Not there yet, but I can now see the promise land

For my tech and media friends it’s been the same a mantra from me the last 7 years. “The brands are way ahead of you.” Coming out of the bust, multi-channel retailers began to cobble together their separate marketing channels to build a more comprehensive view of their marketing executions. They found ways to integrate their email and search with their e-commerce and catalogs. Online display was the one channel whipping uncontrollably in the wind. Well, with the rapid adoption of real-time bidding (RTB) and audience buying this year, it seems our industry has become obsessed with media optimization and channel integration… still more talk than action in my mind, but at least we are beginning to take advantage of the promise of digital. With this in mind, here are my ten things to look out for in 2011:

1. It’s About the Data, Dummy

My guess is the demand-side platforms (DSPs) buzz will pivot next year. Just as DSPs changed media buying forever, so will centralizing data management.

Algorithmic audience buying from exchanges and aggregators has addressed many of the pains that brands and agencies experience with media buying. It has automated a cumbersome process, limits media waste, and provides more transparency. But agencies are using multiple DSPs just as they used multiple ad networks, so all the inefficiencies of decentralization remain. In a multi-channel strategy it is data that needs to be centralized. The ability to define universal audience segments will allow marketers to scale digital campaigns across media channels to effectively find their audience wherever they are. This will also consolidate the systems of record for multi-channel campaigns into a single unified reporting structure for the first time ever.

2. Data Alchemy

A brand’s most valuable asset is its customer data. Blending it with campaign and third-party data makes it all the more powerful. This will include seamless integrations of online and offline CRM data with the ever-increasing behavioral and psychographic data available. Also, large offline data companies will move massive amounts of anonymized data online, adding more visibility throughout the sales funnel.

3. RTB Levels Will Rise

In a recent survey, PubMatic analyzed RTB performance across the telecommunication, automotive, consumer package goods, and finance verticals. Data indicated that publishers generated a larger revenue from RTB campaigns by an average of 64%. Results also show that RTB outperformed traditional run-of-network (RON), and audience targeted non-RTB outperformed RON non-RTB. ClickZ also reports that Google execs predict nearly 50% of targeted digital display campaigns will be purchased on real-time platforms by 2015.

4. New Ways to Buy Premium

Google’s prediction that 50% of display will be bought and sold on the exchanges still leaves 50% for the publishers’ premium inventory? Increasingly, brands and agencies will take advantage of tools to leverage the publisher relations to buy impression-level inventory based on their custom audience segments. They will also flex their buying muscle to purchase premium inventory in bulk to populate private exchanges. Publishers will meet the challenge and learn to package their inventory in new and interesting ways.

5. Multi-Touch Attribution Models

Real-time bidding and audience buying enable media buyers with increased control over the right ad, right person, right time and how much to spend. When you buy audiences, marketers can more accurately track users and focus in on the multiple touch points of users’ experiences. Instead of looking at “last click” or “last ad” models, leverage the data available to analyze the effectiveness of different touch points in getting the user conversion events.

6. Data Mining for Digital Advertising

Data mining offers brands another layer of insight into audience behavior, activity and psychographics. Most of today’s post analysis tools don’t even scratch the surface. Just as the Oracles and IBMs of the world power data analysis for major corporations, brand advertisers also need a similar type of analysis and business intelligence to make informed decisions on everything from up-selling existing customers to targeting tactics.

7. Media Traders

I’m bullish about the future of agencies. In the last year, we’ve seen them transform from an army of Excel jockeys to sophisticated users of algorithmic buying platforms. The savviest agencies are stocking their teams with optimization exporters from the search marketing ranks and even quants from Wall Street. In the words of the lord of the logo himself, Terry Kawaja, “Mad Men are becoming Math Men.”

8. Video Breaks Out

As Adap.TV and BrightRoll get their video exchanges off the ground, the rest of the industry will look for less annoying formats than the repurposed 30 second spot. Hulu will make their inventory available to third-party service and analytics. Also, look for a major producer to go rogue and deliver a free, web only serial drama. Registered mail tells me that Aaron Sorkin is in procession of a fantastic West Wing meets Silicon Valley dramady.

9. Expect a New Google Foe

Waiting on the sidelines are a number of eager outliers building stacks high enough to look the Google monolith eye to eye. Adobe, Akamai, and even IBM aren’t shrinking violets when it comes to online. Facebook and Apple also know a little something about the space

10. Privacy Reaches a Crescendo

If the Wall Street Journal has its way, the American public will take to the streets because Victoria Secrets and J. Crew secretly know their names and addresses, opportunistic legislators will hold increasingly higher profile hearings that only disclose their ignorance, and eventually it will be discovered that masses aren’t such assess because they understand and willingly participate in the value exchange that keeps the internet free. Power to the people!