BYOD – Today’s Driving Force in Ad Targeting

by Jonathan Mendez
May 3rd, 2013

As we move through the second quarter of the year, the remarkable shift in the balance of power in media buying and selling online continues and the ad side has never been more empowered. But, there are tactics that publishers can deploy to fight back and create value and insights that drive results for their advertisers while satisfying their users.

Today, media buyers are not only defining narrower audiences for media publishers to deliver, but more importantly, they are coming to publishers with defined data sets of their own – hence BYOD (Bring Your Own Data) – and they only want to buy the users they are interested in. No one else – just the users they want. This trend has accelerated tremendously in the past 12 months because of the confluence of two powerful developments that literally have had an exponential effect when combined.

First, new ad side data and insights have come on the market and taken hold with many advertisers. For example, retargeting has proven to be an effective means of driving business from existing customers, especially for retailers, and many companies work to service that need.

Second, the rise of programmatic buying and exchanges has given these new ad side tools efficient access to more and more users to scale, bypassing the typical publisher direct relationship. And the introduction of FBX (the Facebook Exchange) allows BYOD advertisers access to literally billions and billions of impressions at a fraction of the expense of traditional display inventory.

BYOD in online advertising is part of a broader trend toward addressable media that goes well beyond online. For simplicity, let’s define addressable media as the targeting of advertising to a specific consumer or household through data through a media channel. The data can come from either the advertiser side or the publisher side, sometimes a combination of the two, and frequently will include a third-party data provider. For instance, an insurance company ran a TV campaign recently for renter’s insurance in collaboration with two satellite TV providers targeted only to households that had been identified as rentals.

This shift is certainly turning traditional media selling online on its ear. Just a few years ago, a media seller would be touting the content of a site, the overall user demographics of the site and its index against a desired demographic set and it would have been enough to win an advertiser’s business. Today, an advertiser might not care about any of those factors when using their BYOD strategy, and they are likely to want to isolate just a fraction of a site’s users.

And, this trend is even scarier for online publishers with inventory on exchanges where they likely have no idea why the advertiser is buying media from them. The publisher will know the advertiser and the CPM rate but is very removed from the why? Was it a retargeted ad for a golf retailer? Was it a data match for a Caribbean traveler? Was it a user interested in a new car?

Do you want to be a publisher in a business where you don’t know why advertisers are buying your media?

There’s a slippery slope here and many publishers have started to experience the downhill trend – a loss of control, a loss of insights, a loss of advertisers and lower CPM’s overall, not higher.

It’s imperative that the online publishing community embraces a BYOD strategy of their own. Publishers must look to their audience and their behaviors and create meaningful insights that fuel ad matches with the needs of marketers. This BYOD effort by publishers has to begin with truefirst-party data about the site and the user experience. While many publishers are embracing DMP’s (Data Management Platform), consider the data sets being utilized by the DMP.They are often commoditized third-party data sets that advertisers already use on exchanges and elsewhere. And unless you have massive scale as a publisher, this commoditized data won’t really be helpful. Publishers need to create new first-party data that is differentiated and put it to use to meet the needs of advertisers and also their site’s users who are seeking a relevant, timely experience both in the content they seek and the ads they interact with.

There are few companies today that have taken on the BYOD challenge directly to help publishers. Yieldbot is one of those companies and we are working daily to provide our publisher partners incredible intelligence into first-party session-based user intent, the most powerful targeting signal of all. Yieldbot is also creating a new channel of advertising revenue for publishers by matching search advertisers with real-time user intent, creating a highly relevant and satisfying experience for users.

The opportunity has never been greater and by all measures the overall online ad spend will continue to grow. But, the risks are also high and the distribution of dollars between search, social, mobile, display, exchanges and new platforms remains to be determined. Advertisers have a lot of options and if you are a publisher whose data would you prefer to be working with? This isn’t a winner take all market, but publishers that embrace BYOD and create true data and insights into their site experience and users stand a strong chance to create separation in the market and drive value for their advertising partners and their audience.

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