By Centro Team Jun 14 2012 Blog

Thriving in a Data-Driven Marketplace

The Internet has changed publishing forever—not just how people consume information, but also how marketers reach those consumers. Marketers can now build cross-web consumer profiles across sites and devices. And they can target those consumers on interests, purchases, actions, and inferred or explicit demographic details without the publisher ever being involved. For the first time ever, it’s not unreasonable to expect the marketer to understand a site’s audience better than the publisher. This creates a fundamental shift in the sales dynamic for most traditional web publishers and poses a serious threat to those publishers’ ability to profitably monetize the content and audience assets they have invested so heavily in to build.

Have no doubt, though, that content is still king. It is content that gives users a reason to log on to the web to begin with. Further, specific consumer content affinities identify all those die hard NFL fans or suburban commuters or urban renters or soccer moms, insights coveted by marketers and agencies. And finally, premium or differentiated environments will always be in high demand. The clean, well-lit environment still has value, as does the deeper, more personal relationship an audience has with a particular publication. In these cases, the content itself may inform consumer interest, but the contextual environment serves to amplify a marketer’s message and introduces the opportunity for a more meaningful consumer connection. Content and context will always matter. Period.

Just a few years ago, that fact left publishers with a lot of room to monetize. The user’s content affinity was valuable enough to sell premium advertising packages. But, things have changed. Today, many marketers are collecting valuable audience and site data with every publisher impression they buy, leading to a lower reliance on those same publishers with the next campaign. See this must-watch video for a rare moment of candor from an agency executive about how that game is played. They are putting that data to work buying cheap media via RTB-enabled networks and exchanges, reaching their audiences for pennies on the dollar. According to a recent IDC report, RTB will represent 15% of the US display market in 2012, and more than 25% by 2015. That’s one-in-four ad dollars, off the table.

There are important offensive and defensive moves to be made in response. First things first, though, one must shore up the defenses. The simplest best practice approach includes: actively monitoring data leakage across web pages and auditing the data practices of particular advertisers, agencies, and partners; developing refined T&Cs that define acceptable data collection types and thresholds; and getting more explicit about the value of audience assets by taking action when folks aren’t playing by the rules.

Moving forward, those publishers that thrive will be the ones that successfully refine their product strategy, building on considerable content assets and deep consumer relationships to deliver audience-aware offerings. It’s no coincidence that just two audience-aware (Facebook) and data-driven (Google) media sellers now fully command a third of the US display market (eMarketer, Feb 2012). The publishers that win in the long run will be those that successfully seek market demand for all-things-audience while playing to their own unique first-party publisher strengths.