Data Costs Surpass Media Costs, Agencies Say

Advertisers often pay more for data than they do for display inventory, according to some media buyers. The emergence of ad exchanges, real-time bidding platforms, and behavioral data brokers, has turned data into an increasingly valuable component of targeted ads – sometimes more so than the media in which the ad is placed.

Speaking with ClickZ recently, VivaKi’s SVP and director, Kurt Unkel, said there “are often instances” the Publicis-owned group pays more for profile data to help target users with relevant ads, than the actual media through which those messages are delivered. Specifically, Unkel cited verticals such as automotive, travel, and finance as areas that the agency sometimes finds more value in data than in inventory.

At an event focused on real-time bidding hosted by AdMeld in New York City last month, numerous executives from agency groups such as Havas and WPP described similar experiences.

“There’s an almost never ending stream of available media out there. Who a user is is becoming more important than where they are,” Mark Zagorski, chief revenue officer at data exchange Exelate, told ClickZ News. Zagorski highlighted certain types of data as particularly valuable to advertisers, such as information on household income, interests, and purchase-intent. He also highlighted automotive as an advertiser vertical that benefits substantially from such data.

Some behavioral networks and data providers have hailed such targeting as the savior of online publishing – helping media owners wring more value from their inventory as display CPMs continue to fall. A study released today by the Network Advertising Initiative claims average CPMs for behaviorally targeted ads are twice as high as run-of-network inventory, based on inventory from twelve of its member networks.

Though it may appear that data middlemen like Exelate and BlueKai are the ones reaping the data rewards, rather than the publishers themselves, Zagorski disagreed. “That always seems to be the common sense view, but we actually see publisher CPMs being driven up,” said Zagorski. “If you can combine great branded media with great targeting, that combination drives the value of both,” he said.

Speaking at AdMeld’s real-time bidding forum, Brian Lesser, general manager of WPP’s Media Innovation Group reinforced that view. “It’s not about buying media cheaper; it’s about better performance.”

Zagorski added that publishers are also monetizing their data more successfully by sharing it with partners like Exelate, and “taking control of their data destiny.” He suggested that in some cases networks would buy up publishers’ remnant inventory purely for access to data on their audience. He suggested that publishers are better off “being proactive about it,” than finding themselves out of the loop entirely.

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