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Will Facebook’s DSP stack up in programmatic?

Programmatic is now well and truly a part of advertising’s mainstream. With Facebook set to roll out a DSP product in 2016, the ability to source and buy real-time audience insights takes on new significance for advertisers.

They know that devising campaigns based on audience data, which means they can engage consumers on a human level is key. Programmatic data allows them to deliver relevant messages online with precision. For an industry already in a rapid state of evolution, the input of companies like Facebook further opens the door for brands to advertise in impactful ways.

Although the details are still to be announced, Facebook’s latest move to expand its ad-platform business is indicative of the appetite that data-owners have to use their assets in this increasingly programmatic world. And if the big players are finding ways to capitalise, it’s likely that smaller ones will soon follow their lead. An influx into the market of new data-sellers will boost programmatic’s value by making even more audience insights available to marketers. But how compelling will all of this data be? And in Facebook’s case, will it be enough to smooth the entry for its DSP?

Whilst it may be one of the world’s top data-holders, we nevertheless predict that Facebook will face challenges in bringing its DSP to the marketing community. For two main reasons — the inability of first-party data to create a universal audience picture and transparency issues around Facebook’s data.

On its own, first-party data does not allow marketers to reach people online in the right places at the right time with the right messages. It reveals who consumers are, but fails to provide insights into how they are engaging with brands, how interested they are in products or services, or how close they are to making purchases. This is the domain of third-party data providers who draw on billions of unique digital profiles to make meaningful connections between brands and consumers. Marketers know this information is at their fingertips and that they can no longer campaign effectively without it. They won’t be willing to compromise when it comes to ticking all the data boxes. To respond to this, Facebook will need to augment its own data with third-party segments to offer a fuller audience picture to data buyers.

The transparency of Facebook’s data will be another factor in its programmatic success. Marketers have come to expect that the data they buy to inform their campaigns is reliably sourced and cleared for use. Will Facebook be able to provide the necessary assurances on these points? Will they want to? The company can expect to be asked questions that interrogate its position as a solid data source. How well it responds will play a big part in determining how its DSP is received.

The notion of transparency is worth considering in more detail. Directness is the cornerstone of successful business for smaller independent players in the programmatic field. These companies wouldn’t survive if they couldn’t prove the origins of their data, and so setting out this information clearly and readily is more than just good for business — it’s mandatory for survival. This behaviour has, in turn, created a marketplace built on trustworthy practices. Facebook will do well to behave accordingly.

But it’s not just the data-sellers whose reputations are pegged to the integrity of data — brands and marketers also depend on being able to prove the authenticity of their sources. Consumers drive relationships with brands and decide if campaigns stack up. Increasingly, they are likely to question where a brand gets its information about them and how it is being used to target them. Answering these questions is crucial to lifting brand perceptions. It also keeps the industry on its toes by reinforcing standards and best practices. Similarly, marketers relying on data for their campaigns must feel confident that it’s accurate and legitimate. Failed campaigns can fall squarely at their feet and they’ll want to know they can back up their choices and strategies with reliable information.

As always, when an industry is in high-growth, there is much at stake and much to be gained from new pressures and players. It will be interesting to see just how the launch of Facebook’s DSP influences the behaviour of marketers and continues to shape the programmatic landscape. Facebook may be leading the way in some respects, but it is operating in a space that is already high in caliber.

Whatever happens, one thing is clear — the desire from advertisers and marketers for audience-led campaign targeting with human-centric values at the core will continue to drive programmatic’s mainstream charge well into the future. Because this is what really matters — seeing audiences as real people with complex desires and not as intricate sets of data.

People know when they are being marketed to, but they mind less if the content of the messages they are receiving is applicable to their lives, defined by them, and helps them progress in ways they believe will serve them.

Kevin Tan, CEO, Eyeota