AdAge recently published an article concerning the distribution of data between marketers, agencies and Google. You can read the full version here, but the gist of it is that marketers make the obvious assertion that their first party data is highly valuable and they are reticent to share this asset with agency and publishing partners. They are wondering about the value proposition of exposing such a highly prized commodity to outside parties. Deep Focus makes the point  that agencies are great at taking existing customer data and finding new customers. Google promises that connecting a marketer’s first party data to the larger data ecosystem makes the marketer’s data more valuable.

I think this conversation is wrapped closely to the idea of barriers to entry. When TV stations dominated the media landscape only those with great means could launch a TV station or network. As media has become democratized any person with a voice and an idea has the opportunity to become their own media channel. The barrier to entry has been dramatically lowered to almost nothing.

In parallel media agencies have been important to marketers because they knew how to manage the complicated TV landscape through a strategic approach and economies of scale. As digital evolved into several disciplines and became a standard on the media plan the marketer’s in-house groups began to understand more about the medium. With the innovations collectively organized through ad tech and the programmatic approach barriers to entry to forge a direct path to consumers have dropped significantly.

We are seeing a shift into the digitalization of all media, in some way or another affecting TV, print, radio and OOH. Principles from the digital media ecosystem are becoming the characteristics of all media. Examples include the dynamic stratification of media, price discrimination and the rapid deployment and testing of data to derive performance.

All this is to say that it is easier than ever for marketers of a certain size to create in-house media strategy and activation practices. Data is a critical part of the decision making process.  It is a valuable asset and it is owned in-house at the marketer. Thus the first party ownership of data becomes an important catalyst for the move to an in-house media buying practice. With data being such a big opportunity for marketers, you can see how the activation of data almost takes precedent over the activation of media. In other words, the activation of media is really the acute activation of the right data, which then re-informs the decisioning process as new data is collected.

The points that Google and Deep Focus make about tying in-house data to the larger data ecosystem and finding new prospects are poignant. However, the programmatic approach makes it easier, and thus more likely that advertisers will continue to build agency-like (or agency-lite) in house media activation / data activation practices.

We are seeing the astute marketer create in-house programmatic media practices. Some examples of this include Netflix, Unilever, Proctor and Gamble, 1-800 Flowers, Electronic Arts and Guthy-Renker. Data is benefitting from the move toward automated activation, so data becomes another programmatically handled aspect of marketing, much like media is. So, I think to win the future (referencing Larry Page’s discussion at TED) marketers have to prepare for the continuing onslaught of data.  Matt Webb, CEO of BERG, in a recent Business Insider report about the Internet of Things (IoT), shares the following quote: “Connecting products to the Web will be the 21st century electrification.”  We are on path to generate and collect data from connected homes, cars, wearable devices (like my favorite the Jawbone Up), Connected TVs and who knows what else.  We’ll see smart offices, factories and cities. By 2018 there will be 19B connected devices globally.  Imagine what that number will be 10 years from now. It’s clear that data is valuable. There is more data and more variety data. The consequence is a future where data illuminates a (close to) real time view of our consumers and their usage habits.

Some marketers will create their own data and expand their data practice. Others will continue to forge strategic partnerships for data sharing co-ops; i.e. collecting second party data. We are still in the early stages of data application for media use in my opinion. As with any new technologies, methods or practices, those companies who get to practice early will generate a level of competency that will grow exponentially as time moves forward.

Image Source: Exchange Wire