“Data Driven Thinking” is a column written by members of the media community and contains fresh ideas on the digital revolution in media.
Today’s column is written by Bill Demas, CEO of Turn Inc., a demand-side platform and ad network provider.
As the first decade of the new millennium comes to a close, the online advertising industry is at an inflection point: We are now entering the era of Display 2.0. Forget all that old school thinking about media buying, audience targeting and the traditional roles once held by agencies, media buyers and service providers in the world of display advertising. The rules of the game are changing.
The display world is going through a classic disruptive innovation precipitated by technological innovations and introductions such as real-time bidding exchanges, privacy-compliant data resellers and exchanges, and of course demand-side platforms. In 2010, we will begin to see the creation of more open platforms, increased systems integration and more powerful analytics to align with – and better tap into – the openness of ad exchanges. Classic ad networks are going to have to adapt to this new world order, beefing up their technology offerings (as some have already done) in order to compete with the exchanges and reinforce the value they bring to advertisers. It will be the end of the party for undifferentiated ad networks targeting brand marketers. Technology, scale, security and strategic expertise will be critical for success.
In another paradigm shift, audience targeting will take on a whole new scope with the continued practice of advertisers buying ‘people’ instead of ‘pages’. These advancements are creating new efficiencies and transforming the way display advertising is bought and managed. They’re also having a bubble up effect upon advertisers, who are demanding improved performance and massive reductions in wasted ad spend. Another unforeseen effect is in the way it is changing the behaviors of media buyers: As one industry luminary put it, the ability to manipulate data and hand-pick your audience is “addicting.” In the near future, having a deep understanding of a target audience will be more important than having a broad reach, and any organization that brings this kind of knowledge to the table – coupled with the ability to execute upon the information – will be the big winners.
That said, the consolidation of advertiser budgets will accelerate for the foreseeable future, and the winners of those precious dollars will be the innovative companies that add value to this ecosystem. It’s about privacy-compliant user-level data, access to inventory in real-time, deep analytics and predictive audience targeting. While managing costs and being efficient is important, true value comes from packaging strategic expertise, advanced technologies and creative ideas to make people’s jobs easier and campaigns more efficient, productive and profitable. Such factors will not only contribute to the success of each individual business, but will grow display advertising. And this will, in turn, create further innovation.
Looking forward, the future of Display 2.0 is really promising. The stars in this entire ecosystem are becoming more closely aligned, in terms of advertisers, agencies, service providers, publishers, and ad and data exchanges. The journey that the industry has taken, from its inception to where we are today, can only be described as an Odyssey. But at the current rate of disruptive innovation, we believe that in three year’s time the industry will double all of the advancements made over the prior twelve years.
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