Will IBM Crush Madison Avenue?
You might dub these last few months the Summer of IBM.
On July 21, IBM announced its launch of an analytics suite for marketers and advertisers. Just over two weeks later, on Aug. 3, IBM announced its completed acquisition of Web site analytics company Coremetrics. On Aug. 13, IBM announced plans to acquire marketing technology company Unica for $480 million.
We’re currently living through a complete transformation of the media buying landscape. Not just IBM, but a slew of major IT and intelligence companies are entering the media planning business. If I were a CEO of a Madison Avenue media buying business, I’d be losing sleep. I’d also take a page from Adobe’s playbook (which I’ll explain later).
With media buying increasingly an area that relies on precise analytics, rich data and sophisticated technology, it was only a matter of time before IT and intelligence businesses joined the media-buying field. And it isn’t just IBM that’s joining the fray. In early January, Cisco led the $27.5 million series C funding of Quantcast, an online audience targeting technology. Meanwhile, Accenture participated in last October’s $31 million funding for advertising optimization technology Adchemy, and purchased assets from consumer buying behavior technology CadenceQuest.
Far from a shift of focus of one company alone, we’re seeing the IT and business intelligence communities enter media buying en masse. You get a sense of how serious this challenge is when you compare war chests. With IBM’s market cap around $160 billion, Cisco’s close to $120 billion, and Accenture’s around $27 billion, each of these companies dwarf even the largest advertising holding company. Omnicom’s market cap holds around $11 billion, for instance; IPG stands around $4.4 billion. The media holding companies are the David’s to the challengers’ Goliath.
But capital is only part of the issue. What’s more critical is the issue of DNA. Media buying came of age when most media plans incorporated relatively few buys across a limited number of distinct, disconnected media channels. The concept of cross-platform analytics was completely foreign, the chief skills media buyers needed were strategic planning and price negotiation — and media planning largely played second fiddle to the advertising businesses’ creative shops.
Today, that’s all changed. Media buys are extremely fragmented, deeply intertwined and highly accountable-making it increasingly critical to apply sophisticated analytics to every media plan. Meanwhile, between DSPs and new platforms launching every day, coders are becoming as critical to the media-buying landscape as media buyers and even creatives.
And in an era when media buying revolves around analytics and technology, Cisco and Big Blue have huge advantages over Omnicom and WPP. Which is why Madison Avenue CEOs have real reason for concern.
How should Madison Avenue face the current challenge? My suggestion is to take a page from the Adobe playbook-and to think seriously about Adobe’s acquisition of Omniture last October.
Read More: AdWeek
DSP + RTB: A Breakable Bond
The concept of a demand-side platform (DSP) I understand and the concept of real-time bidding (RTB) I also understand. What I do not understand is the unbreakable bond between the two.
It seems to me that the idea of a DSP was not powerful enough, nor was it innovative enough to stand alone, and so DSPers had to link them together to make a “powerful,” “new” technology and service. This enabled them to proclaim the “death” of the ad exchange (and maybe the ad network as well) and allowed them to create a buzz that will occupy us all (the online advertising industry) for a long time to come.
DSP + RTB is far from being a game-changer in the online advertising industry. A DSP service can be achieved without having to use RTB, and RTB can be used by ad exchanges and networks with equal success for the right media. I will strengthen this theory through a broken down analysis of the basic offerings and characteristics of a DSP.
Read More: Adotas
AdMeld Names Jason Kelly Chief Media Officer
Ad optimization technology provider AdMeld on Tuesday named Jason Kelly as chief media officer.
Most recently, Kelly served as VP of strategy and revenue management at Time Inc. Digital. At AdMeld, Kelly will oversee global relationships with demand and data partners, as well as lead strategic publisher projects.
AdMeld is one of many startups competing to help publishers better manage all the ad networks they can now choose from to sell leftover ad impressions. As Kelly sees it, AdMeld is in the business of helping publishers “manage and sell their inventory programmatically, analyze and package their audiences, and optimize impressions across the Web and mobile.”
For a share of earned ad revenue, AdMeld — along with rivals like The Rubicon Project, Pubmatic — factor in pricing data, available inventory, and publisher guidelines to determine which ad network is sent an ad impression.
Late last year, AdMeld reported doubling the size of its client base since June. More recent additions include AccuWeather.com, Answers. com, Billboard.com, Daily Kos, Hearst Television, The New York Post and Time Out New York.
Read More: MediaPost