Data Is Hot Now – Commoditization Is Around The Corner

Posted By Jay Friedman On February 26, 2010 @ 12:00 AM In Ad Networks | No Comments

Back in April I gave a presentation and the first question from the audience was, "What is the most significant trend in the next 12 months."  Well, based on JEGI's Tolman Geff's presentation at the IAB, I got it right.  Data providers and aggregators have entered the mix and are a key part of the online value chain now in 2010.  Moreso, this data costs money but advertisers aren't willing to pay higher CPMs, so other player's margins are getting squeezed.

Nothing illustrated the importance of data like the slide where Tolman showed Burst on one side and Interclick on the other, Burst being an inventory aggregator and Interclick being an audience aggregator.  Burst, Tolman says, is valued at $200,000 and Interclick at $110MM.  I personally believe both valuations are a bit extreme, but point taken.  Focusing on audiences is the way of the future.  But hold on there.

Remember a few years ago when the notion of "premium" became a big deal within ad networks? Once it was out there, every ad network was more premium than the next, each touting through as premium sites.  Forget the site name, it's premium!  But that passed.  Advertisers and agencies came to expect a certain level of quality, but rarely any more, at least in our meetings, "ooh" and "ahh" at certain sites being on a site list.  It seems this happens with everything that is a big deal at some point in online.  It's huge and vital at the time, and then becomes a commodity.  This will happen for data too.  Any publisher or network not layering significant amounts of data into their inventory will perform so poorly they'll be kicked off of clients' ad buys.  12 months from now, this too will be ho-hum. 

Now, back to that premium inventory.  Remember those few networks that got their hundreds of millions while it was hot?  If you're in the data game, you might consider a note-to-self right about now.  What do you think?

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