediately and the agency and client are both privy to results within hours. Within days they begin to form ideas about improvement options to test. The agency makes adjustments and cells are created receiving a different mix of creative/media. Results within a few days lead to shifts to what is working, while things that appear not to be working may be given more time to prove themselves, whatever the client wants. The agency may push back and propose that a given tactic deserves more time to prove itself or ought to be curtailed immediately to not waste funds.

Fast-response measurement services for branding effects will supplement fast-response measures of sales, store traffic, and website traffic/relevant interaction. These fast-response branding platforms are necessary to ensure that all decisions are not being made based solely on short-term success measures.

Agency all-media ROI/branding optimizers will take into consideration: targeting based on motivations, previous purchase behavior, demographics, geographics, and other psychographics, as well as reach, speed of reach, cost efficiency, frequency distribution, recency, ad sequencing within individual, resonance between ad and context, resonance between ad and person being exposed, attention characteristics of alternative contexts, and synergy effects. The design of such an optimizer is further elucidated in this RMT paper.

What effects will these systems have on the business world? There will be a double-digit increase in the sales and branding effects for the brands who are the early adopters of these systems. Other marketers will become disadvantaged and become fast followers. Diehards if any will die hard as businesses. When the change reaches the tipping point later in this decade, the adoption curve will accelerate and most of the industry will convert within five or so years after that point.

The two main components of the new marketing will be data and psychology. The harder part of the revolution is the psychology part. CMOs mainly function as intuitive psychologists in synthesizing a company's data and beliefs with their own hunches. CMOs are therefore fertile ground for infusion of more psychological functionality into the system. Tools must be created to help creative marketers feel and think using data and psychology.

Current contracts between the larger clients and agencies specify impressions guarantees that do not take impact per impression into account, which drives agencies to consider CPM even more than they did a half century ago, because their own money is at stake, and it also ensures that campaigns will not maximize ROI and branding effects. In the conversion to come the ROI and branding effects will take over from CPM and the contracts will adapt accordingly. With agencies judged based upon real-world results not abstract impressions counts, the agencies themselves will be impelled to maximize their ROI and branding performance, and they will become leaders in the adoption of better data and psychology methods, the ones most likely to ensure better ROI and branding results. In this they will turn to the evidence, particularly third-party validations, of alternative predictive proxies for advertising impact which can be used as weights on impressions counts in the optimization before campaign and during all reiterative re-optimizations in flight. Quantified media impact scores will become as important as audience estimates.

CEOs and CFOs seeing these new marketing systems and their improved efficacy will have a new respect for marketing. A greater proportion of CEOs will come from marketing. Agencies that demonstrate superior results will find themselves in demand and able to increase margins, often by means of performance bonuses based upon agreed currency measurements.

Greater marketing productivity and reduced marketing waste will simultaneously result in lower prices and higher margins. Market caps for the companies taking this route first will benefit strongly.

By measuring the life motivations of people based upon the content they consume (the RMT method) and including that information in deciding product and communication strategy, companies will establish improved relationships with customers based on respect, trust and trustworthiness.

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