Counterpoint: The Third-Party Ad Server Has A Big Future

“Data-Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media.

Today’s column is by Megan Pagliuca, VP and GM for digital media at Merkle Inc. It was penned in response to Rob Griffin’s recent piece, “The Death of the Third-Party Ad Server.”  

Rob Griffin’s column on the future death of the ad server does not acknowledge that a targeting and measurement methodology dependent on a third-party cookie is fundamentally flawed.

With a better targeting and measurement methodology, the dynamics of the ecosystem will change, and the ad server will take on an even broader role. The ad servers, including Facebook’s Atlas and Google’s Doubleclick Campaign Manager (DCM), are driving the shift to tracking in a cross-device world using Facebook and Google logged in identity as the backbone.

To date, neither has been strong in either mobile or cross-device capabilities but, as they integrate identity, they have the potential to provide long-awaited salvation from inaccurate measurement that has prevented budgets from moving to mobile and digital overall.

Time spent in mobile has surpassed time spent in desktop, but since the third-party cookie is barely useful in tablet and mobile environments, reporting in attribution platforms, DMPs, DSPs and ad servers alike all massively undervalue the performance of those placements. The result of the defunct methodology is marketers are missing an enormous opportunity to reach consumers.  To Rob’s point, cross-device players like Tapad are innovating but there are three problems preventing cross-device ad tech startups from enabling budgets to move to mobile at scale.

First, cross-platform vendors are not integrated into marketers’ system of record for measurement, budget allocation and billing, also known as the ad server. Second, there has been no industry standardization for counting, or industry certification for cross-device players. Third, some of these firms happen to be ad networks trying to drive larger budgets. They really could be generating their cross-device reporting out of thin air and marketers and agencies wouldn’t know the difference. We have seen Medialets fill a critical measurement and attribution gap as the only MRC-accredited mobile ad server, providing an independent and objective source of truth for mobile, while we not so patiently wait for a solve for cross-device.

The same concern applies to the leading ad servers, Atlas and DCM, as they are owned by the leading media platforms, Google and Facebook. Ideally we would want an independent player, providing the source of truth for measurement, budget allocation and billing. The challenge is that only the large media players have the scale of logged-in identity that is required to solve the measurement problem deterministically.

To create competitive advantage and influence consumer behavior, marketers must be able to target and measure at an individual level across devices.  The large media platforms with logged-in identity data are in the best position to enable individual level cross-device measurement as well as get the industry past its dependency on the third-party cookie. They may not be independent and objective, but they are well-positioned to solve the problem.

Now let’s play this out. It’s a year from now and Google and Facebook are operating their ad servers off of IDs that are derived from logged-in identity, rather than off of third-party cookies. I would be surprised if Twitter didn’t offer a competitive solution, too. There will be a new level of transparency in measurement, and reports on discrepancies between people vs. cookies will open the eyes of marketers on how flawed the third-party cookie approach has been.

An ad server, powered by the identity data, remains the single source of truth for cross-device measurement, enabling major budget shifts from TV and direct mail to mobile, tablet and desktop, accurately reflecting consumers’ time spent.