PubMatic’s move to create a marketplace for publishers to partner and collaborate on their own re-aggregated audience-selling represents another surprising, yet inevitable, development in Madison Avenue’s exchange-based media marketplace. My only question is: When will the buy-side capitulate?
By that, I mean when will someone -- maybe a demand-side platform (DSP), or an independent agency trading desk, or some other as-yet-uncoined ad technology acronym -- create an exchange for brands to pool and collaborate on their own audience networks? Sound strange? It shouldn’t. I mean, who could have foreseen the myriad of relationships, configurations and machinations of the current exchange-based advertising marketplace? So why not imagine where it could go next?
In truth, there already are forms of advertiser-generated audience networks. But so far, those are relegated to situations where advertisers utilize the inherent audience reach, or at least the audience targeting data, of other advertisers. That’s what big commerce portals like eBay and Amazon.com have begun cultivating, as well as third-parties such as OwnerIQ that create ad-hoc ad networks leveraging one marketer's (usually a retailer or commerce company’s) audience on behalf of brand marketers looking to reach users who have already expressed their intent as being in-market for some product or service.
That’s a great first step, and I expect to see that marketplace accelerate over time, but as PubMatic’s new PubConnect beta demonstrates, there are some interestingly strange bedfellows in the exchange-based audience aggregation world. So why not an exchange that enables marketers to team up directly to form their own ad nets and consortia? I mean, if publishers can do it, why not brands?
Yeah, I know what you’re thinking. Nuts, right? For one thing, why would brands that compete for consumer attention partner with each other? Aside from the fact that publishers -- who also compete for consumer attention -- are now doing that, I can think of some other good reasons.
For one thing, advertisers already participate in platforms that manage the audiences for other advertisers, whether they like it or not. They’re called “advertising agencies” or “trading desks,” and while it's a general rule of thumb that they maintain firewalls and don’t leverage one client on behalf of another, we all know that’s not completely true.
In fact, there are some trading desks, including the biggest -- GroupM’s Xaxis -- that are public about leveraging clients’ audience-buys on behalf of another third-party, Xaxis itself. The trading desk publicly acknowledges making a market off its clients’ trades by arbitraging their deals and pocketing the difference. If an agency/trading desk can do that for themselves, why can’t someone create a platform that enables marketers to leverage their own audience-buying clout in ways that form new kinds of relationships, markets and business models based on some common objectives?
Companies like OwnerIQ have already demonstrated that can work in traditionally collaborative ways -- like retailer/brand marketer situations. Why not others? Maybe brands could organize networks around complementary offers, messages, or simple lifestyle compatibility. Who knows what could happen, or in what ways brands could come together around audiences?
Think about it.