Is publisher data black gold? There will be blood

The media industry is not helping itself and is in danger of destroying value.

This was the consensus from both the panel and the audience at MediaTel Group’s invite-only ‘First party data – the publisher’s black gold?’ event in London yesterday.

Ben Wood, managing director iProspect UK, made a number of very candid and eloquent statements that seemed to be appreciated by the audience, which mainly comprised of publishers and online advertising networks. “We are operating in a market where agencies want to buy at the lowest possible denominator,” he said.

Wood also said (with a level of humility) “that agencies are to blame for competing for clients on price and the ability to buy the most cost effectively”. Again, this disarmed a very vocal audience. They predominantly feel that their organisations are not rewarded according to the value they create in the delivery of audience – or that there is enough or correct attribution to the effect they have as part of the whole online brand campaign. The delivery mechanic of click-throughs is also seen as very one dimensional.

Agencies need to move away from price – which is difficult with fierce and aggressive competitors – and concentrate on creating value for their clients (which comes from the smarter use of data). The ability to use this data represents an opportunity to change the agency model. Moreover, Wood stated “that the current model doesn’t represent the most profitable way. Nobody wins, the agency and advertising network doesn’t get rewarded appropriately, it de-values brands and there is less money available for publishers to invest back into premium content sites, thus continuing a vicious circle downwards.

Steve Hasker, president, media products and advertiser solutions at Nielsen, added: “There needs to be a distinction between brand building and direct response.” Hasker went on to provide some comfort to Wood and the agency side of the industry and state that all participants are responsible for the trading eco-system.

He provided a comparison with the media scene in the US and other industries (most notably airlines and the need to have two viable suppliers in Boeing and Airbus) that demonstrated the healthy nature of ensuring all parts of the supply chain were rewarded adequately and each were able to make a return on investment.

What came through loud and clear was that everyone can appreciate the value of data, particularly first party data. However, there seems to be a number of disconnects – most notably described by Brian Jacobs of Enreach: “There has been a de-coupling of planning and buying data. Some agency networks have the disciplines in different departments, on different floors, in different buildings and some housed even in different companies.” Jacobs further mooted that we (as an industry) have seen this before in other media.

It seems we haven’t learnt many lessons from the past in creating value for all parties in the relatively new online world.