Monday, March 10, 2008

NYTimes: It's all about the data, dummy!

Great article in the NYTimes on ad targeting and data scale. This is probably the first intelligent article in the mainstream media that I can remember on this topic - explaining that the combination of on-site and off-site behavioral data by consumers is what's driving the Internet today. An extension to the claims in this piece is that the same data is used to drive *products* (i.e. search relevance) as well as ad targeting; but I'll wait for their follow-up piece to close that gap.

Worth noting: The NYTimes has integrated "blogs" and their conversational style allows Louise Story to add some useful and interesting information to the more formal article. Check out her piece at the "Bits" blog for more data and further insight.

Some key quotes:
The rich troves of data at the fingertips of the biggest Internet companies are also creating a new kind of digital divide within the industry. Traditional media companies, which collect far less data about visitors to their sites, are increasingly at a disadvantage when they compete for ad dollars.

The major television networks and magazine and newspaper companies “aren’t even in the same league,” said Linda Abraham, an executive vice president at comScore. “They can’t really play in this sandbox.”...

Web companies once could monitor the actions of consumers only on their own sites. But over the last couple of years, the Internet giants have spread their reach by acting as intermediaries that place ads on thousands of Web sites, and now can follow people’s activities on far more sites...

“So many of the deals are really about data,” said David Verklin...

Some advertising executives say media companies will have little choice but to outsource their ad sales to companies like Microsoft and Yahoo to benefit from their data. The Web companies may prove they can use their algorithms and consumer information to better select which ads for visitors better than media companies can.

“I think a lot of publishers are going to find they don’t have enough data,” said David W. Kenny, chief executive of Digitas, a digital advertising agency in the Publicis Groupe. “There’s only going to be a handful of big players who can manage the data.”...

Even with all the data Web companies have, they are finding ways to obtain more. The giant Internet portals have been buying ad-delivery companies like DoubleClick and Atlas, which have stockpiles of information. Atlas, for example, delivers 6 billion ads every day. The comScore figures do not capture such data.
I am pretty confident that there is at least one zero missing from every number the Times quotes in this article. This is happening today at a monumental scale, and will only get larger as time goes on.

Data is the new lock-in and sustainable competitive advantage.

So how do you collect, store, and analyze all that data? That's why we built Hypertable...

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