“Brand is magic… there is no computer that can figure out magic,” according to Jim Heckman, CEO and founder of 5to1.com, explaining why advertising and marketing will always require a human element — meaning the good services of media planners and buyers.”

“Digital Hollywood: Media Agencies Are Here to Stay — Ad Networks, Not So Much.” MediaPost. May 6, 2010

“Any sufficiently advanced technology is indistinguishable from magic.”

Arthur C. Clarke, Profiles Of the Future, 1961.

Well, do you? Which type of marketing magician do you prefer?

If you attend industry events and haven’t been to a NextNY meetup, I certainly recommend that you give it a try. You might need to buy your own drink, but it’s a great crowd and the community spirit along with the open conversational format make for a great experience.

I’ve listed the problems in descending order of importance to last weeks’ discussion.  Relevance and ROI, two deeply intertwined concerns, dominated the evening. Relevance is defined as the proper answer to the age-old advertising strategy question: “Who, What, When?” In the past 12 months, we as an industry have made tremendous strides in providing better answers to this question. Tech companies have built great new products, agencies have reworked their organizational structures to adopt these new technologies, and clients have literally “bought in.”

We still have a ways to go, however.

Event moderator and avid kayaker Charlie O’Donnell mentioned how recently he noticed a wetsuit sale on  fashion retail site Gilt Groupe. When he tried to buy the suit, it was sold out. Charlie has probably seen hundreds of display ads since his failed purchase attempt and not one of them had anything to do with wet suits.

We’re going to achieve amazing levels of relevance that will benefit consumers and companies throughout the value chain .  But should we, as digital marketers, be so bold as to aspire to achieve more than entirely unprecedented relevance in advertising?  Yes.

Brands demand that we go beyond relevance. Online advertising doesn’t suck in general, but it does receive disproportionately small budgets relative to other mediums such as television.  One reason is that digital is very good at harvesting purchase intent for products sold online, but other mediums, like TV, are better suited for purchase intent generation.  Online is a great complement to other mediums.  Online advertising is good where TV fails (relevance, for example) and struggles where TV excels (emotional connection and narrative, for example).

Since online ads exist in a non-linear, non-interruptive, consumer-controlled medium, it is difficult for them to pass what I call the “Nick Drake test,” in honor of my favorite TV ad of all time, below. You can rename the test after the ad which speaks to you personally with the deepest level of meaning.

This ad is not harvesting purchase intent.  I wouldn’t even say that it directly generates purchase intent.  Instead, it accesses involuntary memory, aka Proustian memory, to create an emotional experience that I still remember 10 years after first seeing this ad as a teenager.  This ad certainly does not suck for the consumer, brand, or publisher.

To be sure, digital advertising, specifically conversational media, is entirely capable of creating emotional connections. To take a personal example, I was impressed when I tweeted about wanting a Kindle and Amazon replied with extremely relevant sales information.  But I was truly amazed when a human responded thoughtfully to my sarcastic reply to what I assumed was a Twitter-bot.  This advertising interaction delivered both relevance and a personal connection.  Once TV ads are digitally served, this fusion of digital relevance and analog emotion will become even more scalable.

Many companies and individuals are now focused on numbers 1-3, and the winners will win big. But that is just one battle. The ability to pass the “the Nick Drake test” at scale will decide who wins the war.

Almost all digital media campaigns involve some element of optimization, and in the next 2-3 years optimization will become more pervasive, more rapid, and more automated.  Digital media planners and account managers will still have control over their campaigns, but they’ll spend more time considering strategic issues and less time calculating and comparing the ROI of different media options.

It’s hard to say who’s going to be the leader in the optimization space: media holding company ventures like Havas’ AdNetik, Vivaki Nerve Center, and Varick Media Management; dynamic creative services like Tumri, Adisn, and SnapAds; ad networks like Turn, Tribal Fusion, and X+1; or buy-side solutions like InviteMedia and Media Math.  The list goes on and on.  There are a lot of players who increase advertising performance by optimizing better than the next guy.  But when I think about Optimization, here are the three pillars that I use to frame the issue:

1. Audience

2. Media

3. Creative

Audience:

This the individual consumer that you are reaching with the ad.  These are the traits that would be relevant to optimization:

A) Demographic profile (age, gender, DMA, HHI, education, etc.)

B) Data from previous ad interactions (first impression vs. third impression, previous visits to campaign landing page, previous visits to advertiser homepage)

C) Data from transactions with brand (current customer vs. acquisition prospect, customer data from client CRM database)

Media:

This is the environment in which you are presenting the ad.  These are the traits that would be relevant to optimization:

A) Media property (Major media brand vs. long-tail site, blog vs. social network vs. editorial site)

B) Page placement (Above the fold vs. below the fold)

C) Context (If a semantic engine scanned the page, how would it classify the content?)

3. Creative

A) Format (Standard flash vs. rich media vs. video)

B) Creative Message (What product are you promoting?)

C) Creative Details (Color of ad, call to action, intro animation, logo placement)

In my experience, media optimization is the most common but there are huge gains to be had by optimizing all three, and even greater gains for those who optimize all three in an integrated platform.

Bottom Line: More and more of digital media will be optimized in the future. Marketers should look at the three pillars of digital advertising optimization — audience, media, and creative — and ask themselves: Which pillars am I currently optimizing? Which pillar do I understand best when it comes to controlling performance? Which pillar would benefit the most from quicker, more automated optimization?