When Data Trumps Content
Last week AdAge reported that Google has big plans for a data-exchange. This was seriously important news but two things conspired to bury it. First, there was all the Google+ hype and second, it was story about data.
I know – data? Snore. New accounting rules make for more compelling reading.
But the biggest digital advertising story you have never heard is data. Never mind mobile. Never mind video and real-time bidding. Gathering info about you as a consumer and finding ways to use that info, across different media, is the future of advertising. Everything else is just details.
From the beginning, the Web promised advertisers a utopia where they could show the right ads to exactly the right people. No more aggregated, generalized audiences, they could target individuals.
But digital advertising still does not differ significantly from the way Don Draper did business. Despite oceans of data being available, targeting and segmentation are still based on the media, not the user.
One problem is that data and content are both very fragmented. Publishers know about your habits on their site but little about your media habits as a whole.
Companies like BlueKai or AudienceScience attempt to address this by providing aggregated user surfing data.
This third party data presents an interesting challenge for content creators and publishers.
In the old days, you bought ads in GQ because you assumed readers of the magazine fit the segment you wanted. GQ got paid a premium because they aggregated that audience.
But third party data allows advertsiers to slice out audiences from different pools of traffic. Information gathered about users’ web habits, search history, their gender etc. can be used to make assumptions about the kind of ads to serve, carving out a segment independent of the publishers audience.
“Thanks New York Times but I will go find my own users on your website.”
If advertisers feel they need these data suppliers to truly aggregate the audience they want, this begs the question:
What value do publishers bring beyond raw ad impressions?
Of course the assumption is that all the data and attendant blackbox targeting actually works.
But assuming it does work as advertised – no one should be paying premium to be on a particular site.
If publishers were doing their job – cultivating audience instead of generating impressions – there would not be a serious market for third party data. But as the business is developing right now, the value of content is in danger.
Which brings us back to Google’s data-exchange. The report is they are working on a market where publishers and third-party data would be combined centrally. Advertisers could buy desired segments from a rich data set, hop on an ad exchange and bid on inventory, never considering an individual publisher’s content.
Google has already woven itself into the online advertising ecosystem in an unprecedented way: search, display, adserving, ad management etc. Becoming the arbiter of audience would be the last step in making their advertising Death Star fully operational.
Occasional contributor, Josh Mortensen first appeared on the Web in 2002, writing for Salon.com.
A version of this post first appeared in The Hippo Files.
