Given Data And Media's De-Coupling, Should A Data Company Be Selling Media, Too? - Day 3 Reactions

Data-MediaIf you'd like to begin at the start of the 4-day, reaction series, click here.

Click "read more" to read the participant's answer to the AdExchanger.com reaction question on the decoupling of data and media:

Adam Cahill, SVP, Director of Digital Media, Hill-Holliday: “If that markup is worth it in terms of the results they deliver, or the convenience they provide by offering the data and media as a bundle, that’s OK with me.” Read more.

Jeremy Cornfeldt, Managing Director, Mediastorm: "[...] I do prefer to work with companies that have a specialized focus." Read more.

Kevin Gentzel, CRO, Forbes Media: "The publishers who succeed will need to become much more lean-forward with conversion optimization for their advertisers in order to compete with the DSPs and similar players" Read more.

Jeremy Helfand, EVP and Chief Sales Officer, United Online: "[...] We risk devaluing and commoditization, real possibilities in today’s environment given the rush to market by many new entrants in the digital data category." Read more.

Darren Herman, Chief Digital Media Officer, kbs+p: “While I think that data + media will be sold together for a long time, I don't think it'll be sold together 100% of the time in the not too distant future.” Read more.

Ali Mirian, VP, Product and Technology - Ad Solutions, IAC: "A publisher is exposed when its data partner gets in the media game, and needs to manage that risk." Read more.

Craig Roah, COO and Founder, Rubicon Project: "We see no inherent problem with data companies selling media themselves so long as they are transparent with their data sources." Read more.

Tom Shields, CEO, Yieldex: “…the risk is that [data providers] alienate a much larger market of content creators that could be customers in the longer term." Read more.

Kurt Unkel, SVP, VivaKi: “We feel that data companies should focus on what they do best - amassing data and insights, and leave the media buying to media buyers." Read more.


Adam Cahill, SVP, Director of Digital Media, Hill Holliday

I’m not overly concerned about the appropriateness of a data company selling media, but am more interested in the effectiveness of the approach. Since the data companies don’t actually own the media they’re selling, they’re presumably marking up the cost of the inventory. If that markup is worth it in terms of the results they deliver, or the convenience they provide by offering the data and media as a bundle, that’s OK with me.

On the other hand, I question whether that approach actually will be more convenient for buyers. The model of using a DSP and then incorporating data into that platform is much more appealing from a convenience standpoint.
Finally, with so much pending in the very near term around privacy, self-regulation, and data, it seems like a good approach to see where things net out before adopting yet another model.

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Jeremy Cornfeldt, Managing Director, Mediastorm

It's hard for me to say what is and what is not appropriate for anyone to do when it comes to their business, however, I do prefer to work with companies that have a specialized focus. The value that data companies can bring to the table is a rich understanding of the audience and multiple ways of how the information can be leveraged in media. It's a more strategic discussion of how to leverage data on behalf of all of my clients rather than a focus of being incorporated into a specific buy.

The direction we are moving towards is a deeper understanding of our audience and this is soley driven by data. And the information we can extract from a data company takes on a much larger role within the client's marketing mix that can extend beyond media. So those companies that are selling both data and media run the risk of diluting their offering. In my experience data becomes the driver of media, creative, packaging (if applicable) in store and your PR strategy. I would encourage data companies to continue to leverage their information to impact the larger marketing mix rather than turn their focus towards selling media.

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Kevin Gentzel, CRO, Forbes Media

Publishers are just this—data companies that sell media.

The previous paradigm of buying audience predominantly via contextual targeting has shifted to buying audience anywhere using aggregated cookie data; however, the powerful role that context can play in the performance equation should not be forgotten. Context still matters—as does the data.

An office manager who is in-market for printing supplies is still an office manager while browsing sports scores or the weather but is much more likely to convert for a printing supplies advertiser while reading about how to reduce day-to-day office costs.

In addition to context, publishers also have large amounts of proprietary audience data and the knowledge of how their inventory converts for different buys. In a world where all media is performance media (and even “branding campaigns” are being metered), publishers must leverage context and proprietary data along with third-party data to deliver the ultimate value the advertiser is seeking.

The publishers who succeed will need to become much more lean-forward with conversion optimization for their advertisers in order to compete with the DSPs and similar players, and they certainly have very powerful tools at their disposal to do so.

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Jeremy Helfand, EVP and Chief Sales Officer, United Online:

As a publisher, we own both data and media. We launched Adcurate last year to leverage the power of this combined solution using first party verified registration data and media. We’re excited about the reception it has received.

I understand the motivations for why a data company would consider selling media. The margins are attractive and it is sometimes easier to help manage the sell through of data. Launching a combined data and media solution, however, is not trivial and there are several factors that should be considered. Understanding data and understanding media each require a specific expertise and it can be challenging to master both. Managing media is complex, especially when it is not your own. Forecasting, trafficking, and optimization are capabilities that media companies focus on achieving. This becomes even more difficult when the inventory is not your own and the infrastructure to manage this can take significant resources to build or manage.

Most importantly, the industry needs to be careful not to neglect the value of data. An intense focus on the source and quality of data will ultimately raise the value of the digital medium. Without that focus, we risk devaluing and commoditization, real possibilities in today’s environment given the rush to market by many new entrants in the digital data category. I’m hearing this concern from many advertising and agency executives across our industry today. This is an issue whose resolution may benefit from a standalone data company.

Ultimately, with the proper stewardship of data, the value of reaching appropriate audiences and of utilizing targeting capabilities can be better attributed to the data itself. I’d hate to see that opportunity wasted for our industry to chase the short term media margin, especially when value may shift from media to data over time, and the combined value grows (1+1=3) through more effective capabilities.

So, if you are a data company looking to sell media, I advise considering the above. If you still intend on selling media, I would recommend using third parties with expertise in that field. It is often more effective to be great at one thing than to try to be all things to all people. We have a great opportunity to move the industry forward. Let’s not see it wasted.

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Darren Herman, Chief Digital Media Officer, kbs+p

Of the big trends we're seeing today across the digital landscape is the decoupling of the "media" with it's "data" component (audience). VMM was founded on this very instance and agencies such as kbs+p and The Media Kitchen have harnessed this into it's very backbone. We call this Audience Driven Media.

About two years ago, Summer of 2008, we were talking with some media companies and ad networks to just sell us their audience data. For every 10 we spoke to, 9 laughed at us. They didn't mind selling us "media" but certainly not "data." Some of the networks and media companies today that are touting their "data" products were those folks that laughed us out of the room; but funny how the world turns, isn't it?

Today, media companies and ad networks make their margins on data coupled with media. The entire industry today is built around evaluating media (i.e. the traditional ad serving systems, analytics packages, etc) and this is why many companies refuse to unbundle - as the majority of the industry doesn't know how to evaluate data for pricing. I expect this to change within the next 6-12 months and I've publicly spoken about it at many different conferences as a challenge to entrepreneurs.

While I think that data + media will be sold together for a long time, I don't think it'll be sold together 100% of the time in the not too distant future. There are very few large media houses that are purely buying data at any meaningful spend level (a single test with Bluekai or Lotame doesn't count) today, but there are billions of dollars going into digital media (media + data).

I think the most successful media companies will have different products to sell us as advanced buyers; some of those products are public and some of them are private. When the tools to evaluate and value both media + data are pervasive, that's when we'll see the industry turn. While the majority of the industry isn't there yet, we at MDC Partners, kbs+p, and The Media Kitchen are.

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Ali Miran, Ali Mirian, VP, Product and Technology - Ad Solutions, IAC

There's nothing inappropriate for a data company to also sell media. After all, publishers sell both data and media as much as any other entity. What is important is proper disclosure. A publisher is exposed when its data partner gets in the media game, and needs to manage that risk. Data companies may argue that the upside outweighs the risks, but until someone delivers a piece of paper that proves this out, pubs will think twice about any deep engagement.

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Craig Roah, COO and Founder, Rubicon Project

Audience and data fragmentation remain key challenges for our industry. Advertisers need to connect with their target audiences, but fragmentation has made it difficult for them to efficiently reach those audiences. Likewise, the recent growth in the number of data companies in the market has created fragmentation at the data level in the audience targeting chain, and now as data companies move toward selling media too – our already too-complex ecosystem becomes more of a morass.

What we’ve noticed? Many companies that started as data providers are now finding media sales an opportunity to make near-term dollars. We see no inherent problem with data companies selling media themselves so long as they are transparent with their data sources. Publishers should be more proactive in leveraging data and selling specific audience segments, and ultimately, we think publishers need to be thoughtful and protective about where their data goes. The biggest threat to data sales are for publishers who have strong focused vertical audiences with excellent relationships with endemic advertisers.

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Tom Shields, CEO, Yieldex

"Appropriate" for whom? For the ecosystem as a whole to thrive, I think it is important to balance the needs of content creators (media), with the needs of the marketers to get value for their dollar. Decoupling data from media can drive value for both sides, but so far has been mostly to the benefit of the marketers. If data companies also sell media to the marketers, thus effectively taking more margin from the content creators, they are likely to drive the ecosystem further out of balance.

Using data to provide value to content creators is harder, because audience inventory management and pricing solutions (like Yieldex) are in early adoption. However, the opportunity to create value is tremendous, because the data can be applied and valued across all of the inventory, including premium. Content creators would love to buy data if it means selling more inventory as premium, but they probably don't want the data provider competing with them.

In the short term it may seem like a good idea for a data provider to sell media in addition to data to their marketer customers, but the risk is that they alienate a much larger market of content creators that could be customers in the longer term.

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Kurt Unkel, SVP, VivaKi

We feel that data companies should focus on what they do best - amassing data and insights, and leave the media buying to media buyers. When our agency teams buy data and media coupled, it's very difficult to understand what is actually driving the real value - the data, the media, or the optimization tactics. As a result, pricing can be very inefficient, and this can in turn sour what is an incredibly useful data relationship.

Additionally, data companies also have to focus resources on media acquisition and optimization when they run a network, which can compromise their core data compentency. Buying media on exchanges and/or managing upfront buys is not trivial, and riddled with challenges. Having mass and differentiated media is key in order to find matches, so why not work with those who already do that well vs. trying to compete with them?

Most importantly, optimization & the definition of success will vary by client. Managing attribution and ensuring accurate conversion tracking is best done by the agency / client, as they have optics into all channels being leveraged. Dropping yet another set of pixels on a client site, and developing elaborate, complicated models (that never are accurate anyways) for managing de-duplication is unnecessary in today's digital environment. Integration of data into media buying systems, such as DSP or DMP (data management platforms) technologies, is the path to scalability for all data providers.

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Read: Day 1, Day 2, Day 3, Day 4

 

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