"Marketer's Note" is a weekly column informing marketers about the rapidly evolving, digital marketing technology ecosystem. It is written by Joanna O'Connell, Director of Research, AdExchanger Research.
I had an interesting conversation about the “second party data” opportunity with some senior level publishers not too long ago, and it got me thinking about this subject anew.
I’ve always seen these kinds of relationships – where a marketer (or agency on a marketer’s behalf) has a direct relationship with a publisher where data is the thing being negotiated over (e.g. second party data… Get it? The marketer is the first party and the publisher is the second party) – as a huge opportunity to be explored. Back in the early agency trading desk days we had the idea that, within the walls of our agency, we could create symbiotic marketer to marketer data relationships (in this case the second party provider is another marketer, rather than a publisher). Think of a travel company with flights to tropical locales and a retailer selling resort-wear. But at the time, the tools that would enable such relationships just weren’t there.
Today, they are, at least if leading DMPs are to be believed. Just look at the recent panel I moderated, during AdExchanger’s inaugural Industry Preview conference, where second party data was heralded as the big opportunity to be explored in 2014. (Side note: AdExchanger got in on the fun just about one year ago today, with this comic strip on the subject: “Come on in to the data party, publishers! It’s great in here!”)
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Certainly, it feels like a cool development for premium publishers looking for new ways to create value and strengthen relationships with their key customers – it’s a new set of parameters on which to negotiate. It’s data that may be proprietary to that publisher and therefore highly valuable to certain buy-siders. And it creates a nice bypass for those, on both the buy and sell sides, feeling burned by - or simply suspicious of - the third party data ecosystem, increasingly under fire over questions of data quality and uniqueness, the sourcing of the data and more*.
I’ve always wondered about the structure of these deals, however, as well as the practical implementation of them. I’m thinking about questions like this: How is the application of the data prioritized? If a cookie meeting a certain set of data parameters becomes available out in the programmatic ecosystem, who gets the right to show that cookie an ad? Is it the marketer with whom the publisher has a data relationship? The audience extension buy the publisher is running? What about in the case of two marketers with a data relationship? How is the data prioritization set? There may be some seemingly simple answers from a technical standpoint; I think the more complex answers are in the business decisions made which dictate how the tech is set up to behave.
All that said, these are by no means insurmountable questions. In fact, the more publishers, marketers and their platform partners raise these questions on the ground every day, the sooner the second party data opportunity will approach market maturity – a good thing!
On that note, I’d love to hear from the community – marketers, agencies, publishers, tech providers – how are you tackling these questions? How are your second party data relationships going? Are they as fruitful as we all want them to be? What challenges are you running into, and how are you addressing them?
*A conversation for another day: what IS the state of the third party data ecosystem? How are buyers (and sellers for that matter) assessing data providers, and what are they finding? I plan on looking at this more closely!
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