Commentary

Signal's Mike Sands Looks To Data Cooperatives in 2016

Mike Sands is CEO of Signal, a marketing technology and data platform that helps marketers connect with their customers via their first-party data. As 2015 draws to a close, Sands shared seven predictions for 2016 with RTBlog.

1. Look For More Efficient Ads & Targeting to Drive Maximum ROI.

"As marketers squeeze the last drop of workflow efficiency out of programmatic and optimize their strategies to improve targeting efficiency in 2016, they’ll increase investment in known vs. unknown audiences.

"The last five years in the evolution of marketing have been about the rise of programmatic media, about buying large audiences for the lowest amount of money: essentially, an efficiency play.

"The next five years we’ll move from the rise of machines to focusing not only on the lowest possible price but more importantly, the best possible target. This is called people-based marketing, and it’s targeting audience segments all the way down to the individual customer.

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"Email today still has a higher conversion and click-through, but doesn’t have the reach and scale of other programmatic mass media, so the question is: how do we bring this to bear with scale?"

2. Marketers Will Get Serious About Closing The Mobile Gap.

"By the beginning of 2016, mobile ad spending in the U.S. will reach $42 billion, accounting for two-thirds of all digital ad spending.

"In 2016, we expect to see marketers get serious about addressing these data gaps by exploring new and different technology solutions for keeping up with increasingly connected customers. More marketers will implement server-based data technologies that use API connections and the cloud to collect customer data from all devices and touch points, enabling them to connect that data to a clear view of identity that can be acted on in real-time.

"Mobile has been very siloed up until now. You’re either marketing in a mobile or a desktop context, but it’s hard to tie behaviors in one channel to another unless you’re a Google or Facebook. We’re looking to close this gap by linking the behaviors occurring across channels.

3. The Limitations of Walled Gardens Will Continue to Force Advertisers and Publishers To Make Tough Choices.

"Digital publishers are feeling the pain. Their CPMs have declined in the face of industry fragmentation and the spread of programmatic buying, and they lack the technological sophistication of the walled gardens.

"The good news for publishers is that they’re increasing their scale by creating private marketplaces and can offer advertisers more value by building stores of authenticated user data.  

"As both advertisers and publishers have realized the limitations of walled gardens, 2016 is the year they will start thinking about ways to create more value outside of those walls, which may take cooperative efforts.

"Advertisers and agencies will look for and demand open alternatives to the walled gardens, getting data in and out so they can optimize. They will demand a free-flow of data.

"Tough choices: They’ll either have to give up control of their identify to the walled gardens in exchange to run campaigns there, or they’ll have to find viable alternatives to walled gardens. Most will do both! But they’re all concerned. Agencies and brands want to see more openness.

"Cooperative initiatives: The rise of second-party data is an important trend. The acquisition of Datalogix by Oracle was a good move. It’s a co-op with many contributors sharing second-party data.

"Our clients want to find ways to work with each other. I think marketers, agencies and publishers will eventually pool their data assets. The power of second-party data is built on a foundation of important first-party data."

4. With Ad Blocking As The New Normal, Advertisers Will Have To Get Smarter.

From our vantage point:

  • Publishers will seek to know more about their customers.
  • Publishers will have to get creative.
  • Advertising will get better.

Advertisers will start to police themselves (a little). Advertisers have to be responsible for some of the rise of ad blocking. No one will block great advertising.  Look in the mirror: Is ad-blocking a result of irrelevant advertising?

Consumers have some decisions to make, and the industry hasn’t made choices yet. Will this result in pay walls at every publisher? Pay or see ads? I don’t know today, but when blocking rises above the noise, I wonder what will happen.

5. The Race For Data Will Drive Bigger and Bigger Acquisitions.

"In 2016, giants Google, Facebook, Apple, Yahoo, Verizon and Twitter will continue to expand through acquisitions. There are a number of factors fueling these acquisitions (including preventing competitors from gaining access to innovative technology and patents), but none is more potent than the race for data.

"Why is the data race heating up now? Because the giants are preparing for the day that cookies are no longer a useful way of reaching customers. In some ways, that moment is already here, as consumers spend more and more of their time in cookie-less mobile environments."

 6. The Realization of First-Party Data Will Create Demand For Data-Driven Leaders.

"In 2016, the first-party data revolution will be in full swing, and a new breed of data-driven leaders will emerge to help businesses leverage that data in order to drive more value across the enterprise. The companies that win in 2016 and beyond will be those that designate a strategic, data-minded executive to lead the organization into the data-driven future.

"Marketers and publishers are waking up to the fact that the most valuable data is their own first-party data. The question is: how do they unlock the potential of that data?"

 7. Relevance Will Be Rewarded: Coalition Loyalty Programs Will Thrive.

"In 2016, more U.S. companies will embrace the idea of collaboration through coalition loyalty programs. The advantages are becoming clear: not only can companies gain new customers and increased spend, but they can also gain solid customer intelligence.

"Cooperative marketing: It’s two first parties getting together and sharing insights, cooperating and marketing together.  Cooperative marketing in the context of a grocery store or retailer already exists, but brand marketers don’t really see that. But there’s so much potential in cooperation -- how could that not work back upstream into the context of cooperative data sharing, targeting at the brand level?"

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