PLATFORM WARS #3: Back to the Future

Are you Old School Enough to Win in the New Ecosystem?

The online advertising ecosystem is starting to feel a lot like The Matrix. Thousands of tentacles of code are stretching out from every technology company, intertwining, and joining the collective. Companies like AppNexus have been built on the idea of the Matrix—an active ecosystem of APIs, linking together supply and demand with centralized data. Everyone is welcome to play in this new RTB universe, and Brian O’Kelley is only too happy to lay the pipes and switches that let everyone’s ads flow through the cookiesphere.

Are you using a centralized bid management system for search marketing yet? If not, you should be. Google, Yahoo, and Bing make their search data easy to manage in systems like Clickable, Marin, or Click Equations. At this point, search has become so highly commoditized that any company with a reasonable monthly SEM spend has access to analytics and management tools that provide 10 times the data and control the average marketer needs. Want to “manage social?” There’s little mystery left in that, either. Anyone with a computer and $50 can walk right up to the most powerful social ad platform in the universe (Facebook) and launch an ad campaign in 5 minutes flat.

How about the “data ecosystem?” Isn’t that fully commoditized also? The real data players haven’t changed (Experian, IXI, Targus, etc), but the way data companies slice and dice the data has somewhat. Products like Datran’s Aperture enable marketers to get a household level view of their advertising audience like never before, and at very reasonable CPMs. If you aren’t leveraging data to understand your client’s shoe size, then your competition is. Data is ubiquitous, cheap, and effective. Once you’ve overlayered a dollar’s worth of Blue Kai intent data on top of an RTB buy and seen conversion lift, there’s really no going back, is there?

So, in a world where everyone can buy any display ad they want in real time, everybody has access to highly powerful SEM tools, and data is available to everyone…what is left?

Well, the obvious answer is the creative. Marketers better have the best stories to tell, and ones that can quickly make an impression across a three-screen world. I think the agencies and marketers that will win in the future are going to be the ones with the greatest creativity.

But this column is about media. In a real time world, where audience is king, but audience and data are available to anyone with the right (and increasingly ubiquitous) tools, who are the winners going to be? Clearly, the people that own the pipes are in a good spot. In search, that means Google, Microsoft, and Yahoo. In display, the winners will be AppNexus and other switch builders. They are the Ciscos of the advertising world. You don’t really see them, but nothing happens without going through a piece of their equipment. So, when everyone has access to search and RTB, what’s left?

Guaranteed display.

Yes, I said it. The future of this industry is going to belong to the companies that can manage the one aspect of digital that will never go away: guaranteed, upfront buying. No matter how much real-time bidding a marketer does, there is always going to be the need to build brand associations, and reach audience where they go to be found. Was Absolut the tastiest vodka in the world, or was their packaging and ultra-cool print ads in high-end magazines what made the brand?

As a marketer, I will probably put performance display and SEM into every campaign I do, but I am always going to need to buy that homepage takeover on ESPN.com for my sneaker campaign…or take over a condition-specific section on WebMD for my pharmaceutical campaign.  That is never going away…nor should it. The combination of inventory commoditization and the growing cookie backlash is going to make premium guaranteed buying more important than ever. This is great news for the publishers that produce quality content…the type of content that attracts the best audiences.

In a world where everyone has access to everything, the winners may actually be the companies that can help marketers find the best data insights from search, real-time buying, and guaranteed buying. The conversation in the online space has been about the real time ecosystem and the data and technology that drives it, and that’s where it should be. But, the future of online advertising is going to belong to the content providers who will increasingly segment their quality inventory from the machines. When that day comes, the companies who provide an efficiency solution for premium guaranteed buying will reenter the conversation. Get ready for the past.

[This article originally appeared in iMediaConnection 12/7/10]

What are we Selling?

Most of us that are involved in sales, marketing, or business development (they are same thing, actually) in the media space don’t really know what they are selling. And I don’t mean that the sales director or your DSP or data company don’t really understand the way their technology works (which can be the case at times). Surely, the digital media salesman can be relied upon to deploy the latest buzzwords, acronyms, and business jargon at the drop of a two-sided, logo-besmirsched business card. (see everyone’s favorite web humor from the year 2000). We all know what product we are selling.

That doesn’t really cover it, though, does it?

What we are really selling is a dream. The dream of a digital future, and the hope that technology continues to be the solution to the problem, rather than another problem itself. It’s becoming a tough sell out there for a few reasons. I think it all started with the flying car. Ever since the car was invented and the first guy has to wait more than 10 seconds for a traffic light, we have all dreamed of the flying car. The personal hovercraft…essentially the DeLorean from Back to the Future, without the time machine capabilities. That thing was promised to us (coming soon!) way back in the 1950s. It was even clear, not so far back as the 70’s, that we would–with certainty–have something like that by the turn of the century. Well, it’s 2010 and we are all still waiting. The way traffic is getting around New York, Los Angeles and China (they had a traffic jam that lasted a week, recently), we are going to need them soon. Now, even though we still want them, nobody ever talks about them anymore.

I hope that’s not what happens to us. We are out there selling the future of advertising, and the future of how it’s measured, bought, sold, traded, served, shown, billed, and reconciled. Whether you are out there “pimping uniques and impressions” as some like to say, or selling SaaS model software for selling or buying display ads, or hawking premium data sets to ad networks, exchanges, and DSPs–you are selling the dream. You are an evangelist, a technology tent-revivalist of sorts, going from one campaign event to the next, trying to convince people  to take a nice sip of the technology Kool-Aid It tastes pretty sweet at first.

It seems that, with all the technology and measurement tools, that this business is worthy of being proselytized. We are offering  a world that has changed dramatically for the better. Instead of (in the print days) selling some vague subscriber that is self-described as “recalling your ad” and “passing along the magazine an average of 2.3 times,” you are selling results. Doesn’t matter how they pay for it; in the end, everyone is measuring by CPA (including yours, if your software/media/data cost is counted into the equation). The basis for that CPA comes down to the numbers, and the numbers don’t lie. Or, more precisely, they lie in ways that are harder to argue against.

What you are out there selling is control, which is the ability as a buyer to control exactly who you are reaching, and where they are being reached. Control over pricing, which means knowing how that audience is being valued, whether on an impression-by-impression, or guaranteed future audience. Control over what data you use to make decisions about that audience, and control over the technology you use to disperse your messages across the many screens of the interconnected web. We are far away from the time when the dream of total transparency and control over media is as easy as, say, updating your Facebook profile.

But, after the dust settles and an emerging class of technology winners in the media space emerges, we will see how well the dream was sold…and who ended up really buying it.

(Hopefully it’s not all Google).

Chris O’Hara heads up sales and marketing for TRAFFIQ.

[This article appeared in DIGI:day Daily on 12/2/10]