Think BR: The value of data optimisation

How much does the average marketing director understand about how their brand’s online display budget is being traded and whether it is delivering audiences in the most cost effective way?

Unless you are a specialist in digital advertising technology, the digital display landscape or ecosystem can seem fiendishly complex.

Today there are no less than twenty - and probably more - specialist sub-sectors providing some general, and some niche, services to an advertiser wishing to place a digital campaign.

Within each sector you might find 10 to 20 different digital business brands.

The roles of these service providers, whether they are an agency group at one end or yield optimiser or ad-server at the other, are sometimes complementary, but often overlap and are competitive.

To make matters more complex, the ownership of the different companies operating along the trading chain has become truly blurred.

Out of this jungle, which has grown up around the digital media space and through which every digital display campaign must pass, two key themes are emerging from the advertising technology community which are beginning to creep onto the agendas of brand marketing teams.

They are, firstly, whether the complex ownership structures across the different elements of the brand planning, buying, distribution and analytics chain have, through shared corporate parentage, compromised the neutrality of decision-making and the delivery of optimal value for advertisers.

Secondly, whether the digital eco-system is caught in a process where diversity and choice are being eroded to a point where sometime in the future only dumbed-down solutions are available.

Across these two trends flows the concern that most marketers simply have not caught up with the rapid evolution of digital advertising technologies and the way the shape of the digital advertising business has changed in terms of ownership.

The issue of neutral decision-making has been provoked by the relationship between agency groups and their fast growing media trading platforms, such as Publicis’ Audience On Demand and WPP’s Media Innovation Group.

The relatively recent trend of digital trading platforms sitting under the same ownership umbrella as their agencies is asubject that has provoked heated debate within the advertising technology community but barely a flicker of recognition among marketers concerned with developing holistic brand strategies. 

As ever, the US is unwrapping the issue first. Debates at events in the US such as OMMA Adnets and articles in specialist US media such as Digiday show how heated this can become.

It may or may not develop in the UK as marketers further investigate the decision making processes. Much of the debate boils down to the simple issue of transparency and understanding.

However, another aspect of this relationship that bares further immediate scrutiny is the value of clients’ audience data, how that data is used in conjunction with a range of other clients and whether individual clients are achieving maximum value using generic solutions supplied as part of an agency deal.

By aggregating audience data from various clients and putting that pooled data through analysis and combined trades, agencies can extract additional value from digital budgets.

While there is nothing wrong with this in principle, and clients have always been happy for media agencies to pool budgets in order to extract maximum value from media deals, the use of arbitrage between media budgets and the value of online inventory raises questions about how much clients understand about the value of their audience behaviour data.

Customer or audience data enables those charged with placing a client’s digital budget to assess the value of different elements of media inventory for individual clients against the generic price achieved and return a proportion of the value achieved.

The more data brought into the equation, and the better that data is, the more value a buyer can extract.

For example, an obscure corner of the web may have a low generic value based on general audience figures but, to a particular group of consumers a brand wishes to target, it may be particularly relevant and therefore more valuable.  

Overlaying that data on that media space can transform its effectiveness to a particular brand.

In this sense the data not only becomes a currency, but can also be used to deliver huge media cost savings if it is funnelled through an optimisation system that is sufficiently sophisticated.

It is large clients contributing a huge volume of audience data that have most to gain or lose.

Returning to the second theme, a shift towards consolidation and more homogenised systems is perhaps inevitable as the digital sector matures, but again it is worth asking whether the advertisers are sufficiently aware of the implications and whether it will play a role in shaping its evolution to their advantage.

Consolidation of buying points and the emergence of co-ordinated trading systems are of course beneficial, delivering better value and making digital display advertising accessible to a broader range of brands.

Agencies thrive on the sophistication of their thinking and strategic planning capabilities as well as their buying fire power.

In theory, planners will always point clients towards the most effective solution.

It’s also true that some compromises are inevitable in the process of achieving fast turnaround on campaigns. Marketers inevitably want the process to be streamlined.

But without investigating the full range of options available, brand marketers managing large digital budgets could find their campaigns shoe-horned into generic solutions rather than tailor-made alternatives.

The difference (or savings) small changes can make to a campaign through data manipulation can run into four figures for every significant campaign.

Through competition the advertising technology sector has delivered ever more sophisticated and effective ways to reach people online.

It is complex, but its diversity is in many ways its strength.

Clients will naturally want manageable systems, but I suspect as more grasp the full picture, they’ll play a more direct role in shaping the digital industry in the pursuit of cost-effectiveness.

Carl White, chief executive officer, ValueClick Europe