Related Expertise: メディア業界, デジタル/テクノロジー/データ, マーケティング・セ－ルス
The digital revolution has turned countless businesses and business partnerships on their heads—not the least of which is the relationship between advertisers and their agencies. For the former, digital solves a problem that has dogged the industry since the days of John Wanamaker and his oft-quoted observation: “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.” Advertisers now have the ability to know whether they are targeting the right person in the right place at the right time—a powerful capability.
For agencies, however, this capability comes at a price. The almost limitless choices and flexibility related to the timing, placement, and format of digital ads inject multiple layers of complexity—and, often, inefficiency—into digital-marketing operations. With more than 20 potential intermediaries between advertisers and publishers today, the value chain has morphed into a maze of myriad associations and solutions. Complexity too often reigns, and it’s not surprising that agencies are wasting far too many resources and way too much time—in an age when both are in short supply.
To gain insight into the digital-age drivers of efficiency and effectiveness, The Boston Consulting Group undertook a study using lean methodology to map and measure the end-to-end processes of 24 digital campaigns across 15 European advertising companies. (See “Our Methodology,” below.) We found that those companies that had determined to get their arms around the complexity of the digital world by undertaking a comprehensive approach involving integrated tools and processes had realized staff time savings of up to 33 percent in their campaign operations. Others that had opted for a more narrowly focused approach had realized efficiency gains that averaged 12 percent savings in time expended.
For our study, we used a lean technique called value stream mapping (VSM) to analyze the efficiency of digital-marketing campaigns. In addition to mapping processes, VSM uses workshops to measure efficiency and help visualize waste and value creation. The facilitator works with participants (six to eight experienced employees) to map out all activities performed, including details such as the process time, waiting time, tools used, and percentage right the first time. Participants are asked to identify any concerns that arise in performing the activity and to propose ideas for improvements. This technique provides a starting point for understanding key “pain points” and developing an operational-improvement strategy.
Specifically, our study focused on the planning, activation (setup, trafficking, and purchasing), and reporting activities of a search and display campaign, including both brand and direct-response elements. Unified platforms were defined as seamlessly integrated ad-server, demand-side-platform, and search-engine-marketing tools that used the same infrastructure. Within the study, any agency in our sample that was using at least two of the three tools was considered to be using a unified platform.
BCG conducted full-day VSM workshops with 15 organizations (14 agencies and one direct advertiser) based in France, Germany, Italy, the Netherlands, and the U.K. We selected these organizations to provide balanced representation with respect to size and location. Overall, the 15 workshops resulted in 24 campaign samples, with equal numbers of campaigns operating with and without a unified platform. Nine agencies provided both unified and nonunified samples within the same organization.
We researched not only the causes of the inefficiencies that agencies encounter (uncovering more than 25 “pain points” throughout the campaign process—from planning to billing) but also how they limit effective use of agency time. The impact is extensive—and expensive. Only 20 percent of campaign-processing time is spent on activities, such as strategic targeting, data-driven innovation, and performance optimization, that directly improve performance. The remaining 80 percent—four days out of five—is devoted to heavily manual, low- or no-value tasks, such as formatting reports and data entry, as well as significant amounts of rework.
Fortunately, there are solutions. Agencies can achieve quick improvements in efficiency (along the lines of the 12 percent cited above) by implementing a unified technology platform that provides a single user interface, allows for data sourcing from a single pool, and eliminates the need to reconcile, consolidate, and transfer data from multiple sources. The time saved can be applied to value-added activities.
Unified platforms can also replace many of the workarounds that agencies have developed to address specific process issues. This is an important benefit, as these workarounds are unlikely to be sustainable—or scalable—in the long term as technology advances and applications proliferate.
The digital-advertising industry will continue to evolve, becoming increasingly ROI driven. As advertisers focus more on measurable goals for both brand building and direct response, improved efficiency will soon become a basic competitive requirement. But just eliminating waste is, by itself, insufficient for winning consistently in the digital world. Sustained competitive advantage will come from more comprehensive efforts for adapting processes and structures for the leveraging of new technologies—efforts that shift the resources freed up by enhanced efficiency to focus on campaign performance, enhanced optimization, and deeper insight.
The agencies that seek such long-term improvements (up to the aforementioned 33 percent, which could well grow much greater over time as efficiencies are extended to other platforms and processes) can benefit from leveraging lean methodology. They also need to form collaborative partnerships with technology providers, advertisers, and media owners in order to realize the full potential of improved performance.
Lean techniques seek to create more value for clients, eliminating waste by optimizing workflows in terms of effort, time, and capital required. They also enable agencies to identify and address the root causes of inefficiency in their structures, processes, and tools. This frees up time to invest in realizing the potential of new technology solutions and to take advantage of the latest advanced technologies that enable increased integration and value creation, such as search-to-display remarketing.
None of this can be achieved overnight—or even in a matter of months or quarters. It takes a step-by-step approach, implementing a series of “quick wins” that buy the time necessary for planning and executing longer-term performance improvements. The balance of this report examines what’s required and lays out a roadmap to an efficient and profitable digital future.
Growing operational complexity has led to proliferating inefficiencies in digital advertising, affecting the ability of agencies to spend more time on value-creating activities and ultimately leading to more effective campaigns. To gain an understanding of the potential for improving the efficiency and effectiveness of digital advertising, Google commissioned The Boston Consulting Group to prepare this independent report. The findings outlined in this report have been discussed with Google executives, but BCG is responsible for the analysis and conclusions.
The authors would like to thank David Dean, Salvatore Cali, Cenk Sezginsoy, Cristina Tuckley, Robin Blumenthal, François Régis Turc, and Florian Bonnet for their contributions to the development of this report.