“Networking” is written by members of the online advertising network community.
Today’s column is written by John Garber is VP, Business Intelligence, Lotame Solutions, Inc.
Much has been said recently about new and as yet unrealized data opportunities for publishers. Many companies are knocking on the doors of publishers and peddling our DMPs, SSPs, and DSPs, all as a way to “maximize revenue, yield, and ARPU.”
Today, the best way for publishers to monetize their data is to become part of a media coop and sell their inventory too. To repeat: the best way to monetize data is by selling inventory and becoming part of a coop.
Here’s why. When a buyer buys data separated from the media, they take on the responsibility of monetizing what they just bought. They make zero money if they learn that a person is a male, interested in sports, but then never get a chance to put an ad in front of that person. The media is still the monetization vehicle at this point in the development of the data market. The risk is all on the buyer in a straight data buy. Because of that, buyers of data (today) can’t afford to pay high prices for straight data and they have trouble understanding how much to spend because they don’t know if they’ll get to use their new purchase once, a hundred times, or never. Ultimately, this means small checks to the publisher.
When a publisher both sells their media inventory and joins a data selling coop, they then remove the buyer from the responsibilities of finding the audience. 100% of the people who generated the data in the first place also generate media opportunities from the same site. They naturally go together. To maximize what you can make from the data you need to sell them both: straight data and data targeted media.
The market displays this phenomenon right now…. here’s an example:
- A run of network campaign sells for 6 shekels
- That same campaign combined with declared (not inferred) age and gender data sells for 9 shekels
There’s a 3 shekel upcharge for leveraging the demographic data.
That same demographic data sells for less in a data market. It’s the same data. The difference is, when the ability to deliver the ad to it becomes guaranteed, the buyer has no risk, and the value goes up.
In any marketplace, you’ll find nuance. There are other forms of data than what gets sold or used. CPGs historically and presently are the darling buyers of moms-related media. Those sites currently sell their data when they sell their inventory because measurement companies like comScore (and others) help realize data value because of the market value and common currency of their audit. And brands are willing to pay for that data point. That’s what makes the cost of that inventory so high. A premium parenting site may have already maximized its data+media revenue and its only additional option is straight data sales. With that said, even “mom” data in a data market sells for significantly less than what it adds to the price of inventory on a mom’s site because the risk is all on the buyer in the data market.
So, as publishers step into this new data world, it’s important for them to remember that data value for non-intent data is still unquantified. Publishers have always been in the intent creation business and hand-off intent activation to search and ecommerce engines. Make no mistake: there is absolutely value in non-intent data, as that data is the foundation that supports audience creation, media, creative, and optimal frequency, all in the hopes of creating that ‘inception’ moment for a consumer to reach for that product on shelf, in the auto dealership, or when booking a vacation. I expect existing online ROI models to evolve into sophisticated attribution methods for valuation across the continuum of intent creation and activation.
