Marketing Evolution — Increasingly Complex Simplifications

The evolution of marketing is fascinating and becoming increasingly complex (and also simpler at the same time) in the digital world. I am amazed by the journey.

BD (Before Digital)

In the ‘olden days’ of print, TV and radio it was simple — a company wanted to sell a product so they made a contract with a media outlet and advertising began. When publishers first began their exodus from print media towards digital, they started looking for new ways to generate revenue. The most intuitive revenue model was the one they had already been using in print — advertising. Display advertising came about to replicate printed ads in the online world and enable website monetisation, which is the bread and butter of digital media today.

Conversely, advertisers were looking for relevant publisher websites which could display ads to their target audience.

Digital

In today’s modern, tech-filled world, data is what drives most aspects of digital media. To compete in the marketplace, organisations need to put customers first and make customer experience(CX) the factor that sets a company apart from its competitors. To put customers first and give them what they want, one needs to first understand how to gather data from many touch points along their customer journey and use this information to determine how to make the customer’s experience even better.

Platforms

Many organizations look to Data Management Platforms (DMPs) and Customer Data Platforms (CDPs) as ways to manage all of their customer’s information being gathered. With this data, companies are then able to use Demand-Side Platforms (DSPs) to buy appropriate forms of advertising, such as display, video, and search ads. A supply side platform (SSP) might also be used by publishers to manage, sell and optimize available inventory.

Here is a longer description of each platform:

Customer Data Platform (CDP) is defined by the CDP Institute as “packaged software that creates a persistent, unified customer database that is accessible to other systems”. It is bought and controlled by business users, most often in marketing distinguishing it from a data warehouse or data lake which is usually custom-built by the corporate IT department. The CDP creates a comprehensive view of each customer by capturing data from multiple systems, linking information related to the same customer, and storing the information to track behavior over time. The CDP contains personal identifiers. Examples include Segment, Tealium, Arm Treasure Data.

Demand Side platform (DSP) is a real-time bidding system that connects media buyers with data exchanges and supply-side platforms (SSPs) through a single interface. DSPs serve as the middleman between media buyers and publishers, providing a repository through which they can buy and sell ad inventory. Examples include: Google Ads, Matomy Media Group, Double-click Bid Manager

Data Management Platform (DMP) is a unified and centralized technology platform used for collecting, organizing, and activating large sets of data from disparate sources. Data management platforms have risen to the forefront of media and advertising on both the buy-side and sell-side, as a result of an increasing focus on the analysis and targeting of audiences across multiple platforms, devices and media channels. The DMP is built on five interconnected pillars: collection, unification, organization, activation, and analytics. Examples include Liveramp, Oracle Data Cloud, Google Audience center.

Types of Data

In marketing the two primary types of data available are known as ‘first-party’ and ‘third-party’. First-party data refers to the company’s own data that they have collected from their own consumers and/or brand. Third-party data is information that’s collected by an entity that doesn’t have a direct relationship with customers. Data unification may be done in-house by the IT Dept, by a DMP or by an independent company like Fastbase which has an experienced team of big data experts using specialised techniques to collect freely available data and then consolidate it. A DMP should certainly have the ability to unify all different types of data within their one platform: first-, second-, and third-party:

• First-party data: Refers to a brand or publishers own data that they have collected from their own consumers and/or brand advocated. This can include data from a website, CRM, social, search, display, analytics, or any other source of data they own. Because first-party data is gathered directly from the source (i.e. gather it from site visitors), it is high-quality and valuable.
• Second-party data: Leading DMPs also allow second-party data sharing among selected partners, which are unique and bespoke data assets derived directly from an external source, including a publisher, a separate entity within your own business or an independent partner. Second-party data is someone else’s first-party data that you are accessing directly from the source rather than via an exchange.
• Third-party data: Directly inside the DMP there should be direct access to a range of third-party data providers and prepackaged data segments. Clients can use this data to build new, larger audiences and to understand what actions and behaviors consumers are exhibiting across the wider internet, for an even more holistic view of their target customer.

Being able to use first and third-party data effectively can help an organization deliver next-level CX and that should be part of the company’s comprehensive data strategy.

Programmatic Buying

When real-time bidding (RTB) was introduced in the late 2000s, network optimizers morphed into a new type of advertising technology (AdTech) platform, which we know today as supply-side platforms (SSPs). An SSP is an AdTech platform used by publishers to manage, sell and optimize available inventory (aka ad space) on their websites and mobile apps in an automated and efficient way. By using an SSP, publishers can show display, video and native ads to their visitors, and monetize their websites and apps.

The additional complexity is the shift to programmatic buying. Although this does also make the process simpler because it is programmatic and therefore quicker and less-costly as there are virtually no staff costs.These are the ways of purchasing advertising:

Programmatic Guaranteed

• Negotiated directly between seller and buyer
• automated RFP, campaign trafficking, reserving of inventory
• Reserved, Fixed Pricing, One-One pub/advertiser relationship

Private Marketplace (PMP)

• Pre-negotiated fixed pricing (CPM, CPC, etc.)
• Within exchange environment, ‘first-look’ at audience segment
• Unreserved, Fixed Pricing, One-One relationship

Private Exchange

• Participation restricted to select buyers/advertisers, deal ID
• Auction based, requires bidding
• Unreserved, Auction, One-Few pub/advertiser relationship

Open Auction

• All buyers and sellers can participate, no direct relationships
• Can block advertisers, set price floors
• unreserved, Auction, One-all relationship

The future of advertising is transitioning towards programmatic advertising. It will be the automated process by which artificial intelligence (AI) makes decisions on ad placement using real-time bidding (RTB) across several channels such as online, mobile, TV and social media.

So as the industry progresses, media buying will become more efficient and advertising will become more targeted. A company will be able to easily reach its target consumers while saving time and money.