Media boss is mining data to discover advertising's 'secret sauce'
Alan Cox has been in the advertising game for 30 years. At buying agency Core Media, he's investing heavily in analytics to uncover the 'magic insights' he hopes will deliver growth in a rapidly-evolving digital world, he tells John Mulligan
Core Media's offices on Dublin's quayside are just as you'd expect them to be - edgy and funky. A sort of fusion of Google and Ikea, but on a more compact scale. As Alan Cox climbs the stairs from reception, his bright stripey socks - the de rigeur accessory for any media exec worth his salt - provide a handy beacon to help avert possible stumbles.
He's in fine form, even if the showery morning has served to quickly dull the memory of a holiday to Italy from which he has just returned.
"I was in Sorrento last week. It's such a beautiful place. I hadn't been to that part of the world for over 20 years," he says. "But I keep in touch with what's going on."
And there is plenty to keep him busy.
Core Media is Ireland's biggest media-buying agency, and last year booked 1.9 million TV ad spots for clients, as well as 84,500 minutes of radio advertising time. It booked an average of 363 newspaper adverts every week.
It all adds up to chunky numbers for Core Media, which is 16pc-owned by French international media giant Publicis. The rest is owned by management, including Cox.
Last year, Core Media's turnover was just over €194m. This year, according to Cox, the target is €225m, with expected operating profits of €4m. It employs 279 people, who can share in the profits (the firm has been named one of the top three medium-sized places to work in Ireland).
But at a time when people have never had so much choice as to how they consume their viewing and read their news, Cox (49) knows that there's a challenge to ensuring that advertising - and its placement - remains effective.
"The industry is fascinating," he says, as sunlight hesitantly glints off the Liffey. The view from his office runs east to west, the Custom House and the imposing Samuel Beckett Bridge prominent on the canvas.
"It's undergoing so much change driven by technology companies, that it's never been a more interesting time. It's always full on."
The rapid advent of social media and the intense use of mobile devices to consume news and information poses a headache for advertisers and buying agencies such as Core Media, in terms of determining where they should be allocating their budgets to greatest effect.
And the rise of apps - whether it's Facebook, Snapchat, Instagram or a number of others - means the very nature of how advertising is delivered has had to evolve quickly to remain relevant to consumers, and to be adapted to new media.
Last year, the online ad spend here was €248m - a 31pc share of the 2015 market. This year, it will be 34pc of a total €915m, according to Core Media. By 2021, the firm reckons it will hit €500m, or 40pc of the ad market.
"Things change so often. I have to keep up with it daily," says the chatty and likeable Cox, who got interested in advertising when in the early eighties as a teenager he gravitated first to CB radios - his handle was 'Tomcat' - and then began working on pirate radio stations.
"The first radio station I worked on was based in a garage in a guy's house in Cabinteely. We had to go off air every time his mother wanted to do the washing because the record decks were sitting on top of the washing machine," he says.
While Cox says the efficacy of advertising can actually be more easily and more quickly assessed on digital channels, persuading clients that they should be directing budgets based on data can still be an issue.
"It takes quite a lot of evidence to support significant shifts of budgets into different channels," he says. "Offline media has proved to be effective for clients for many years. There are challenges within the digital space, from viewability to ad blocking, and they can cause sentiment difficulty for digital with clients on occasion."
"It's understandable, given the pace of change," says Cox. "But digital advertising is growing 22pc this year at an industry level, and another 20pc next year."
He believes all advertising spend will ultimately be directed towards digital channels. "I'm exaggerating to prove a point," he adds. "But it will go to 100pc eventually."
The 'London Independent' this year canned its print edition and now only publishes online. But Cox still thinks newspapers, despite their declining circulations that will one day mean decisions for many about whether to keep printing, will continue to have some sort of future - although they probably won't be printed every day.
"Some people feel that newspapers won't exist in the future, but I don't agree with that," he insists. "Newspapers will not continue to print seven days a week. But they will exist in some form. The problem is, will it be viable to print? Sales will continue to fall, but they will reach a bedrock and will hold there." That could be optimistic though, but Cox says newspapers could still print at weekends, for instance, or on special occasions.
One of the current imponderables, says Cox, is how the current generations growing up immersed in digital will mature as audiences.
"We don't know if they're going to continue gobbling up digital media exclusively, or whether they will expand their horizons," he says.
"I have a feeling that the further we get into this virtual, digital world, that more people will miss some of the tactile things. We've seen that on a small scale in relation to vinyl [records]. It's small, but it's now a viable product. People like tactile things. It's not all about zeros and ones."
And, with so much data now available in terms of how information is consumed, and who's consuming it, there's another challenge: how to harvest it and analyse it to derive useful and actionable insight.
Cox says the marketing industry has been a laggard when it comes to utilising "big data".
Core Media is investing €600,000 this year in its own data science unit, and €1.1m next year.
"There is so much data. We're trying to get a platform to merge those data sets. And by taking those disorganised, siloed data sets and amalgamating them, and finding the hooks - that's where the secret sauce is. That's where we'll uncover the magic insight that will be a springboard for growth for our clients' businesses," according to Cox.
"There are very few examples of where that's been done. We want to be not just a leader in the Irish market, but a world leader in terms of that investment in data. That's a key goal."
Interestingly, Cox says that while print media was immediately hit by the advent of digital media, radio escaped much collateral damage for some time. "Radio thought it had got away with it, but it has started to bite. This year, radio spend is down marginally this year - about 1pc at an industry level - but TV will grow by about 5pc," he says. "It's starting to be hit by sentiment. Radio is seen not to have innovated enough."
"Media organisations, including newspapers, have to stop thinking about the short term. They have to start thinking about 10 years down the road," he insists.
"The most powerful medium in Ireland by a country mile, in terms of its influence, is still the newspaper. But newspapers still produce their content for websites through the lens of a newspaper. They have to stop doing that and start looking at them as a distribution channel for content of all kinds."
Meanwhile, the chief executive of listed Irish food group Greencore, Patrick Coveney (brother of Simon, the Minister for Housing), has joined Core Media as chairman.
"One of the problems that occurs in every industry is group-think," says Cox. "There's a danger you don't challenge each other as much as you should. We were very keen to get someone from the outside who would do that."
No stripey socks for Christmas then.