On Middlemen: Publicis And VivaKi’s Kegelman Discusses The Online Advertising Value Chain

Middlemen ReactionAdExchanger.com recently asked several members of the advertising ecosystem about “Middlemen” and, specifically:

  • “Are there too many parties trying to insert themselves into the online advertising value chain? How do you see this playing out?”

The following contribution is an agency perspective from Sean Kegelman, SVP, Partnerships & Ventures, Publicis Groupe’s VivaKi.

The question of – if there are too many parties in the value chain – is about who is adding value (and who isn’t) and how interests are aligned (or not aligned).

Advertisers and media companies each have a specific goal: the former to use online advertising to achieve a goal specific to their marketing objectives; and the latter to monetize their media assets.

Today, outside of direct media buys, a bunch of players get in the middle to help assist in transactions between the two (agencies, ad networks, tech platforms, data providers, etc.). When these players are adding value by providing a more efficient or more effective way to operate, then their presence can be justified.

Before “exchanges” (and I extend this label to other inventory aggregation points that allow ad transactions at the moment of delivery), intermediaries like ad networks were a necessary link to help aggregate scale in media and data for cookie level targeting. Today’s environment creates a more common “media / advertising operating system” allowing the end points of the value chain to interact more directly. Third-parties still add value:

  • Data providers supply information not directly available to either advertisers or publishers
  • Agencies provide strategic counsel, execution, and (more holistically) integration across tactics and channels for an advertiser
  • Yield optimizers and aggregators can provide valuable mechanisms for publishers (large and small) to manage complexity and make their inventory available
  • Technology platforms provide the critical infrastructure for integrating with these media and data sources and to assist with decisioning

Others that are involved in the value chain today that don’t fall into one of these areas will either evolve to more directly align with these points or find themselves struggling to justify their role. There is a broad range of both size and type of advertisers and media companies that need to be addressed.

One area of the advertising value chain that is not as crowded today that needs more players focusing on it is performance analysis. Today the definition of performance is much too confined. It includes a remedial and narrow set of directly observable behaviors and almost no view into attitudinal impact. Companies that want to insert themselves into the value chain of online advertising will find this to be a much less crowded space, but ultimately, whoever helps solve these problems will benefit greatly by allowing the overall market to grow significantly.

More opinions on Middlemen>>>

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