The rise and rise of ad technology

Media agencies and media owners are in danger of failing to anticipate the impact technology will have on their businesses. Rhys McLachlan, corporate development director at Videology, explains…

We are at the start of a revolution in media. Technology is playing an increasingly powerful part in all our lives and media will be no different.

At best, we may be required to engage with an algorithm or a delivery mechanism that anyone without a PhD in mathematics will struggle to understand. At worst, much of what we currently define as the media business could be frozen out by new technologies and platform owners.

TV buyers may not care about packet data rates but perhaps – as we move towards a world of internet broadcasting – they should.

In my previous role at a media agency, I’ve spent much of the last few years as the go-to guy for the future, engaging with technology brands and trying to find ways to utilise their platforms and technologies to make our messages more effective.

We focused particularly on video on demand and delivered a number of industry firsts including web-connected TV opportunities and the implementation of the UK’s first addressable IPTV solution.

My key learning from these experiences is that media is being redefined by technology companies, most of whom have a core business that’s not media… yet. Samsung’s primary objective is to sell more connected TV sets, Cisco’s focus is on revolutionising the way information flows. A by-product of these initiatives is the ability to tap into a new business and revenue stream that didn’t previously exist… media and advertising.

These technology firms also have far more financial firepower to redefine our industry than the legacy media owners that currently dominate our time and investment. The UK’s biggest media owner Sky might be worth £12 billion but in 2010 Samsung generated over £17 billion of profit on revenues estimated to be more than £161 billion.

Technology has enabled us as advertising professionals to do some pretty amazing things, create more powerful messages than ever before, but as an industry we are effectively bystanders within ecology that enables it to happen.

If we are to ensure that we can utilise these new spaces then the ad industry needs to stop sticking its head in the sand.

While it’s unlikely that brands like Sony and Panasonic are ever going to invite us into their development labs (although definitely not out of the realm of possibilities), we do need a new understanding of the technology space that they are defining.

We need ambassadors who can go to these companies and understand the implications of what they are doing for our business, and for our businesses.

The future of our industry lies in creating a positive nexus between technology and advertising; a place where new companies can turn the mountains of data into clear actionable strategies for advertisers.

We need people who can interpret the story and distil the benefits for agencies and clients. That’s the challenge I’ve taken up at Videology but if I had one piece of advice for my former colleagues in the agency world it’s this: be mindful that in the future you will need a much greater portfolio of partners – many of which don’t currently exist as media properties.

While there is no question that the current media powerhouses provide tremendous value, you need to think beyond ITV, News International and Global and embrace far more companies of all shapes and sizes. Not always for what they might enable you to do today, but definitely for what they will help you deliver in the future.