"Data-Driven Thinking" is written by members of the media community and contains fresh ideas on the digital revolution in media.
Today’s column is written by John Donahue, CEO at White Lightning + The Judge's Son
The promise that marketers have been making for the last 15 years – that data will transform advertising by increasing efficiency and yield while lowering cost – is finally coming to pass. Programmatic and data-driven buying have come to the forefront of the media business for everyone from small businesses to giant CPG manufacturers.
Since it takes data to power programmatic buying, the value of data keeps rising. And because data is more valuable than ever, everyone wants to be at the center of the data universe. Agencies, publishers, brands and tech companies are all fighting to amass as much of it as possible.
And In This Corner…
This battle royale for data ownership makes sense, in part because different players tend to see data in terms of a giant, zero-sum game of king of the hill. There seems to be a belief that the company who owns the data will win. But this couldn’t be further from the truth.
Agencies, increasingly worried about disintermediation, are trying like hell to position themselves at the center of the data universe, with some going as far as building their own data-management platforms (DMP).
Brands and businesses want in, too. After all, it’s their media dollars generating much of the relevant data. P&G, for example, has built its own DMP and is making the legal conditions on using outside data in its media plans so difficult to work with that using it is nearly impossible.
Not to be left out, media companies are making their own claim to the data. Hearst went as far as buying the DMP Red Aril back in 2011.
Tech companies, including Google, Facebook, Yahoo and Microsoft, are also integrally involved. They provide communication platforms bursting with profiled users. These companies understand user behavior across platform, device and even context. Beyond this, a different breed of tech company, such as Adobe and IBM, as well as more specialized companies, like Aggregate Knowledge and BlueKai, are all working on DMPs that unite advertising data generated from different sources.
And The Winner Is…
The good news is that there is plenty for everyone to do in the short term. Winning depends not on having more data than anyone else, but on managing the data relevant to your value proposition better than anyone else.
Agencies, for instance, are the acting portfolio managers of their clients’ marketing efforts. They win by understanding how an audience reacts to the ads they are being shown in any given space and situation. Therefore, agencies need to amass data around the segment they speak to, as well as the responses generated to given ads in specific contexts. Further, as the primary buyers of media, agencies need to understand the advertising ecosystem. To this end, they need to manage a comprehensive database of rates and opportunities for each publisher.
But agencies do not need to be masters of CRM data. While there may be some overlap when it comes to targeting specific users, no rational person advocates using advertising to manage CRM. Beyond this, brands should not surrender the relationship between their consumers and their products to agencies.
Brands are merchandisers, informers and customer advocates. They win when they create a strong relationship between the product and customer. They need to be the masters of the data concerning how their offering is perceived. To this end, they need to understand not just how ads perform tactically, but how their messaging is perceived strategically. Further, brands should not surrender the profiles of their users to be managed by agencies. No one is better positioned to manage CRM efforts than the brands themselves.
A brand’s need to understand its users doesn’t mean it should own all the details about how to reach those users. That’s what agencies do best.
Publishers need to create an environment that consumers regularly visit so advertisers can reach them. They win by understanding their readers, in terms of the content they consume and how they like to interact with ads. Publishers should focus on owning the relationship between their audience and their content. They should amass reams of data on who their readers are, what they are most interested in and how to engage them.
That said, publishers are not well positioned to understand the specifics of how consumers engage with specific brands or products. And, even though it will be tempting to create user profiles for targeting, a publisher’s reach is typically limited. Publishers will still need to rely on tech companies to tag users across sites and platforms.
Tech companies have their part to play, too. Some, like Google and Facebook, blur the line between publisher and technology play. They have deep insight into their own profiled users. Tech companies win when they are able to leverage these profiles to create unique, highly relevant and personalized ad experiences that are perfectly suited to their audience. Further, the pure tech plays, such as IBM and Datalogix, help provide the framework to unite the many specialized sets of data that advertising generates, allowing them to interact nicely.
But there is a limit to the value that tech companies provide. There are conflicts of interest when it comes to keeping comprehensive data about outside publishers. Further, though they understand their profiled users, it will always be difficult for these companies to create a comprehensive profile of the relationship a user develops with a particular brand, particularly on any type of emotional or “in-home” level.
So where does that leave us? You don’t need me to tell you that when the consumer wins, we all win. But the key is, like so many other things in life, there is no data version of a silver bullet. No one company will own all of the data required to engage all relevant consumers wherever they go or whatever they do. However, if all of us – agencies, brands, publishers and tech companies – do our part in building a better consumer experience, everyone wins.
So instead of engaging in a misguided game of king of the hill, we need to remember that it’s the client we need to get to the summit. That is what will unlock the dollars. We all need to focus on what we do best to make the data mountain scalable, and the fact is, we all have our work cut out for us just trying to perfect our part of the climb.