'It's a Mess.' Stuart Colman, Former MD Europe, VP International of AudienceScience, Discusses the Current State of Data-Driven Display

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Stuart Colman is founder of Colman Media Consultancy and former Managing Director Europe, VP International of AudienceScience. He has a decade of experience in digital media, developing and managing award-winning sales teams and driving international business growth.

I’ve been fortunate enough to have been involved in data-driven digital advertising for a long time. This includes being part of the sales team that helped the FT first introduce ‘behavioural targeting’ to the UK in 2003 (and hearing the immortal line, “Isn’t this just a way to monetise s**t inventory?”), through to running the international business for the world’s largest independent data management technology company, AudienceScience. During this time I have seen data driven advertising grow from its infancy to what some would today argue is the heartbeat of the digital media industry around the world.

So, as I take stock of my last 10 years involvement in all this, I’ve been asking myself how things look to me today. Unfortunately, the answer is, “It’s a mess”, and watching many businesses make a ham fist of it makes me angry and disappointed.

This, to me, is the reality today: many publishers still don’t really know what to do with their data assets, often selling this asset cheaply in search of short term revenue. Advertisers, on the other hand, don’t truly understand the value locked up in a data world, whether they’re buying it from a third party, or it’s data they can generate and control themselves. The result is they often simply entrust their data and strategy to agencies. Finally, agencies seemingly just want to own and control everything with little consideration given to the impact of their actions on the long term sustainability of the digital marketplace — and don’t even get me started on the VC-funded, built-for-sale, not-to-scale, me-too tech providers that are often no more than ‘product features masquerading as genuine companies’ whose only value seems to be to fill up the Lumascape just that little bit more… like I say, a mess.

Thankfully though, it’s a mess that holds great potential, if only we can tweak a few things and rebalance the ecosystem. From my perspective, this is what I think businesses should be doing.

Publishers

Remember sex education at school? Putting aside the embarrassment of how it was taught, the common message to us raging hormonal adolescents was, “Don’t give it away to soon or too cheaply – take your time and make sure it’s right for you.” Publishers of the world, THIS IS GOOD ADVICE. You have spent a huge amount of time, money, effort and energy creating your relationships with readers, which in turn has given you a hugely valuable insight into these users. Don’t just give it away for a fast buck as you’ll be sacrificing what makes you unique and special to your advertisers.

In terms of who you choose to partner with, do this carefully, understanding not only what value they can bring you in the short-, mid- and long-term, but also why they want to work with you and what their short-, mid- and long-term plans are. For example, if you plan on giving your data to a 3rd party to sell anonymously in the market, understand what potential impact this may have on your own long term sales opportunities – you can guarantee that the other protagonists in the media ecosystem have very little interest in helping you protect your premium sales value, so start from a position of mistrust and build from there. Also, ask yourselves, does this company have your interests at heart, or are they just after a short-term market advantage and have no concern for the consequences this could mean to you business 18 months down the line when they no longer need your data? Selling your data alone isn’t the answer to your commercial challenges – it’s a great new revenue opportunity, but one that has to sit as part of your overall revenue initiatives, and decisions about selling your data cannot be made in a vacuum.

So what about doing data partnership deals directly with your top 20 or 30 advertisers rather than IO (and therefore commoditised) based deals via agencies? If your data truly has value to an advertiser’s marketing strategy, they will be falling over themselves to partner with you to help unlock your combined data assets to drive marketing performance. It may challenge convention, but if it’s a positive thing for your business, it’s a good thing right? I would love to see publishers begin to develop these kinds of partnerships as it will ensure the long term sustainability of the ecosystem and see the value in the marketplace go to those who should be getting it.

Advertisers

WAKE UP! It’s almost criminal as an advertiser to sit there and say, “Yes, let’s do this data thing”, and then walk away, leaving it entirely up to your agency to drive and control. Do you have any idea what data assets you generate yourselves? Are you collecting, understanding and actioning all of the data available to you, through either owned or earned media – data that is essentially free to you? I don’t just mean retargeting, as this is not even scratching the surface of what could be available. Do you understand which publisher partners hold the most valuable insight for your marketing initiatives and do you have data relationships direct with those publishers – relationships that could yield unique data assets for you to leverage? Does data and, more importantly, the actionable insight data-driven digital marketing offers, sit at the heart of your entire marketing strategy? If the answer to any of these questions is “no”, then, putting it simply, you aren’t doing a good enough job. Data has the opportunity to revolutionise the way marketing is performed, driving huge value and efficiencies across all mediums and putting people – for its ultimately people who buy products – back at the heart of what you do. So don’t just sit there, get involved and make it central to what you do every day.

Agencies

For the love of God, PLEASE try and do something original and add value! Setting up a trading desk powered by Invite (or any of the myriad DSPs out there), and buying the same 3rd party data as every other agency trading desk, is not clever. It offers nothing original, adds no real additional value to clients and some would argue that, in many cases, it is killing off the industry. I would bet a lot on money that in the next five years, the technology that drives automated trading and campaign efficiencies will have replaced the need for ‘buying agencies’ and will instead be governed and controlled by the companies providing this technology, or by advertisers directly. So any agency that plans their future on a DSP-powered trading desk buying commoditised 3rd party data is in for a tough time.

Agencies play a hugely important role in the management and delivery of marketing campaigns – their role needs to be strategic and offer insight and value to their clients, but this often is at odds with the procurement-led client pitches that dominate our agency world thinking. So again, it’s time to start challenging convention and building a better ecosystem. Deep down, clients know you’re right to want to change things, so I firmly believe that reasoned argument will ultimately be met with understanding and action. To not change is like continually going back to your ex for a night of passion – it might be cheap and easy, but you know it’s not right, it isn’t moving your world on and will ultimately end in tears!

As for buying 3rd party data, and coming from someone who has lived and breathed data for so long, I don’t believe it has a long-term future. For the vast majority of countries outside of the US, I think it’s almost impossible to get the scale needed to make this a commercial success, and people will soon begin to realise that the value sits in 1st party, in-depth data partnerships between the data owners (publishers) and the data users (advertisers) and buying commoditised, non unique, generalised data doesn’t offer anything new or valuable. If I had a £1 for every time an agency or advertiser had said to me privately that 3rd party data doesn’t really work for them and what they really want is access to true 1st party that they can use to build into audiences specific to campaigns and clients, I wouldn’t be sat here writing this, I’d be on a beach in Bora Bora. So if they are all saying it privately, then there must be some truth behind it.

We have a great opportunity ahead of us but, as it stands today, we’re going to struggle to make the most of it. I’d love to see us try and get past the ‘short term, fast buck, inflate my stock’ world we seem to live in and move towards understanding and actioning the true value data-driven digital marketing offers. Let’s have publishers understand that, in spite of what they often think, they hold many of the data aces and should be prepared to challenge convention and fight for a true and appropriate value for the product they offer; advertisers, let’s see you get involved directly and really begin to unlock the vast potential both your digital touch points, and the digital touch points of key publisher partners offer, to really drive intelligent marketing; and agencies – innovation, insight and strategic value is what your clients want from you instead of cheap, easy and fast. The future is exciting, but it’s going to have to look very different to today if it’s to fully unlock its potential – I just hope everyone is up for the challenge!

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Comments


  • Nick Ellsom

    Great article and well written Stuart. I am with you all the way on the frustration (and occasional anger) with the industry and it’s over reliance on short term wins over long-term sustainability. Data is extremely powerful, but like anything it needs to be worked and refined over time to really unlock it’s potential and isn’t a 5 minute quick fix which many seem to believe it is.

    The term big data whilst being a good way to open up conversations and gain interest from the less technically minded is also a confusing term that scares people off unfortunately. Big suggests complex and difficult, whereas for most advertisers and publishers they need to be starting with smaller and more simple data to unlock valuable insights into where opportunities lie and what works for them.

    As you point out, first party data is the big win for the vast majority of the market and I suspect that even doing data deals direct with third parties therefore is still a mid-to-long term ambition for most, as they don’t yet have the infrastructure in place to make the most of these deals.

    The future is incredibly exciting, but until we can rid the industry of the fly by nights who are selling silver bullets that don’t exist, we can’t truly realise the potential offered up by data. High volume, low quality inventory is still far too prevalent on many plans and until the industry recognises that data means targeting, reduction in waste and therefore the end of the dominance of reach and frequency activities we may well go round in circles for a while. Trust is going to be everything in this market for the next few years whilst we try to navigate the choppy waters. Let’s just hope that advertisers and publishers alike are able to identify which partners warrant their trust and which don’t. Opportunity knocks for those that get this right.

  • Jerry Maguire

    Like we always say around here…. the only good data is free data!

  • http://twitter.com/moneill moneill

    Very well put, Stuart. Well argued and clearly stated. I’m pinning this to my wall.

  • Alasdair Cross

    Excellent article Stuart.
    I think we’re at the early stages of discovery and value-creation from data. From Quantcast’s perspective, data means Audiences, and our ability to help publishers and advertisers realise value from Targeting to these audiences will contribute to increased display advertising efficiency.

  • Wayne Blodwell

    I agree with Nicks comment on the high volume, low quality inventory being far too prevalent in the marketplace, however this is often the inventory that generates the most ‘success’ for an advertiser who operates on a last-click CPA basis. The changes need to come from the top, and that means all the way up to procurement teams advertiser side.

  • http://www.facebook.com/profile.php?id=697617185 Ciaran O’Kane

    I think Stu’s opinions around agencies ["the next five years, the technology that drives automated trading and campaign efficiencies will have replaced the need for ‘buying agencies"] warrant a post on their own. Deliciously provocative as ever. Nearly good as his balls-out performance at the Data Economy conference last year.

  • Nick Ellsom

    Good point Wayne, procurement are targeted on cost savings and not on delivering greater performance to the business so it’s not on their radars. Marketing on the other hand seem happy to sit in the comfort zone offered up by reach and frequency planning.

    Someone needs to rock the boat client side and whoever does that successfully will make a big win for themselves, but they are also just as likely to get burned by increasing the complexity to their activity to the point it costs more to deliver the same returns as reach and frequency activity did. They likely won’t get much thanks either internally or from elsewhere in the industry if they open up this can of worms too. And so everyone continues to plod along waiting for someone else to make the first move.

  • http://www.invizua.com/ James Sandoval

    Beautifully done Stu. We need to talk [again]. I’ll ping ya.

  • Petteri Vainikka, Enreach

    The arguments put forth in the article could not be more spot on! Publishers who have spent centuries building a valuable audience, valuable media environments, and valuable media brands (not to even start with their valuable advertiser relationships!), are today seriously selling themselves short in exchange for a quick one-quarter win. The only region where publishers have been – and for their good fortune – remain to take an entirely different approach to the topic of ‘data’ seem to be the Nordic publishers. (They are also doing significantly better in their digital businesses than e.g., their UK peers. One is almost pressured to explore if could there be a correlation here worth noting?)

    A further current development worth including in this context is the ‘publisher trading desk’. Wherein agency trading desks are systematically reducing the genuine value add of agencies to their clients (who can get the very same technology and 3rd party data directly from DSP vendors as pointed out here), publisher trading desks are about as distant and removed from the core activity of publishers (i.e., selling their audiences in their media environments) as possible. They are certainly nice small trading empire building activities as such, but their value for the long term benefit of the publisher (who is paying their wages) is seriously missing.