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How the Social DSP Will “Defrag” Social Media Advertising

There are a lot of channels that come to mind when we think about the maturation of the digital ad industry. Mobile, display, social and video, advertising is on the rise, and when it comes to Internet advertising as a whole, the numbers are astounding.

The IAB Internet Advertising Revenue Report released by the Interactive Advertising Bureau in December and conducted by PricewaterhouseCoopers found that Internet ad revenues for Q3 2013 climbed to nearly 10.7 billion, marking 15% year-over-year growth. And according ad spend data from Advertising Perceptions, 47% of client-side marketers and agencies are expected to increase their ad spends on social channels; 40% will increase spend on video sites like YouTube and Hulu; and 27% will increase spend on ad networks.

Demand Side Platforms (DSPs) that allow for programmatic and real-time buying continue to receive a lot of attention for their sophistication when it comes to targeting and retargeting, inventory availability, potential reach, and reporting. Many DSPs also incorporate research and data from first and third parties to enhance intelligent segmentation. When it comes to optimizing their campaigns, DSPs are making the online ad market more manageable for advertisers in ways we’ve never seen before.

Brands are finding new ways to optimize their campaigns across social media, as well. They’re leveraging consumer conversations and interests to serve potential customers highly contextual ads and content across social channels like Facebook, Twitter, Instagram, Tumblr, and LinkedIn.

From the videos we watch on YouTube to the music we listen to on Spotify to the things we say on Twitter to the friends we have on Facebook—advertisers have more information about potential customers than ever before.

When we look at social media platforms and their active users, we’re seeing a true convergence. According to Pew, 42% of Internet users use two or more of the top social media sites. But unlike the display, mobile, and video advertising space, advertisers do not have a comprehensive tool that allows them to measure, optimize, and target their campaigns to a unique and contextualized audience across multiple social media platforms. Enter the Social DSP.

Our experience in media and marketing tells us that in the not-so-distant future, the industry will see the development of such tools that let advertisers engage with the consumer across all social platforms, based on interest and context. Such enablers are what I refer to as “Social DSPs.” The emergence of such tools is predicated on the increasing convergence of lexicons among social platforms. We saw this when Facebook, Instagram, and Pinterest embraced the hashtag, made famous by Twitter. Just last week, Facebook announced the incorporation of trending topics. This convergence will facilitate both the ability to target unique users and aggregate audiences across social platforms, as well as enhance the advertiser’s ability to speak to and engage with customers in a similar way, with optimized content and across any platform.

We aren’t yet at the point where advertisers can match Facebook profiles to Twitter handles to Pinterest boards, but we are nearing a tipping point.

Today, tools that help address the fragmentation of social media advertising do exist—for example, Unified, which helps advertisers to measure ROI for their social media buying and Social Code, which optimizes performance marketing across Facebook and Twitter. Soon, we can expect that a similar lexicon combined with evolving cross-platform audience segmentation based on contextual insights will enhance these currently available offerings.

BIA/Kelsey predicts that by 2017, social ad revenues will reach $11B in the U.S. alone, and we believe that Social DSPs that empower advertisers to create creative and relevant campaigns will facilitate this growth. Advertisers’ social ad management will be more efficient—but, more importantly, will also add greater value to consumers via a more sophisticated understanding of their interests.

Maren Lau is CMO of IMS Internet Media Services.

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