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Home : Blog : June 2013

Real-Time Marketing and The Client-Agency Relationship

June 10, 2013 by Brand Algorithms
Real-time marketing, as a marketing concept, has been gathering momentum of late, in this age of social media, always-on consumers, and higher customer expectations. Given the relative newness of the term, it is necessary to define it operationally, so as to preclude any misconceptions about the scope and rigour of the practice. So, here goes: real-time marketing refers to the practices of conceptualising and executing brand communications, and of planning and purchasing online advertising space, on the basis of real-time information from the target market and the online advertising marketplace, respectively. The two components - brand messaging and online advertising media planning - need not be executed together or sequentially: either practice would qualify as real-time marketing. An oft-repeated example of real-time marketing from a brand messaging point of view is the Oreo tweet at this year's Super Bowl, played on February 3, 2013, in the USA. An earlier blog Topicality Turbocharges Brand Buzz, describes what happened. From the media-buying perspective, Real-time Bidding (RTB) and Programmatic Buying are examples of real-time marketing practices.

How does real-time marketing redefine the traditional client-agency relationship? For an answer to that question, let us look at how companies are going about practicing real-time marketing.

Real-time Brand Communications
In an IBM survey of more than 500 companies worldwide this year, as reported by eMarketer, the following findings stood out:
  • IBM categorized the sample as Leaders - those in the top 20% in terms of cross-channel integration and use of technology for customer outreach - consisting of 102 companies, and the Rest consisting of 410 companies.
  • Among the Leaders, IBM found that 39% were already putting out real-time offers to customers, based on customer context: a fairly sophisticated practice. The figure among The Rest was just 15%.
  • 65% of the Leaders and 49% of the Rest used segmentation (a statistical and predictive technique) to understand and drive customer activity.
  • 85% of the Leaders were likely to deliver personalised messages in real-time over websites and customer service centres, while only 67% of the Rest used websites and 63% used customer service centres. The next popular real-time brand messaging medium was face-to-face communication, being utilised by 76% of the Leaders and 62% of the Rest. Social Media ranked fourth on the list, with 71% of the Leaders and 50% of the Rest using it, and mobile channels measured 62% for the Leaders and 43% for the Rest.
According to IBM, the key to real-time brand messaging is to use data and analysis to deliver real-time messaging through automated technology, which can rapidly respond to customer actions using advertising, marketing collateral and other content posted to appropriate channels, using automation.

Real-time Bidding (RTB) / Programmatic Buying
Brand-owners, today, are purchasing ad inventory through programmatic buying, often at a lower cost than traditional ad-buying methods. Demand-side platforms and real-time bidding exchanges are automated technology facilitating this practice. As reported by eMarketer, a survey by Digiday and digital advertising technology provider OpenX, of media buyers and publishers in North America, in February 2013, found that:
  • 70% were already doing some programmatic trading, with 77% of those buying via RTB planning to do more of it in the next 12 months
  • Not just that, 70% of the media buyers surveyed said they would evaluate replacing the direct relationship (with publishers) model with programmatic buying.
  • There were concerns among media buyers about programmatic buying, despite the advantages of cheaper pricing and better targeting, viz. the need for more information before placing bids, the restriction with respect to the exposure to additional inventory, and the lack of a system for preferred access to inventory.
The Oreo Super Bowl Blackout tweet won two bronze medals in the "innovative media" and "social media" categories at the recent Clios. Some traditional agencies were neither impressed nor amused by the selection, being of the view that a single tweet does not constitute a body of work . The fact is that many tweets are written by the brand-owner, so where that leave the advertising agency? This trend, coupled with the imminent possibility of brand-owners cutting out the media-buying agency for online media buying, spell an existential crisis for advertising agencies; at least in the online universe.

Reworking the Relationship for Real-Time Marketing
There is more to real-time marketing than brand-owners single-handedly and instantaneously churning out brand-related messages on various social media platforms, as events occur, or purchasing media space whenever prices are attractive. Organisations interested in practicing real-time marketing will have to customize the workings of their marketing and client-facing functions, as well as their agency interactions, in three areas:
  • Structure
    The traditional silo-based structure of marketing, agency, and customer support teams communicating via formal hierarchies has to give to way to multi-functional teams, communicating instantaneously. Depending on the level of activity on each online platform, it may be necessary to form more than one team to cover the various channels the brand is present on. In the case of the Oreo Super Bowl event, an agency team was embedded with the brand team at a control centre set up just for the event. This is a good idea for big events, where the different functions may need to work off each other, and turn around ideas in minutes.
  • Tools
    An organization will need to invest in tools for success in real-time marketing. On the brand communications side, a sentiment analysis tool, a campaign management tool, a content management tool, and an analytics tool are a must, while on the programmatic buying side, a real-time bidding exchange and demand analysis tools are required. The tools will allow the brand-owner to turnaround ideas and intent to action faster.
  • Process
    The organisation's process will have to be modified to account for cross-functional teams, for the need to react faster to potential opportunities or threats, and for faster execution of decisions.
Brand-owners need to start planning for real-time marketing, although India is still some distance away from the time when this approach to marketing will be indispensable. In another couple of years, when Internet penetration has reached critical mass, a real-time marketing strategy will deliver significant benefits. Until then, a brand-owner can work towards getting the organization ready - in terms of structure, tools, and processes.

Tags: Programmatic Buying, Real Time Marketing, Digital Marketing
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