As Advertising Week wraps up, two things are clearer than ever. First – the data exchange business is more embraced than ever before and is alive and kicking. Second, the data exchange business has a target on its back…and the FTC is aiming right at it.

Cookies are good, data is good, relevancy is good. Lack of disclosure is bad! In fact, last week at OMMA, Eileen Harrington, Deputy Director of the Bureau of Consumer Protection for the FTC said the FTC and legislators are not satisfied with the level of information provided by the industry. In fact her actual words ere “They haven’t been forthcoming much at all in any meaningful way.” I have to ask, is that true, or do the FTC and legislators just not understand? Apparently giving consumers access to an easy global opt-out mechanism via the Network Advertising Initiative is not enough for them.

As much as those of us in the industry know that many of the methods in which data is collected and utilized is not only harmless, but beneficial in creating relevant experiences for consumers, those outside of the industry do not seem to understand this and have perceptions of big brother following them. Of course there is plenty of private and sensitive data collected as well, and guidelines and even laws probably will be required to ensure that nobody pushes past the line of acceptability.

FTC intervention is inevitable, as calls for self regulation by the FTC do not seem to have yielded any industry collective body or effort to define and enforce self regulation. The IAB last week ceded that they do not feel that they are the body to do so. But someone has to, and soon.

In the wake of NebuAd getting shot down for working with an undisclosed number of ISP’s to collect vault-loads of consumer data, this is a real issue and expect regulation to happen one way or another.

Companies like BlueKai are hedging these steps by giving consumers access to the assumed preferences collected in their profiles through behavioral observation, which are anonymously cross referenced by ad servers via cookies. Consumers will have the ability to simply adjust their interests and preferences to help cater more relevant web experiences, or of course they can opt-out altogether.

Ad exchanges have yet to fulfill on the promise of buyer-seller connection at scale, due to the commoditized inventory running through the exchanges. The addition of or evolution into data exchanges   will certainly change that by creating more value in commodity ad inventory.  We’re seeing constant progression in the data exchange marketplace, although I’ve noticed how delicately the behavioral targeting players dance around the term “data exchange”, in light of the many microscopes aiming in their direction. Each of the big four (Google, Microsoft, Yahoo, AOL) have some type of exchange, and therefore the investments will be pursued until successful. Yahoo’s Apt rolled out this week as well, and promises to combine behavioral data with Right Media’s exchange platform to offer publishers and advertisers the ability to better address specific audience segments. I look forward to this next era of the data exchange, and hopefully a self-regulated one.

  1. […] The Era of The Data Exchange Cookies are good, data is good, relevancy is good. Lack of disclosure is bad! […]

  2. davelinhardt says:

    Is the data exchange marketplace viable and growing? What do you estimate the current market size to be?

    I am asking because Lookery entered the dead pool a few months ago. When I spoke to some folks there, it seemed to be a case of their solution being ahead of the market.

    As with all new solutions, there is a adoption curve. Marketers need to be thinking about data exchanges, seeing results and budgeting for them before the market can be large and viable.

  3. Jason Heller says:

    The big media agencies have not only embraced the era of the data exchange, but have built their own systems to leverage this data and in some ways have even created the same type of solution and do not need the data exchanges anymore. However, other than the major media buying firms, there is an entire industry out there that can be utilizing these systems. I think the fact that the major agencies have their own data systems now must have taken a large part of the potential from the data exchange vendors. This post was from Sept 2008, just when the agencies were beginning to develop these systems.

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