Posted by John Guevara in Analytics, Blogroll on November 19, 2008

I recently attended a panel discussion in New York on media fragmentation consisting of media agency execs including:

- Bant Breen (Interpublic - Initiative – President, Worldwide Digital Communications),
- John Donahue (Omnicom Media Group - Director of BI Analytics and Integration),
- Ed Montes (Havas Digital - Executive Vice President),
- Tim Hanlon (Publicis - Executive Vice President/Ventures for Denuo)

The discussion was kicked off of by Brian Pitz, Principle of Equity Research for Bank of America.  Brian set the stage for a spirited discussion regarding the continuing fragmentation of online media along with research on the issues posed by this.  The panel discussion touched upon many issues including fear placement around unknown user-generated content, agency lack of skill set to address this medium and lack of standards.  However, what surprised me most was the unanimous consensus in opinion that there is more value further out on “The Tail� of the online publisher spectrum due to the targeted nature of the content.  Yet the online media buying statistics conflict with this opinion (over 77% of online ad spending is still flowing to the top 10 sites).

When asked “why the contrast?� between their sentiment and the stats, the discussion revealed the level of uncertainty due to a lack of transparency into “The Tail�.  Despite the 300+ ad networks that have emerged to address this very challenge, the value chain lacks the data to confidently invest the dollars.  In addition, there was a rather cathartic moment when John Donahue professed that agencies should “Take Back Your Data From Those that Hold It Hostage�.

It is our belief that the opinions expressed by the panel serve as evidence of a shift towards a new era in media where evidential data will drive valuation across media rather than sampling-based ratings acting as the currency.  No one will be immune from this:

- Agencies need it to confidentially invest their clients dollars and show demonstrable ROI of their services
- Ad networks need it to earn their constituencies’ share of marketing budgets
- Ad networks need it to defend the targeted value and the appropriateness of their collective content
- 3rd Party measurement firms (comScore, Nielsen Online, ValueClick) need it to maintain the value of their objective value
- Advertisers need it to support the logic budget allocation decisions
- BIG MEDIA needs it to defend their 77% stake

You might be thinking, “The need for data is no great epiphany�.  However, I submit that the amount of data and the mere fact that all participants should have their own copy is a shift in thinking.  Gone are the days where:

- The value chain is driven solely by 3rd Party’s and their audience samples
- Ad Servers/Ad Networks are the only keepers of the data
- Service Providers can offer data for a fee

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John Donahue on November 25th, 2008 at 8:04 am #

First off…thanks for attending. It’s great to begin to see cutting-edge silicon valley elite paying attention to my business.

So let me dissect your post a bit. First off, let me deal with the comment on “leveraging the tail” vs the 77% stat you quoted. The reality is such…we want to play in this regard but you have to understand the cost when the tools are so disparate and no one is helping us truly make a business model about it. When the cost of doing business on hyper-targeted segments exceeds the value, it doesn’t make a lot of sense. What I mean is assembling a 5 billion impression campaign on an exchange is time consuming and managing the billing is time consuming. If we can begin to leverage the selection and targeting in a way that gives transparency to where the ad is running our clients are interested when we can do it in a cost-effective manner.

To further address this, it is not a one thing or another game. It’s all about pulling it all together. So if I am leveraging a premium inventory buy to fill the top part of my funnel, I might be leveraging an exchange to fatten the bottom at the point of conversion. Point being…it is not x or y but more so x and y. Sums are better than conditions…why choose! Take both!

As per the “take back you data” quote…I LOVE IT…oh wait….I said it. We 100% need to get our hooks into more and more data. The more you know the more you can capitalize on. It’s a very simple premise :) Feed me data and I get the value and therefore will likely want to buy your inventory.

Gone are days…you are correct. It is a new day in which we are empowered by information and as the information informs…we act. If you want into our wallets…open up your data pipes. Great companies like yourself can help me make sense of it then :)

Thanks for attending Aster!

Brian O'Kelley on November 28th, 2008 at 3:49 am #

John’s points here are spot on - data is king, and it’s exciting to see agencies taking action toward using it. This points toward a new phase in the evolution of online advertising where display starts taking share not just from offline (due to accountability) but from search (due to brand impact and reach). Exciting times!

John Donahue on December 11th, 2008 at 7:50 am #

agreed man. the times are exciting. you nailed it on the head in regards to capitalizing on the misattribution of conversion to media type. fixing it is fun :)

Alex Maiorescu on January 5th, 2009 at 2:35 pm #

Many agencies understand the intrinsic value of the data that others hold, but only a select group of agencies and vendors have the capability, the knowledge, the maturity, the experience and the vision to take back their data and extract meaningful insights. You need powerful platforms, like Aster to store and analyze the data, and you need implementation partners, who understand the media business (shameless plug for Primary Impact) to make a platform like Aster deliver maximum value.

John is right, managing the tail is currently too costly for the extracted value. Management of the tail needs to be as simple to buy, and as simple to report as it is to report on the top 10 sites - that takes a lot of data and a lot of analytics. Right now the tail is wagging independent of the dog.

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