2015 was a fantastic year for many data-driven marketers, with data management platforms (DMPs), consultancies and marketers getting something nice under their trees.
Unfortunately, 2015 also saw legacy networks, supply-side platforms (SSPs) and some less nimble agencies receive coal in their respective stockings for failing to keep up with the rapidly changing paradigm as marketing and ad technology merge.
In the great tradition of end-of-year prediction articles, here’s my take on the year’s biggest developments and what we’ll see in 2016, including a rapid technology adoption from big marketers, a continuing evolution of the agency model and an outright revolution in how media is procured.
I thought 2015 was supposed to herald the “death of the digital agency model.” As agencies struggled to define their value proposition to big marketers that were increasingly bringing “programmatic in house,” agencies were reputed to be on the ropes. Massive accounts with billions of dollars in marketing spend were reviewed, while agencies churned through cash pitching to win new business – or at least trying keep old business.
The result? Agencies swapped a ton of money, but were abandoned by no serious marketers. Agencies got a lot smarter, and starting spinning new digital strategies and DMP practices to combat the likes of system integrators and traditional consultancies. And the band played on.
In 2016, we will continue to see agencies strengthen their digital strategy bench, start moving “marketing automation” practices into the DMP world and offer integration services to help marketers build bespoke “stack” solutions. Trading desks will continue to aggressively pursue unique relationships with big publishers and start to embrace new media procurement methodologies that emphasize their skillset, rather than the bidded approach in open exchanges (more on that below).
Marketers Hug Big Data
Marketers started to “cross the chasm” in 2015 and more widely embrace DMPs. It’s no longer just “early adopters” such as Kellogg’s that are making the market. Massive top-100 firms have fully embraced DMP tech and are starting to treat online data as fuel for growth.
Private equity and activist investors continue to put the squeeze on CPG companies, which have turned to their own first-party data to find media efficiency as they try to control the one line item in the P&L usually immune to risk management: marketing spend.
Media and entertainment companies are wrangling their consumer data to fuel over-the-top initiatives, which put a true first-party relationship with their viewers front and center. Travel companies are starting to marry their invaluable CRM data to the anonymous online world to put “butts in seats” and “heads in beds.”
If 2015 saw 15% of the Fortune 500 engage with DMPs, 2016 is when the early majority will surge and start to make the embrace of DMP tech commonplace. The land grab for 24-month SAAS contracts is on.
It used to be a that a senior-level digital guy would get sick of his job and leave it (or his job would leave him), leading to a happy consultant walking around advising three or four clients on programmatic strategy. In 2015, that still exists but we’ve seen a rise in scale to meet the needs of a rapidly changing digital landscape.
Marketers and publishers are hiring boutique consultancies left and right to get on track (see this excellent, if not comprehensive, list). Also, big boys, including Accenture, Boston Consulting Group and McKinsey, are in the game, as are large, media-centric firms, such as MediaLink.
These shops are advising on data strategy, programmatic media, organizational change management and privacy. They are helping evaluate expensive SAAS technology, including DMPs and yield management solutions, and also doing large systems integrations required to marry traditional databases with DMPs.
Match Rates (Ugh)
Perhaps unpublicized, with the exception of a few nerdy industry pieces, we saw in 2015 a huge focus on “match rates,” or the ability for marketers to find matches for their first-party data in other execution systems.
Marketers want to activate their entire CRM databases in the dot-com space, but are finding only 40% to 50% of cookies that map to their valuable lists. When they try to map those cookies to a DSP, more disappointment ensues. As discussed in an earlier article, match rates are hard to get right, and require a relentless focus on user matching, great “onboarding services,” strong server-to-server connections between DMPs and DSPs (and other platforms) and a high frequency of user matching.
This was the year that marketers got disappointed in match rates and started to force the industry to find better solutions. Next year, huge marketers will take bold steps to actually share data and create an available identity map of consumers. I think we will see the first real data consortium emerge for the purposes of creating an open identity graph. That’s my big prediction – and hope – for 2016.
Head For The Headers
2015 was the year of “header bidding,” the catch-all phrase for a software appliance that gives publishers the chance to offer favored demand-side partners a “first look” at valuable inventory. I am not sure if “header bidding” will ultimately become the de facto standard for “workflow automation,” but we seem to be relentlessly marching back to a world in which publishers and marketers take control of inventory procurement and get away from the gamesmanship inherent in exchange-based buying.
Big SSPs and networks that have layered bidding tech onto open exchanges are struggling. Demand-side platforms are scrambling to add all sorts of bells and whistles to their “private marketplaces,” but the industry evolves.
Next year, we will see the pace of innovation increase, and we have already seen big trade desks make deals with DMPs to access premium publisher inventory. It’s nice to see premium publisher inventory increase in value – and I believe it will only continue to do so.
2016 will be the year of “second-party data” and the winners will be the ones with the technology installed to easily transact on it.
2015 was a great year for data-driven marketing, and 2016 will be even more fun. Stay safe out there.
This post originally appeared in AdExchanger on 12/17/2015