Mobtown Labs

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So last week I attended the Admeld RTB conference along with a lot of former co-workers who have gone on to many different segments of the industry.  It was good to catch up with old friends and also good to see what a lot of exciting startups are doing in the space.

The ad network space is evolving and what used to be contained in one company or one ‘stack’ is now being unbundled and the innovation that is going on on each level of the stack are opening up a world of debate and excitement.

This is maybe my current best guess as to what the stack looks like right now:

Publisher -> SSP -> Data Segmentation Engine/Provider -> DSP -> Agency -> Advertiser

This could probably look a thousand different ways and there are many different types of each  and larger media companies and agencies are bundling some of these pieces together but at the end of the day there are 4 value components that technology can benefit.  For those marketing majors, you can think of this as the 4 P’s of display advertising.

• The Media - content in which everything shows up on
• The Data - attributes of the site, content, user, history, frequency
• The Ad - the actual piece of creative
• The Sale - the product being sold to the consumer, how much it’s worth, how much the advertiser can afford to pay to achieve the sale of their product or the brand value and equity of that product.

At the end of the day this stack right now is most focused on trading of The Data and The Media.  Why is that?  Well because there is more money to be made in an efficient, scalable manner on trading media and data than on any other piece of the marketing mix.

The ability to show up on the right piece of media is the pinnacle of importance and the power of The Media!  That’s why media companies are worth billions of dollars.  If you can’t reach consumers and have your product show up to them…..you could have the best data in the world, the best ad in the world, and the best product but if you can’t get it in front of the consumer’s face, all is lost.  And it’s massivly scalable.  The more we make the more consumers consume and the more ads we can show.

Next in line I think is The Data.  Showing up is the most important thing but showing up to the wrong user is a waste of money.  So having data attributes on that user is probably the next most valuable thing…….at least that’s what we think right now because data can be sold in a scalable manner like media.  The scale here is more limited than media as there are only so many users and the only way to scale is to further segement those users and increase the value as the segment gets more granular.

The Ad is a place where the advertising industry has placed a lot of value in the past with high priced creative consultants and creative agencies but this has taken a back seat in the online space.  It could be argued that the industry is peaking it’s interest with the acquisition by Google of Teracent and the current buzz in the industry of companies like Dapper and Tumri.  But the creative and the ad itself cannot be scaled as easily as media or data.

Finally there is The Sale.  The Advertiser or the CMO, or the agency still really owns this process which limits scale value and innovation in the space.  Only with Landing Page Optimization and deals like Accenture/Adchemy to really understand The Sale side of the equation and plug that back into the rest of the online marketing mix can you use technology to improve this piece of the equation….at least so far.

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Previously I wrote about adservers touching on Full Service options and open source options on the publisher side.

One trend I would like to highlight is manipulating Adserver arrangements to put together a Demand Side Optimization Platform (DSP).  This seems to be a trend with smaller networks setting up “private networks”.

An interesting way I’m seeing this done is by using both an advertiser and publisher Adserver solution in tandem.  For example taking an application of DFA for the Agency planning tools and matching it with an application of DFP with Adapt.  Adapt is Dart’s solution for optimization to offer cpa pricing but if it’s only used for inventory sources for one advertiser it can be manipulated to be a performance buying platform.  I’m not sure exactly how this is set up and what DART’s fees are for this (whether they charge you for both solutions and double dip on CPM’s) but Collective Media used to source Dart Adapt on their website (which they now call their proprietary AMP).

That said, I don’t think might be a sound solution for an agency trying to set up their own DSP platform without hiring on a technology department.  Not sure what the costs are and how much you could customize it either.

Image by scubadive67 via Flickr

Recently had a back and forth on Twitter with Andy Monfried, CEO of Lotame as he made the prediction that 2010 will be the year that social media comes of age for advertising.

@btomasette:

@andymonfried:

2010 will be the year that we go from “time telling” about social media to “CLOCK BUILDING” about it’s uses and ways for companies2use data

agreed but I think it’s also the year where advertisers get away from the banner and embrace real-time media buying

I think there is a lot to be said about this and the trick is to think beyond the cookie.  Right now I think too many ad networks and publishers are relying on cookies when there is an army of content creators (bloggers and editors) who know their users and already have a process in place to connect with companies to create content around them.  This is called PR.  A company does a press release, pitches the story to writers and writers choose to pick it up or not.  Right now this process is completely separate from advertising which is banners and month long media buys and year long media plans.

The problem is social media is becoming more and more real-time so PR and advertising have an opportunity to merge.  Advertising buying and planning need to adapt to this and technology needs to make it easy.

Once this happens and you merge PR and Advertising services like Gnip and Lotame and Google Search trends will be able to be put in the hands of the content creator and advertiser and we will be able to function beyond the cookie and beyond the banner.

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