Each of these companies has either released or is producing ad
platforms that will use their data to make ad buys across the web.
Rakuten, a large Japanese e-commerce company, also introduced a
U.S. ad business last month with the expectation that it will
eventually use its first-party data to sell ads.
In addition to these giants, many marketers -- including Kraft, Netflix and Kellogg -- are using their
own data in-house so they control their approach to automated ad
By using their own data, marketers can reduce their dependence
on ad-tech middlemen, which can charge 15% per transaction in many
cases. For example, Kraft used its data as a negotiating chip to
lower these rates, according to Bob Rupczynski, a VP leading the
company's in-house data effort. "I think you'll see a correction,"
he said, speaking of ad-tech rates.
Kraft is also using the data to execute more effective automated
ad buys, Mr. Rupczynski said. "There's only so much you can get out
of the efficiency play, and buying cheap impressions doesn't build
brands," he said. "You're going to see the industry make the
At the same time, the new emphasis on first-party data is making
marketers' lives more complicated. "They're going to have to become
smarter about the data they collect," said Will Phung,
director-media at M&C Saatchi Mobile. "Marketers now have to
understand, 'O.K., I have this data, I have to find some way to
translate it into an anonymous cookie that then can be matched in
some sort of programmatic environment and shown an ad in the right
Brian Lesser, CEO of Xaxis, WPP's programmatic unit, expressed a
similar sentiment. "From an execution standpoint, it's getting
harder, not easier." As for Facebook and others trying to leverage
data, Mr. Phung said it's too soon to tell if they will dominate
the digital ad industry. "It's not just having that data, it's also
having some machine intelligence able to tease apart that data," he
In other words, first-party data isn't truly valuable without a
layer that optimizes media buys based on it. "Weather data itself
is not where our power lies. It is what we do with it that makes it
truly interesting," said Vikram Somaya, general manager of
WeatherFX, the Weather Co.'s data division.
Facebook does a great job with its data on its own site, but Mr.
Phung said the question is whether it can do the same on the rest
of the web. If it can match what it does in its news feed, "they're
definitely going to get dollars not just from us but from agencies
across the board," he said. Facebook has a running start on that
front: its ad server can already tie together people's identities
across screens, something the rest of the industry struggles
Up for grabs, according to Mr. Phung, could be the spending on a
number of ad networks and programmatic platforms. "The opportunity
is absolutely huge," he said.