Data exchanges offer publishers, who are sweating bullets over 2009 revenue targets, an opportunity to create a new source of revenue as they are able to leverage their valuable user base and resell anonymous cookie data that advertisers can serve against.
In yesterday's MediaPost, CEO Mark Zagorski, from Israeli-based behavioral targeting data exchange, eXelate, exhorted publishers to "take back their data" from the evil ad networks. At first glance, this might sound like Group M's T's and C's data land grab from two weeks ago. But, Zagorski is merely peddling the BT solution which is very compelling for publishers.
We take some issue with Zagorski's clever recommendation that publishers should demand a separate revenue stream from their networks and exchanges who are likely generating revenue through the user data on publisher partner websites. Good luck with that.
It seems to us that the revenue is returned to the publisher through the CPM which the publisher is setting or negotiating with the network or ad exchange. Still, Zagorski's point about Tacoda offering a separate revenue stream to publishers reminds us how nice it is to receive yet another check.
A smart network or exchange would offer this second stream to premium publishers as a retention marketing effort. The new revenue would be pulled out of the usual display ad check the publisher normally receives.
On the other hand, though self-serving, we think Zagorski (formerly of Modem Media, WorldNow and MediaSpan Group) is spot on by suggesting that companies like eXelate and BlueKai offer a great new opportunity for publishers. (Hey, what's with the weird capitalization on these BT exchanges?) Why not use these companies to resell anonymous cookie data? And why not sign up for both eXelate and BlueKai and others?
Though privacy concerns are well-documented in the online behavioral advertising arena, we think the ongoing use of anonymous user data to provide more relevant advertising to users cannot be stopped. Do people think great content appears out of nowhere? Somebody has to pay for it, and BT advertising will remain an important slice of the monetization pie. Moreover, data exchanges are an exciting development for the exchange model.