The digital advertising business moves at such a fast clip that it’s difficult for anyone to keep up with emerging trends.
For this reason, AdMonsters sits down with thought leaders within the sector who are doing the work of pushing the envelope and innovating so that we can share their insights with our readers.
Today’s interview is with Scott Messer, an executive media operator with a passion for creating, operating, and monetizing digital businesses. He first started in the digital media business back in 2006 and has held numerous leadership positions within the industry. Today, he is the Principal and Founder of Messer Media.
We spoke with him about the challenges of Seller Defined Audiences, Deal Curation as a Service, and the recent EU Study on the impact of recent developments in digital Advertising on privacy, publishers, and advertisers.
Seller Defined Audiences: The Challenges
AdMonsters: Everyone in the industry is looking for innovative ways to reach and engage audiences. You’re a proponent of Seller Defined Audiences. What are they, and what’s the promise that they hold?
Scott Messer: Seller Defined Audiences are a great spec for targeting because they result in high-quality audience segments. Developed and released by the IAB Tech Lab, Seller Defined Audiences let publishers monetize their first-party audiences without the bother of using a unique ID or revealing a user’s identity to advertisers. In essence, Seller Defined Audiences provide marketers the ability to home in on their exact audience while guaranteeing user privacy.
AdMonsters: How widely are Seller Defined Audiences used?
SM: Not very widely. The challenge is that there isn’t enough consistency between publishers to make it a reliable tool for advertisers at the moment. We need to work on developing consistency between publishers on what they’re making and representing through Seller Defined Audiences so that buyers can trust them more readily.
It’s an interesting paradox because publishers have unique inventory and they want to label things uniquely, but buyers want uniformity. We need publishers to come together to create some kind of consistency, but they don’t have a way to do that quite yet. I call this the chocolate cake problem, meaning there are many ways to make a chocolate cake, but if you want a consistent cake, you need all of your bakers to use the same recipe.
AdMonsters: Is anyone working to address that challenge?
SM: Yes, we see some companies doing really great work. For instance, Permutive has created standard cohorts for advertiser activation. I think this is the right approach because publishers are providing standardized ingredients, which allows advertisers to know exactly what they’re buying. The challenge is that it’s limited to the Permutive universe.
AdMonsters: What is the right entity to lead this effort?
SM: I think companies like Permutive are the right approach. An analogy is the organic label. The FDA developed the standards, but each food manufacturer develops products to meet them.
We need suppliers — the publishers — to say, “This is the product that we make, and you will always get a consistent product from us. Here is the transparency into our ingredients and recipes.”
Deal Curation as a Service
AdMonsters: Switching topics, in a LinkedIn post you came up with a new acronym called DCaaS (pronounced Dee Kass) and went on to predict it will become an important trend. What is DCaaS?
SM: That stands for deal curation as a service, and I certainly hope it catches on and grows. To understand what it is, let’s go back to a type of entity that’s familiar to all of us: the ad network.
Ad networks select a group of publishers and add some value to it. They may resell inventory from a bunch of travel sites, and then recruit campaigns run by Travel & Hospitality brands, promising the marketers or their agencies relevant inventory at scale. In this respect, these ad networks are serving as representatives of the publishers.
But when programmatic came along, all publishers put their inventory into real-ish time auctions, and the SSP/DSP connections were no longer a matter of curation. It was just, “Here is everything.” To reach the right audience, buyers had to layer in things like audience data, fraud verification, brand safety, and a million other things onto their buys because curation didn’t exist. This greatly added to the cost of doing business (not an ad tech tax per se), and thus programmatic was neither automatic, simple nor cheap.
DCaaS builds up pools of high-quality inventory, adds high-value creative services and data elements, and offers it all to buyers in a bundled package touting high-performing KPIs.
Now buyers are getting to the point where they’re asking, why am I doing all this work and still having problems? Can’t we just buy high-quality inventory directly from a list of top publishers?
That’s where DCaaS comes in, which is offered by media companies like Kargo, GumGum, Vox’s Concert, Yieldmo and in some respects, Audigent. They are doing all of that publisher curation and much more on behalf of both parties. DCaaS builds up pools of high-quality inventory, adds high-value creative services and data elements, and offers it all to buyers in a bundled package touting high-performing KPIs.
AdMonsters: DCaaS sounds like a winning proposition for buyers. Do publishers benefit equally?
SM: Absolutely! Publishers get a steady stream of premium quality brands and CPMs, usually without diluting their own sales proposition. Further, DCaaS is often securing IOs for their buys and services, so the revenue is much more dependable and forecastable. Sure, the DCaaS providers get a larger cut than traditional SSPs, but still, it is a much lower cost than what a publisher might bear on their own to generate the same demand…if they’re even able to do it all.
EU Study on the Impact of Recent Developments in Digital Advertising on Privacy, Publishers and Advertisers
AdMonsters: There’s one more topic we want to hear about. You recently did an analysis of an EU report in which you more or less concluded market and regulatory forces are making digital publishing unsustainable. Explain what you mean by that.
SM: Market forces are the browsers, social platforms and device makers, and regulatory forces are the government. The government side is making it difficult for publishers to use data to drive value out of their inventory. Meanwhile, initiatives like Apple’s App Tracking Transparency is kneecapping marketers. In an article, Eric Seufert called it the ATT recession. In the article, he posits that the tech pullback we’re seeing right now is a direct result of Apple ATT.
Brands advertise on the web, and publishers count on those revenue streams. For the web — journalism, entertainment and much more — to succeed, we need a basic currency of targeting and measuring campaigns across the web. The combination of market and regulatory forces is blocking that currency, and it’s a real threat to the industry, even democracy.