If you'd like to begin at the start of the 4-day, reaction series, click here.
Click "read more" to read the participant's answer to the AdExchanger.com reaction question on the decoupling of data and media:
Dan Beltramo, CEO, Vizu: "A key issue for data providers who choose to sell media to consider is how or if doing so may affect their relationships with other partners they may have." Read more.
Barry Chu, VP of Product Marketing, BlueKai: "The fact that we’re not competing for media means our partners get to build their competitive value on what they do best […]" Read more.
Walter Knapp, COO, Lijit: "A data company that sells media should somehow compensate the publisher/data provider […]." Read more.
Paul McLenaghan, VP, AdAdvisor Platform, TARGUSinfo: "In the case of the data company turned ad network, there is typically not a great deal of transparency around the pure play impact of data, and there is certainly not transparency around the quality of inventory where data is running." Read more.
Dan Scudder, Business Development, Rapleaf: "A data company should always be selling data first, media second." Read more.
Matt Shanahan, SVP, Strategy, Scout Analytics: "A publisher that outsources sales to a third party can end up like the sports superstar who is surprised when their financial manager bankrupts them." Read more.
Josh Shatkin-Margolis, CEO, Magnetic: "Advertisers are going to look to the companies in the ecosystem to provide one complete offering […]." Read more.
Kirby Winfield, President & CRO, Mpire/AdXpose: "Whether it's a data company selling media, or a media company selling data, as long as the practices are transparent and third party verified, there's no issue." Read more.
Mark Zagorski, CRO, eXelate: "I believe that there is always some level of conflict when you aren't a pure player in any sector […]" Read more.
Dan Beltramo, CEO, Vizu
In general, there is nothing intrinsically wrong with data providers selling media. Often data providers are going to be in the best position to understand their data and to leverage them on behalf of their clients.
I think the main issue is that there is a clear understanding between buyer and seller as to the sources and nature of the data being employed and how they are being put to use.
A key issue for data providers who choose to sell media to consider is how or if doing so may affect their relationships with other partners they may have.
Barry Chu, VP of Product Marketing, BlueKai
At BlueKai, we feel there are some key reasons why data companies should not sell media, and the main one lies in the conflict of interest it creates with their media partners. Companies like BlueKai have built a business around providing quality data a-la-carte to buyers across the ecosystem including ad networks, ad exchanges, publishers and portal to deliver high-performance targeting. The fact that we’re not competing for media means our partners get to build their competitive value on what they do best (media targeting, optimization, etc) while leveraging BlueKai’s high quality data for more unique and effective targeting across their inventory.
The data-only model also enables BlueKai to remain completely laser-focused on our core, which is creating a digital data economy that enforces fair compensation to the data providers, market-driven pricing to buyers, and a high standard for data quality and consumer friendly practices.
While our specialization in data means we don’t have control over inventory or specific around media/data mix, we feel this is the value-add and expertise that our partners bring to the table. We focus on working closely with our partners to gain data performance insights so we continuously monitor and improve the performance of our data.
Walter Knapp, COO, Lijit
We frame the question from the publisher or data provider point of view. If a company has the ability to bring data to a media equation then that should be a good thing. Therefore, it should be entirely appropriate to have a data company sell media; provided that the company can show a benefit to the both publishers that provide data and the advertiser that uses the data. Where this most often goes off the rails is when a data company leverages its relationships with publishers to collect and/or tune data and then they sell media that potentially devalues the publishers’ contributions to that data.
The major challenge today around data is the refinement of that data into useful audience segments that perform for advertisers. This is challenging work that essentially forms the core competency of successful data companies. The trick is fairly assigning attribution back to the source(s) of that data especially as more components or signals are added to refine and tune the audience segments. A data company that sells media should somehow compensate the publisher/data provider while also achieving the performance expectations of the advertiser. This requires that data companies have adequate reporting and attribution both of which seem to be largely missing components in the state of the market today.
Paul McLenaghan, VP, AdAdvisor Platform, TARGUSinfo
As a leading data provider, agencies and advertisers frequently seek our guidance on this very question. When we dig a little deeper into what their real concerns are, it is not so much that they feel it is imperative that media and data be bought and sold separately, but rather they are frustrated and confused by the lack of transparency about how and where media and data are bundled.
So in our opinion, the right question is not "is it appropriate for a data company to sell media", but rather "what should agencies expect of a data company?"
The short answer is transparency. The opportunity created by many of the changes under way in the ecosystem is to provide enhanced transparency around the impact of advertising --- whether the goal is brand lift or sale - and the contribution of each element including media, placement, creative and of course data.
When the media buy is a mechanism to enable a data company to deliver its core value, i.e. its high quality data, at scale in a cost-effective manner, then it may be appropriate for the data company to facilitate access to media that includes proprietary data. In this case, a partnership between data company and DSP can make for a very simple yet powerful value proposition. The data company can build a data strategy with an advertiser and leverage the DSP to buy impressions when the target data segments appear across the DSP's inventory sources.
Given that the DSP juxtaposes data with the inherent cost controls of a biddable environment, the data company can ensure that the advertiser is getting the maximum exposure to the right data on inventory that makes sense for their brand. In this scenario, there is transparency between the data that is driving the decision to buy any given impression and the content in which the advertisement ultimately runs. Thus it is wholly appropriate for a data company to buy media in this fashion, because the "media buy" is simply a data delivery mechanism that provides the advertiser with transparency around data delivery and performance.
On the other hand, when data companies take the approach of using their data to more effectively drive revenue by arbitraging media bought on exchanges or through proprietary sources, they begin to resemble ad networks rather than pure-play data companies. This can be a great way to make money today and there is nothing inherently "wrong" with this approach, but it can really shortchange advertisers whose best interest the agencies are looking after.
In the case of the data company turned ad network, there is typically not a great deal of transparency around the pure play impact of data, and there is certainly not transparency around the quality of inventory where data is running. Agencies are likely overpaying for low quality inventory. Publishers should be concerned with this as well as the data company is effectively making high margin profit off their inventory.
If a data company is going down the road of bundling media with data, agencies should require that they are transparent about where the impressions ran and the cost of acquiring those impressions, so that the agencies and advertisers buying media from them truly understand what value they should place on the data as opposed to the media.
Dan Scudder, Business Development, Rapleaf
A data company should always be selling data first, media second. The key element is to focus on the needs of the client - some clients want to interface with only one company and get the full campaign management from them. These clients are often data savvy and have a particular interest in the data, but need the media packaged in to fulfill their needs. A data company can win the business on the data and fulfill the campaign by overlaying data with media.
In the long run, data companies should continue to focus on data as their expertise, but when interacting directly with clients, it's important to look at the client relationship as a key proprietary value as well. Helping clients succeed will benefit everyone in the long run, whether selling just data or including media as well.
Matt Shanahan, Scout Analytics, SVP, Strategy
There are two sides to this question. The first questions is whether data is enough to be sustainable as a company? The second is whether media is the logical complement?
In regards to the first question, the separation of data from media will exist on a continuum. The less proprietary and differentiated the data, the more it will be decoupled from the media. In other words, commodity data will be available for sale and distribution independent of the media. There are limits to what a data company can aggregate. Think of the demographic data BabyCenter.com has regarding their audiences’ children. They are not about to give up that advantage to a data company or anyone else. In a February IAB Leadership Meeting, Tollman Geffs from JEGI questioned the viability of data companies without being tied to monetization. It is therefore natural for a data company to seek the next rung up the ladder and participate in the transaction.
This leads to the second question, should data companies sell media too? According to analysis from Terrence Kawaja at GCA Savvian, connecting advertiser and publisher currently extracts 64 cents of every ad dollar. The logic for a publisher to allow a data company to sell media placements would be if it could cut that tax at least in half. But a data company that sells media placements is basically an ad network with the same incentives to create high margin and valuation. So what would change? While it would be attractive for the data company, it may not be so to the publisher or the advertiser for that matter.
For any business, there is no more important role than understanding and controlling your revenue model. Publishers need to oversee and control the sale of their placements and audience. A publisher that outsources sales to a third party can end up like the sports superstar who is surprised when their financial manager bankrupts them. Technology rather than new forms of middlemen are the answer to efficiency in placing advertisements. Publishers and advertisers need straight-through-processing solutions that link them together based on fixed fee transactions.
Josh Shatkin-Margolis, CEO, Magnetic
Advertisers should get data and media from the source where they will get the most value. In some cases, a data company would be in a position to sell both media and data in a synergistic fashion. In some cases, it will be more beneficial to have a DSP or an ad network to figure this out for you. It will all depend on how complex the system is and how difficult it is to work with the data.
Using search marketing as an example, many people who are tasked to do search re-targeting find they want to pick the keywords, as they are used to buying media and keyword data in one place (i.e., Google, Yahoo). In most cases, no matter what kind of data you want, the process is a lot easier working with one entity like a data provider or a DSP or an ad network. Advertisers are going to look to the companies in the ecosystem to provide one complete offering and data providers will need to strategize what role they will play in that one complete solution."
Whether it's a data company selling media, or a media company selling data, as long as the practices are transparent and third party verified, there's no issue. You certainly want to see a "Chinese wall" between the data practice and the media practice, and there should be clear contractual language stating that the entity in question will not leverage specific data client information against the media side (or vice versa).
In many cases, a company's media practice can strengthen its data offering from a simple proprietary technology standpoint. Running a media business at scale gives companies advantages in data warehousing, processing speed, latency, and delivery chain evaluation that they can leverage against the data side without conflict.
I think the "bright line" rule on this topic is this: whether it's a media client or a data client, the client always owns the data collected and generated via its relationship with the provider. This simple rule should put to rest any concerns about the propriety of a dual offering.
Mark Zagorski, CRO, eXelate
I believe that there is always some level of conflict when you aren't a pure player in any sector, because at the end of the day you either (a) end up being competitive with your own customers or (b) fail to fully serve their interests. I think the key reason that data and media access were split in the first place was because of these inherent conflicts, and a main reason why independent data companies like eXelate are thriving.
If you are a data guy selling bundled media as well, you are competing against the DSPs, Networks and ad platforms that are buying your data. And, because you have a vested interest in ensuring that your media business grows, you have an incentive to protect certain data pools, and be less than transparent with data performance stats for your data clients, as that is your "secret media sauce". On the flip side, if the data is what is driving your media performance - not your adept media optimization skills - you have no reason to reveal that to your media customers as the data itself is transportable to other media sources.
The bottom line: unlike the creamy deliciousness created by the components of a Reese's Cup, combined data and media sales are not so great together.