Today DMP, Tomorrow DAP

VIA MEDIAPOST

The recent Krux acquisition by Salesforce marks the latest consolidation in a crowded marketing technology landscape. As companies continue to try to build end-to-end marketing tech stacks that bring data together from across media channels and from every corner of the business, they have the opportunity to go from merely identifying potential consumers to turning them into loyal customers.

Data Management Platforms (DMPs) can play a central role in this shift. Instead of just serving as an information warehouse, the DMP of the future can become a learning platform that drives marketing and business decisions. Doing this requires a change in mindset and capabilities: from “Data Management Platform” to “DataActivation Platform,” a complete media activation engine that unifies three primary marketing inputs – Audience, Attribution and Ad data – to optimize marketing channels and outcomes.

The robust DAP of the future will be characterized by the following:

Moving from identity to action in real-time.

Right now, there’s too much data inefficiency and time lag between seeing relevant data and activating it. Post-campaign analysis can yield insights that might have improved campaign performance, but you often don’t see the information until it’s too late – or the analysis sits in a different system from where your campaigns are actually running, making it far from seamless to implement insights. To eliminate waste and improve ROI, the DAP needs to do the heavy lifting of integration and interoperability across planning, activation, measurement and analytics platforms. 

Cross-channel, dynamic optimization.

The typical use-case for a DMP is a one-way push from the DMP to partners. A DAP use-case would be dynamic and cyclical. In one direction, you still would have audience data pushed out to partners. Completing the cycle in the other direction, critical attribution—or action—data would return back to the DAP to inform effectiveness, automate optimization and lift performance.

This can in turn be dynamically analyzed to incorporate other inbound data streams (like site data, purchase data, creative results and other third-party data) to inform attribution and improve audience segmentation – insights that can be used across the organization.  

From ad targeting to business decisioning

Today’s DMP is used primarily for first-party data storage to inform ad targeting and delivery. The future DAP becomes an active “brain” driving marketing performance. Think of a DAP as a marketing hub that unifies and enables data, workflow and analytics to ensure marketing decisions are made correctly and swiftly.

The DAP represents the convergence of ad technology with marketing technology. Properly executed, a single DAP strategy will apply to both paid and owned activation channels.

The promise of a DAP is evident.  Here are some key steps to help brands make the shift from a Data Management Platform mindset to a Data Activation Platform approach to marketing:

Choose a DMP.   It’s impossible to be DAP-enabled without getting your data ready for syndication and targeting. Focus on addressable marketing channels first (e.g., digital, TV, email, etc.), then move to future data-driven opportunities.

Pick an Identity Management Provider.  In order to properly target and measure, you must be able to recognize the same consumer across multiple devices. Combine deterministic and probabilistic methodologies to maximize scale and accuracy.  The key is to reliably bridge Device ID and Cookie ID to enable multiple use cases – online and offline.

Centralize Your Data Providers.  Onboard and manage all first- and third-party data providers in a single DMP.  Here is where audience modeling should take place to engage likely customer prospects.  This is far less effective without first getting your Identity Management framework complete.

Select an Attribution Provider of Record. Now that you can identify and target audiences, let’s make sure you can properly attribute success by platform, screen or format. Your attribution provider of record can be your ad server, site analytics tool or specialized measurement partner, but the key is to standardize methodology and primary KPI to compare performance across channels.

Customize your DAP. Make sure your technology partners (DMP, DSP, Ad Server, Attribution Provider) embrace interoperability and can “talk” to your DAP; do an audit of partners and assess their API capabilities that enable read/write communication.  Here’s where you unify audience, activation and attribution, no matter how your ecosystem of partners change (which they will). If you don’t have in-house expertise or have not yet centralized your data, consider a programmatic or marketing technology consultant to help design the right DAP for your organization.

As consumer behavior becomes more complex, and access to audiences evolve, enterprises must embrace technology to gain control, transparency and accountability of their marketing investment. Following these key steps will put you on the path to having a DAP that activates all available data for optimal results.

Moneyball 2.0

Welcome to a world of multiple exchanges, complex algorithms, confusing jargon, aggressive middlemen, and tuned-out clients. Sound familiar? Well, it’s not ad tech. It’s Wall Street.

The eerie parallels between today’s Wall Street and the increasingly automated world of advertising are unmistakable in Michael Lewis’ new book, “Flash Boys.”  (Lewis has shed indirect light on our industry before with his 2003 book “Moneyball,” which became the the hero narrative for quants.)

In “Flash Boys”  a group of entrepreneurs take on the big banks and high-frequency trading firms, because those players are using opaque private stock exchanges to rip off unsuspecting clients.

This contemporary high-tech Wall Street is, on the surface, very similar to programmatic ad tech. Clients entrust professionals with their money; the professionals make trades in a complicated system of bidding alorithms and exchanges; and a host of middlemen and technology people manage the handoffs between buyer and seller. Sounds a lot like marketers putting ads on digital publishers through a programmatic system.

Given the parallels, players and would-be players in programmatic should sit up and pay attention to “Flash Boys” — if for no other reason than to avoid Wall Street’s mistakes.

Here are the similarities between “flash boys” and programmatic advertising:

Math Men. Like advertising, Lewis’ Wall Street, on the surface, is dominated by client guys with expense accounts. Underneath is a class of mathematicians, software programmers and IT guys, who are building the plumbing and the logic that makes the whole financial system work.

Murk. However, a market built by Math Men has major clarity issues. Just as in programmatic technology, the plumbing of the new Wall Street is complex and hard to understand. And according to Lewis’ descriptions of clueless salesmen and clients, Wall Streeters would rather live in a world they don’t fully understand than look stupid by asking questions.

Agency problems. Murk breeds a disease that’s best described by microeconomics: agency problems. The textbook definition of an agency problem is when a “principal” hires an “agent” to act in the principal’s best interests; but the agent’s interest may conflict with the principal’s. Agency problems thrive in murk. When the principal can’t understand what the hell the agent is talking about, the principal is going to have trouble applying his or her judgment.

The tragedy of murk and agency problems is that they slow down the adoption of a system that can actually benefit everybody. Don’t trust your agent? Now a principal will become mistrustful, and simply avoid the new system.

What Programmatic Advertising Can Learn from “Flash Boys”

Many of Michael Lewis’ books view exotic worlds through the eyes of a naive hero figure. In “Moneyball” it’s Oakland Athletics baseball coach Billy Beane (played by Brad Pitt in the movie). In “Flash Boys” it’s Brad Fukuyama, a trader for Royal Bank of Canada. In their small ways, both heroes took on an established system and won.

I would argue that any of us entering the deep dark woods of programmatic should emulate this Michael Lewis hero archetype in order to be the best champions of our businesses in a complex world of advertising technology.

Heroes are ordinary. Fukuyama and Beane didn’t know a damn thing about the exotic worlds of high-frequency trading or statistics (respectively) when their narratives begin. They are not powerful people in their industry. They do not even have especially distinguished careers. Yet they change the system. Translation to advertising: Advanced degrees are not required to take command of your programmatic strategy.

Heroes ask stupid questions that are actually smart. “Flash Boys”’ most compelling passages show how Fukuyama and his companions chip away at the secrets of high-frequency traders. They do it by asking questions, and by demanding answers they can understand. One is shocked by how many people they have to ask, how many times they have to ask, and how much balderdash they have to tolerate, to get real answers. Translation to advertising: Gird your loins for condescending answers to your common-sense questions, but stay strong.

Heroes are not afraid to demand change. Once the heroes of “Flash Boys” truly understand the system, they are able to create a solution that works for them. (Fukuyama has started an alternative exchange called IEX in response to the experiences covered by “Flash Boys.”) Translation to advertising: The programmatic ecosystem is in its early days; the way it works can be shaped by clients with clear ideas and demands.

I am in no way suggesting that the world of programmatic is a treacherous place in need of reform. Quite the contrary; I believe that programmatic advertising offers astonishing efficiencies for marketers, and those efficiencies can be used to benefit those marketers’ products and customers, employees and shareholders.

What I am suggesting is that the ecosystem of programmatic advertising will benefit from a plain-English approach. Businesspeople — marketers and media folk alike — can, and should, still speak Business even after they cross the border into Technology. Math-man dazzle and murky terms should not be tolerated. Agency costs can be avoided; efficiencies can be gained; and, as we build the ecosystem we deserve, we can all be heroes.