Welcome to the tech stack arms race.
A mass consolidation of data players this summer is changing the industry landscape and fueling further confusion over brands choosing to in-house media capabilities.
Over the last several months, IPG acquired data company Acxiom, Omnicom bought buying consulting firm Credera and vowed to build out its insight platform called Omni, AT&T acquired AppNexus and Salesforce absorbed Datorama. Then there are the consultancy disruptors, like Accenture, which recently launched a programmatic division to help brands take media buying in-house.
Every major agency holding company in 2018 is investing in its own proprietary technology platform of some kind that solves one or many types of problems in the media marketing chain, said Mark Wagman, head of MediaLink’s data and technology solutions practice.
It’s created a fork in the road where brands are asking themselves what components can be stripped from media agencies to bring in-house, and what should be left at the agency.
"Some of these larger agency holding companies are building their own tools as a way to combat the independent technology players and the Facebooks and Googles of the world," he said.
"Then you also see those with propriety first-party data assets like AT&T heavily investing in advertising technology. These big enterprise companies which are looking for ways to diversify their own revenue streams are looking at ways to better activate data, and they’ve clearly made a decision that renting the tech is not as interesting as owning or buying it. That’s what’s driving much of the consolidation."
"Fighting off Google and Facebook is a fool's errand"
GroupM is one agency building out its tech stack armory. The WPP shop’s priority right now is to expand its [m]platform application suite to deliver faster, more powerful audience insights tools that support media planning and creative development. It wants to drive [m]platform’s connectivity with the activation platforms and media owners most important to clients, globally.
The company is also building better campaign management and optimization tools into buying platforms. GroupM’s partners are providing more tools to operate their platforms than ever before, from Google’s Ads Data Hub, to Alibaba’s Uni Marketing, to AppNexus’s Programmable Bidder and access points at The Trade Desk.
Evan Hanlon, GroupM’s US president of [m]platform, believes that agencies’ enhancement of data tools and greater transparency over recent months has been key to getting clients back on board with outsourcing media.
"The industry has done a bad job helping clients understand the different types and domains of data and technology," he said. "Hyperbole abounds here and the result is some clients thinking they need to consider in-housing everything.
"We already see the pendulum swinging back as agencies better clarify how data is generated and used—and the strategic value delivered by enabling technologies. Attention to cleaning up the supply chain and adtech consolidation is helping and will bolster client confidence in their external partnerships."
GroupM tells clients to take in-house technologies that touch their most precious strategic asset: their own data. Data management platforms (DMPs), customer data platforms (CDPs), third party data licenses and marketing automation software all make sense to have in-house.
Technology that doesn’t scale or that has more value when integrated into the planning, activation, and optimization of media makes less sense to in-house.
GroupM isn’t trying to beat the Googles of the world. In fact, it’s looking at ways to work with them.
"Fighting off Google, Facebook, and other key platforms is a fool’s errand," said Hanlon. "There’s no substitute for Google’s search capability or Amazon’s commerce expertise.
"As ecosystems consolidate around fewer strong players, competition between those platforms will make interoperability more difficult. So the agency that thrives going forward will be an expert cross-platform planner as well as an expert in-platform operator. Partners like Google and Amazon are are already inviting us to bring more of our own intelligence onto their platforms so it can be used to improve marketing effectiveness for our clients, in privacy-compliant and protected ways. We are leaning in."
Brands "should be weary" of closed data platforms
Clients owning their own adtech to house data is echoed by the team over at Accenture Interactive.
Glen Hartman, head of Accenture Interactive North America, said having a data management platform and ad server is "table stakes" because brands benefit from greater transparency into how media dollars are being spent across the value chain. They also help create a closed-loop framework and infrastructure that enables more real-time data analysis.
He stressed that brands should be "weary" of closed data platforms or service providers of any kind—be it agencies, consultants, outsourcers or others—who are focused on media in isolation.
Exactly what to take in-house and leave at the agency depends on the brand vision and strategy. There is no right answer.
"That said, companies that we have seen that are on the in-housing journey are likely to use outside partners for ad technology build-outs and integrations as well as ad operations," said Hartman.
He believes the industry will continue to see brands in-house components of programmatic to better integrate media campaign data with their other data sets to create and deliver experiences that are relevant across every interaction in the customer journey, including digital media.
Hartman said audience insight is the center of media and creative strategy and data is a highly valuable business asset—a brand’s audience data is the best way to create advantage in digital media. Collecting, organizing, and syndicating audience data is a critical marketing function that should be owned and controlled by the brand.
He added: "Ultimately, we believe the brand is a set of promises to customers. How those promises are kept are in the experience. And brands need more control to deliver more meaningful, more useful experiences."