Dec 27, 2006

Advertising = Data

Scott Karp wrote last week that innovations in online advertising could dethrone the page view as the metric of choice. Jarvis picks up on it today, from a different angle.

This followed up on a
post Karp wrote back in September about the middle -- and large -- area of online advertising that is in-between, so to speak, branding and direct response, where, he writes:

"Traditional approaches to advertising, rooted in TV and print, still hold sway over branding. And search clear dominates direct response. Whoever can figure out a new value proposition for the fuzzy middle will be able to take a big slice of the pie — and possibly even growth the pie, as search did."

I believe the huge opportunity -- the fuzzy middle Karp refers to -- is one with the absence of brand or direct response labels, and instead is a market focused on data or analytics. In other words, the advertiser intent or motivation (reach, response, etc.) becomes much less important, at least in terms of the publisher side of the equation. What increases in importance is the data provided to the advertiser. The middle opportunity can, in my opinion, be captured by providing rich, detailed and new levels of analytics. An advertiser may only care about reach, or unique users, for some campaigns, but for others might wants levels of segmentation that heretofore don't exist (but are being developed).

In other words, all that matters is data, and making that data relevant and actionable (and visible) (and even share-able).

Then, concepts like branding, DR or even page views fade in importance because an advertiser can take a data set (provided by a publisher, a network or a third party provider), analyze that data, mesh it with strategic or tactical objectives, and make an ad decision. I see alot of similarities here to the direct marketing industry which is data driven like this.

I am seeing much innovation coming from different areas in this regard. Lotame, a company I advise, is providing enhanced analytics, data and services for user generated content publishers and advertisers. Similarly, I have been impressed with what I have seen coming out of the AdBrite marketplace and the RightMedia exchange, to name just a few.

Old categories (brand, DR) miss the point, as I see it. Only one label matters -- data.


Andy said...

Andrew - Great insight, and 110% accurate.

It also happens to be the "publishers" or websites that are fastest to adapt to this evolution, will be the ones to win HUGE.

Great comments, keep the flow coming.

Love it,