Media Arbitrage Reaches the Large Intestine
June 11, 2010 § Leave a comment
I missed the Rubicon event in New York yesterday that featured a panel of experts bravely wading into the media question of our day, “Is All Inventory Created Equal?” Fortunately, a colleague was there to take notes, which she shared this morning. From her recounting, I can barely stand the fact I wasn’t there.
There was a survey in advance about DSPs: good or bad for publishers? Befitting the industry, the results were rigorously risk averse: 49% said maybe. Love that. But some credit should go to the 21% who answered DSPs are “Great” for publishers, and the 29% who said, “Great for advertisers, but not publishers.”
There was no such ambivalence with regards to transparency: 70% of respondents to the pre-event survey agreed that adequate transparency into web sites on a media plan does not exist today. That’s a shame, because 64% of respondents believed high quality content adds value to advertisers and another 24% believed context mattered to advertisers regardless of whether it’s published by a brand-media company or not.
What a pickle.
The data portion of the program behind them, panelists waded into the content. The ball appears to have gone back and forth across the net a few times between Jason Kelly, beleaguered defender of content, and the DSPers, Sean Kegleman and Marta Martinez, advocates of the Data Age. Data yes, content no. Content yes, data no. Data yes, content no. Content yes, data no.
Two themes reportedly emerged, and they are the important ones:
Theme 1: There is a lack of trust among all players in the industry;
Theme 2: Ad networks = outsourced media buying. But, today, there is a new source of media aggregation; ergo, ad network services are no longer required.
Ergo, agencies and their DSP proxies are the new ad networks.
The Rubicon panel revealed that the classic ad network model is moving through the industry value chain to its inevitable release into the atmosphere where it will be returned to the earth from which it came. As it goes (wherever it goes), it continues to breed mistrust. This is clear. But, mercifully, we should expect the pace of its escape through our system to accelerate now that it is in closer proximity to the client’s business because all customers desire transparency, including agency customers. The purge will be hastened by the forces of the macro-environment, notably IPG’s MagnaGlobal forecast this week that online ad spending will reach $100 billion, globally, by 2015. It is a dose of the supply side. Market medicine.
Of course, at $100 billion ad agencies will be utterly overwhelmed by the media economy unless we race to their rescue with new compensation models. In this space, the proposal has been made repeatedly to restore 15% ad agency compensation. Backwards as it may seem to lead us, it is unquestionably baked into the brave new world thanks to the arbitrage model agencies are confiscating from ad networks. Have the markets finally spoken as to the cost of media planning?
Until then, I’m anticipating the (inevitable) next panel in the series of media and brand value discussions titled, “Is All Soap Created Equal?” This one is to reportedly be sponsored by Google.