ADOTAS – They promise advertisers greater performance and increased returns for their online advertising campaigns. They claim to solve the problems associated with the traditional display media buying model through advanced analytics and intelligent real-time decisions.
They are demand side platforms (DSPs) and they have next-generation media buyers excited. Unfortunately, most DSPs are woefully limited in several important respects and most simply can’t deliver what they claim to.
In principle DSPs are designed to be a state of the art platform that give advertisers greater control over pricing, targeting, and managing their online media campaigns. DSPS give clients access to real-time bidding, advanced data acquisition, ad serving, reporting and analytics. The idea is that a single system can connect into multiple ad exchanges and can be accessed from a single users interface.
The potential benefits are instantly apparent: transparency, reach and optimisation across multiple media sources, data integration and deep analytics.
Much of the excitement around DSPs is due to media buyers seeing them as the vehicle for taking ad networks out of the equation and replicating their services at a lower cost. DSPs can achieve this.
But what many marketers do not appreciate is that though DSPs are doing something quite exciting — most are not doing it very well. Put simply, DSPs lack the advanced technology to derive the best results from complex raw data, they disregard the individuality of advertisers with a one-size-fits-all approach and they neglect the importance of creative customization when targeting users.
Most claim to have machine learning algorithms, where the algorithm evolves based on data. In order for a machine to learn and deliver optimal decisions, it requires scale of data. How many DSPs have the traction in order to have real scale of data? Some do, but very few.
Quite simply, the technology and engineering driving most DSPs is not advanced enough to process this information and translate this into the best, smartest real-time bidding decisions for media buyers. Most DSPs are not equipped to make the best and most profitable decisions on behalf of advertisers as they lack the scale of data and the intelligence behind those decisions are second-rate.
Without the ability to make the most profitable decisions for advertisers, the resulting ROI will be poor. If an advertiser doesn’t benefit from improved performance through a DSP, they might as well go back to a legacy ad server and buy media the old fashioned way.
2011 is the year when the tide goes out and we will all see who has been swimming in the display ecosystem with their trunks off. Those with cutting edge technology and truly defensible IP will swim. The rest will sink.