Karl: Good morning. I'm Karl Fitzpatrick and welcome to business matters. While the business community welcomed the news this week that the government's plan to drive down insurance premiums is starting to pay dividends. The new personal injury guidelines which were introduced earlier this year are having an immediate impact with PIAB, indicating that the average reward has decreased by approximately 50%. As a result, it is expected that businesses should see a reduction in their insurance premiums as the award amounts continued to fall.
Karl: Now, my first guest this morning is Fergal O'Connor from Buymedia who's hoping to help SMEs to excel in their advertising activities by providing them with access to important data, Fergal you've a distinguished career in the world of advertising spanning over 20 years. So start by providing us with an insight into that journey.
Fergal: Yeah, so I, my background is is very much media and advertising based. I kind of fell into advertising basically, in a publishing company in Dublin. And since that, then I've worked across print, radio, television, outdoor, and most recently social and digital type of media companies.
Karl: So how did that then prompt the decision for you to go off and set up a company called Buymedia.
Fergal: I suppose it was born out of frustration and what I saw as a lot of unfairness in the market. So you have big brands, you have the likes of Procter and Gamble, Nike Sony, Coke, all these big brands that everyone's familiar with. And when they come to advertise, they have huge advantages in the marketplace, because they've got huge budgets, for example, Procter and Gamble's annual advertising budget is 7 billion per annum. They have huge marketing resources, they've advertising agencies coming out of the ears, they've got creative, they've got data, they've got historical insights. So they have a huge amount of advantage when it comes to putting together an advertising campaign. And then on the flip side of that marketplace, you have the small medium enterprises, and all of those advantages, that the bigger brands have are disadvantages for the SME, so they're typically dealing with a smaller, much smaller budget. So they're, they're typically dealing with fewer or little marketing resources, and little or few insights, probably little or no technology. So therefore, when it comes to advertising for a small medium enterprise, the playing field is not level and all the cards are stacked against them. So the inspiration or the idea behind Buymedia was how do we or is there a way first of all, to see if we can level this playing field for small medium enterprises.
Karl: So how does Buymedia provide SMEs with insights that large companies have been using as advantages Up to now.
Fergal: The way we tend to look at it is, we look at the past, the present and the future. So, the SME advertiser approach is typically, you know, they need to advertise. So where should they advertise? Well, they should advertise where their customers are, but for a small medium enterprise, where is that, so they would need to do a huge amount of research, they would need to have a huge amount of data, a huge amount of insights. And they just, they just don't have the resources or the access to those things. So typically, what a larger brand would use are the likes of TGI Kantar, which is consumer insights. They're an international company, market research company. And they do a piece of consumer research every month in every country around the world. And they have an Irish version, obviously, and all the big brands and advertisers will use these insights. And it gives you a huge amount of data and behavioural information and attitudinal behaviour about your particular customer. The key thing for us as well is it gives you media insights. So not only can you identify the ideal customer for small medium enterprise, but you can also identify the media that that customer is consuming. So before we do any spend of advertising at all, or recommend any spend of advertising at all with a business, we will look into these type of insights and data. And we will find out what's the best media for this advertiser to advertise in, in the first place. We also use things like Nielsen. So we have data that's built into our system from Nielsen. We're members of the Institute of practitioners in advertising, so we basically have combined this aggregated data that we put into our system. So when an advertiser comes to us looking for advice, or information or insights of where they should find their ideal customer, we have all that access to that data for them from the get go.
Karl: Now Fergal, I do want to speak to you about the technology that underpins all of this because I know you've been through the NDRC and you're also an Enterprise Ireland client, the technology that you've built is using artificial intelligence and machine learning. So provide us with an insight into that.
Fergal: Yeah, so exactly right Karl. So because we are an Enterprise Ireland company, obviously technology is at the heart of all we do, we built the technology ourselves, so through the Enterprise Ireland and the NDRC program. We first of all, obviously validated marketplace and customer but we built out the technology. And basically how it works is we ingest all the data from the business so we will set up key performance indicators with the business in terms of what drives success within the business? So that's revenue, is it impressions on a website? Is it social media engagement? What are the key things that are important for them to know that it's driving success, then we match that against the spend. So we, we then monitor where they're spending their advertising, the mix of advertising between print, radio, TV, outdoor, social, and digital. And then we match the two, the artificial intelligence within the system matches the two together. And we can then over time again, it's not a, it's not a quick fix approach. But over time, as we build up this data, within the business, the business starts to learn what campaigns are working, what campaigns aren't working. So it's making more data driven decisions going forward for the business.
Karl: And of course, there's been major disruption to the advertising industry over the past 10 to 15 years. But where do you see it going over the next 10?
Fergal: Yeah, well, there's huge debate about where the industry is going to go, there was, there was a big thing about personalisation, everything would become much more personalised, it will be much more, you know, your name would be on the advertising, so it'd be directed specifically to you. Things have slightly changed again, over the last few months with Google announcing that they're going into a cookieless. World, Apple have announced that they're going to wall off their gardens in terms of privacy for the customers. So that ability for a business or an advertiser to try and reach customers in this more personalised way, has has been hampered somewhat by these moves by Google and Apple. So, it's really open to see what way this industry will go, because that personalised approach is probably not going to be available to advertisers for much longer.
Karl: And having spent 25 years across a range of different media platforms, how effective are SMEs at measuring their advertising spend, and its overall impact?
Fergal: Yeah, I think that that's a huge failing, unfortunately, of SMEs at large. And it's not, it's not just in Ireland, we deal with businesses in the UK and in Europe and the US as well and it's across the board. The learning piece is really, really difficult. We would talk to some businesses, and when you ask them, you know, how are you measuring the performance, it literally either, you know, the back of a napkin, or it might be at best an Excel sheet or something that they're trying to pull them together. The big difficulty that SMEs face and it's not even their own fault, it's the way the media marketplace is set up to some extent. So media is generally siloed. So, you have the print industry, and you have the radio industry, you have TV, you've outdoor, you've social and digital. And they're all in their own silos so for a business to even attempt to measure the integration of those campaigns, or how each of those individual media campaigns, are having an impact on the business is really, really difficult. And I suppose that's part of the challenge that we try to address on our platform as well. So by pulling all of the information into one place, at least the business can have an overview of - look, what campaigns or what mix of campaigns are working better, what campaigns aren't performing, so well. At least they have a visual overview of how that works. And with the intelligence that's built into the platform as well, it can make recommendations, but in general, to answer the question, very, very poorly in terms of the measurement you can do, you know, they will generally have probably good insights into Google Analytics, or maybe even their Facebook dashboards and things like that. But if you're talking about how are they measuring the integrated approach to advertising, that's virtually non existent among all SMEs.
Karl: And Fergal, for the businesses that have been using Buymedia up to now and of course, your own platform? How has it influenced their advertising spend and effectiveness?
Fergal: Yeah, so that's a really interesting question. Because what we have found is, you know, there tends to be a kind of a mindset within SMEs, that advertising is a cost, it's something they have to do, it's not something that they see is an investment in the business. And that's generally happened, because over the years of running their business, they've probably been stung a number of times, you know, generally the approach that an SME takes is, you know, they do a little bit of advertising, they generally aren't doing it maybe in the right places, they then don't get a great result from that advertising. And so therefore, the take an attitude or a bias or a heuristic in their mind that advertising doesn't work for their business. So they tend to advertise less, the business grows less, and therefore it's, it's like almost this downward spiral. So what happens then when you start to bring data and insights to the table is, it really helps the businesses that we deal with identify, you know, where their ideal customer is, where the most valuable customers are. And so therefore, when they're spending the money on the media companies that are recommended through data, they generally get an increase in the return that we're getting on the investment in the advertising. So we generally get about a 27% increase on the return on investment that a business has been getting before they started using the system. So what happens then is once they start to get it, it's almost like the opposite of the downward spiral, you get this kind of upward spiral or this virtual circle of good vibes about advertising. So they see that advertising is having an effect they can see from the data that their revenues are being driven upwards. And so therefore, they tend to invest more in advertising.
Karl: Since businesses have reopened after lockdown. Lots of them are enjoying somewhat of a purple patch, and are of the mindset that they're too busy to advertise at the moment, what would you say to that?
Fergal: Yeah, again, it's a dangerous tactic, because there's often like, and the opposite applies as well, you know, I've often heard over the years, you know, times are bad, so we can't advertise and then times are good, so we can't advertise. So there's always kind of a, I suppose, the flux between the two. But what we found is, it's the consistency and that's the really important thing. It's to be in the top of the mind of your potential customers, when they are ready to buy, because you may be busy today, you might be busy this month, you might even see the next three or four months as being really busy. But there will come a time when that will drop off. And when that time comes, you want to be in the top two or three choices of the customers that are in the market for your product or service at the time. So the key to it is there's a there's a there's a beautiful graph, if anybody wants to look into it, it's called the long and the short of it, by Binet and Field, they are two godfathers of advertising effectiveness. And basically, you can see the short term impact of that kind of advertising. But what you want to do is you want to build up what's called the brand equity in your business. So regardless of whether times are good, or whether times are bad, you have a constant flow of new business coming into your pipeline that you can manage. And if you don't do that kind of consistent advertising and consistent marketing in your business, what tends to happen is you will go to these peaks and troughs, you'll be really busy, really quiet, really busy, really quiet. Whereas if you do the long term approach to your advertising, then you get this consistent flow of customers into the business. That's more manageable.
Karl: Yeah, you've made some very interesting points there, especially around things like building share of mind and making sure that you're top of people's mind when they're thinking about a product or service. And of course, repetition creates reputation. So you need that consistency. I remember Gavin Duffy joining me on the show a few years ago speaking about smart marketing. And he said don't fall into the trap of circus advertising. You know, when the circus arrives to town they do a bit of everything over the course of two or three weeks, but they disappear again. And everybody forgets about them, you know. So it's an interesting point you made.
Fergal: Exactly, 100%, Google have actually done a report recently, and they call it the the rooms in the mind. And it's creating a space in the mind's of your potential customers, that your business is sitting in one of those rooms. And the rooms, the way they describe it, the latest Google research, the psychologist that wrote this report for them. The way they described it was sometimes the rooms may have the lights off. But when the lights go on, you want to be one of the things that are in that room when people turn on the lights.
Karl: Finally Fergal, what are your growth plans for Buymedia over the next three to five years?
Fergal: Yeah, so at the moment we're still relatively small, we're a HPSU company, we've taken on investment recently. So we're growing out the business and the team at the moment in Ireland. Our plans over the next 12 months would be that we expand or we help more advertisers within the Irish market to get a better return on their investment. We're also looking into early 2022, we probably looking into the UK market, we've already kind of expanded on the supply side there. So we have some of the media companies. We have all the data built up on the system for the UK market. And then the next step will be to maybe take some of the regional areas in the UK and start to run some test markets in those.
Karl: Well, if you've just tuned in that was Fergal O'Connor from Buymedia. And it's great to see small businesses now able to access this valuable data.