The volume of online ad inventory purchased through exchanges continues to grow. Yet, the cost of third-party data on which to target those buys remains prohibitively high for many advertisers, agencies suggest. Most advertisers currently buying ads on a real-time basis are therefore doing so based on their own first-party data, rather than audience information acquired from vendors.
The number of real-time impressions bought by Publicis-owned technology unit VivaKi has increased roughly 300 percent, year-over-year, according to SVP and director of the organization’s Nerve Center operation, Kurt Unkel.
Despite that fact, less than half of the 150 advertisers currently buying real-time impressions through its Audience on Demand (AOD) platform are doing so based on third-party data, he said, stating, “For some advertisers the results often aren’t effective enough to warrant the cost of the data. The question is – is the data adding substantive value to the campaign?”
According to Unkel, around 45 percent of clients buying on exchanges this year have made use of third-party data, but not necessarily to inform every buying decision. A much larger percentage – around 65 to 70 percent – have targeted based on first-party data, while some advertisers have utilized combination of the two.
It’s a similar story for clients of WPP’s Media Innovations Group, the unit’s SVP and general manager Brian Lesser said. Exchange buying is a fast-growing part of the group’s business, but not necessarily based on data from outside sources. “Third-party data is a tremendous advancement in our business, but the majority of exchange-based buys are currently being run with first-party data. Often the easiest way to ensure success on the exchanges is with retargeting,” he said.
Lesser, too, described instances where the cost of third-party data is simply too high to justify the increase in campaign performance it delivers. “The challenge around third-party data is the economics. In many cases the media is more affordable than the data itself,” he added.
Advertisers in certain verticals appear to be finding more value in the purchase of such data than others, though, and both Unkel and Lesser highlighted the auto and financial verticals as examples of these. As the exchange space continues to grow and mature, however, Lesser suggested the industry could be doing more to attract the attention of verticals yet to find value in investing their ad dollars in it. “Data companies should focus on attracting different types of advertisers into the exchange space,” he said.
Agencies aren’t the only parties participating in exchange-based buying, though, and some brands are finding value in buying media from those platforms directly.
Angus Lovitt handles display media buying in-house for European-based online gaming site King.com, and was hired directly from Publicis agency Starcom MediaVest to do so. According to Lovitt, the company utilizes no third-party data to inform that activity. “We don’t do data based audience buys, as the price of audience data does not justify the uplift in response. I understand this is a global truth right now speaking to people in the industry,” he told ClickZ.
Lovitt suggested there are advantages of moving from network buys to exchange-based purchases beyond targeting opportunities alone. Price, transparency, and centralized campaign control are just some of the benefits for an advertiser like King.com, he suggested.
“As a rule data buying would probably be prohibitive for most direct response advertisers unless they have a very niche audience. If I relatively indiscriminately spray millions of impressions at a 15 cents CPM versus thousands of targeted impressions at a $2 dollar CPM I’ll choose the former any day if more cost effective,” Lovitt said.
UPDATE: A previous version of this story stated that Starcom MediaVest is owned by WPP. It is actually part of Publicis Groupe.
There’s a significant increase of video content this year, and as it still hasn’t reached its peak, we’re analysing the most popular ... read more
Verizon has agreed to acquire Yahoo's operating business in a $4.8 billion cash deal, sealing the fate of one of the internet's pioneering giants.
Facebook will take the lion's share – more than two thirds – of global ad revenues for social sites this year, according to a report from eMarketer.