By: Claude Galipeau

This week, IAB Canada released its yearly report on digital ad spending. Three years ago was a landmark when digital ad buys first surpassed those on TV. The IAB’s recent report is further proof of the shift in dollars, with the 2015 results showing that digital outpaced TV by $1.4 billion, for a total spend of $4.6 billion. Digital is now firmly in the lead as the solution for brands to reach and engage consumers.

Consumers are spending more time online, both on desktop and increasingly on mobile, which is one leading cause for the growth in digital. Another is measurability, often mentioned by analysts and pundits. But an important trend lies buried in this move to and leadership for digital – the shift of investment from contextual ad placements to performance media. And here the real story is about the use of big data.

Ad media other than digital (TV, radio, print, OOH) principally are planned, placed and measured by context and demographics. Moreover, demographics (e.g. age, income) are usually imputed or ascribed based on survey panels. Digital has always been planned in this manner, using panel data from comScore or Nielsen.

However, brands and their agencies have increasingly sought finer and finer targets, and better returns-on-investments linked to campaign key performance indicators.

It’s here that digital has outpaced, because it outperforms, other ad media. Initially in digital (during Internet 1.0 and 2.0), planners bought contextual placements (e.g. a home page, a sponsorship). Then search media first pushed dollars to performance, with last-click attribution. Then performance creeped up the digital marketing funnel to consideration and even to brand campaigns. We’ve seen cost-per-click, and now cost-per-action, per-acquisition, per-conversion, per-app-install, all different and ever finer KPIs. Throughout this trend, we’ve seen the growth of “deterministic” and “probabilistic” targeting and attribution, based on user log-in and opt-in information, beacons, cookies, and coupon redemption, both online and offline.

And it’s here that big data matters. Those companies that have the most signals, from log-in demographics and location, to usage and behaviour, to search, to content consumption, to social, are winning at the performance game. So scale matters. And it matters domestically and internationally, since Canadians consume across the web outside the .ca domain. It matters to be global with your footprint and have multiple touch points, from email and messaging to search, content and social. It matters across devices, outside the confines of desktop.

Yet even diverse signals and scale aren’t enough. You need data science to structure and manage the signals. You also need ad tech to apply the signals for targeting, trading in exchanges, dynamically optimizing during campaigns, calibrating and verifying with online or offline data. All this requires data scientists and engineers focused on ad targeting and campaign delivery. The winning companies have big data, but deploy big capital and big brains to develop and run big ad tech.

This is the new business that’s underpinning digital’s leadership. It’s data-driven audience targeting at scale. And it’s being played best by global players.

Clients continue to ask for general demographic targets, such as men 18 to 34, and with context, like sports. This reach remains powerful for brand awareness campaigns and are effective, as brand lift studies often show. Yet brands increasingly seek narrower, more granular performance driven targets. And they are shifting dollars here. So they request: Please find us women who intend to buy a car; but a luxury car; who is a Mercedes owner and wants to upgrade; and only in Vancouver. Or, please find us New Canadians, and those who intend to open checking and savings accounts. Or, please find us contractors, and only contractors, not interior designers. These campaigns succeed when using multiple signals combined with data science plus ad tech that features best-of-breed optimization and verification.

Big data is a major factor in the recent leadership of digital in ad spending. Big ad science and big ad tech are driving the increase in share, and widening the gap from other ad media. It’s all because brands now want performance over context, targets that return on the investment made, and campaigns that are verified. Big data is truly the top currency in advertising.

Claude Galipeau is the country manager at Yahoo Canada and a board member at IAB Canada