Is the ad server dead? No, it's not dead yet; just on life support.
The top three ad servers are now well over 10 years old and none of them are independently owned. All three use the same basic tab-to-tab navigation they did in the late 1990s. Despite some improvements in functionality -- both current and contemplated -- they are still focused on the tactical process of how to deliver an ad to a page.
This focus has dictated the design and user interface of the ad server. Fixating on the tactical elements of ad serving has been at the expense of the strategic use of data, and manipulation of data is precisely where the marketplace is headed now and in the coming years.
Data is becoming the Holy Grail
Instead of focusing on how to get a leaderboard delivered on a web page, we need to think long and hard about what ad management systems should really do, which is flexibly and efficiently manipulate data. You can see the shift toward data-focused strategies all around us at each end of the digital media workflow.
Financial data. If there is a single area crying out the loudest for help it is in the management of financial data. As an industry we are all familiar with the problem associated with reconciling third part data from digital campaigns. But why is it so difficult for publishers to integrate the billing file from their ad server to their legacy financial systems like Great Plains or PeopleSoft? This is generally not a technical problem; it's a project management problem. If I see one more publisher re-key information four times before it gets into invoice format, I may go catatonic.
It used to be that ad traffickers got no respect. Now, I would claim the folks that get the short end of the stick are the ones responsible for sending out invoices. Ad servers routinely leave customers at the altar when it comes to this end of the operations process. This level of service needs to be a part of any vendor's solution.
Buy-side data. Agencies are becoming more adept at analyzing data and using it in the optimization of campaigns. This ranges from understanding lag time to conversion to attribution modeling. Several agencies are creating in-house dashboards to present this data in a form that is understandable and actionable. Agencies that previously focused only on CPC campaigns are figuring out that an ideal combination of both display and search produces the most efficient conversion. That takes data mining and analysis, and agencies are stepping up to that plate with their own solutions.
Publisher-side data. A common complaint among most ad serving clients is that they treat inventory management as if it was a "one size fits all" solution when we know that is not the case. For example, the composition of inventory for auto sites and travel sites consist of unique arrays of targetable key values: make, model, year of car and booking time frame, travel origin, and destination.
Other sites have unique peaks and valleys in inventory availability. As a result, publishers are taking data into their own hands. The best of breed end up extracting delivery information directly through the ad server API to create inventory and reporting tools that meet their specific needs as a publisher. Ironically, ad servers are woefully prepared to handle the volume of data requests from their clients and they frequently time out before the data pull is even completed.
Audience data. The shift from the page-centric targeting of ads to audience-centric targeting is readily apparent in the proliferation of audience applications. The accumulation and management of potentially hundreds of custom targetable audience segments is just not something ad servers are set up to do well.
While some publishers are wary of jumping into this pool, they will need to become accustomed to the fact that they need to leverage the value of their audience and its extension across the entire internet with the same attention and expertise they give to leveraging the value of their content to advertisers. Developing a clear strategy for management of a publisher's audience is going to be a key focus in the next couple of years. This too is all about the manipulation of data.
Network data. Everyone these days want to create and run a network. What they often fail to realize is this creates a funnel consisting of all the data we've already discussed and more. A new class of clients has emerged -- the affiliate -- and managing data on how the network performs in generating revenue is crucial to running a business efficiently. Reports need to be generated, net revenue needs to be calculated, and compensation needs to be paid. These are data-driven tasks that can't be handled by spreadsheets.
We need a seismic shift in approach
While I will never discount the value of people who perform the valuable roles of creating new ad formats, trafficking them, and handling customer service, the trends above suggest that data is becoming the Holy Grail in our business. The implications are that the landscape of advertising is changing with greater momentum and it will call for new applications, created with a fresh perspective, to make the transition from the tactical delivery of ads, to strategic manipulation of data.
Doug Wintz is principal and founder of DMW MediaWorks.
On Twitter? Follow iMedia at @iMediaTweet.
