Digital media gives marketers the chance to customise advertising to customers

Discussions on the disruptions the Internet, or new media, have had on advertising are not new. But as digital media and technology change the way consumers consume media, they are also rapidly changing the advertising industry.

Neil Stewart, CEO for Maxus Asia-Pacific, said digital media has given marketers the opportunity to customise advertising to their consumers. Digital technology such as cookies, have enabled advertisers to track and store online usage information and open up opportunities for advertisers to create more specific and targeted advertising.

Maxus is part of GroupM, the world’s largest media investment management group that serves as the parent company for all of WPP’s media agencies. Among the services it offers are consumer insights; direct, digital, promotion and relationship marketing; media and production services; and specialist communications.

The agency was named “Global Media Network of the Year” on Dec 15 by Campaign magazine, ahead of PHD, OMD and several other global agencies. This year, the three-year-old agency raked in US$2.8 billion (RM8.88 billion) in new billings.

Stewart gave a scenario of a user on a Shangri-la hotel website. “Let’s say you search for a holiday and get onto the website and proceed with the steps we can track you by putting a cookie on the server. You get onto the final step, but do not book the room. We know that, because we can track you.

“Now you may then begin surfing on a completely different site where we have bought space from and we may want to re-target you. We can use this information that you nearly booked a room in Hong Kong during the Christmas period and we can immediately customise an ad for you along the lines of, ‘thinking of a holiday in Hong Kong during Christmas,” he said in an interview with The Edge Financial Daily.

As Stewart explains, this scenario has already been going on. What we may expect for the future is for television advertising to be customised as well.

“Look at the growth in a country like Malaysia or across the region, in Internet Protocol Television (IPTV). With IPTV we are going to be able to know your IP address and can serve you a different mix of advertising. What we know of online advertising, sometime in the future, we can expect television advertising to achieve the same level of precision.

“What technology has enabled or is going to enable us to do could be scary and creepy and there is now a lot of debate, very healthy debate, concerning privacy but digital media has provided us with more opportunities,” said Stewart.

The debates surrounding privacy are still raw in Malaysia. The Personal Data Protection Act 2010 which was passed in April last year which may likely be implemented next year does not cover the use of cookies. According to Tepee Phuah, a practitioner at Tay and Partners, the Malaysian information commission however has the power under the act to recommend future regulations surrounding the usage of cookies and they may well recommend the same regulations that the UK has just recently imposed.

In the UK, said Phuah, consent from users are needed before cookies can be used to store or gain access to information stored in the computers or terminal equipment of the users. Phuah explains that although the Malaysian legislation does not currently cover cookies, the act applies to the media agency who processes, has control over, or authorises the processing of personal data of users stored in these cookies in respect of commercial transactions. In Phuah’s view, online advertising can be construed as a form of commercial transaction as defined by the Act.

Media agencies will therefore need to pay close attention to the act, and ensure they comply.

Stewart said agencies such as Maxus would have a further role to play in the future. “A lot of our value in the future is going to be advising clients what not to do, not what they can do,” he said.

“Digital technology has given clients more opportunities but there is going to be a choice; do we want to use this information? Just because we can do something, or have access to this information does not automatically make it right, agencies would have to start thinking about what is appropriate,” he added.

What digital technology has given clients, however, is more accountability. According to Stewart, advertising is now starting to be more customised, giving marketers more opportunity to track their spending, and the effectiveness of where they spend it. “There is so much more opportunity to be so much more accountable,” he said.

“Now we have media that did not exist five years ago and are taking up consumer attention. There are so many different advertising platforms and professionals have to now think more broadly of how to communicate to their audience. There is a larger canvas to play with,” said Stewart.

He added that industry professionals now have to be more interested in the way consumers behave, rather than just see themselves as media buyers or media owners in order to deliver more value.

This article appeared on the Media & Advertising page, The Edge Financial Daily, Dec 22, 2011.