Enter The Brand Trading Desk (BTD): Why Brands Will Build Ad Businesses Leveraging Their Own Intent Data

In a recent post we explored how Amazon could (and most probably will) launch a new ad solution that would make it one of the dominant media owners in the entertainment ad sector. The concept of brands becoming media owners is one that excites and interests us. We may well start seeing the entire buyer seller dynamic changing: agencies becoming networks; networks becoming agencies; publishers becoming advertisers; advertisers becoming media owners. Ad land is evolving and the lines continue to blur.
What does it mean for a brand to become a media owner and effectively launch their own trading desk?
Take a step outside of the digital ad tech industry and this is an idea that some agencies and ‘social gurus’ have been advocating for a long time. The activation of social strategies by building and creating content on behalf of brands which is then distributed through owned and earned channels; this is ultimately social media in a nutshell.
The ideas being presented here are more about how can brands actually monetise that content, the assets and ultimately the audience intent. We predict over the next 12 months we will begin seeing the rise of the BTD (Brand Trading Desk).
In the same way publishers are now, finally, looking at launching their own Publisher Trading Desks (© 2011, ExchangeWire), brands have an equally large opportunity. The opportunity of course is supplying the wider ecosystem with a data driven ad solution, without simply plugging the data into a third party data exchange and letting buyers continue to scramble about how to value the richness of that data. Long live the direct agency sales proposition?
The BTD has some barriers to entry
The BTD is not a model that could effectively be rolled out by every brand, thankfully. Firstly, the brand must operate within a space that is crying out for strong, local audience scale (we explore some of these later). Secondly, it needs to be able to scale to meet the advertiser’s expectation levels. And lastly it depends heavily what sector the advertiser operates in (for hard to reach audiences, scale isn’t actually the priority).
Conflict? Everyone is conflicted
Of course conflict issues tend to arise from anyone looking to create new, incremental business models and ad solutions. A major one that brands could face is who do it sell to and can it really sell to its competitors? This again is why the sector of the brand is crucially important; having a diverse set of demand to sell to is key to scaling the business opportunity. There are some advertisers however that potentially would be happy selling to indirect competitors if not direct competitors and any complimentary industries linked to the initial core brand.
Who could launch the first BTDs?
Ryanair, MoneySupermarket and General Motors are the leading candidates. Travel, finance and auto are some of the biggest sectors investing across RTB right now. These are also sectors where there often tends to be a dearth of quality data and invariably that data can be very generic.
Ryanair – The Travel Brand Trading Desk
Ryanair is in a strong position when it comes to assembling a BTD. 1) they have extensive traffic volumes, 2) they operate across the whole of Europe and 3) and of course they have intent by the boatload. It doesn’t take a genius to figure out the potential business model here. Yes, Ryanair could work with a number of data ‘onboarders’ and sell their data for a figure unlikely to ever go beyond £0.50 OR they could create their own BTD and sell it packaged with media into the agencies. This is ultimately the foundation of the entire BTD model.
MoneySupermarket – The Financial Brand Trading Desk
MoneySupermarket is arguably in the strongest position when it comes to any BTD. Finance is a notoriously difficult sector to crack when it comes to user targeting. The data in the market is non existent / weak at best – but as most are aware it is one of the consistently strong spenders in digital marketing. MS could bring to market an ad solution that covers insurance, credit cards, mortgages, loans, savings, ISAs, pensions (this list is pretty much endless). Not only is this data not available on any data exchange, it is also arguably the most coveted data segments that buyers crave.
Let’s not forget the savvy acquisition of Money Saving Expert (even if the reported multiple earnings price was a little surprising). MS have the ability to extract intent on consumer’s financial based shopping habits, in the tens of millions. The value of this is incredible if it can be packaged and positioned correctly.
General Motors – The Auto Brand Trading Desk
Lastly, General Motors could build the biggest data driven auto ad solution in the market. GM own assets. Lots of them. They have an extensive product portfolio across multiple markets and again can target users based on the engagements being exhibited: customising cars on site, requesting brochures, etc etc The question of who to sell to is slightly harder for GM. In as fierce a market as auto is, it would be unconceivable to think it could sell to a major auto manufacturer competitor.
It is also redundant to think it could sell to a different manufacturer competing in a slightly different sub-sector (ie Ford selling audience intelligence to Porsche), there just would not be enough of a salient fit. However, you could see GM selling to car insurance providers and car finance providers. There is strong intent being exhibited about someone looking to buy a car soon – prized data for anyone looking to sell product to these new car buyers.
The BTD proposition might never get off the ground. It might never provide a business model that rivals any other existing revenue streams. But brands are already selling ads (mostly by via sales houses). The demand side will no doubt be sniffing around, trying to lock down data deals. The smart move here is for these brands to create a sustainable ad business model where the value of their data is not unbundled – and is sold as an intent laden ad package to the market.
Disclaimer: ExchangeWire is aware that, yes, it is yet another acronym, and might well not be that differentiated from what an ad network actually does – but the BTD will be a stand-alone ad business with own its own proprietary intent data, as well as its own inventory. And let’s not forget that it will mostly be doing audience extension through Adx, the SSPs and now Facebook (thanks FB for all that longtail inventory, and on a postview metric too).