‘You Need a Pretty Garden Inside Those Walls if you Want People to Come Play in it’

Next year will be the year of mobile no more as the multiscreen audience prevails; the ‘war on data’ will become the ‘war on identity’; and we’ll see the emergence of the ‘vertical walled garden’. Read more predictions for 2015 from Gareth Davies, Adbrain, CEO and ExchangeWire columnist, as he eyes the emergence of new players on the ad tech scene, as well as the death of the Lumascape as we know it.

1. Simplicity rules 

Forget predictions, the digital consumer is already a default mobile-first user.Facebook is already the self-proclaimed king of mobile. 66% net revenue ($3bn in Q3 this year alone) from mobile ads need not be sniffed at after all. Looking at the year ahead, my money is on the rest of the packing trying, some more successfully than others, to catch up. And try they must. Facebook, and to a slightly lesser extent, Google, Apple, Twitter and a few emerging vertical players are quietly yet rapidly becoming audience companies, selling intent and behaviour to marketers, not the siloed device-centric impression packages of yesteryear. To win in mobile, all you need do, paradoxically it seems, is not focus too much on it. But companies need to first master multiscreen identity – that is, unifying a single, privacy-safe view of the user across browsers, apps and devices.

2. The quest for identity heats up

I recently took part in the ExchangeWire TraderTalk TV 2015 preview where Caspar Schlikum [Xaxis, CEO, Europe] made a compelling case against the usual big data rhetoric by stating that ‘data alone is just data’, and beauty (read value) lies in the eye of the beholder. I’d further this to say that the real battle in 2015 will not be data ownership, but identity, and trust new(ish) players to emerge. We all talk about the power of the multi-screen single sign-on of the Google’s and Facebook’s of the world, but let’s not forget Apple and their 200 million plus credit cards on file, tied neatly to iOS device IDs, emails and a wealth of first party user data. All valuable tools to preen and beautify what is already rather pretty walled garden.

The question for 2015 will be around whether or not these identities (and critically, the associated consumer intent) remain locked inside these walled gardens. My money is on ‘yes’. But the real wager is on whom else joins the fray.

I expect to see intent and identity-rich e-commerce players like eBay, Amazon, Alibaba and Rakuten roll out powerful walled gardens and buy/sell-side stacks of their own. Welcome to the world of platform fragmentation.

3. Consolidation and the rise of the platform wars, AKA: what about Microsoft, AOL and Yahoo?

History has taught us that those who build comprehensive adtech stacks with tools on both the buy and sell-side reap the benefits of valuable network effects.

Google wins because they touch every impression that flows through their pipes, be they ad serving and optimisation providers, attribution and analytics vendors, or intent (search) or media (YouTube, gmail etc) owners. With the rebirth of Atlas and Facebook’s multiscreen audience efforts this year (not to mention the complexity and pain of ad server switching costs for both buyers and publishers), expect more pieces of the stack – from DSP to SSP tools, attribution, data management and more – to rapidly evolve in 2015, creating a true, identity and data rich contender to DoubleClick’s long-time dominance. The real question will be how will AOL, Yahoo, and Microsoft respond?

Microsoft may well divest their ad business, moving upstream towards their true heartland, the home of the CIO, focusing on data management, data intelligence, identity and marketing automation. But who do they buy to accelerate this move?

With the recent Adobe/Datalogix news, expect the Salesforce – IBM – Oracle – SAP – Microsoft dynamic become very interesting indeed. Perhaps 2015 will truly be the year ‘Martech’ comes into its own.

This leaves the big question of Yahoo! And AOL. If there’s only room for one, it will be she who brings the most data to the table. The jury’s still out for me, but the fight will be an exciting one to watch.

4. The rise of the publishers and death of the open exchange

As the landsacape shifts, the tech giants assemble their stacks and take out smaller players, expect premium publishers to wake up and fight back. We’ll see publishers become defensive about their data assets; careful about whom they partner with and how much gets shared behind the walls of the tech giants.

Those that play their cards right will benefit from walled garden innovation and increased yield (notably in the world of multiscreen where mobile yields will immediately increase), but a careful balance between sharing and over-sharing will need to be struck.

We’ll also start to see the emergence of ‘new publishers’ skill up in the ads business. Data rich, tech savvy publishers who’s DNA is consumer insights and data. Think Pinterest, Pandora, Spotify and more build data and identity rich media offerings.

Finally, we’ll start to see an increase in direct-buying (PMPs), especially in mobile. We already have Xaxis starting to say that only 20% of what it buys is on open exchanges, so this leads me to ask if we’re going to see the death of the open exchange in 2015?

5. The Lumascape shrinks

If we look at the Lumascape, marketers and publishers own the consumer, with everyone else in-between concerned with price and driving efficiency gains at the margin. Expect to see ‘margin’ players whose role is to optimise (or arbitrage) price elasticity between buyer and seller side-lined in 2015 by data intelligence providers that augment the value of the consumer interaction. Rather than optimising the $0.20 elasticity on a $1 CPM, we’ll see technology companies increase the value of that dollar by 3-10x and possibly more. This won’t just effect paid media (think cross-device attribution, real-time frequency capping, location, device and intent driven optimisation and more), but will dramatically impact how companies think about, reach, measure, attribute and improve their touch points with consumers. True business intelligence will emerge.

Adtech will indeed get smart, forcing technology vendors to prove their worth lest they be gobbled up by larger ‘margin’ vendors that sit in their same box for pennies on the dollar, whilst the tech and marketing cloud giants roll their dice on the Monopoly board, attempting to pass landlord Google who own a hotel on every block (DFA, DFP, DBM, Admeld, Google Analytics etc.), collect $200 and stay out of jail free. Again, my money is on those who create proprietary intelligence from data, and stay alive as consolidation picks up pace. It’s going to be one hell of a ride.