DIGITAL MARKETING HUB v2.0 - AdExchanger

Digital Marketing Hub v2.0
BMO Capital Markets
Private Exchanges
In aiming to maintain control over “second channel” ad pricing, private exchanges have
become common in the past 18-24 months. These are exclusive marketplaces where a single
website publisher (or group of publishers, e.g., Disney/ESPN family of websites) can sell
its non-guaranteed inventory directly to buyers, including agencies/ATDs and DSPs. Private
exchanges allow publishers to select and exclude certain buyers and set price floors for its inventory.
At times, access to newly created private exchanges has required buyers to guarantee
that they will spend more with the publisher in the following year.
Tools to manage “direct buys” are increasingly being integrated into each of DSPs,
ATDs, SSPs, and private exchanges. For example, independent DSPs and SSPs have recently
begun connecting select pre-approved buyers and sellers, creating smaller, more controlled
marketplaces that still take advantage of programmatic and real-time bidding technology.
The point, as always, is that these business models are constantly overlapping and shapeshifting
as innovation continues apace.
Data Management Platforms (DMP)
Up until now, we’ve mostly been describing these the Web 2.0 ad tech business models
as being based around media/impressions; but in IP advertising ecosystem, data can be
viewed as a separate asset/input altogether. Each impression generates multiple types of
data (IP address, browser type, etc.), in a sense making it a much larger potential “marketplace.”
In this sense, modern digital advertising data finds its roots in business models like direct
mailing list vendors.
The term “data management platform” has been a popular one lately, but remains relatively
elusive to pin down. We first heard the term applied to start-ups like Bluekai, Exelate,
Lotame and TargusInfo (acquired by public Neustar) in recent years. These companies began
by creating massive caches of online usage data through cookies and then sold it to parties on
both the buy and sell-side of the ecosystem in order to help optimize ad buys and sales. Today
many of these companies also offer first-party data (see below) management tools and are increasingly
integrating intent and purchase data. From here, we’ve seen the term adopted by
more established players like Acxiom and Alliance Data’s Epsilon over the past six months.
These companies have long-established relationships hosting marketers’ first-party marketing
databases – including services to “cleanse” them and remove duplicates -- and then often layered
on (or appended) their own third-party data products. Moreover, other ad technology
companies that may normally be recognized as demand-side platforms, ad networks or other
terms have built their own proprietary “data management platforms.” No doubt, the business
model is in store for much more innovation and evolution in years to come.
The term data management platform (DMP) has come to describe companies that deliver
data via programmatic technology tools, in particular APIs. The source of the data
was primarily from cookies that the DMP would drop on users’ browsers. Often called and/or
branded as aggregators or exchanges, DMPs began to play the role of third party “fuel source”
for the Web 2.0 display advertising ecosystem. Because of the intimate connection between
media and data, DMP-like functionality is often found in DSPs, ad networks, and other business
models (another example of the always innovating and overlapping ecosystem).
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June 7, 2012