Interesting article about bringing “Wall Street-like analysis” to the advertising industry.

That unfortunate choice of words does not mean what it appears to at first blush. By “Wall Street-like analysis,” I do not believe the writer meant to imply that 1) the analysis was conflicted, 2) there was in inherent bias in it; 3) the parties are inappropriately compensated. Rather, the reference was to a rigorous mathematical approach, using standardized accounting to determine results (profits) via a consistent methodology.

Please pardon any confusion.

Excerpt:

“It’s putting numbers to an industry that never had numbers before,” says Mr. Herman, 27, who started and sold three media and technology companies before founding Varick last summer. “It’s nice to be able to tell your brand manager or the chief marketing officer which audience is interacting with the unit, what time of day, what day of the week, and what the response is on certain types of offers. Before, nobody could really tell you that . . .”

Where the data guys were once an afterthought in a marketing presentation, now they are at the core of the online strategy. What’s more, they can help advertisers save money in traditional media by testing different phrases or images online to see what works before producing an expensive television commercial or magazine ad . . . The shift to data-based campaigns is forcing marketers to learn new skills and drawing a new breed of worker to Madison Avenue. While most data executives now in the field came from media backgrounds, they are recruiting Wall Street math geniuses because the job requires hourly adjustments in strategy based on numbers.”

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Source:
Put Ad on Web. Count Clicks. Revise.
STEPHANIE CLIFFORD
NYT, May 30, 2009

http://www.nytimes.com/2009/05/31/business/media/31ad.html

Category: Financial Press, Mathematics, Web/Tech

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

5 Responses to “Advertising Goes Quant”

  1. alfred e says:

    Quants on Madison Ave? Too bad they were on Wall St and not there all along. So now, which ad agency is going to need a gov bailout? Quants have always been part of better ad campaigns. I guess now they want to make sure they’re getting real-time internet stats. What now an internet ad Pump and Dump team?

    Kind of makes some sense. Marketing has morphed from a single minded unified campaign to one that feeds on segment inefficiencies to milk those little nooks and crannies for more pop.

  2. gorobei says:

    I remember offering quant-like services to ad firms back in the 1980s. They hummed and hawed and really didn’t want to ink the deals: clear goals, objective measures, and pay for results scared the hell out of them. They knew 80% of them were dead if they signed.

    Took the same deal to Wall St, and could line up 8 figure capital for a trial run in 24 hours.

    No surprise where the science-geeks went. Maybe Madison Ave is ripe to get hit next: they are soft and deserve a little introduction to the real world.

  3. VennData says:

    Michael Dell’s burnout, “You’re gettin’ a Dell, Dude” didn’t work. What tech wants to be associated with dumbness? …techs hate stupidity, especially faux-cool stupidity. And the service? … yikes…

    Dell’s return should be driven by the statistical advertising, quant-based marketing of their installed base and follow up, service-oriented, up-selling etc… but he’s just blowing it.

    Dell was a flash in the pan, he got lucky. He wanted tax cuts and cost cuts to cheapen his way to prosperity.

    Game over.

  4. bergsten says:

    Conflicted analysis, inherent bias, and inappropriate compensation sound EXACTLY like what mass media advertising placement has been all along. If you don’t believe this, check out what is shown during “sweeps” and PBS pledges (and isn’t otherwise), and how ad agencies are compensated.

    But what they have and Wall Street doesn’t is awards (awards for “art,” not contribution to sales).

  5. PrahaPartizan says:

    “…recruiting Wall Street math geniuses because the job requires hourly adjustments in strategy based on numbers.”

    Pardon me, but anybody who writes drivel like this deserve whatever reward they might be handed. If these firms are looking at “strategy” as being an hour-by-hour affair, God help us, because we’ll wind up with exactly the same debacle we’ve gotten in the financial industry. How can you adjust “strategy” on an hour-by-hour basis? Tactics? Sure. Operational? Sure. Strategy assumes you’ve established a long-range horizon and vision of what the final battlefield will look like and adhere to an overarching plan, not modify the approach with every little wiggle in the numbers. Trying to play with the tactical decisions to compensate for a true defective strategy will merely prolong the agony and increase the expense. Besides, if the strategy begins to prove defective, just when do you throw the upper echelon executives responsible for the POS strategy overboard? How often will you be completely replacing the corporate executive suites (or is that suits) daily if you’re going to let each blip in the charts decide which strategy is optimal?