Just some high level thoughts on where things are at and where things are going in digital display advertising…
We may look back and call 2010 the year of the “DSP.” It was the year when agencies recognized they could leverage ad network technology and fundamentally change the way their businesses operated. In an instant, buyers had scalable, centralized access to auction-priced display inventory. This new shift realigned agency resources, buying habits and media planning workflow because now, display media could be bought and sold instantaneously. A commodity was now being bought, traded, and sold as if it were the stock market. But now, two things are slowly happening which will bring us to the next wave of technology, or technology protocols and processes. Data Management, or now otherwise known as a DMP:
1. Buyers are hedging their bets with DSPs, but lack a centralized data warehouse.
As the DSPs or Ad Management Platforms continue to grow, in terms of scale and technical features, the buyers are continuing to explore competitive offerings. At the end of the day, if a DSP is going to power an agency trading desk or a buyer’s business, it will become imperative that the buyer maintains options. And as this diversification happens, the buyers will lose the ability to maintain a standardized, centralized, exportable data set. A data set that can be used in any DSP, any traditional network, or any publisher and more importantly, for any medium whether it is advertising in display, text, audio, mobile or video.
2. Publishers are realizing the need to better segment and monetize their first party data.
Publishers face perhaps the most challenging problems of anyone in this ecosystem, primarily due to the fact that the majority of VC backed businesses in the last few years have been focused on the buy-side. As a result, publishers must consider the effects of working with ad networks, data companies, trading desks, yield optimizers, ad verifiers, privacy companies and must do so with inadequate or legacy technology. Technology that was built for the traditional ad network world. The value for publishers, outside of the content and the inventory they create, is unarguably the audience data. It is for this reason publishers are now focused on securing a comprehensive data strategy. A strategy that provides intelligence and protection to monetize data through direct or indirect media sales, or through direct or indirect data sales, all the while leaving that choice up to the publisher.
We will look back and call 2011 the year of the “DMP” and perhaps the year that a new Online Advertising Operating System was formed. The year when a loosely coupled system of advertising technologies (or few tightly integrated systems) began to work together in an attempt to empower media planners with the same capabilities of that of a sophisticated ad network. And in the middle, will sit the delivery mechanisms (DSPs) and the intelligence (DMPs) so that young media planners can deliver data driven ad campaigns for their client across all mediums and platforms from right behind their desks.
I always knew there was something super advanced and different about the Black Eyed Peas. My first sign was when I saw them perform at Intel’s private launch party for their Core 2 Duo processor at the 2006 Consumer Electronics Show in Las Vegas (thanks to Marc Harrison – pictures below). It was the first time I ever experienced a collision of mainstream music, technology, celebrities, and media all in one room, at one major event.
Yesterday I read an article in the Rolling Stones by Chris Norris titled “40 Reasons To Be Excited About Music” and sure enough, coming in at No.1 was “The Black Eyed Peas – Will.I.Am and the Science of Global Pop Domination.”
The entire article is certainly worth a read for anyone that’s in to music, but the piece that really hit me was this…
“To Will.i.am, songs aren’t discrete works of art but multi-use applications – hit singles, ad jingles, film trailers – all serving a purpose larger than music consumption. Creatively, he draws no distinction between writing rhymes and business plans, rocking arenas and PowerPoint, producing albums and media platforms, all these falling under a cleareyed mission to unite the largest possible audience over the broadest range imaginable. It’s a mission he communicates with a combination of Pentecostal zeal and Silicon Valley jargon, suggesting a hybrid of Stevie Wonder and Steve Jobs.”
It’s the idea that media and music are really one in the same. That business and music are thought about the same way and are less complimentary but more interconnected.
Over the past year, the lines between technology, software, media, music, marketing and news has become increasingly blurry.
Global advertising holding companies like Havas, OMD, and Publicis are now looking to build their own technology units in house in an attempt to replace the need for Ad Networks and control the entire online advertising stack.
Software is Media, says Fred Wilson in a recent post – “Media are the tools that are used to communicate. And software that runs on the web is part of the media landscape.”
And even today there’s news about how Hearst, another traditional publishing company, is looking to buy the digital advertising firm iCrossing for $375M.
As are lives continue to digitize, the companies and artists that continue to take a longer, interconnected view on culture, technology and media, will be the ones that succeed. Will.i.am and the BEP are definitely on “that next shit now.”
When things get so complicated the best thing you can do is go back to the basics.
In today’s world of online advertising, the “basics” are changing so it’s important to understand what those changes are and how they affect a marketer’s business.
I wrote a piece that was featured in today’siMedia Connection that discusses this very point.
Excerpt from the article:
We are at the cusp of a new age of online advertising. As news ways of thinking about the ecosystem emerge, so too are there new ways for advertising campaign deployment. Math now seems as equally important as creativity. Technology now seems as important as artistic ability. This evolving trend has spawned new companies and has required older companies to change their very DNA, and with that, their name or classification.
Data is King. If you don’t believe me, consider this:
Rental car companies and insurers are refusing service to people with poor credit scores because data mining tells them that credit scores correlate with a higher likelihood of having an accident.
Nowadays when a flight is canceled, airlines will skip over their frequent fliers and give the next open seat to the mine-identified customer whose continued business is most at risk. Instead of following a first-come, first-serve rule, companies will condition their behavior on literally dozens of consumer-specific factors.
The “No Child Left Behind” Act, which requires schools to adopt teaching methods supported by rigorous data analysis, is causing teachers to spend up to 45 percent of class time training kids to pass standardized tests. Super Crunching is even shifting some teachers toward class lessons where every word is scripted and statistically vetted.
In the world of Online Advertising, marketers, web publishers and technologists alike are beginning to realize that data is hugely valuable. In the past, advertisements were served to websites based on the content of the website. Today, advertisements are served to websites based on data that is informing the ad server to show that advertisement. As a result of this paradigm shift, the digital media community is beginning to realize that media and data are separate commodities. Where you see your advertisement is very different than how or why that advertisement is there in the first place.
Being able to leverage the power of this online data is great — but what does it really mean? Let’s take a look at the type of data that is available for digital marketers.
There are two types of data we should look at.
Singular Data Points
Multi-Variable Data Points
A “Singular Data Point” is a piece of data that is very cut and dry. It is a binary 1 or 0, “yes” or “no.” For example, if I recently went to an e-commerce travel site, configured a flight for 2 people from NYC to LA, and clicked “view price”, then you could make the argument that I am very interested in flying in the near future. The instant I click the “view price” button, a single data point can be obtained classifying me as “someone interested in domestic travel.” This may hold a ton of value for marketers at the bottom of the advertising funnel (see diagram below) who are looking to convert on a very specific type of user for a very specific product, and has been, still is, and will remain extremely valuable. Some examples of “Singular Data Points” include: Purchase Intent or In-Market Data, Age & Gender and Household Income.
These are data points that explicitly and intuitively describe certain consumer attributes. They are more or less declared characteristics or definitions of a consumer.
“Multi-Variable Data Points” however, tell a very different story. Imagine for example that someone, who happens to be female, 24 years old, and makes $40k/year, went to a social network, checked her inbox, wrote on a friends profile page about last night’s TV show, left that site to read and comment on an article about the New York Giants, uploaded a video about comedy, checked the price of a flight from NYC to LA, and finally, viewed another friend’s photo album who happened to have just returned from a trip to LA. What does this social data say about that user? Nothing? Is it completely arbitrary and meaningless? In fact, it’s exactly quite the opposite. Being able to leverage “dozens of consumer-specific factors” in real time gives a marketer the capability of executing and deploying various tactics such as:
Influencer outreach strategies
Creative optimization for advertising units
Deeper visibility into brand engagement opportunities
Custom optimization for various and wide ranging back end performance metrics
Statistical data analysis and research
Comprehensive search strategies
Informative and cost effective media buys
Moreover, this social data presents huge opportunities for marketers looking to reach consumers at the top of the advertising funnel, but still has applications toward the bottom of the funnel as well.
Today, there is much debate around the value of social data vs. purchase intent data. How and when it should be used? How much should each cost? How should it be sold?
If we look at social data and purchase intent data as it might be applied in the advertising funnel, it would probably look something like this:
Now let’s consider social data and purchase intent data in terms of value vs. time. If we consider our previous example, we can make the argument that purchase intent data is hugely valuable for a short period of time. If I am looking to book a flight within 2 weeks, that does not necessarily mean I would like to travel a year from now. For a travel related company, that 2 week data point is again, hugely valuable.
Now if we consider our social data example, by demonstrating undeclared and implicit behavior over an extended period of time, we can make the argument that this data has tremendous value indefinitely. If we were to graph social data vs. purchase intent data on a value vs. time graph in today’s environment, the graph might look something like this.
But as companies become even more sophisticated, develop better applications of technologies and data mining, then someone’s day to day behavior might prove even more valuable in the future. This is certainly true when it comes to “creative optimization.” It is the idea that a creative ad unit showed to a consumer will be directly linked to their “social data” and that the consumer GENERATES OR INFLUENCES some form of content, message, conversation, or engagement. “Consumer Creative” – or “Social Creative” is the next leap of value to marketers, and as we evolve in the creative evolution of social media/data, the value vs. time graph will probably look something like this.
At the end of the day, having the ability to make educated decisions using comprehensive data sets is what will differentiate businesses from their competitors. It will give the forward looking organizations a way to stay relevant, efficient, and strong, while other companies continue to use outdated and inefficient methodologies.
And as these technologies evolve, become more sophisticated, and create incremental value for marketers, web publishers and consumers, the “data” companies will have a responsibility to uphold the privacy rights of all parties involved. These safety and privacy measures will become, and are already, inherent features of the technologies, because with the power of data comes the responsibility to collect and use the data in ways that provide appropriate protections for user privacy. Responsible industry members will continue to develop practices and policies that can work for marketers, publishers and consumers in this arena (we are one of those companies).
Nevertheless, if companies and marketers want to make the best decisions possible for their clients, they should consult the data for the answers and throw the guess work away. In our world of digital media, find your exact target audience and save money on wasted impressions or eyeballs. It’s all about the data, as well as harnessing the power of consumer driven information.
“Here’s what’s important. We’ve allowed the way transitions look from the outside to drive our perception of what they must feel like to those going through them on the inside. From the outside, they look dramatic, almost revolutionary breakthroughs. But from the inside, they feelcompletely different, more like an organic development process.“-Jim Collins, Good to Great
Online advertising is the key to the future for companies that want to be successful, but a small firm called Lotame has just raised $13 million in Series B funding to take aim at advertisers and provide a unique way of getting in front of the target audience….(continue reading @ mashable.com) or at:
“Clearly, the good-to-great companies did get incredible commitment and alignment – they artfully managed change – but they never really spent much time thinking about it. It was utterly transparent to them. We learned that under the right conditions, the problems of commitment, alignment, motivation, and change just melt away. They largely take care of themselves.”-Jim Collins, Good to Great