That BlueKai thing

So, someone mentioned the topic of BlueKai today, and it reminded me that I wanted to pose the following question:

Are the companies that are using BlueKai to re-sell their targeting data maximizing shareholder value?

My gut says no.

Supposedly, it’s not well known who sells their data to BlueKai, but anyone with Firebug can sniff that out. Ebay definitely does, and I’m certain that I’ve seen in a net trace on expedia in the past as well. (though curiously not tonight.. hmm)

Anyway, my gut says that the folks who are selling this data would earn more revenue by using the first few retargeted impressions for their own advertising and then selling the rest to someone else. (I’ve seen numbers that basically prove this fact for at least one advertiser.)

As it has been described to me, what happens today is something different: If advertiser wants to bid on the first few retargeted impressions, they may be bidding against the very person that they sold their data to – increasing demand, and raising the price (and reducing the ROI) for both of them.

Have I been misinformed? If there are any folks with first hand experience in this sort of execution, please drop a note!

One thought on “That BlueKai thing

  1. It’s really the same story that publishers faced with ad networks a few years ago: they compromise on profit maximization in order to get a cheap and simple distribution mechanism. The key compelling reason to buy is that without a BlueKai, they wouldn’t commit the resources to make it happen at all; it’s too far out of their core competency.

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