Today's article is written by Jeff Hirsch, President and CEO, AudienceScience, an online advertising technology company.
I hear and read a lot these days about the democratizing power of the Internet. It’s a great issue. Some pundits say entire revolutions in the Middle East are being fueled by social media. And the film generating the most buzz at the SXSW festival was “Pause, Press, Play,” which takes a hard look at the democratizing effect the Internet has had on arts, culture and society. In this case it’s not always a good thing. Exhibit: Friday by Rebecca Black. Exhibit: Warlock.
The Internet is also a democratizing force in the digital world.
Here’s what I mean by providing Web “democratization.” All due respect to Apple and iTunes, but there’s a lot more to music than the top 40, classic rock and indie rock that it has built its business on. It needs competitors to keep it price-sensitive and it needs competitors that can affordably spread their message of more eclectic musical offerings. I’d hate to see eMusic go away because it can’t compete. It is sophisticated, eclectic and focused on discovering new music. I’d hate to see the reasonably balanced and in-depth Washington view of Politico go away, with its accompanying ad network, because it couldn’t provide the infrastructure to its advertisers like the New York Times, WSJ and USA Today do. Amazon accepts ads on some of its newer properties, with the strong accompanying argument that says it’s more merchandising than advertising. Winbuyer, on the other hand, runs network ads on its site, and is more likely to depend on these ads as a way to drive revenue and compete against more powerful retailers.
There are a few different strata of websites out there. For the purposes of this conversation, let me break it down into two camps – websites that have their own salesforce and websites that don’t. Websites that have their own salesforce are, of course, larger ones and often part of significant media companies. They can sell their advertising based on context, audience, special packages, and control the use of their inventory through their size and power. Websites that don’t have their own salesforce are dependent on third party ad sellers. These third party ad sellers, networks in normal parlance, absolutely depend on the use of data to make ads relevant and, therefore, of value.
Let’s take the simplest form of data necessary for relevancy: how many times has a consumer seen the same ad in x period of time. Frequency capping is absolutely the most basic form of audience targeting. Without it, advertisers would be engaging in wholesale spray and pray advertising, which means that ad prices would drop. This kind of drop in ad prices means a drop in the rates that a small website commands, and that means huge pressure on their ability to survive.
The result? Eliminating the use of data for targeting ads destroys the democratic fabric of the Web. Larger sites prevail and smaller sites that allow us to express our unmediated opinion disappear.
Eliminate targeting with data. Eliminate the democracy of the Web. DMP has become the acronym to mean Data Management Platform. Perhaps, in this case, we can call it a Democratic Media Platform.