Kevin Tan, Singapore-based CEO of data marketplace Eyeota visited Australia recently, and met with a bunch of local publishers, advertisers and trading desks. Reflecting on his Australian trip Tan says the level of sophistication in the Australian open marketplace means Australian buyers are all vying for the same data segments, and this is driving up price on both sides of the equation.
The Australian programmatic industry has hit a level of sophistication where there are enough programmatic buyers who know how to utilise data. This increases demand for specific segments of audience data, which in turn increases the price.
Publishers are now taking notice and setting prices based on growing demand.
How using data drives up price
When you start using audience data with specific segments you’re actually pre-identifying who you’re going to deliver your message to, and who is going to respond.
For example, a very specific segment would be: females aged 25 to 30 who live in Sydney and are in the market to buy a car.
Several major advertisers may be targeting this particular segment.
When buying programmatically you’re purchasing inventory people come to on an auction basis – so when these “females aged 25 to 30 who live in Sydney and are in the market to buy a car” come online, there are a lot of advertisers fighting to serve them impressions – all using the same standard segment data.
As an advertiser (buy side) when there’s a lot of demand for particular segments, this pushes the price of inventory up.
As a publisher (supply side) when you are able to define in advance who and what are your prime ad spaces, then this allows you to charge more for that inventory.
Let’s liken it to traditional TV buying
If you buy a prime time ad spot like a TVC in the World Cup Cricket final, it is going to cost a lot more because it’s been preidentified as huge audience.
The same goes in digital. The current situation in Australia right now is that the buy-sides (advertisers and agencies) have been more progressive and quicker off the mark to incorporate and utilise programmatic tools to find those big moments to target consumers.
For a while, that meant buyers could see where they were buying their ad space, and who they were buying it for. There was visibility on how much they should pay for that ad space, whereas a lot of the supply side (publishers) didn’t have that visibility.
Now that more publishers are embracing programmatic tools they are saying things like: “These are the right spaces I’m selling and we’re seeing a lot of bids. These are the placements that are going to get more audience and so I’m going to increase the price of this inventory”.
As a savvy audience data user you know that the price goes up when a lot more buyers are bidding on the same data.
What this means for buyers is that competition is getting stiffer, and buyers will become more competitive and need to employ different and smarter programmatic tools, techniques and data to stay in the game.
On the publisher side, they are also becoming more sophisticated in using programmatic tools to learn more about their audience, maximise their inventory and make it work harder for them.
Programmatic is the rule now. The data combo is the exception
With competition driving both sides to get the best value for money, players on the buy and sell sides will have to step up their game.
It’s no longer a case of “who is using programmatic versus and who is not?”
Whether you’re an advertiser, agency or publisher – it’s now a case of “who has the most unique data combination?” in the race to unlock the greatest audience value.
