CIO's Martha Heller talks to Greg Walsh, CFO of IPG Mediabrands, about how big data and second screens are transforming media buying.
How is technology changing your business? We have a goal that by 2015, 50 percent of our buying will be automated, which includes even the most traditional media buying processes. Much of this is focused on programmatic buying, where we use data to buy audiences in real time. That's very different from buying TV way in advance of the event and then seeing the results after the fact.
We have an audience measurement platform that allows us to take data on competitive spending, household viewing, surveys and ad-serving and combine it with our own customer data. By putting all that together, we can improve the accuracy and effectiveness of a media plan. In fact, we have increased our effectiveness by up to 35 percent.
What is challenging about using data effectively? There is a difference between customer data, and customer data that is reliable and useful. Once we have the data, the challenge is knowing what to do with it. How can we integrate customer data into our traditional systems? How do we assemble it in a way that allows us to improve client media plans?
We have people who can turn data into insights and strategies, but we need to give those strategists meaningful data. The challenge is in hiring the data scientists who can organize the data.
As your industry has become more technologically-driven, how has your role changed? Our biggest cost and asset is our people. The second is our technology. So just as I need to understand how we are developing our talent, I need to understand our technology investments. Technology tends to threaten people; it is my role to explain how it is making them more effective, not replacing them. As a result, I work very closely with our chief HR officer, Alastair Procter, and our CIO, Sam Chesterman.
How are consumer technologies affecting your industry? It's the evolution of the second screen, where people watch TV but there is also a second or even a third screen. The more screens people are on, the more ways we can reach them. We need to recognize how many screens people are on and what drives them from one to the other.
Our revenue model is also changing. In the past, we billed clients on the number of [employee hours] we commit to an account. But as technology makes us more efficient, we can drive the same results with fewer people. That means we could have a revenue issue on our hands.
So we have recently developed a pay-for-performance model for compensation. We are looking at having a substantial piece of our compensation tied not to bodies, but to whether we've met our own goals and our clients' business outcomes. For some clients, that outcome is sales, while for others, it's market share, restaurant traffic or shareholder value.
What technology are you most excited about? A few weeks ago, I forgot to grab my phone when I left the house. That experience made me realize how much life has changed since mobile technologies. How do I pay for my coffee? How do I access my train pass? How do I communicate with anyone? I don't need a wallet, or ID or cash. But without my phone, I have nothing. To me, the evolution of mobility has been amazing.
This story, "A CFO's view of consumer data" was originally published by CIO.