Home  › Media › Media Planning

A Second Helping of Online Media's Alphabet Soup

  |  January 11, 2011   |  Comments

Are we about to see a complete change to the media buying culture? Part two in a two-part series.

In Part 1 of this column, we covered the basics: the definitions of all of these three-letter acronyms and who the main players in the space are. Let's pick up where I left off – recapping the Adam Cahill-led ad:tech New York session, "Ad Networks, Exchanges & DSPs - Next-Gen Audiences and Media Strategy: Understanding the Opportunity."

A Really Big Deal

Cahill describes the whole situation as "a really big deal," with approximately $850 million already flowing through DSPs today. Given that J.P. Morgan is estimating the size of the online advertising market to be $8 billion, this means that DSPs already represent 10 percent of that market! Zach Coelius, CEO of Triggit, told Cahill that, "There are 5 billion RTB impressions available across the key exchanges every day. Cahill extrapolates this to mean that, based on comScore data of 417 billion U.S. ad impressions, 35 percent of total impressions in the market today are RTB-delivered. And yet, points out Cahill, none of this stuff is even registering on most CMOs' agendas!

A Complete Change to the Media Buying Culture

Now for the profound part: Cahill portrays the space not about new technology but about a cultural shift, because this kind of ad buying completely changes the job, and therefore it's really about the people doing the job. Prior to the introduction of this kind of technology, value came from the media planners and buyers, as in prior to a campaign launch. In this brave new world, the value comes post-launch and the skills required don't involve research or negotiation – instead they're more about data and analysis, understanding auction dynamics, managing campaigns through an interface, and delivering constant optimization. Either a lot of people will need to be retrained or agencies will be looking for new people altogether.

What the Future Will Bring

Looking into the immediate future, Cahill sees two important short-term developments:

  1. The composition of exchange trade and media is changing, e.g., video and mobile inventory is coming on board.
  2. The quality of inventory will continue to improve as more publishers come on board (they can no longer ignore the better economic value to them of exchange-selling than ad network-selling) and have more control over how their inventory gets sold, e.g., setting price floors or choosing who can (or can't) buy their ad inventory.

Cahill also gathered market growth predictions from industry insiders, which ranged from "RTBs will represent 20 percent of display market in a couple of years" to "It will double next year" to "50 percent of display will be purchased through platforms in the next two years" to finally "All display, other than custom buys, will be exchange-based." (Cahill himself tends to lean towards the "50 percent of display will be purchased through platforms in the next two years" opinion.)

Other Predictions and Opinions

In the time since ad:tech, I've done some additional reading and polling of my own. The resource authority on the ad exchange space right now is AdExchanger.com, and its managing editor, John Ebbert, provided me with his prediction: "The media spend in the world of the data-driven digital advertising will increase at least three-fold in 2011 as buyers and sellers understand that real-time bidding is game-changing and enables huge efficiency gains for marketers and publishers (who have valuable audiences) alike."

Mike Baker, CEO of DSP DataXu, sees 2011 as the year that "real DSPs clearly differentiate and break away from the pack to attract 30 percent or more of all online buys." He also explained that brands entering the DSP space have had trouble scaling their audience-based buys and have become more "direct response-like" in their digital thinking.

Meanwhile, Ken Nicholas of MindOnMedia[Sales] takes a different view: "DSPs are just one more tool in an arsenal, albeit one that is hot at the moment. While they will serve their purpose in automating and driving costs out of one part of the media process, they are not going to supplant every aspect of the media buying (or selling) world. At some point, either the parsing of audience data will become so granular as to be way past the point of diminishing returns, the prices on ad inventory bid so high via RTB auctions most DSP firms now offer that buyers will go running back to individual properties to 'lock in' inventory deals, or some other disruptor will come along, that the 'hype' over DSPs will decrease to a more measured level."

At the very least, maybe you'll want to take Baker's advice: "If you haven't tested programmatic buying through a DSP, you're officially behind the curve and need to get moving."

ClickZ Live New York What's New for 2015?
You spoke, we listened! ClickZ Live New York (Mar 30-Apr 1) is back with a brand new streamlined agenda. Don't miss the latest digital marketing tips, tricks and tools that will make you re-think your strategy and revolutionize your marketing campaigns. Super Saver Rates are available now. Register today!

ABOUT THE AUTHOR

Hollis Thomases

A highly driven subject matter expert with a thirst for knowledge, an unbridled sense of curiosity, and a passion to deliver unbiased, simplified information and advice so businesses can make better decisions about how to spend their dollars and resources, multiple award-winning entrepreneur Hollis Thomases (@hollisthomases) is a sole practitioner and digital ad/marketing "gatekeeper." Her 16 years working in, analyzing, and writing about the digital industry make Hollis uniquely qualified to navigate the fast-changing digital landscape. Her client experience includes such verticals as Travel/Tourism/Destination Marketing, Retail & Consumer Brands, Health & Wellness, Hi-Tech, and Higher Education. In 1998, Hollis Thomases founded her first company, Web Ad.vantage, a provider of strategic digital marketing and advertising service solutions for such companies as Nokia USA, Nature Made Vitamins, Johns Hopkins University, ENDO Pharmaceuticals, and Visit Baltimore. Hollis has been an regular expert columnist with Inc.com, and ClickZ and authored the book Twitter Marketing: An Hour a Day, published by John Wiley & Sons. Hollis also frequently speaks at industry conferences and association events.

COMMENTSCommenting policy

comments powered by Disqus

Get ClickZ Media newsletters delivered right to your inbox. Subscribe today!

COMMENTS

UPCOMING EVENTS

UPCOMING TRAINING

Featured White Papers

Google My Business Listings Demystified

Google My Business Listings Demystified
To help brands control how they appear online, Google has developed a new offering: Google My Business Locations. This whitepaper helps marketers understand how to use this powerful new tool.

5 Ways to Personalize Beyond the Subject Line

5 Ways to Personalize Beyond the Subject Line
82 percent of shoppers say they would buy more items from a brand if the emails they sent were more personalized. This white paper offer five tactics that will personalize your email beyond the subject line and drive real business growth.

WEBINARS

    Information currently unavailable

Jobs

    • Lead Generation Specialist
      Lead Generation Specialist (The Oxford Club) - BaltimoreThe Oxford Club is seeking a talented writer/marketer to join our growing email lead-generation...
    • Health Marketing Editor
      Health Marketing Editor (Agora Inc.) - BaltimoreCome flex your intellectual muscle as part of Agora, Inc’s (http://agora-inc.com/) legal team...
    • Marketing Systems Analyst
      Marketing Systems Analyst (OmniVista Health) - BaltimoreOmniVista Health is looking to add a Marketing Systems Analyst to our expanding team. We...