How Cadreon’s Arun Kumar Connects The Dots Between Walled Gardens

Walled gardens are cropping up across the digital ecosystem.

“It’s just the way the world is going to be for the foreseeable future,” said Arun Kumar, global president at Cadreon. “I don’t see that changing.”

As president of a global trading desk, it’s Kumar’s job to follow the consumer across these walls as he or she moves through the digital world, which involves evaluating and partnering with vendors who can patch together a holistic journey.

“The way we look at investments is, what’s going to help us get commonality across channels and tactics?” Kumar said. “How do we navigate the reality where consumers seamlessly move across screens?”

When a solution isn’t available in the market – which is often the case – Cadreon builds its own.

“We’re only looking to build systems that help us connect platforms,” he said. “I’m not going to create an alternative to commodities.”

Kumar, who will speak at AdExchanger’s Industry Preview next week, spoke with AdExchanger.

AdExchanger: What investments in technology are you looking to make this year? What capability do you need most to stay ahead of the competition? 

ARUN KUMAR: Michael Roth stated it very clearly in the earnings call for IPG when he spoke about investing behind a data stack. We’re also looking to invest in whatever helps us better integrate the ecosystem. [It] only gets more fragmented and harder for our clients to navigate.

Why hasn’t IPG Mediabrands built a data stack yet? 

There’s been a data stack at Mediabrands for the last four years. We were one of the first to connect online and offline data sets. But use cases evolve. Three or four years ago, you didn’t have such a burst in the mobile video or connected TV space. Large networks are focusing a lot of their infrastructure and attention behind that.

I’m very careful about where investments go. You have to judge the benefits and use cases [for] clients. We’re far more focused on what’s future-facing. Where do we want the market to go? Some of the areas we’re investing in, there isn’t a product available in the market. If [we] can’t find it in the market, then we on the buy side will have to build it.

How do you feel about clients placing the bulk of their spend within walled gardens like Facebook and Google?

There’s a constant interplay between two variables: convenience and media objectives. You find an overinvestment behind a few channels because the stack is easier to navigate.

But when you go multiplatform, platforms don’t sync well with each other. They have [different] rules of engagement, so there’s a fair amount of manual work. It comes down to having a discussion with the client about [whether or not their] objective is being served. Each garden offers a certain return. You have to decide what return you want. It’s easy if you go to one player, but then there’s a loss.

Who do you see as the next big contender to the duopoly, if there is one?  

Amazon is definitely coming up as a rival. They have rich shopper data and they’re starting to get TV viewer data on their shows. Snap is interesting to watch. You’re seeing a lot of forward thinking from networks like Turner. Comcast has made a lot of strides in addressability.

The TV space is where you’ll see innovation. Clients are migrating digital budgets back into TV. If the TV networks become more advanced in targeting, you’ll see those players become genuine competitors. It’s still a great medium, it offers great impact and if you’re able to get that level of targeting, then it’s going to be a viable alternative to some digital platforms.

Are we just going to be living in a world of walled gardens?

Yes, we are. Each one has very strong reasons to believe they have the authority to put up those walls. What advertisers should expect – and get – is complete transparency into what happens within that ecosystem. If I’m able to get the right metrics and understand what’s happening to the extent that I need to, that is a good first step.

If you put on your consumer hat, you will realize some of the tactics we talk about only end up frustrating consumers. I don’t think the fact that I bought something on Amazon is something I would necessarily want Netflix to know. You can’t expect these players to hand over information and make a free data exchange. They have to take privacy laws into account.

In a world of walled gardens, are true cross-screen targeting and measurement attainable? 

It’s an aspiration. I’m not sure you’re ever going to get to perfection. Unduplicated reach and frequency capping is going to be impossible because you can’t cut across certain walls.

From a media agency point of view, you need a basic understanding across channels. You should be able to at least estimate unduplicated reach and help clients move money from video to TV. I don’t think you’ll get to a stage where, in real time, you can move money between Google and Facebook with full visibility.

What do you see as far as consolidation trends in 2017?  

There are too many players and the market is starting to shake out. There’s a lot more scrutiny paid now to who is in the stack and the role that provider plays.

People across spectrums are building their own stacks. You see Adobe saying, “I want a great data stack. I sort of have a bidding engine, but I want a very strong delivery platform and video is the future.” So it makes sense for them to go after TubeMogul. If they’re able to make their aggregated data sets addressable to video, that’s big for them.

All of the big players are looking at the gaps they have. They want fully functional stacks that tick all of the boxes. It’s easier to buy than build from scratch.

Smaller companies are running out of steam. They’ve maxed out their product and they need investment to grow. The fact that Wall Street is not really friendly to ad tech stock doesn’t help. If you really want to grow your product, you have to work with one of the big guys.

Who will come out as the winner? 

The usual suspects will be around. I expect Facebook and Amazon to give Google a bigger challenge, especially with header bidding. A lot depends on how Snap develops and whether it can compete with Facebook and Instagram. It will be interesting to see where companies like Adobe and Oracle evolve and whether they get into buying and activation.

In the next couple of years, I’m hoping that it’s not a duopoly and it becomes a triple play. If I had to bet, I would bet on Amazon.

This post was syndicated from Ad Exchanger.