The online ad industry is experiencing a seismic shift when it comes to who controls the decision-making and allocation of ad impressions. Brands that leverage technology for programmatic buying have gained the ability to activate audiences across multiple campaigns. If these brands find a single user within multiple segments and multiple campaigns, they can discern which campaign is the best option for that particular user.
Deciding to bid on an impression is a great first step, but this — controlling the allocation of that impression across multiple campaigns — is where programmatic gets interesting. This level of specificity is only possible when the brand controls both the decision to buy and the ability to allocate the impression.
Unfortunately, a power grab by some of the Internet’s biggest media companies is making this kind of control harder to come by. At the end of this year, YouTube will lock away inventory behind its walled garden, removing it from open exchanges just as Facebook did not so long ago. This larger change is an effort by online gatekeepers to control more revenue, data and – most importantly – decision-making power. For advertisers, this is a losing battle, one they need to fight now if they want to maintain control of their advertising decisions as the addressable media market expands beyond the Internet.
Advertisers should seek to control not only whether they buy an ad impression but also which campaign is assigned the impression and the most efficient value for that impression, based on a holistic view of all campaigns running. This level of control is only possible when the technology is working solely on behalf of the advertiser’s interest. It is made all the more effective when the advertiser’s first-party data informs the decision-making.
The recent moves by YouTube parent Google and the other “walled gardens” go against this logic. Buying within these environments requires the advertiser to cede control of the decision-making mechanism to the walled garden itself. The gatekeeper in turn demands that advertisers pass along valuable first-party data and strategic bid price information, allowing these inventory holders to ingest and leverage that data so they can decide which impression is awarded to a campaign.
In this scenario, advertisers are entrusting the gatekeeper to make the best decision for them, which prevents the marketers from delivering bespoke consumer experiences across all channels and touch points. As more of these walled-off digital ecosystems appear, advertisers will cede further control over the ways in which consumers interact with their brands.
These gatekeepers are also compromised by conflicts of interest. They must serve the needs of multiple advertisers buying within their walled gardens, the publishers they partner with, and their own media interests. How are these three masters’ interests prioritized? The media company ultimately holds final decision-making power, commanding revenue, removing control from the advertiser, and competing for revenues with the publishers they represent.
This battle for share of wallet and the competitive risks between these operators has the potential to unwind the years of progress and investment that marketers have made in understanding who their customers are and delivering relevant customer experiences to those customers online.
Google and Facebook, while quite large, can’t address all media, nor will they ever. Advertisers need to protect themselves from becoming causalities in this unwinnable war, as traditional media, especially TV, become addressable.
That medium, TV, is the ultimate game changer for data-driven ad buying. When advertisers can apply their first-party consumer data to buy TV time on an impression-by-impression basis, they’ll want all the data and decision-making power they can get their hands on. At that point, the current online gatekeepers will represent a small portion of the available addressable inventory. For advertisers, the world of data-powered ad buying is about to open up even more. It’s important to maintain control to better prepare for the future.
Mike Peralta is CEO of AudienceScience.