Advertising subsidies support publishers throughout the media system. Publishers are organizations that produce and distribute content through analog or digital means; think of newspapers, television production firms, and search engines. The advertising subsidy involves payment for the right to persuade the publisher’s audience to purchase or otherwise support a product or service. Traditionally, that has meant purchasing space or time on or near a publisher’s content—for example, a newspaper article or an Internet video.
By Nick Couldry and Joseph Turow
Image Attribute: epSos .de / Creative Commons
Advertising
subsidies support publishers throughout the media system. Publishers are
organizations that produce and distribute content through analog or digital
means; think of newspapers, television production firms, and search engines.
The advertising subsidy involves payment for the right to persuade the
publisher’s audience to purchase or otherwise support a product or service.
Traditionally, that has meant purchasing space or time on or near a publisher’s
content—for example, a newspaper article or an Internet video.
Most people
likely think of advertising in terms of its most visible manifestation, the
persuasive message. Yet the activity involves two sets of activities in
addition to the creation of the ad. One part, traditionally called media
planning and buying, revolves around the strategic consideration and provision
of funds to pay for placement of the notice. The other part, evaluation
research, involves determining whether and how the message worked. The amount
of money used for the direct-subsidy aspect of the process—media buying—is
huge. Industry consultants’ estimate upward of $250 billion as the global
amount of money advertisers and their agents spend on placing ads on one or
another medium.
The use of
data to plan and evaluate these expenditures is by no means new. As far back as
the 19th century, advertisers and their representatives in the nascent ad
agency business bought, analyzed, and evaluated lists of individuals who might
be influenced by particular direct-mail solicitations to determine whether and
how the postal service was a good ad medium. In the early 20th century,
advertisers worked with print media firms they subsidized—principally
newspapers and magazines but also outdoor boards—to develop trusted total
circulation figures based on audits. Somewhat later, they supported companies
that used audience ratings panels to infer circulation data for radio and
television broadcasters. By the 1960s, such circulation and ratings activities
were yielding large streams of data that planners and buyers examined in
advance of purchasing advertising space and time. To these numerical
considerations were added the quantitative and qualitative results of depth
interviews, surveys, and experiments by marketers, media firms, and advertising
agencies to learn why certain ads in certain media succeeded and others did
not.
From a
colloquial standpoint, all these activities may well have been considered to
involve big data. In response to a late 2012 trade article (Smith, 2012a) about
a conference which was devoted to “Data-Driven Marketing,” a reader asked,
Whats all this latest fixation/obsession
about data all about, as if we never knew it existed before, well it has, big
time, and clever marketers have been using it well for years and don’t need to
be reintroduced to it as if experienced marketers were schoolkids.
In fact, that
article’s author (one of the conference organizers) had himself questioned the
term’s use in the advertising context and had come to the more specific
conclusion that-
Data has been “big” all along. What has
changed now is not just scale and cross-channel inputs, but the sheer speed and
accessibility of data as it moves to the cloud and becomes present on any
device anywhere. Making data actionable in real time and at the point of
critical need or decision-making is where data is not just big, but enormously
effective. (Smith, 2012b)
In fitting
this characterization, the ad industry does not merely mirror the fascination
with data crunching taking place throughout society. The perspective reflects a
transformation of media planning, buying, and evaluation in the advertising
industry that began in the 1980s. The alterations were fundamental—institutional
as well as technological. Before the 1980s, advertising practitioners
considered media buying and planning as rather straightforward, unexciting
components of a standard (“full-service”) agency’s offerings to clients. During
the 1980s and 1990s, however, agency executives began to take a different
approach to their media planning and buying divisions. Several factors were
involved, but many of them centered on the fragmentation of media channels due
to cable television (Turow, 1997). A clutch of new agency holding companies
with international footprints (WPP of the United Kingdom, Omnicom and
Interpublic from the United States, and Publicis from France) established
freestanding media buying operations that, along with media buying firms Aegis
in the United Kingdom and Havas in France, claimed special quantitative
abilities. Using different computer models, each insisted it knew the best ways
to reach increasingly dispersed audiences according to a growing number of
demographic, psychographic, and geographic characteristics in the most
efficient and accountable ways possible. According to a research firm that
keeps track of buying firm developments, these six companies spent $224 billion
advertising dollars worldwide in 2009 (RECMA, 2010). That year, the six
controlled about 45% of purchasing in the U.S. advertising market; in most
European countries, the share reached 80% (RECMA, 2010).
The buying
firms’ emphasis on computer-driven quantitative analyses to target fragmented
media audiences served as a testing ground for the coming age of ubiquitous
digital media. Although advertising appeared during the 1980s on computer
dial-up services such as Prodigy, the business was marginal and ad agencies did
not consider that it had mainstream possibilities. The growth of commercial
advertising on the World Wide Web with the introduction of the Netscape browser
in 1994 pointed to a venue for marketers to reach millions of audience members.
The second half of the 1990s marked a transition period during which publishers
and various partners refined ways to construct the audience in greater detail
than earlier decades.2 Central to their digital activities were
technologies—cookies, tracking pixels, Flash cookies, and various mobile device
“digital fingerprinting” methods—to trace people’s actions within and across
websites, applications (apps), devices, and physical locations.
The ability to
tag audience members and track what they viewed allowed publishers to create
and offer up segments of inferred interests to advertisers who might conclude
purchasing interests from that information. Advertising networks were doing the
same thing, though across websites, and they and a growing number of data
collection firms such as Axiom, Experian, BlueKai, and eXelate often matched
their cookie-like trackers with those of other firms to enhance advertisers’
ability to target very specific types of individuals—and often even very
specific (though still anonymous) individuals. By the late 2000s, audience data
exchanges owned by Google, Yahoo, Microsoft, Interpublic, Facebook, and other
major players facilitated the auction of individuals with particular
characteristics, often in real time. It is, therefore, now possible to buy the
right to deliver an ad with a message tailored to a person with a specific
profile at the precise moment that that person loads a Web page. In fact, via
an exchange, a publisher can sell an advertiser the ability to instantly reach
and tailor a message for someone the advertiser knows from previous contacts
and may even have followed around the Web.
This article is an excerpt taken from a technical paper, titled - "Advertising, Big Data, and the Clearance of the Public
Realm: Marketers’ New Approaches to the Content Subsidy" published at International Journal of Communications under Creative Commons License.
Download The Paper - LINK
Cite This Article:
Couldry, N., & Turow, J. (2014). Advertising, Big Data,
and the Clearance of the Public Realm: Marketers’ New Approaches to the Content
Subsidy. International Journal of Communication, 8 1710-1726. Retrieved from
http://repository.upenn.edu/asc_papers/413
Copyright ©
2014 (Nick Couldry & Joseph Turow). Licensed under the Creative Commons
Attribution Noncommercial No Derivatives (by-nc-nd). Available at
http://ijoc.org.
