Richard Sharp is managing director at ValueClick Media UK
Fifteen to twenty years ago, the concept of an ad network was about as new as it gets. Ad networks arrived about the same time or just before Google emerged and began to commercialise search.
By understanding how audiences moved across networks of publisher inventory and providing brands with an easy way to reach huge numbers of eye balls efficiently online, ad networks were to become hot property and grew into global entities. Google even felt the need to buy one.
But the second decade of digital display history has seen rapid and radical change in the online advertising industry. A wave of innovations in the form of real-time bidding, agency owned exchanges, demand side platforms, supplier side platforms, the concept of big data optimisation, attribution modelling and mobile integration, have transformed online display.
These trends have shifted the focus for all parties from media buy to audience buy, to audience buy plus. The plus bit is the optimisation of advertising performance through smart analysis of reams of behavioural data and will ultimately join the dots between behaviour on and off-line.
So running across all the trends and innovations we’ve seen in the past few years is nothing short of a technology arms race; a race to offer brands the most relevant, most exclusive audiences and optimise campaigns to the maximum.
These changes have also meant that the traditional role of suppliers in this space is changing. Technology is disrupting relationships between the advertiser, agencies and media owners. Their roles have become blurred and anyone familiar with the Lumascape charts, famous in the ad tech sector, will know that there are not just 50 shades of grey when it comes to suppliers, but hundreds.
Ad networks have in effect become more like agencies and agencies are themselves destined to become technology suppliers. Old concepts such as the media plan are starting to seem a little dusty in the context of programmatic buying and real-time campaign optimisation.
Media agencies currently need to strike a balance between analogue media planning and buying and dovetailing that with expertise and technology capability that will enable them to deliver effective strategies online. They are looking at whether they should outsource their technology, buy in capability or develop their own. Either way evolution is a necessity because without the right kit and if they fail to keep pace with a market that is seeing massive innovation fed by buckets of venture capital money, clients will begin to question their role.
The agency model is in even further crisis; the objective positioning and neutral stance that agencies once traded off is no longer viable given their relationship with group trading desks. The conflict between ‘media neutral’ buying, whilst in effect also being a media owner, is a positioning agencies are struggling with. No doubt a solution will be on the horizon and the agency model is certainly not dead, but it is in transition.
There are other challenges facing ad networks. Simply aggregating media and delivering audiences is not enough. Ad networks have morphed too as they’ve invested in data analysis and optimisation technologies mixed with the delivery of premium behavioural audience data not available on the open market. This means they are able to offer a far deeper level of service to brands direct and continue to work closely with agencies.
It’s now common for ad networks to buy audiences through exchanges and direct from premium publishers and blend in their own audience optimisation services. It’s the insight and implementation of audience data, executing and buying media that truly delivers incremental growth which ad networks must now deliver.
To add further to the complexity of digital marketing relationships, look no further than News UK setting up its own global ad exchange to handle both online and mobile for its premium brands.
So are ad networks in effect a new kind of agency? Are agencies becoming like media owners? Can media owners add value in new and innovative ways?
Rather like the Borg in Star Trek, digital media will eventually assimilate virtually all media and brand advertising. So over the next decade or so, we’ll almost certainly see online display, direct and social media campaigns flowing freely from desktop to mobile, to TV, to out-of –home etc.
In the future, suppliers will have multiple identities accumulated over the years. Brand marketers will need to think beyond old-fashioned categories and look very closely at the technology on offer instead.