DataView: The DataXu Blog
Category: media efficiency
- Agencies Grapple with Ad Technology and its Place in a Services Business
06/25/2010 | Categories: advertising, data, data driven decisioning, demand side platform, digital media, DSP, innovation, media buying, media efficiencyThere’s been a wave of innovation in online advertising over the past year; new ad technology made just for ad buyers (DSPs) are quickly gaining traction as a way to improve media effectiveness and realize operational efficiencies. DSP’s give agencies a powerful new tool, but the emergence of “buy side technology” is forcing them to grapple with a tricky new issue: how best to build a new technology core into an old services business model.
Some agencies have decided that forming strategic partnerships with external technology providers is the way to go. Others believe that the best strategy is to try to develop the technology themselves. While it’s too early to conclude the winning approach, this is an issue that smart clients will monitor as the digital era marches on because it will affect not only agency performance, but also the basic economic structure of the agency-client relationship.
In-house ad tech
The in-house technology approach is probably best embodied by WPP, with its 2007 acquisition of ad network and technology firm 24/7 Real Media. Since the acquisition, WPP has done a nice job of using these assets to grow an internal innovation engine known as MIG (Media Innovation Group). In a recent interview, MIG’s Brian Lesser explained some of the reasons for their continued investment in proprietary ad technology:- More holistic media strategy – can alleviate issues that result from a fragmented media buying approach and result in a more efficient media spend.
- Data-driven marketing – integration of client data throughout the agency’s decision-making process informs the marketing strategy and results in more valuable insights to guide the clients’ campaigns.
- Less data exposure – with in-house ad technology, proprietary data is pushed solely through an agency’s platform and is thus able to be leveraged exclusively by the agency.
Third party ad tech
Alternatively, Publicis and Omnicom have weighed in as favoring partnerships with external ad technology providers. Curt Hecht of Publicis’ Vivaki business unit recently discussed with AdExchanger their partnership with Internet giant Google, which includes use of Google’s new “house DSP” Invite Media (acquired by Google last month). And Omnicom’s Randall Weisenburger explained to ClickZ that they have opted against building an in-house DSP because of the vast benefits technology partners can provide to clients:- Greater access to innovation – when agencies partner with outside technology vendors, they can innovate more quickly and better align with client needs.
- Focus on core competence – agency resources can be focused on larger strategic considerations that are core to the agency.
- Less risk of agency bias in media buying decisions – advertisers can be confident that an agency’s recommended technology strategy will not be influenced by an in-house proprietary service.
Ultimately, these different approaches are still very new and only time will tell what truly makes the most sense for the agency and for its clients. But just as advertisers want to know about an agency’s creative approach, it’s now best practice to dig into their technology roadmap.
- Mike Baker, CEO, DataXu
(**This piece was also posted on the MarketShare blog at Forbes.com: http://bit.ly/d0hEX3)
- Shortening the Cycle Time for Data Driven Insights
03/11/2010 | Categories: algorithms, data, media, media efficiency, Yahoo!In a recent Q & A in AdAge, Scott Burke, a VP of Engineering at Yahoo, shared some great observations about the use and valuation of data by marketers today. Two points, in particular, resonated with me, as they reinforce key aspects of our mission here at DataXu:
1. Shortening the cycle time for data-driven insights will benefit everyone involved in online advertising.
2. “It’s not about how much data you have, it’s what you do with it.”
In the article, Scott mentions how Yahoo strives to accelerate their decisionmaking internally, and do so in an “iterative loop” of hypothesize, test, learn, repeat—a paradigm that describes our platform’s learning system quite well. Scott also echoes our philosophy that the ability to derive insights from data more quickly will make all parties involved in advertising more effective. We built our platform to analyze enormous amounts of data with unprecedented speed, in order to make highly informed decisions about the barrage of ad impression opportunities available at any given second on the Internet. We also recognized the value of learning from each of those decisions, to continually improve the system’s decisionmaking data models and algorithms going forward. This dynamic, closed loop learning model – especially when combined with real-time bidding – gives our clients a distinct advantage over more static approaches to buying media online. We extend the continual learning outward from our system, too. Our clients gain timely, granular insights from their campaigns that they can apply to better inform a range of marketing efforts.
The ability to leverage data in this dynamic way can also extract more value from the data itself, as the quote from Scott in my second point above illustrates. It can be challenging for marketers to anticipate what type of data will have the most impact on a campaign’s success, but when applied within an intelligent system, you can pick out the signals that matter for the specific campaign. More data isn’t always better. But more advanced decisioning can make limited data do big things or elicit the select, valuable gems among larger sets of data – both tasks that are nearly impossible for an individual to do without the benefit of some powerful technology. (For more on my thoughts about the role of data in display campaigns, please see a recent column I wrote for ClickZ.)
It’s great to hear validation in the marketplace that what we offer our clients is relevant and meaningful. The amount of data marketers have at their disposal is growing by leaps and bounds, so our goal is to continue to develop the best system for using that data to improve media efficiency and lower customer acquisition costs.
