You've Got Data, So What?

There is a lot of talk in the industry about the power of data. Digital and data go hand in hand, making digital media the most accountable marketing format. Theoretically, this all makes sense: understanding who your audience is at an impression level, delivering a marketing message in real time. Right time, right place; amazing, right?

Let’s take a step back and discuss where the combination of data and media planning intersects. If you’re in media planning or media sales, you know that data has become the key selling proposition. This is because display media, specifically, is becoming more and more competitive. If we were to generalize, there are three main hot media categories today (aside from the direct relationship with a publisher):

Ad networks. A collection of publishers who sell a portion of their inventory through a network partnership. The pricing model set for CPM thresholds for inventory and publisher lists is typically transparent but placement is not guaranteed. Pricing is usually below the CPMs proposed in a direct publisher relationship.

Ad exchanges. A marketplace environment where publishers can choose to sell and advertisers can choose to buy inventory based on set parameters and price bids. Publishers sell portions of their inventory at a CPM range, and advertisers will win or lose inventory based on their CPM bid and the availability of the desired inventory.

DSPs (demand-side platforms). A technology which most often sits on top of a majority of the ad exchanges. They can take advertisers’ budgets and goals and their algorithms learn appropriate bids based on the conversion goal. The DSPs can real-time bid for an impression based on the perceived quality of the user and the likelihood of conversion.

All of the above have pros and cons related to price, placement, control, and transparency.

Within each of these categories, there are hundreds of partners entering the market every day. Everyone is trying to get in the game, so what’s the unique selling proposition for all these players? Data! Every media partner I have met with recently tells me about their data partnerships (e.g., BlueKai).

Let’s Get Technical: How the Data Segments Are Determined

The more advanced data segments are determined based on cookie level data matched against a database of detailed information (all personally identifiable information is stripped). For instance, if a media company manages a direct marketing business or an email business where they have more data points for a user (as long as the user has previously interacted with a piece of correspondence or visited their environment), that cookie data can be matched back to more detailed data points, based on offline inputs by the user.

Here is my problem with all this great data: it has become a commodity. Only a certain percentage of the online population is captured and tied to these audience segments. It is only as good as the life of the cookie data and we could potentially see a decline as the consumers become savvier (education is becoming increasingly important for compliance reasons).

Additionally, these standard audience segments are sold to all advertisers (let’s face it, most of our “in-market segments” look pretty similar). This increases the price because there is so much competition on a single impression; everyone is trying to purchase the same impression

Trust me; I am not discounting the importance of data for optimizing, learning, and targeting your audience. However, the most valuable data you have is your own, so take a hard look at what you are buying to ensure you’ll get the best performance from your media.

While this discussion could go on and cover several topics, I will end it here, but I would be remiss to not suggest everyone please review your privacy policies and remain compliant!