Exchange services help publishers sell, buy audience data

In the last year or so, a new concept has been popping up in media advertising: audience data exchanges. These marketplaces bring together the relevant players in advertising and audience data to make it easier for media companies and advertisers to target relevant groups. The model is evolving as a venue for media companies to buy, sell and share audience data.

Media companies can use audience data exchanges in two ways: They can purchase audience data to improve their advertising revenue streams with better ad targeting. They can also sell audience data to marketers, creating a new revenue stream.

An evolving marketplace

As many players in the space will tell you, the audience-data ecosystem is convoluted and everchanging. 

The market includes data providers that work directly with advertisers and publishers; one example is Clearspring, which recently launched an audience platform. Other players to note include demand-side platforms (DSPs), which buyers use as a hub to buy advertising and audience, and data management platforms (DMPs), which manage audience data. In addition, data exchange vendors may sell bits and pieces of functions, such as data managements tools.

At the top of the food chain are the full-service marketplaces, which include three main vendors: BlueKai, eXelate and Brilig.

While these exchanges have different models, they all basically connect audience data sellers with data buyers. The buyers generally consist of advertising exchanges, advertising networks, advertising agencies and DSPs, although, as noted above, media companies can be both buyers and sellers of audience data. Here's an overview of each full-service audience exchange provider:

eXelate

Launched in 2008, eXelate was the first marketplace for audience data, and just recently received $15 million in new funding. Publishers on the platform can sell and buy audience data in its marketplace, which is made up of ad networks, agencies and DSPs.

Here's how it works: Publishers anonymously contribute data about their digital audience to the buyers looking to target consumers in a particular vertical (travel, auto, etc.). Those advertisers can take that data in order to target visitors once they leave a publisher's website.

eXelate markets itself as publisher-centric, offering data management and privacy monitoring tools to help publishers better manage their audience data. The tools allow publishers to segment their audience, control access to that audience data, and then push data into the marketplace, according to Mark Zagorski, chief revenue officer at eXelate. He described the platform as similar to an ad server, but for data.

In addition to managing audience data for the exchange, publishers can also use the tools for their own audience monitoring or to create a private marketplace for data. For instance, Zagorski said, a media company could sell some data anonymously on the exchange while also selling premium data under its own brand.

BlueKai

Also launched in 2008, BlueKai offers an audience marketplace as well as audience analytics tools. BlueKai's model is more focused on selling data to media companies to improve ad targeting, rather than buying data from them.

Publishers use the platform to improve behavioral ad targeting, as marketers look for better ways to define and target audiences. BlueKai enables publishers to buy quality audience data to "create more effective, high-value audience packages," David Wiener, BlueKai's director of product marketing and platform strategy, said in an e-mail..

"For example, if someone searched an online travel agency site for travel to Hawaii, this person is very likely in the market for air travel and hotel accommodations in Hawaii," Wiener said. "A publisher can take this data and now intelligently create a scaled in-market traveler category for  airline and hotel advertisers on their own website."

More targeted ads can help publishers monetize pages that previously were unsold or undersold. For instance, "news" content is sometimes undervalued because anyone could click on a news article — it doesn't tell the publisher much about the person and whether they want to buy a car. By layering better data on that target, BlueKai could help get more value out of those "low-hint" pages, Wiener said. 

Brilig

Brilig, a startup that debuted in June, adds a new flavor to the audience marketplace: an open exchange where buyers and sellers can trade data openly (rather than anonymously like the other exchanges). Media companies can buy, sell and share data on the Brilig platform.

The audience marketplace consists of audience data, segments and algorithms. The exchange is crowdsourced by thousands of websites and hundreds of data companies, explained CEO Paul Cimino. He described it as almost like a social network or co-op.

Rather than aggregating and packaging data into segments (e.g. "auto intender"), Brilig is just facilitating the marketplace. "We don't make segments; we're an open, transparent, fluid market," he said. 

Privacy and other challenges

One of the primary challenges to audience data exchanges comes as no surprise: privacy. Online privacy concerns have received attention from consumers, which have translated to attention in Washington. Audience exchanges seem to take the issue seriously, looking into ways to be more transparent and offering "opt-out" functions.

"As an industry we need to work towards transparency at a site and ad level, meaning the consumers should be able to go to a site and know what specific data is being collected or if they see an ad, they should know what data is being used to show them that ad," Wiener said. He added that BlueKai is working with Better Advertising, a platform that lets consumers see the types of data being collected about them and opt out from being tracked.

Another challenge for audience exchanges is their lack of standardization. Zagorski said there needs to be a consistent nomenclature in the audience data industry. For instance, a "travel intender" doesn't necessarily mean the same thing on BlueKai as it does on eXelate.

Because of that lack of standardization, Clearspring CEO Hooman Radfar said the notion of buying through an exchange, rather than directly through companies like Clearspring, may be premature. An advertising exchange has defined standards for ad inventory, he noted, but audience exchanges are "not quite at that point."

What's next for publishers?

Despite these issues, audience data services offer publishers new opportunities to improve existing revenue streams and potentially create new ones, which some vendors see as critical to their future growth. “Any publisher who doesn’t have a data strategy is going to be dead,” said Brilig's Cimino.
 
As the market matures, eXelate's Zagorski expects more publishers to warm up to selling audience data. “In the last six to eight months publishers have really become aware of the fact that their audience data is becoming a key revenue source for them," he said. By allowing advertisers to put cookies on their sites, publishers have for years given data away for free. Audience exchanges, he noted, enable publishers "to take control of their data — and get paid for it.”