Platforms Need To Follow The Triopoly’s Playbook And Give Data A Day Job

"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 Matt Keiser, founder and CEO at LiveIntent.

The upcoming General Data Protection Regulation (GDPR) will increase risk for sharing data. The era of every platform getting willy-nilly access to first-party brand data is over.

Platforms will be forced to prove to owners of first-party or intent data that they’ll receive more value than they give. It’s the formula that has fueled the dominance of the Facebook, Google and Amazon “triopoly,” which each gain access to brand data because marketers know the investment is worth it.

For an example of how others can emulate the giants, look no further than Criteo, which has achieved near-triopoly status by following this recipe.

Criteo adds tags to brand web pages to collect intent data, which facilitated retargeting and first-look, the early iteration of header bidding. This approach gave Criteo access to valuable data that signaled user intent, differentiated media and metadata at scale. Criteo owned the media activation, and closed-loop attribution helped it understand what works.

The byproduct is world-class artificial intelligence and an identity solution that drives true performance. Naturally, Criteo became the remarketing leader. Just like search, it gives data a day job and brands keep coming back.

The data Criteo requires for remarketing makes its businesses run. Criteo CEO Eric Eichmann said the company sees $550 billion in sales from 18,000 partners, almost twice what Amazon sees, and it captures all the associated intent data. Criteo used its remarketing success to build its identity co-op, which made its remarketing business even better. Now it will repeat the recipe by wielding the same data set to offer differentiated onboarding, measurement and attribution.

Google first did the same with data from DoubleClick tags. From there, Google bolted on the most complete industry stack, spanning targeting and attribution across most digital. Facebook, Amazon and Criteo are following Google’s recipe. Each giant gives data a day job and gives back more than they take – that’s why many brands see them as a necessary evil.

If Criteo were starting out today and said, “Give us your data. We’ll build an identity graph and provide onboarding, measurement and attribution for a SaaS fee,” many would reject it. Brands need a reason to hand over data. Criteo’s best-in-class remarketing justifies it. That access to the data let Criteo build out other offerings, which creates revenue and closer brand relationships.

The Promise Of Consortiums And Their Attribution Advantage

Brands and publishers know that challenging the triopoly is a matter of life and death, but when brands pool data or a collection of ad tech companies work together, they can match the triopoly’s scale. That’s the impetus behind the industrywide consortium (disclosure: LiveIntent is a member), the motivator behind The Trade Desk’s adsrvr.org cookie efforts, the reason behind DigiTrust and a topic of conversation among all publishers.

The shared nature of co-ops and consortiums is a step forward and the only pathway for most to achieve the scale necessary to compete. However, tuning AI and identity graphs requires media activation and a closed loop to understand the customer journey from exposure to purchase, which Criteo and the triopoly have.

Non-triopoly buyers can’t close the loop, and many publishers’ exposures aren’t accurately tied to the conversion, so the triopoly claims them. Publishers’ media, because of the cross-environment conundrum, doesn’t look as valuable as it once did, which is balderdash; quality, trustworthy publishers matter more than ever.

Identity graphs built from giving data a day job are a large part of the triopoly’s secret sauce. Identity graphs are crucial because mobile ad-supported content, delivered in apps, including pre-installed email apps on Android and iOS devices, require cross-environment (yet often on the same device) measurement and attribution. The impression and conversion occur across separate environments, causing the same challenges as cross-device.

For instance, the impression happens in-app but the conversion happens on the web. Customer data can’t make the journey: A mobile ID from an app must be matched to a commercial cookie on the web, which is only possible with an identity graph. As a result, publishers often get short-changed and don’t get credit for exposures they drove.

The industry knows that search steals attribution from TV and other media. After all, where do people go to learn more about a brand they saw on TV and billboards? Search. World-class identity graphs, which the triopoly wield, have recreated the magic. They wield the data to claim more than their share of attribution, effectively lowering publishers’ inventory value.

This is why certain platforms perform better for the same inventory. It’s why the triopoly is better at claiming more exposures that lead to conversions, which makes it look like their media is better.

Premium content is not worth less than it once was; the methods used to optimize performance and measure success aren’t working, and co-ops and consortiums are part of the answer.

You Must Be Differentiated And Give More Than You Take

In a post-GDPR world, fewer platforms will get access to brand data, but those that do will receive more leeway because they will be seen as a necessary evil to compete. Differentiated performance keeps brands coming back, and co-ops can help.

However, it’s another case of the rich getting richer. GDPR, like intelligent tracking prevention, favors established players because they’re the ones that can prove differentiated performance.

Co-ops help brands wield differentiated capabilities and make some things easier or cheaper but do not guarantee success. Without billions of cookie syncs, hundreds of millions of deterministic logins and a closed-loop understanding of what did and didn’t work, an identity graph is not in shape.

Marketers should focus on what drives performance as they define it. Data and metadata are the muscles that create performance. Any weak link within that chain hurts performance, which is why consortiums are helpful. Consortiums help sync rates, making everything work better together: targeting, optimization, measurement and attribution.

It’s imperative that those seeking first-party data put that data to work and wield it for differentiated performance as the triopoly does. Like an athlete, one must exercise the data to turn average data into world-class data.

If you have data and connectivity but don't exercise it, it’s as worthless as the exercise bike I hang my laundry on. All the tech in the world can’t replace sparse or untapped data.

Follow Matt Keiser (@mrkeiser), LiveIntent (@LiveIntent) and AdExchanger (@adexchanger) on Twitter.

2 Comments

  1. Matt, great article. Certainly one the best op-eds on AdEx this year. The game theory components written in between the lines are fascinating and critically important for advertisers and publishers to grasp. After all, they can't win if they are playing the wrong game. What's also interesting is how so many advertisers and publishers believe their data is valuable, yet how can the value of anything be known until it is traded?

    Regarding retargeters and the like, you may be giving too much credit to their data and tech prowess. Any time an ad tech vendor can get an advertiser to believe in last-click, then that ad tech vendor gains a natural hedge. Cognitive dissonance and confirmation bias are by far the greatest arbitrage levers in the digital media game.

    Reply
  2. Thanks for your kind words! Attribution is in the eye of the beholder, so ad-tech vendors are at the whim of the marketer.
    If the marketer chooses last click vendors there is no choice but to optimize to last click... until that changes, dollars will continue to flow from quality publishers to walled gardens.

    Reply

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