Commentary

Brands Taking Ownership Of Data And Tech Changing The Marketplace

The similarities between the programmatic ad marketplace and Wall Street have been detailed several times before, and the analogy arose again yesterday during AOL’s mini conference on the state of programmatic and where it believes the market is headed in 2015.

AOL used the analogy to show how automation “disrupted” stock trading, contending that the process took 1-2 weeks before automation and just 1-2 minutes after. The digital ad market was impacted in a similar manner.

The presentation was for the most part an overview of the programmatic marketplace, including the good (speed, scalability, workflow automation) and the bad (quality, technology tax).

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AOL then spelled out its five predictions for 2015, including the prediction that “forward-thinking brands will insist on data ownership” next year. This is an interesting prediction because the case could be made that this already happened in 2014 -- something that had a material impact in the marketplace.

AOL cited its own research from earlier this year noting that 50% of brands are using their own data management platform (DMP), supporting the notion that the “ownership of data” trend is already well underway. The World Federation of Advertisers (WFA) reported earlier this year that nearly 60% of advertisers currently take ownership of data generated via programmatic, compared to 33% in 2013.

In fact, 2014 saw brands take more ownership of multiple aspects of digital advertising. The programmatic “in-house trend” debate was born as brands began asking tough questions. We even saw brands turning away from agency trading desks in favor of in-house teams and independents.

The programmatic benefits of owning one’s own data aside, brands may be looking to get more hands-on for a much more human reason: peace of mind.

The fascinating reality is that although nearly every brand is using or plans to use programmatic advertising in the near future, few trust it. Becoming more hands on with technology and data gives brands a firsthand look at the underpinnings of programmatic advertising.

However, as we saw in 2014 with the “in-house trend,” the increased scrutiny that brands are bringing to the programmatic ecosystem is not about trusting what’s already there, but finding what they trust. This was never more evident than when GroupM announced it would pull out of the open ad exchanges due to quality concerns.

So if brands press on with taking more ownership of data and technology in 2015 -- something AOL predicts -- the marketplace will continue to evolve as brands find what works and what they trust. We’ll save that for the next batch of 2015 predictions.

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