The Great Ad Tech Break Up
The great break up of ad tech is coming. And it's appropriately driven by data.
Since 2007, everyone has been predicting "The Great Consolidation". Purported to be driven by overlapping, commoditized service offerings, a drying-up of outside capital, and slower growth rates, ad tech companies were going to be purchased for at lower-than-expected valuations, merge, fold, or drift to the margins of the media technology landscape. Old guard companies would fade into oblivion or become "ghost ships" of limited value.
The truth is that while consolidation has happened at a small scale, ad technology platforms still proliferate. If anything, it has become even more challenging for publishers to discern platforms of real value from those simply passing impressions through and making a margin along the way. Ad technology HAS evolved, but only as a means to compete with itself. Header bidding allows for all bidders to compete on an even level and the looming move to server-to-server bidding advances that effort. To differentiate, platforms have become desperate to carve out their own space, pushing outstream units to the rails of each page, asking for more and more "code on page", and serving more instrusive units (things that "pop") which often create errors, over-lapping ad units, and a poor user experience - increasing bounce rate & decreasing both revenue per visit and lifetime customer value.
Meanwhile, their "partners" have moved on. Publishers now see more than 60% of their traffic on mobile devices, with a fair share of that coming from AMP pages or Instant Articles. Limitations around these platforms, as well as limitations in screen size & network speed, combined with aggressive ad units make for a poor user experience. This means publishers need LESS ads, FEWER intrusive ad units, and a more streamlined user experience.
It's not me, it's you.
This means ad tech platforms are, in many cases, no longer evolving to keep up with the needs of their customers. And when that happens, it means it's time for a break up. It's time find a new relationship. And publishers are now looking for partners who can finally give them what they need - information via easy to use BI tools.
Information is the key to long term success for publishers, and as publishers shed vendor relationships with those who cannot support their new business, they will look for partners who can provide business intelligence tools, data, and insights that address the intersection between content production, audience development, and profit growth. When the world went programmatic back in 2007, sellers acquiesced control over price & placement data. As social platforms become significant traffic drivers, publishers were forced to try to value traffic from across a diverse number of inbound channels. The ability to value this data (price by ad slot + traffic by URL) remained with major ad tech platforms but was rarely shared with their end supply partners.
It took a number of years for publishers to create stable enough programmatic infrastructures to actually recognize they need access to this critical information, and only now are publishers waking up to the need to use this data in order to create the most profitable AND user friendly business they possibly can. Platforms like Adomik, Surge, Moat, AppNexus, and others are finally delivering to publishers BI systems which "connect the dots", and will allow publishers to create a digital media experience that no longer relies on overly intrusive ad units to increase top line revenue. Instead, publishers can target discrete audiences, by platform, to increase traffic to their most profitable pages across ALL platforms. Information is finally the service that ad technology vendors of value are bringing to market.
The break up is happening, but publishers are looking for new partners - partners who can offer them what they need for the future. Since the future is data-driven, partners who can offer information and intelligence will be the winners in the battle for publisher attention.
