SpectatorBytes

We are entering a new stage on the Web. Significant elements of the digital publishing, video, advertising and social media infrastructure have been laid out. Scale winners in each of these ecosystems have emerged such as YouTube, Wordpress, Facebook, MySpace, Advertising.com, Google’s Ad Sense, etc. Now, new players are emerging as a second wave of innovation is taking place in the form of advertising networks based on new formats and solutions (e.g., Broadband Enterprises [a Velocity investment]), micro-publishing platforms and networks (e.g., Twitter), high-quality content video aggregation experiences (e.g., Hulu), etc. The focus of this wave has been around enhancements in user experience (efficiency and speed), new solutions for advertisers (contextual, semantic), serving vertical niches and communities, and gaming.

In the next stage of Web innovation, “real user” data will play a major role. The previous two stages have laid out the foundation for the collection of data across the Web in a much more efficient manner. The emergence of social networks and in particular Facebook have significantly helped advance this effort. As I have mentioned before there are several efforts underway to collect this data across the Web to help advertisers and ad networks use real user data to improve the targetability of their campaigns. Blu Kai, Lookery, Peer39, Media6 are among this new breed of data players. This would move the Web beyond audience panels and turn this medium into a highly precise marketing vehicle.

As data becomes more important, publishers would benefit from maintaining tight control over it. Advertisers can extract great value from it (advertising centric-buying solutions rely heavily on this data to enable optimization) and thus publishers may not want to allow 3rd parties to easily have access to this data. Publishers may want to play close attention to the type of agreements with advertising serving and inventory management tools/services. Publishers may want to ensure that their data is not easily available to advertisers without their consent and more important without extracting a monetary benefit. Independent advertising services providers (such as Fattail in which we have an investment) can prove attractive to publishers. The compensation model for publisher data is still taking shape. 20% of revenues seems to be the going rate when the data is used by an ad network to enhance performance.

GroupM’s recent announcement about data ownership indicates that advertisers have already begun to focus on the user data and its value. This emphasis on data among advertisers and advertising agencies can be expected to increase as they seek to ensure the data their spend helps generate is not used against their later initiatives in the marketplace.

Some Ad Networks are also likely to take advantage of this user data to drive differentiation for their offerings.

The exciting part about this new “data-driven” stage is that it will help online as a medium to finally start delivering on the promise of hyper-targeting/precision-marketing.