Why the Sky is Far From Falling in the Ad Tech Industry

Jun 14, 2019


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Article ImageAs quickly as a smartphone screen refreshes, ad tech has opened the door for brands to reach any digital touchpoint, across any channel, device, and format. In just a few decades, advertisers have evolved from courting only a few hundred newspapers, magazines, and broadcasters to juggling millions of online media publishers.  

As you can imagine, managing so many touch points has not been without its challenges. Issues over brand safety, fake news, and the realization that many ads were being served to bots have been a blow to the ad tech industry. While some may see these headlines and conclude the bankruptcy filings, high debt loads, and layoffs currently plaguing the industry point to its collapse, the exact opposite is happening.

The ad tech industry is thriving, evidenced by the fact that massive giants, Facebook and Google, are still surviving off of it. Meanwhile, as additional big players (like Amazon) enter the space, the slow decline of the duopoly is opening the sector for others to make waves. This rise in competition is not only creating opportunities for more contenders, it’s breeding profit for the industry as a whole.

Marketing data is more important – and effective – than ever and, in turn, brands are seeing greater results. The recent IAB 2018 Internet Advertising Revenue Report details the industry’s continued growth, with digital revenues totaling $107.5 billion in Fiscal Year 2018 and internet advertising being the only media type to experience double-digit growth year-over-year.

While companies have every reason to be concerned about ad fraud and the quality of the digital supply chain, those who have the right tools and resources are making strides in effectively eliminating waste and ensuring companies get more value and reach more consumers.

The industry isn’t failing, but those who can’t keep up are.

If anything, the current issues we face are shining a spotlight on areas needing more attention. The systems that brought us success in the past are being re-worked to be safer and more transparent. We’ve seen the ad tech industry collectively reshape the way media is bought and sold to create a new business model that gives brands the transparency they're seeking.

These changes aren’t a sign of decline, they are a sign the advertising industry still sees immense future potential in programmatic – enough to spend time, money, and resources on improving it.

Here are six ways ad tech companies are strengthening programmatic for a future of continued growth:

  1. Stacking Teams with Talent — Machines may facilitate real-time bidding at speeds of hundreds of milliseconds per transaction, but it takes people who know how to leverage the technology to reap the benefits. Companies are recruiting and growing specialists with a unique blend of art and science backgrounds, with a combined discipline of marketing strategy, data science, and a rich knowledge of the digital ecosystem. These investments in people who thrive while crunching numbers, solely for the joy that comes along with uncovering behavioral insights from data are fueling increased performance across the industry.
  1. Multi-Pipe Solutions Delivering Scale at Lower Cost — A restricted ad stack severely limits a brand's access in a world where consumers can choose from virtually limitless choices for media consumption. You can’t run an effective digital marketing campaign with access to only a handful of partners — it’s like trying to type a novel with access to only a third of your keyboard. As we’ve seen lately, platforms do go down, and alternative options must be available to be put into place at a moment's notice. The inability to gain access is one reason for Sizmek's recent fall, as the company came to the realization "they do not have the scale (large enough share of media business) to justify costs of continuing their DSP." While multiple licensing fees are expensive for brands to purchase on their own, and prices will continue to rise as we work toward our goal of fixing a crappy media supply chain, companies are investing in multiple licenses from reputable programmatic outlets to allow their clients to advertise across a wide range of inventory opportunities.
  1. Shifting and Swerving Along with the Market — The current layoffs within the industry are not a sign of decline. In fact, they have freed us from the restrictions of segregated departments operating in silos. Strategic technology investments optimize all areas of the digital advertising process to streamline the approval and RTB process, so campaigns spend less time getting approved and more time driving revenue. This resiliency and collaborative environment is helping companies stay on top of new opportunities currently opening up in rich media like virtual reality, voice-activated, and chatbot-driven user experiences.
  1. It's Not About Quantity, It's About Quality — Counting impressions has become obsolete and has already given way to a new set of sophisticated metrics focusing on the transparency clients demand. The lack of standards in measurement and verification is what allowed lower-quality sources to create a waste of ad spend. It's a given, we must demand certification by Trustworthy Accountability Group (TAG). Data reporting and analysis has improved by leaps and bounds over the last decade allowing real-time campaign evaluation, for the sole purpose of monitoring, tweaking, and ensuring campaigns are consistently performing at their peak.
  1. Treat Data as the Priceless Commodity It Is — While it's true brands have far more access to customer information than ever before, this still may not be enough. If your data isn't complete, your audience won't be either. First-party data cannot bring the depth of information companies need to create retargeting campaigns or find new untapped markets. Ad tech companies are implementing controls to protect clients’ data allowing them to aggregate it with second- and third-party data to bring more value and insight into a digital strategy. Programmatic is people-driven, not media driven. Limiting your target to brand loyalists restricts your ability to reach new prospects. Companies are using old data and moving beyond merely analyzing demographics, but also including past behaviors, relevancy, and outside factors like the weather. Aggregating data from multiple sources ensures clients create and share relevant messages far more precisely. It is the accumulation of data points that will allow us to pinpoint targets to deliver trustworthy placements in real-time campaigns accurately.

There's no doubt programmatic is becoming much more complicated. The ad tech industry is consistently evolving, but one thing has remained the same:

You either swerve with the sector or die trying to stay in your lane.

The key to surviving – and thriving – is the right combination of a team of experts, a scalable mix of platform providers, programs that offer detailed real-time reporting, and experienced team capable of tracking the consumer journey from initial impression to conversion.


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