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How Unbundling Media and Technology Will Nurture Innovation

In Ad Tech, Maybe Its Best to Fire Your Sales Force and Plug Into a Platform

Reposted from AdAge, December 7th, 2011

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Ad technology companies want to prove the value of their offerings to advertisers, and more often than not they’ve turned to the media-selling business as a way to have their technology, algorithm or special sauce adopted by the market. But selling media distracts from the core goal, which is developing innovative technology that helps advertisers deliver on their campaign goals.

To better serve the advertiser, tech companies need to forget about media and start focusing on what matters most: innovative technology that drives results.

Media drives technology, but ask anyone in this space, and many will tell you that dealing with media delivery is a headache. If companies eliminate the distraction that comes with bundling technology with media, they can approach technology head on, pushing my team to develop our technology and adapt to market demand quicker. As a CEO, I can build more products around my data to generate tech driven revenue at greater scale, rather than worry about selling media to drive the top and bottom line.

Several companies moved in this direction this year, either pivoting or killing off their media-selling branches to focus on developing data solutions and technology that can better serve their clients. The tipping point in this evolution may have come earlier this month, with AppNexus’s recently launched “app marketplace,” an open platform for both digital media buyers and sellers.

The program, called AppNexus Apps, makes it possible for data providers and other tech vendors to simply plug into the AppNexus exchange through an open API, and buyers can select the vendors and technologies they want to work with on a campaign-by-campaign basis.

Ari Paparo, AppNexus’ SVP of Product, said this move was designed to help ad tech providers develop their business and focus on creating new technology, rather than burden themselves trying to distribute their offering. This is exactly the kind of thinking the industry needs to produce better results for advertisers.

I hope this format is the beginning of a big change across the entirety of the tech landscape, for a number of reasons. It’s going to encourage technology creators to get more creative, it will help innovation flourish and, more important, concepts like this will free technology companies to do what they do best, which is build technology.

That focus on technology pushes innovation forward. Platforms like AppNexus may not be the end-all solution, but APIs will undoubtedly become a key part of ad technology as interoperability becomes a focal point. The use of APIs encourages technology creators to get more creative with their offerings, and the more they learn about the API and its capabilities, and the more the platform expands these capabilities, the more innovative the offerings will get. Removing the burden of working on media means tech companies can diversify their offerings and develop more creative products that will help advertisers drive better results.

Another benefit to this approach in general is that it simplifies the process of accessing and utilizing technology for advertisers and their agencies. Working with and coordinating multiple tech partners for an individual campaign is time consuming, highly inefficient and a pain in the neck. If an advertiser buys media through all the partners, it needs to look at all the results separately. Technology partnerships without a media offering streamline the process for advertisers, giving them access to greater capabilities and bringing more advertising dollars to the online space.

The API methodology is a no brainer for this RTB-driven advertising category, and I hope all of the other players in this market adopt the same approach. Relieving the pressures of selling media is going to speed up innovation in this space, so much so that technology companies with a dual focus will likely get left behind. Plug-in platforms democratize the ad tech landscape, but the goal is easier ad operations and better technology. Only then will we drive more advertisers into the siloed world of real-time advertising, which is beneficial for everyone.

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Online Advertisers: Do You Know Where Your Data Has Been?

Reposted from AdAge, July 27th, 2011

Online Advertisers: Do You Know Where Your Data Has Been?

Published: August 08, 2011

As children, our mothers would often admonish us for picking things up off the street by saying, “Put that down, you don’t know where it’s been!” We listen to our mothers at that age because they’re the authority in our lives.

Online, data providers are trying to exert the same kind of authority. The problem is that they’re doing the exact opposite — they’re giving marketers and publishers data and telling them that “it doesn’t matter where the data came from. Just write us a check.”

When Google purchased AdMeld last month, it showed that major companies are taking data and the supply-side very seriously. Everyone’s looking to drive consumers down the funnel, from display to search to purchase. The problem is, data providers run all of their display business through a black box. This means the companies holding murky information are the ones who determine how we measure success, and they expect all of their partners to keep cutting checks without any transparency.

Third-party data providers talk themselves up a great deal, promising social data, intender data, influencer data, or more intent-level search data than anyone else online. Forrester predicts that more than 50% of all consumer purchases will be influenced by the web by 2014, and that will happen largely because consumers turn to search as the first step in their process. This means search intent data has a lot of value for marketing, especially if you can connect it to display. Any company able to do this would have the power to determine market value for display ads because it can follow consumers along the sales funnel.

The problem with the black box, however, is that the provider doesn’t have to share its data with anyone. Everyone pays the same, and publishers and advertisers never really know if they’re actually buying the audiences they want. We know that the consumers most likely to click display ads are also not the customers brands are looking for. Is everyone going to shell out for bad data? Premium publishers aren’t going to play this game, and they’re going to move toward transparent data models.

Publishers know that the first-party data they generate is the most valuable resource they have. But they’re also learning that supplementing that with third-party data gives them a better view of who is coming to their site, where these consumers have been before, and what kind of products they might be shopping for. The more insight a publisher has into its audience, the more it can charge advertisers.

But the most important factor in this is that publishers and advertisers want to know where this data came from. Advertisers aren’t going to pay when they don’t know where consumers have been. Publishers aren’t going to pay for data unless it’s transparent — there’s absolutely no point in just blindly buying data, whether it comes from an established company or a new player in the third-party data space.

Display is enjoying a renaissance right now, but the channel is quickly splitting into multiple parts. Advertisers now understand the difference between using cheap, dirty data and spending a little more for transparent premium data. It’s never been more important for advertisers to work with top-tier publishers to get their message across, and these publishers are not going to work with black box clandestine data providers to sell their inventory.

Advertisers don’t want to buy into a black box, and publishers don’t want to sell that way. With a new emphasis on transparency, how long before the less reputable data providers start losing their entire publisher partners to other outlets? Everyone wants to be the authority on display, and the big providers want to tell everyone where to get their data and what defines success. Except, unlike our mothers, these companies don’t always know best.

http://adage.com/article/digitalnext/online-advertisers-data/229156/

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