Data Wars in Ad Tech

In today’s digital economy, data is one of the most valuable assets of any organization. For online advertising, quality data is a requirement for ensuring that the right ad is seen by the right audience at the right time. In the ongoing battle for acquiring this data, several ad tech companies announced last week a new technology consortium to enable the sharing of a common, omni-channel, people-based identifier, between publishers and advertisers who are members.

The press release says this will take the form of “an identity framework built from pairing an encrypted version” of this identifier, with “a common, open cookie that resides on a shared, open domain”. Many see this as a direct response to the dominance of Google and Facebook, who currently account for almost half of all digital advertising dollars.

When it comes to data, Google and Facebook have the advantage of having large, deterministic data sets. This means that based on user action (i.e. signing up for a Google or Facebook account) they are able to directly attribute to an individual all of the data collected, regardless of device, from any site they control or have content on (think Google AdSense ads, and Facebook comments and share buttons). For everyone else, attributing data to individual users across properties and sites is probabilistic, meaning they must rely on cross-matching the proprietary identifiers in use by each network, and across multiple devices. This cross-matching can be very effective and accurate, but by definition will always be less precise than deterministic data sets. Thus, this new consortium hopes to level the playing field by offering members access to a true, deterministic, cross-platform identifier.

The consortium hopes to move quickly in establishing this new platform. They have a deadline to complete the technical specs within the next two months, starting with a CEO gathering in New York later in May. And they hope to allow others to start testing the technology within the next two to three months.

This is just one battle in the overall war for data which has been going on for a while, and in which all technology companies are engaged, especially in advertising. Last year saw the acquisition of several companies by Oracle to bolster their Data Cloud product for marketers, and some saw Adobe’s acquisition of TubeMogul being equally about acquiring the data as acquiring the technology. One thing is clear: the collection of quality data is a key asset for everyone in the ad tech space.

All of this highlights the ongoing importance of protecting consumer privacy. There has long been the trade-off of allowing data collection and tracking in a responsible manner to support an advertising industry that in turn fuels the free availability of content and services provided by media and publishing. The last few years have seen heightened awareness on the part of consumers concerning data collection practices, as evidenced by the rise of ad blockers and controls around third-party cookies. If freely available services and media are to continue, this balance between responsible data collection and consumer protection must be maintained.

We’ll be watching the development of this new cross-identify platform with great interest over the coming months.

2 thoughts on “Data Wars in Ad Tech

  1. I keep getting scared when I look at at a Lego set for my son on Amazon.com and then see an ad for that exact product on Amazon.de when I visit a German news site. The web is not for the squeamish. I understand that ads are necessary for having access to free content. If advertising on the web was done a little less intrusive (e.g. ad popups) then maybe ad blockers weren’t so popular.

  2. You’re not alone, Uwe. After a recent online shoe purchase, I saw several ads on other sites wanting me to buy more shoes, some showing the exact pair I had already bought. This is a lose-lose situation for everyone involved. Publishers won’t be getting paid for a click-through on those ads, advertisers waste their budget, and I’m annoyed and creeped out by all the re-targeting. Technology opens up all kinds of new possibilities for online advertising, but the industry has to remain aware of these issues around intrusiveness and data privacy.

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