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November 14, 2013, Article

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iMediaConnection: The end of the point-solution mindset

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The era of wading through ever-changing LUMAscapes to cobble together numerous disparate point solutions to accomplish marketing objectives may (thankfully) soon be coming to an end. No doubt the individual point solutions introduced over the last five years have brought new efficiencies, scale, and innovation to the digital marketing landscape. But the industry initially failed to recognize the true promise of integrated and holistic marketing — transparency, control, and accountability of each marketing dollar across channels, across the consumer funnel, and across the enterprise — instead slotting each new technology into a narrow bucket, regardless of its true potential.

A particularly noteworthy example is the DSP. There is no arguing the success of the DSP model, despite the naysayers and skeptics who scoffed at the notions that software could make media buying as simple as trading stocks, or that algorithms could drive step-change improvements in marketing performance. As the DSP wave grew, holding companies built their own trading desks, individual agencies built operations entirely around these platforms, and new features, services, and solutions cropped up around them – from viewability, to dynamic creative, to offline data matching, and much more. DSPs are here to stay. But their true power is only just now beginning to be tapped. In part because ad tech is run by people, and people like to put things in boxes.

For an industry teeming with innovation, ad tech can sometimes be surprisingly myopic. Perhaps it’s because the technology really is so powerfully complex and dynamic, or perhaps it’s precisely because ad tech moves so fast that people need to compartmentalize to keep up. Either way, some of the less forward-thinking folks in the industry have pigeonholed DSPs as media-buying tools primarily focused on display. They remembered the acronym but forgot the meaning. It’s easy, after all, to look at the most immediate use of something, slap a label on it, and move on. Especially when the world is changing around you every day. If you want to cobble all those compartmentalized boxes together, you do what one does with boxes: start stacking them on top of each other, until…

Nonetheless, most people in the industry have not forgotten the vision of a true platform for the demand side. The original idea behind the DSP model was to intake user and media data, model that information and determine the optimal marketing actions to achieve a business objective, execute those actions in real-time across addressable channels, and analyze the results, all in automated fashion within a single, simple workflow. Intelligent decisioning based on a vast wealth of data was the fundamental purpose of the DSP — access to display media was a secondary feature, merely a function of where the ad tech industry was at that point in time.

Of course, the technology has now advanced far beyond that. The DSP of today can ingest online and offline data from first- and third-party sources, programmatically access premium and remnant media across display, video, social, mobile and other media, optimize creative delivery across an array of interactive formats, and seamlessly integrate with best-of-breed solutions and features across the ecosystem. Perhaps even more importantly, DSPs can uniquely tie these data, media, and creative assets together with sophisticated algorithmic decisioning, attribution measurement, insights & analytics, and the workflow to make it all seamless. In other words, the DSP now offers marketers a true platform on which they can flexibly build out a wide array of marketing capabilities — from branding to direct response, from online to offline, from display to all addressable digital channels. DSPs are finally fulfilling that original vision — becoming the underlying operating system that can deliver an integrated and customer-centric approach to marketing. In fact, the most innovative agencies and marketers are now investing in development of their own solutions atop DSP technology, strategically assembling the best answer for their enterprise, in the true platform sense.

Today, CMOs and their teams are paying more attention to technology than ever before, and trying to make sense of it all. It's clear they need enterprise-level solutions that are customizable to their specific businesses. It’s less clear how to go about that, as the sometimes artificial lines drawn around DSPs, DMPs, ad servers, and other technologies perpetuate the conventional wisdom that marketers must cobble together a mixed set of point solutions to succeed.

But the history lesson is clear. From ERP to CRM, LUMAscape-like hordes of point solutions gave way to centralized platforms on which game-changing capabilities and powerful business-specific applications could be built. Hence the increasing attention being paid to ad tech by companies like IBM and Salesforce, and the increasing visibility of ad tech solutions among not just CMOs, but CIOs and CFOs as well.

DSP technology has fundamentally changed the ad buying business, and the model is only going to continue to grow and evolve. In the next few years we'll likely see nearly all of digital media, including still-nascent channels, bought on a programmatic basis. Marketers need a true operating system that unites their data, media, creative, and analytics across multiple partners and applications in order to succeed. Whether the buying is done by an agency on behalf of an advertiser, or the advertiser directly, the underlying platform is the key to this transformation, which has already begun to take shape.

Point solutions alone no longer make sense for marketers looking to build strategic advantage through technology. They need a single, flexible, and customizable platform that provides transparency, control, and accountability, while giving them the necessary flexibility to stay on top of new challenges and innovations. It just takes a little thinking outside the boxes.

Ari Buchalter is COO at MediaMath.

On Twitter? Follow iMedia Connection at @iMediaTweet.

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