Matthew Hunt, Managing Director, Adconion UK, Gives An Ad Net Perspective On The Evolving UK Display Space

It’s fair to say that the digital sector is one of the few industries that are faring pretty well despite the current tough economic times. And where you find an industry enjoying 27.5% year on year growth, you’ll almost certainly experience a business environment rife with change. These changes can be felt throughout the sector – technology advancements, privacy issues, social media, ad exchanges (real time bidding (RTB), ad networks, demand side platforms (DSP) and supply side platforms (SSP) are all driving this space forward. It can be a proverbial minefield for marketers as they try to navigate their way through.
But what do the changes mean? Where is the market heading. And what should marketers be mindful of as they plan their campaigns? Here are a few of my thoughts.
The key industry changes that are affecting the online display advertising business today
The biggest changes are revolving around the use of technology to automate the buying and selling of online display media. The net result is the emergence of the ad exchange that comes in many different forms. Large agency buying groups have launched Demand Side Platforms (DSPs) in order to automate much of their performance and audience targeted buying. On the publisher side, many have chosen to automate the sale of remnant advertising space by allowing Supply Side Platforms (SSPs) to auction their inventory. This is a positive move because the top tier networks will continue to drive scale in an automated ad market and also offer buyers and sellers service-based alternatives to direct exchange buying.
The impact of the introduction of the ad exchange model
The introduction of the ad exchange model is positive in that it validates what ad networks have been promoting since 2005 – using technology to bring buyers and sellers of media together. However, there is confusion among some marketers and agencies as to the key differences between DSPs, SSPs, ad exchanges and ad networks. While it’s true ad networks leverage technology to make the decision when to show which ad and to which user, the key difference is that ad networks are set up to provide simultaneous benefit to both sides of the transaction, and ad networks are held accountable to this equilibrium on a daily basis.
The UK’s leading networks offer two key points of differentiation: firstly service. Pure ad exchanges offer a cold, self-serve technology whereas ad networks continue to lead the market in providing value through client and publisher service. The obvious skills shortage in all global digital markets clearly demonstrates that technology is great, but it is only as good as the people that drive it and connect with partners. Secondly ad networks now offer diversified distribution to multiple audiences on multiple devices. Networks have a proven track record or delivering results at scale and I expect they will continue to deliver value to agencies and to ad exchanges as key strategic partners.
Real Time Bidding (RTB) will become the heart of the online advertising industry as it enables advertisers to target audiences by individual impressions and publishers to receive higher yields for impressions. It’s not without its challenges though. On the structural side, RTB requires huge data capacity and for publishers there is a risk of data leakage or pricing devaluation.
How technology and data will improve the performance of online display campaigns
For media agencies campaign optimisation is the key. Technology is helping us to do this. Data for optimisation is an essential element of successful online campaigns, and you have to have the team and expertise in place to deliver the changing insights and value agencies and publishers are seeking. Based on our close relationship with our clients we have evolved Adconion’s business to become a, multi-channel digital distribution platform (DDP). Audiences are increasingly fragmented, connecting to the web, using multiple devices and viewing multiple types of content, particularly social. We use exclusive and non-exclusive data to build anonymous profiles of users and distribute advertising messages through in-stream video, in-banner video, display, email, mobile and social media channels.
How data privacy issues will affect the industry
Self-regulation is key to the continued growth and success of the online display advertising industry. We need to do a better job in explaining to consumers the benefits of using technology in ensuring the relevant advertising reaches the right person.
The biggest opportunity for digital businesses in the next 12 months
The biggest opportunity lies in multi-channel content and advertising distribution on a large, automated scale. We reach 325 million people online around the world with a dedicated platform that supports display, social, email and video. This week we announced the acquisition of smartclip, Europe’s leader for digital advertising. This will allow us to offer an exclusive audience which can be reached in scale across in-banner, in-stream and Connected TV. Advertisers are crying out for companies that can join up the customer journey – and we intend to deliver on that need.
Our market is converging at an incredible pace with a business model that’s constantly evolving. Data, technology and automation are driving the online and mobile space forward at an unforeseeable rate. I don’t have a crystal ball but I firmly believe that our market will be a very different place in the near future. It will be a market led by a handful of networks that will continue to evolve as ‘digital distribution platforms’ offering excellent targeting across a number of clearly defined channels, insightful data and excellent customer service. Watch this space.