Awash in Data And Opportunities.

For years, folks have talked about digital marketing becoming a data-driven world. It has certainly been one of the drivers of the online advertising marketplace; an expectation that data and data-driven insights will someday rule where relationships and gut instinct used to hold court. Well, that day is almost upon us. With Google’s meteoric rise and the extraordinary overall growth of digital marketing, we are seeing a new marketing landscape emerge — and data is certain to be a big part of it.

The shift to data is the culmination of a natural progression in the market’s development. Ten years ago, the digital marketing world was led by infrastructure players, with ad serving, content management and e-commerce driving much of the business. The past five years have seen the development of application-driven companies, with the big players focusing on how to apply online infrastructure to solve marketing problems and create opportunities. This has given us everything from auction-bid search and contextual ads to behavioral targeting to ad-supported social networks.

Now, with robust applications in place, and their monetization power and scalability quite well proven, the market is starting to look at data services that run on top of the applications as the source of future long-term growth. What will this future look like? Here are my thoughts:

Lots of actionable data, everywhere. Today, one of the biggest challenges for companies seeking to leverage behavioral targeting or search advertising or performance-based advertising has been access to actionable data. No more. Everybody now knows that data is the fuel for growth. Everyone is starting to mine it and make it available to third parties.

Lots of opportunities to use action data. For most of the past 12 years, even if you had actionable consumer marketing data, you couldn’t do much with it because the ad-serving systems and ad networks were closed environments with little capacity to leverage targeting data, and certainly not in real time. That’s all changing. The big four (Google, Microsoft, Yahoo and AOL’s Platform A) are all opening up their networks and systems to leverage third-party data; so are the ad servers like WPP’s 24/7 Real Media; and so are the ad networks.

Dearth of experience in using data at scale. In a world soon to be awash in data and opportunities to use it, one thing is clear. There are not many folks out there that have a lot of experience in using it. Sure, folks like Amazon have done a great job leveraging consumer purchase data for marketing recommendation services, but that’s been mostly inside their environment and largely in just one vertical, books. We’re moving into a wild, wild west in monetizing real-time marketing data, and we’re going to need many more people that know how to do this.

Lack of a public policy framework. Consumer data means people data, and people data means privacy is involved. As we see this data take on more value and play a bigger role in our industry, the public policy implications are going to become much more pronounced. That is why the Interactive Advertising Bureau opened a Washington D.C. office last year, and is already expanding it, having just announced a search to add a second person to the office. Public policy will shape much of what happens here.

I know that many new start-up companies are working on new ways to capture or “action” consumer marketing data online. However, as you might guess from my points above, I am not convinced that they will be the big drivers of the next generation of our industry. In fact, they may get marginalized, since I think that actionable data and opportunities to use it in real time will grow to almost infinite scale. The real value, I think, will be in knowing how to use it in ways that grow the business for marketers and don’t harm consumers. What do you think?

By Dave Morgan
Dave Morgan, founder of TACODA and Real Media, is working on the next big thing. Watch this space.
Courtesy of http://www.mediapost.com