Aggressive Data Mining May Prompt Federal Regulation

Technological advances and a public now used to sharing information online has led to a new frontier for marketers, one in which they can mine rich data troves and serve up relevant and useful advertising. But marketers are risking the wrath of regulators and the public. Marketers are now taking offline data (income, credit rating, home value, savings) and merging that with online data. The offline data — including extremely sensitive, personally identifiable information — has been used by the direct marketing industry for decades. But only recently have marketers begun to connect it to online behavior. But it’s getting more common. “The line between merging online and offline data isn’t no-man’s land anymore; it’s becoming more of a common practice,” said Mike Zaneis, Washington lobbyist for the Interactive Advertising Bureau.

Read More: AdAge

Why Online Ad Categories Are Won By New Entrants

In Silicon Valley, every startup fears than an established brand will one day acquire a rival or build a similar offering and instantly become the industry gorilla. When it comes to advertising, Google, which claims not only both the largest ad network and number of relationships with advertisers, but the most automated and profitable system on the Internet, is the most obvious example of this phenomenon. Ditto for Oracle and Cisco in the enterprise software space and eBay and Amazon in e-commerce. Yet while fear of the 800-pound gorilla rightfully looms, upstart ad ventures can take heart in mounting evidence that suggests online ad categories are not cornered by deep-pocketed brands, but by new market entrants. This has held true across several different categories, including Google in search, DoubleClick in ad serving, Advertising.com in display, NexTag in CPA, RightMedia in exchanges and AdMob in mobile. Each of these companies emerged from humble beginnings to become billion-dollar businesses, and did so in the face of large, incumbent competitors. Additionally, a slew of other firms exited at valuations in the hundreds of millions of dollars, among them Overture (search), Atlas (ad serving), ValueClick (display) and Quattro (mobile), to name just a few.

Read More: Gigaom.com

Angel Investor Jerry Neumann Discusses The Online Advertising Value Chain

AdExchanger.com recently asked several members of the advertising ecosystem about “Middlemen” and, specifically:

• “Are there too many parties trying to insert themselves into the online advertising value chain? How do you see this playing out?”

The following contribution is from Jerry Neumann, an angel investor in The Trade Desk, 33Across, Domdex, CPM Advisors and Flurry and a co-founder of Root Markets, a quantitative marketing pioneer.

Once there was only one intermediary: the black box, the ad networks, AdSense.  They operated on a model that I’m personally familar with from raising children: you get what you get and you don’t get upset. Then the producers and users of ad inventory decided to grow up and take control of their own process -deconstruct the black boxes and start to learn themselves what works and why.

Read More: AdExchanger