Lesson 3: Digital Advertising Course to Avoid Frustration with Technology

This time, we'll review the third session of " Dentsu Inc. Style Digital Marketing " currently available on the online video learning service schoo WEB-campus, titled " Digital Advertising Lecture: How to Avoid Getting Stuck on Technology," and discuss aspects not covered during the lecture.

The ad tech field is an area where many marketers tend to stumble. There are two main reasons for this. First, the abundance of acronyms often leads to confusion and misunderstanding. Second, it's a complex world with various players and vendors, ranging from startups to large corporations. To help avoid these stumbling blocks, this lecture focused more on conceptual discussions. For details on each area and explanations of specialized terms, please read the articles linked below to deepen your understanding.

Past Article: Dentsu Inc.'s DMP Implementation Theory - Refining Marketing with Data [Part 1]

Digital Advertising and Ad Tech

First, how do you perceive the difference between digital advertising and non-digital advertising? I believe it lies in the method of information transmission being "interactive," meaning two-way communication occurs. Traditionally, "broadcast-style" one-way communication was a highly efficient method. However, recent technological advancements have reduced the cost of "interactive" communication. This has significantly increased the prominence of digital advertising, which allows for flexible control over pricing, ad formats, ad devices/platforms, and ad delivery targets. In essence, it represents a world where the 4W2H of communication (What, Who, Where, When, How, How much) can be freely optimized.

Trends in Ad Tech

The evolution of digital advertising and ad technology is almost synonymous with the evolution of computing power. As the ability to handle vast amounts of communication data has grown, three major trends have emerged in the ad tech world.

The first is granularity. The units of ad transactions and the granularity of optimization are becoming increasingly fine-grained. The second is automation, necessary to properly handle ads that have become too complex for human management. This shortens the decision-making span itself, giving rise to the third trend: acceleration. Pushing these trends to their limits has led to the emergence of DSPs (Demand-Side Platforms), which allow purchasing ad impressions down to a single impression; SSPs (Supply-Side Platforms), which conversely sell ad impressions at a high price per impression to boost publishers' revenue; and ultra-fast RTB (Real-Time Bidding) markets that execute these ad transactions in fractions of a second. This can be understood by imagining the Tsukiji Market, where many sushi chefs and fishermen gather, becoming hyper-accelerated, with automated buyer and seller systems operating within it.

Programmatic advertising, a form of managed advertising, processes data volumes unmatched by other industries. Compared to the New York Stock Exchange, it handles 100 times more transactions and 10 times more data per transaction. Google and Facebook emerged as the overwhelming winners in this data handling arena. They boast sales representing 85% of the digital advertising market (2015), making them the driving forces in this space.

How to Engage with Ad Tech

However, digital advertising is not "invincible." It constantly navigates between ideal and reality. Issues like estimation accuracy—the precision of identifying user attributes based on web behavior data—and the fragmented ID problem, accelerated by the rise of smartphones. The moment a user switches devices or browsers, they are assigned a different ID, making it extremely difficult to optimize experiences across all devices.

Furthermore, precisely because digital is a medium that "actively gathers information," we face the "Are banner ads even effective?" problem. Banner ads, driven by an excessive obsession with clicks, raise questions as a branding method. Additionally, most creatives are designed to provoke clicks, making it rare to encounter an ad that leaves you thinking, "I'm glad I saw that." Consequently, a trend of rejecting ads, known as "ad blocking," has even emerged on mobile. Furthermore, the very ability to track metrics can lead to misunderstanding their meaning. For example, the metric called "impressions" (ad exposure) is not synonymous with "the number of times a person saw the ad." There are numerous pitfalls here: "Was it even displayed on the screen?" "Was it seen by a program, not a person?"

There are only three ways to solve these pitfalls. However, if you thoroughly implement these three, your ad campaign efficiency will definitely improve.

① Leverage digital strengths to refine and quantify every element/consideration involved in ad operations.
② Start small with new technologies and conduct proof-of-concept experiments first.
③ Avoid obsessing over existing KPIs; regularly verify whether they are appropriate metrics and repeat the process.

The Future of Ad Tech

Regarding the future of ad tech/advertising, this is purely my prediction.

It is certain that data will continue to grow exponentially, and how to effectively utilize this data will become an eternal challenge for all companies.

In doing so, it will be crucial to distinguish between "valuable data" and "non-valuable data," set clear objectives as marketers, and select the appropriate technology, resources, and processes to achieve them.

Ad tech may well evolve beyond just "advertising" in the future. This is evident when looking at leading companies like Google and Facebook.

However, ad tech itself is still far from perfected; it remains a developing technology.

Organizations that can identify its pitfalls and potential through proof-of-concept experiments and make smart investments will prevail in this field.

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'Dentsu-Style Digital Marketing' is scheduled for six lectures on the dates below. The live broadcasts on the recording days are free, so don't miss out.

Lecture 1: Getting Started with Digital Marketing: Masafumi Tanizawa
May 27 (Fri) - Completed, recorded lecture now available

 Lecture 2: Content Marketing for Digital Marketing: Akiko Gunji
June 24 (Fri) - Completed, recorded lecture available

Lecture 3: Digital Advertising Course to Avoid Technology Frustration: Koichiro Kondo
July 22 (Fri) - Completed, recorded lecture available

4th Period: Integrating Mass Advertising and Digital Advertising: Sohei Mitani
Friday, August 26, 19:15〜

Session 5: Marketing Systems Linking Customer Experience to Business Growth: Katsumasa Yagi
September 23 (Fri) 19:15〜

6th Period: Enriching Innovation Thinking Through Digital: Masafumi Tanizawa
Friday, October 28, 19:15〜

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Next up on August 26 (Fri): "Integrating Mass Advertising and Digital Advertising" by Sohei Mitani of Dentsu Digital Inc. Be sure to tune in.