News & Views

The future of advertising is software

by Contagious Contributor

More and more ad campaigns will start to look like software development projects. In future, great insight will lead to great coding and great experiences. Phunware's Jon Hook explains.

Back in 2011, venture capital guru Marc Andreessen famously said: 'software is eating the world.' In 2015 it’s starting to eat the advertising business.

Over the past 10 years, there has been an explosion of new software companies enter the advertising space which are driving the media ecosystem. Ranging from ad networks, ad servers, exchanges, data management platforms, SSPs and DSPs, there are now thousands of companies that can sit between a brand and their target consumer.

Enter Google and Facebook, which are set to generate $35bn in revenue, over 50% of all mobile ad revenue in 2015. Why? Quite simply their software platforms allow brands to create targeted advertising incredibly effectively through their ability to manage, mine and monetize first-party data at scale and cross-device far more effectively than other technology companies.

While no brand/agency will win a Cannes Lions for running a Google Search campaign or a Facebook Display campaign, the ad:tech war between Facebook and Google is forcing media agencies to start understanding algorithms and the code behind them.

But it’s not just the media agencies that are affected. Publishers – even those with both great content and first party data – are looking to these software platforms to enrich audiences and monetize their traffic more effectively beyond their own walled gardens.

Look no further than the recently announced programmatic Pangea Alliance Initiative bringing together the FT, CNN, Guardian, Reuters and The Economist as an example.

The impact of software is also stretching to the advertisers as well. Software and the platforms it powers have become key sources of data to help them build up consumer profiles that aren’t confined to single publishers.

Brands are teaming up with and/or acquiring software companies that have developed technology that enables brands to identify, engage and track users regardless of device.

What comes out of this process is a vision of marketing communications that’s as much about applying software as it is about applying creativity in the quest to deliver a great consumer experience. Let’s take two software-driven campaigns as an example:

WWE recently used an app to improve the experience for visitors to WrestleMania 30 in New Orleans. The app didn’t just help them book tickets, it combined location-based technologies to help them get to the venue, find their seat, as well as order snacks, watch instant replays and purchase merchandise, thanks to 120 iBeacons installed around the venue.

Software provided a seamless end-to-end experience designed to build loyalty, even promoting the location of autograph-signing sessions around the event as each wrestler became available.

Meanwhile, Oral B demonstrated a connected toothbrush and a smart mirror at the recent Mobile World Congress. With an open approach to app development, the potential for toothbrushes that tell your dentist when you aren’t doing the full circuit could be less than a year away, with the first apps due in October.

Dentists might use such apps to add extra brushing time to daily routines or redirect efforts to a frequently missed part of the mouth.

As brands become much more about the experiences that consumers have and less about the advertising, so marketing departments will need to build new software that adds value and builds brand loyalty.

In a world where what brands do for consumers is critical, software sits at the heart of delivering that positive experience.

Jon Hook is VP Advertising at Phunware