Gang war? The death of premium publishers? The evolution of ad networks? Or, just dinner discussion on DSPs.

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I’ve heard many opinions about DSPs, often exaggerated or misinformed. Therefore, I was looking forward to hosting the IAB’s Innovators Roundtable Dinner (IRD) on October 27 in New York, sponsored by Casale Media.  Marketers and agencies came together at Sparks Steakhouse (yes that steakhouse outside of which 2 mafia bosses were gunned down in 1985) for a lively discussion on balancing audience and environment in the age of demand-side platforms.

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Whereas a few months ago (and certainly last year), the discussion would have centered around answering the question what exactly is a DSP, the marketers and agencies at my table had already tested the waters and were ready to swap stories.  They had found demand-side platforms valuable for performance but limiting for branding with the caveat that it always depends.

For direct response, the ability of a DSP to target an audience results in impressive conversion metrics. Plus, DSPs help marketers define and zero in on audiences that they never knew existed by leveraging demographics and psychographics that match the marketer’s profile based on a myriad of data points. If the agency knows the sweet spot(s), media budgets can be better allocated to optimize conversions.

When the discussion turned to brand advertising, sensitivity to context and environment became a top priority. A DSP can help a marketer find soccer moms, but when is a soccer mom most receptive to the brand messaging? If an auto marketer wants to introduce a new SUV model, is that best done when she is reading general news, social networking with friends or even researching household products? Also, the marketers and agencies in attendance had a healthy dose of skepticism about the makeup of audience segments. For example, could a user flagged as a soccer mom by a DSP really be a single urban professional who just happened to click on a link to a parenting article?  Everyone agreed there is a role for finding audiences on DSPs, but it will never replace the need to target by the context and environment of the message as well.

The other issue that always seems to come up is ad verification, and this dinner was no exception. If an agency or marketer is focused on audience, where are the controls so the advertising does not appear next to inappropriate content? At the IAB we created Networks & Exchanges Quality Assurance Guidelines to provide brand safety assurances and detailed information for buyer control over ad placements through certified networks & exchanges. As a next step, we’re kicking off a project to allow technology platforms like DSPs to be compatible with these guidelines. The IAB is also launching a working group to develop guidelines for ad verification in collaboration with the Media Rating Council (MRC).

A few weeks ago, I was in the Bay Area (congrats Giants!) visiting IAB members, and I had the opportunity to tour the nerve center of a real-life DSP—Turn’s office in Redwood City. In the center of the office is a dedicated screen with a graph showing impressions bought and sold on exchanges in real-time. The total number of impressions transacted in real-time today is a small fraction of interactive media buying. However, as marketers and agencies realize the benefits of audience buying, this number will surely grow—but by how much?  Based on the conversations at the IAB Innovators Roundtable dinner, it depends on how DSPs and other intermediaries prove their ability to deliver brand messaging to audiences in context.

Gina Kim is Director, Industry Initiatives, for the IAB.