Why is data now so important to media owners?

Dominic Finney, director at digital consultancy FaR, says with the right strategy media owners with strong brands and clear business models are well placed to thrive…

Data is both a challenge and opportunity to the majority of media owner’s commercial models, as it represents a very real challenge through the media markets ability to now access, replicate and establish a commercial offering around a media owner’s existing audience without having to purchase inventory directly from a media owner’s site.

Whilst, at the same time, providing a potentially lucrative opportunity, as media owners now have access to tools that will enable them to monetise their audience in new and cost effective ways through the use of data profiles and real-time buying, which in theory enables media owners to increase the value of their inventory.

The main drivers behind why this has become so important to media owners are technological developments and a recent spate of consolidation in the market. As technological developments have established a set of tools that can both mine and integrate data across disparate sources, coupled with a set of tools that now enable the market to both profile this data across a large number of parameters in order to deliver much more relevant advertising messages to the audience selected.

This coupled with consolidation within the market on both the buy side and the sell side has created a market that is growing exponentially. On the buy side consolidation has seen all of the large agencies concentrate their buying points through the use of data and tools that both automate buying and create real efficiencies in terms of scale. On the sell side the market is witnessing the emergence of active marketplaces, that began with network optimisation companies who are now morphing into or accessing ad exchanges, which in turn provide a platform for media companies to sell their inventory across a more open market place.

In effect this has created access to greater volumes of inventory and data that can be bought and sold in an increasingly liquid market through the use of these ad exchanges. What this means from a media owner’s point of view is yet to be defined, as the market is still relatively nascent.

But, the key for media owners is in their strategic response to the rapidly emerging opportunity. By understanding where they have real strength in this market in terms of the value of their audience. And by establishing a relationship with their audience, which enables them to build meaningful data driven solutions, they can then establish the most effective ways to engage with the market that, both protects their core sell to market whilst at the same time developing new ways of monetising and creating value within their existing audience.

The three central questions that should underpin any new developments are how does it affect a media owners core sell to market, can a media owner ensure they have complete control of their audience profile and will these developments deliver long term increases in both commercial revenue and yields. This can result in widely differing approaches to the market from an aggressive approach where a publisher builds their own network (effectively a private exchange) through to a media owner deciding to place their audience behind a digital wall and effectively disengaging themselves from this market place

These varying strategies are driven by a media owner brand proposition, business model and the assets they have available to drive their business forward. The key is that the strategy is coherent and enables the media owners business to thrive as the audience driven trading market emerges. With the right strategy media owners with strong brands and clear business models are well placed to thrive.

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