Driven by the rapid fragmentation of the media marketplace, programmatic buying is revolutionizing the advertising industry. Though advertisers are still expected to deliver the right content to the right consumer at the right time, they are now harnessing data and technology to target audiences with extreme precision and engage them in meaningful dialogs.

This shift is creating a new kind of advertiser.

What Quantitative Analysts Do

These new marketers now develop strategies based on comprehensive analysis of large quantities of consumer data. They then use algorithms to purchase and place ads across a wide spectrum of digital media outlets. Success for these new advertisers depends on data quality and their ability to quickly and efficiently react to changes in consumer behavior across multiple channels simultaneously.

The rise of this new advertiser signifies a key change not only in the marketing profession but in the industry at large.

Audiences are no longer gathering in clusters around a few larger channels, such as traditional TV. Consumers are dispersing widely across a growing number of digital channels.

Advertisers must develop strategies for engaging their digital audiences, which are far more transient in nature. To do this, many companies are looking for advertisers who understand complex data and technology, and use them to create targeted ad campaigns that deliver proven ROI.

Ultimately, companies that don't embrace this shift in advertising will fail to connect and fall behind their competitors in the long run.

The Rise of 'Quants' on Madison Avenue

Just as Wall Street quantitative analysts (known as "quants") revolutionized the securities industry over the last decade with data-driven, computerized trading strategies, the rise of quants on Madison Avenue is transforming the advertising industry by introducing specialized data and technology to marketing professionals.

These Madison Avenue quants use sophisticated systems to determine the best time and place to deliver highly tailored ad content to specific consumer demographics. They rely on data analysis and advertising models that more closely mirror their target audiences' behavior to implement successful ad campaigns.

New quants are quite different from past advertisers. They are equal parts savvy marketer, strategist, trader, and analyst. This quickly evolving role may also affect who decides to pursue a career in advertising. Students and professionals who once considered careers in Silicon Valley or on Wall Street are now increasingly lured by the notion of managing complex advertising models on programmatic desks within the creative industry.

 A New Type of Advertising Strategy

The programmatic approach to advertising centers on a fundamental shift in how ads are purchased and placed. As a result, the skills advertisers need to be successful have evolved accordingly.

Though an emphasis on high-level strategy that focuses on consumers' behavior still exists, the execution of that strategy is becoming highly sophisticated and technical.

In the future, executing ad campaigns will resemble those of an equity trader in the stock market. Madison Avenue quants will need to be nimble in a constantly changing market and adapt their advertising strategies in real time.

Knowing Marketing Fundamentals

The new breed of marketer still needs a solid foundation in marketing fundamentals to be successful. These marketers' skill set and expertise must expand beyond that for them to thrive in this new media landscape.

Many young quants are expected to use data and technology to identify, develop, implement, and measure ad campaigns.

As a result, undergraduates studying advertising are beginning to see more requirements for courses such as statistics, mathematics, and business. At the graduate level, new courses are now covering marketing analytics and marketing analysis. Additionally, centers focused on merging advertising and technology, such as Carnegie Mellon University's Center for marketing technology and Information, are beginning to play a pivotal role in redefining the advertising profession.

What Quants Can Do for Your Company

By harnessing those new tools, quants can move beyond just delivering timely ads to consumers based on location and browser history. They can now create predictive advertising models tailored to individuals based on a much broader data set, including online activities, geo-locations, social media posts, purchasing histories, and brand loyalty.

Moreover, quants can also track ads' impact on consumer purchasing behavior over longer periods of time.

By collecting and understanding that information, quants can target consumers with the highest statistical probability of purchasing within the shortest amount of time.

And though quants are mostly touching the online and digital space at the moment, TV and radio will also become more driven by programmatic buying strategies as traditional and digital channels continue to converge.

* * *

Programmatic buying and the quants who drive these strategies represent a significant change that will affect every aspect of the advertising world. Advertising team structures, agency roles, data and technology providers and, ultimately, consumers will all be affected.

Smart CMOs have already begun building their quant teams. Though the extent to which these new developments will affect the industry's future direction remains to be seen, one certainty is that quants have arrived on Madison Avenue, and they are revolutionizing the advertising industry.

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image of Alan Izenman

Alan Izenman is chief digital officer at Active International, a corporate trade provider.

LinkedIn: Alan Izenman