A longtime presence in the data management and marketplace arena, Lotame closed off its data-driven ad network to new customers in August in the hopes of building more interest in its data management platform, Crowd Control – the move was successful, with a dozen new publishers and content groups signing up for the DMP. AdMonsters caught up with Lotame COO and General Manager Adam Lehman to talk about shutting down the ad network, privacy perils, data licensing and what confounds publishers most when approaching data monetization.
First off, the news: what was the impetus for shuttering your ad network? Is a publisher-side DMP simply a more lucrative business?
Lotame started as a publisher-side DMP — courtesy of the WayBackMachine, here’s a glimpse at our earliest days. Since the market wasn’t ready for a DMP in 2007, we adapted by creating an audience-targeting network model. Now that the market is there for our DMP offering, we wanted to get back to our tech and business roots. At the same time, we recognize the pressures on the ad network model by virtue of the “secular” shift away from network buying and toward exchange-based buying.
How is a publisher-side DMP similar/different from other kinds of supply-side platforms? What kinds of publishers do you think are better served by the tool?
Current supply-side platforms focus on increasing yield on publisher inventory. A true DMP, while setting a publisher up for higher downstream yields, works more at the foundation of a publisher’s data management and utilization. Our DMP enables pubs to ingest first-party data, segment it, enrich it (with available third-party data sources) and monetize it, both in combination with audience-targeted media sales and on a standalone basis through data licensing, creating a whole new publisher revenue stream. A DMP is best suited for publishers that have multiple web properties and a direct sales force that can sell the benefits of audience-targeted solutions and the publisher’s cross-site inventory sources.
Crowd Control is an interesting name for a DMP – it makes me imagine beefy men with shaved heads and sunglasses standing with their arms folded above the masses. I assume that’s what all your engineers look like?
For the most part, yes. However, if he or she is exceptionally brilliant, we will allow a typical coder to join us now and then.
Client testimony from the likes of InvestingChannel.com and Break Media suggest Crowd Control’s chief advantage is its ability to analyze mounds of complex data – how are you able to deliver such efficiency?
From the outset, we built our technology with scale in mind. We then married that scalable architecture with the data-specific tools and learnings we developed in running a high-volume data-driven ad network for four years (in terms of taxonomy structure, proprietary data categorization tools, optimization tools and unique analytics).
What are the chief improvements you’ve made on the DMP over the last year? What added features do you hope to address in the near future?
In the past year, we’ve introduced custom taxonomies to support customer-specific data classification; pre-optimized, goal-based data segments; indexed audience profile reporting; seamless purchasing of third-party data; tag management; and integration with numerous data and media sources. We’re working on several exciting new features, in areas that include content personalization and cross-channel data management, that we’ll announce as we get into 2012.
Lotame still runs a data marketplace – where does the for-sale data come from? How do your agreements with publishers regarding re-selling data work? What do you suggest for various pubs – when is it a good revenue stream for them?
Data within our data marketplace comes from participating publisher partners. To be clear, a publisher partner needs to affirmatively opt-in to have its data included and licensed to third parties. We view our data offering as a value-added offering to publishers using our DMP. Of course, it also serves the demand-side of the market by providing a very large, unique and high-performing source of segmented audience data.
Data licensing represents a good new opportunity for publishers that have (1) reasonable scale in their audience reach, (2) an openness to licensing data on an anonymized basis, and (3) solid privacy practices that support the licensing of user data.
How is operating a publisher-side DMP and a data marketplace not a conflict of interest?
As indicated above, our data marketplace is a value-added service to DMP clients. If a DMP client wants to generate an additional data revenue stream through our data marketplace, we provide them an easy way to do so. If the client doesn’t want that, we’ll offer them tools within Crowd Control that make it easy for them to effect direct data licensing transactions. We don’t see any conflict of interest in this offering, and haven’t heard that as a concern or criticism from any of our current clients or prospects.
Lotame was recently hit by claims from privacy advocates that it was collecting “too personal data”; how does the company defend its data collection practices from a user privacy standpoint? How should publishers do the same?
When it comes to our privacy practices, ours is one of the most progressive companies in the industry. We were one of the first companies to offer a short, no-exceptions retention policy of nine months. We were one of the first to offer a full-featured preference management tool with which users may control their anonymous profiles. We were one of the first to adopt and deploy enhanced notice tools through our partnership with Evidon. We were one of the first to honor Do-Not-Track headers. And so on.
Because we operate in a sensitive and highly politicized area of business, we’ll continue to face privacy questions, some legitimate and some less so. In any case, we’ll continue to stay out ahead of the industry in the priority we give to users’ privacy concerns.
Lotame recently updated its privacy policy – what’s the key change?
The key change in our recent privacy policy update was to call out (where relevant) our business model shift, from network to DMP. As a result of this shift, our DMP clients will guide much of how data is collected, used and shared through Crowd Control.
What are your feelings about the FTC’s proposed online privacy framework? Can you determine how browsers employing DNT tools in their browsers are affecting data management efforts?
We’re open to considering all of the various legislative and regulatory frameworks being proposed by the FTC, Department of Commerce, and the White House, as well as the various House and Senate bills that have been introduced.
That said, we continue to believe that (1) existing laws and regulations provide ample fodder for regulators to address “bad actors” and (2) beyond that, additional regulations will do far more harm than good. We believe they would slow down the innovation and data flow that provide a lot of under-recognized social benefits, while failing to provide consumers any meaningful additional protection or benefits.
What flummoxes publishers most when approaching organizing and monetizing their wealth of user data?
Publishers are most flummoxed by the challenge of managing their data in a way that suits their existing sales capabilities, personnel and strategies. That’s why a DMP like Crowd Control becomes so attractive. With an easy-as-pie user interface, a fully customizable taxonomy (which a publisher can map to its existing sales packages), immediate data categorization supported by our in-house data team, and ongoing technical and account support, Crowd Control enables a publisher to hit the ground running with audience-targeted media and data sales, and generate clear ROI in the process.