I recently heard the term faces rather than places whilst in a personal conversation with a friend from the UK and for some reason it played on my mind. It made me realise that actually the whole advertising industry has shifted exactly in that manner. The context which my friend spoke of was his personal life!
The advertising industry used to be built around the idea of buying a fixed website, a fixed page on a magazine or newspaper and was very much orientated around buying space. Let’s call that renting. Now the very same industry in digital is moving away from the rental market and instead securing buys across actual audiences. These are the faces the advertisers want to recognise and not the places they used to go to get a gun-shot audience. It reminds of dating. The advertisers now know that it’s not the place that matters but the type of date they seek. Then the ‘places’ come secondary if that. Why not follow the audience as they meander through the (clubs!) different addresses on the web and pay premium for exactly the audience the advertiser needs instead of 10x that for a gun shot audience. Acxiom has the power to narrow down its targeting down to a few houses in USA – but how totally scary yet amazing will it be once they or their competitors -can start pin pointing the actual person. Narrowing down a house or a few houses is not efficient if you have a family – each person has different targeting requirements. Some you may not even want to target.
The advertiser or agency is now buying or aspiring to buy real time audiences. Think about the world cup – us women are rarely interested in football or sports until a world cup happens. Then the audience can be skewed as we don’t fit into the mould of a football segmented audience. Now the technology the industry is moving towards is dynamic audience or behavioural targeting which can include or exclude sets of segmented buckets of audience. Peel the onion and target the core.
It’s easy to see why the industry is moving here its all about efficiencies in the marketplace; less impression wastage, less resource constraint, less fragmented audiences etc. Less is more – more ROI, more contextual audience and more engagement with the ‘face’. Ultimately the utopia is to build out that face and profile that user down to the most inner data segment possible.
Audiences travel far and wide and to get to the inner core of a ‘face’ it’s imperative to truly follow the face to as many places as possible. This means that the long –tail publishers are going to become more and more relevant. That’s truly conflicted given that agencies fear the unknown long tail and don’t want to compromise brand safety beyond their comfort levels and appetite for weird and wonderful publishers. An ad-exchange here is therefore limited by its agency users and its one major reason why agencies never did truly harness the world of ad-exchanges; the very fact that a DSP exists is testament to that. Interestingly – this must be true given that the Double-click ad exchange and Right Media both moved to become Premium exchanges.
After all, to truly take the digital budgets out of the hands of agencies is to mould to their needs, desires, wants and most of all their fears.
Asia is not in my opinion thinking of faces but it’s very much parked in the places momentum. That’s natural given the fact the audience is still new to most websites, the internet penetration is low and generally there is much change to see still in Asia. However, interestingly many ad agencies have been reaching out to speak to me about where they sit in the eco-system in the next few years. So it’s evident that we’re all paying attention to the US market.
Australia is the outlier and that’s evident from Google recently going in market to release its Adx again; after poor adoption the first time around. The messaging is mixed; on one hand we have premium inventory and on the other we have ad sense inventory going into the AdX. Simply put its still very much an ad-exchange as Right Media is. We have real time bidding for Google which is widely rumored not to be across all of its inventory due to scale and you have Right Media which is real-time bidding with an hours’ delay across all its inventory. The faces and places is questionable if the landscape is not equal in bidding for inventory at the same time.
Coming back to the long tail publishers –they should only apprecite if advertisers put faith more in the audience then in the page and those ad revenues for long tail unqiue publishers should appreciate over time. It then begs the question – how sustainable are mass publisher portals that bring in generic audiences. Will we see a fragmentation in the publishers? Or a consolidation? Yahoo has been especially smart about its home page and brought on some of its competitors (indirect) by creating tabs on its home page to allow users to dictate their own needs. This empowers the user, brings in a better audience engagement and should help stickness.
As I wrote recently on Future, Forwards and contracts; I keep coming back to the performance market of advertising and the commoditisation of media. Not all media will be commoditized by a DSP or Ad-exchange. Why? Because its still evident that advertisers are not fomulating ideas, marketing budgets on a real time basis but along the lines of a R+D timeline, a marketing timeline and ultimately in a timed environment. Therefore the follow through of such a thought process is still very likely to remain guaranteed brand premium inventory. No publisher is going to want to commoditize its premium inventory and allow market forces to dictate prices because it in the same manner has to maintain its own budgets, forecastings etc. The true commoditisation process will only occur if the push comes from advertisers. This means they have to truly adopt, embrace and endorse the ad-exchange DSP model. If not; then we will still be in a hybrid state of commoditisation. Can an advertiser remain strong and boycott publisher premium guaranteed inventory? If so then the market economy for advertising is on the turn of a heel.
What if instead, you have a brave enough advertiser who creates their own DSP? or even agency? The agency incentive is to fight to salvage its 15% margin for doing nothing more than pass a IO over to a publisher/ad network. Cut out that 15% and the industry has saved billions!
Its interesting to see that whilst we are all concentrating on the ‘DSP’ the real focus should be on not only how we buy inventory but the actual ‘inventory’. Inventory at scale is sold by its ‘place’ – i.e. the publisher website and not by its ‘face’. The likes of some Data DSPs will change that; other huge data powerhouses like Acxiom, Audience Science and Phorm will take one step further and concentrate on the inventory. That’s the true key to packaging efficiency, buying habits and the long tail. That’s when we come to the real question of ‘ Big Brother’ and privacy issues which are so important politically and commercially. Hopefully, the European Union makes a great impact here.