Making Big Data Real

But the market is about to be forced to organize by the vendors offering distinctive services that solve business problems for publishers and marketers, and by strategic investors seeking to create a more efficient marketplace. This author, an authority on trends and developments in digital marketing, describes the forces and the companies setting

Much of the business world is consumed by and swimming in Big Data. Were you a casual observer you might even say that the majority of companies are now drowning in data. A considerable proportion of insiders in industries as diverse as financial services, mobile telephony and digital publishing has little to no idea which data are valuable or how to deploy them. The truth is in this in confusing world, where new vendors are popping up every day and there are few standards for measuring performance and return on investment, many marketers and proportionally more publishers are avoiding taking on the challenge of Big Data altogether.

The purpose of this article is to present a broad brush on the state of ad tech – broadly defined as technology-, math- and data-enabled marketing services – an admittedly complex marketplace, but one that can make the challenge of taking on the Big Data challenge less formidable. Another purpose is to highlight the business models and strategies of four leading companies from quite different walks of life – in terms of how they serve clients and the business models they employ – that are helping to reduce the complexity of big data by presenting cohesive and integrated enterprise solutions for marketers and publishers.

Whose data is it anyway?

Given what we know, or don’t know, about audience and media fragmentation, the reality – for those serving the Big Data market for marketers and publishers — is that real data, effectively deployed and interpreted, make for real insight.

Few marketing department leaders are sufficiently numerate to know which data are useful and how best to deploy data, as well as the supporting math to understand the value they are creating or destroying for their shareholders. This unacceptable state of affairs prevails inside big marketers like retailers, consumer packaged goods companies and financial services companies. It also applies to traditional and digitally native publishers who are seeking to “own” their readers, listeners and viewers by better understanding what the data about their behaviors, intent and loyalty are trying to tell them. Finally, the imperative to understand the data and to do the math especially goes for advertising agencies and other intermediaries (such as by type of business), the many that are clinging to any perch they can as their business continues to decline.

Ad agencies in particular have much to loose, since there are few barriers to entry for vendors offering significant reach and scale, and that are seeking to control specific links of the industry’s value chain (see the four examples below). Gone are the simpler but inherently conflicted days when agency clients were able to rely on the same agency to spend their money and then tell them the results they created. Now, leading marketers[i] use between five and ten data, math and tech vendors, none of which is an agency holding-company subsidiary.

Agencies have always behaved as if their clients’ customer data were their own. But marketers nowadays are increasingly viewing data as an asset – to be owned, mined and leveraged to maintain an edge in serving certain core audiences. For marketers, publishers and ad agencies, the legal ownership of the data or right to access them is the ultimate form of control over how, when, where and why an audience is engaged. Since many marketers, and even more publishers, would prefer to outsource the complicated work of audience management, ownership is the missing link in a lot of audience data-management strategies at the moment.

Big Data: A crowded market

The data-ownership issue frames the current status quo among ad tech vendors: there are just a few players – first, second- and third-party data[ii] providers and integrators, as they are known – that matter. So they can bob and weave with their clients’ emerging needs, each has a strong entrepreneurial bend. Each member of this short list also knows how to take a disorganized corner of a growing market and make a real company out of the opportunity.

The many vendors who provide services to marketers, publishers, and their supply chain intermediaries form what is loosely called the digital advertising marketplace[iii]. Current estimates value this market at just under $60-billion for 2012. With such a bounty, it’s no surprise that there are as many vendors as there are. Terry Kawaja, founder of Luma Partners in the San Francisco Bay area, has identified several clusters of vendors. (Please see the footnoted link to a series of visual depictions of the display, video, social, mobile, gaming and commerce marketplaces).

That there are dozens if not hundreds of these vendors — virtually all of them with venture backing — has created a malaise for their industry, clients and for the state of Big Data as a decision-making tool. This presents a quandary for entrepreneurs looking to enter the market with their next great algorithm, data integration tool or attribution (what happened when money was invested) insight. The same goes for the potential investors that are seeking to organize the marketplace by rolling up a few of the most differentiated and successful vendors to present a more integrated and cohesive offering to publishers and marketers.