Peter Davies: Are Networks Dead?

Peter Davies is the Senior Vice President of Sales & Marketing at Adconion Direct, a leading digital distribution platform spanning Display, Email, Social Media and Mobile.

Firstly let me state this very clearly: networks are not dead.  In fact, not only are they surviving, the experienced ones are in fact thriving. How can this be?

Recently I had an agency partner of ours ask, “As our Trading Desk grows, are you worried about the sustainability of your model?” My straight answer was No. In fact, I actually thanked his trading desk and reminded him that imitation is the greatest form of flattery.

Over the past four years, ‘networks’ were the piñata’s of the ecosystem, with everyone shouting that they will not survive, simultaneously taking a swing at the piñata, (many of whom had their blindfold firmly in place).   While we have seen consolidation in the space (and yes I agree it was needed), we have also seen other networks thrive and continue to grow.

At the time, these cries of “Death to the Network” began; some could be forgiven for making such bold statements, and since then we have witnessed first hand the rapid change in technology and business models that many didn’t predict.  For starters, DSP’s, Trading Desks and Networks are all starting to look very similar…  I won’t go into detail on the suitable differences between each, but I will instead share with you six factors that I believe will impact the short and long term success of networks in the future.

1. Technology

Those networks who have invested in their own technology, albeit different layers of the tech stack from advanced algorithms resulting in increased predictive performance, real time bidding technology to gain an edge in programmatic buying or a profile store to manage the deluge of data that is available.  Which one of these is more valuable is arguable, however our view is that the decision making on which placement to accept, at what price, then which ad to serve, based on thousands of variables a few milliseconds is something that should be proprietary.  Why?  If you own this aspect of tech, your engineers and business intelligence team can continually apply learning’s back into the technology, continually improving it specifically for their advertising partners.  When you license it, you have no control to change or improve it.  Those networks that have invested in tech, who do not license, will continue to thrive as their competitive edge is bought to the surface.

2. Data

To quote one of my favorite movies, “Data Is So Hot Right Now”.  However like most things, not all data is created equal.  Networks need to determine what is truly 1st party Vs 3rd party data.  As almost all 3rd party data is available to anyone, anytime, making it a commodity.  In addition to having the tech firepower to process data as mentioned above, thriving networks can highlight 1st party audience data, lots of it, and from multiple sources. Rather than those networks building limited data insights off the ads that are being clicked on.  Having, relevant data density, immediately enables qualification of all incoming 3rd party data, plus the ability to build a 360 degree or high definition profile of user from ALL digital touch points. For example, what content they are engaging with on their PC, what apps they are downloading on their smartphone, what their social preferences are and what offers they are most interested in receiving.  This level of data, rather point play only data, will ensure leading networks will continue to thrive

3. Innovation

Networks are known to lead, not follow, resulting in significant innovation for the industry.  Proof of this is the innovation that can be seen in social, mobile and Connected TV to name a few… but simple innovations exists, by bringing new products to advertisers before the rest of the market.  An example of this would be one of the hottest industry topics of viewability… you are starting to see networks take a stance and offer products that guarantee viewability for advertisers.  Those networks that innovate and bring new products within more traditional channels like Display will continue to thrive.

4. Transparency

A big gripe over the past few years has been transparency, in both the content and placements, but also in pricing and data.  Putting the tools (DSP’s and API’s) in the hands of the user has only accelerated this trend.  Leading Networks have realized that they too need to become transparent, and those that open up, so their partners have transparency and clarity, in real time, on their campaigns will continue to survive.  However to go one step further, the networks that will truly thrive are those investing in not just highlighting campaign performance, pricing and data insights, but those who can offer actionable insights, rather than data for data and transparency for tranpsarency sake.

5. Customer Service

Networks who provide an impeccable service layer on top of proprietary tools, innovative solutions and real time dashboards will spring ahead in this market.  As much as our partners like the real-time dashboards to provide transparency and clarity, our research shows that they are logging into it infrequently and for seconds, not minutes.  Why?  They are overloaded with work and information, hence requiring customer service that is there for them 24/7, providing actionable insights and industry intel, and campaign recommendations.  As much as API’s, Dashboard and UI’s have risen, we believe those networks that invest in the right people to manage their partners will ultimately thrive.

6. Results

Lastly and most importantly, results are truly paramount.  Experienced and trusted networks know what works, knows what doesn’t, but most of all understands how to take calculated risks to drive results for advertisers.  This inherent ‘skill and experience,’ mixed with all of the before mentioned points will ensure that leading networks continue to be critical partners for agencies and advertisers, regardless of the evolution of DSP’s and Trading Desks.

The next time someone asks if networks are dead, I suggest we first look at their tech, data, innovation, transparency, customer service and results, before bucketing them as one in the same.  For those that tick the boxes, hold them with high regard… for those that don’t tick the boxes, continue to swing freely at the Piñata.

  • http://twitter.com/DeBearclaw Matthew Barrowclough

    Great read…Actionable insights and the right people on the network side are the distinguishing value ad for brands and publishers.

  • mark severini

    I agree with everything that Peter has covered in this article and would only add that the same will be true for mobile ad networks as this market continues to evolve.