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Why Repenting Won’t Fix Advertising Online

We need to move from words to action to repair ad tech.
by , Founder & CEO at BuySellAdson March 14, 2017

Digiday’s The Confessions is the Page Six of ad tech. You can’t help but take pleasure in the crass, gritty, and brutally honest interviews with anonymous industry insiders.

Lately, the murky future of ad tech has dominated the series. Executives, publishers, and developers have weighed in on diminishing publisher revenue, sluggish technology, and meaningless buzzwords (or “marketing bullshit” as one confessor would say).

Unfortunately, their candor alone won’t change the ad tech industry. To do that, marketers and publishers must stand up to companies that refuse to adapt to their needs and expectations.

Confessors aren’t exaggerating

Sources in The Confessions series share negative outlooks on the future of digital advertising as long as it continues down its current path.

It’s clear that programmatic bidding has failed consumers, premium publishers, and advertisers alike as inventory values drop and user experience suffers. This means the people buying, placing, and consuming advertising no longer benefit from it.

Audiences have voiced their displeasure with irrelevant, annoying display ads served through open exchanges by installing ad blockers. Nearly 70 million Americans had ad blockers in 2016, and that’s expected to rise to 86.6 million people this year according to eMarketer. That means one in three internet users in the United States is expected to have an ad blocker in 2017.

Premium publishers continue to lose as exchanges commoditize and undervalue audiences, leading to bid rates that can no longer fund quality content. An ad tech executive told Digiday that publishers receive less than 30% of programmatic media spend, with the bulk going to agencies and ad tech vendors.

Maybe people have been hiding the truth long enough that they buy into their own Kool-Aid. (Source)

Advertisers aren’t winning, either. More than 70% of marketers say digital advertising user experience needs to improve. A recent spike in hateful websites and low-quality inventory has also raised marketer suspicions towards open exchanges.

Programmatic RTB is shortchanging audiences, publishers, and advertisers while lining the pockets of middlemen and advertising behemoths. Dissatisfaction is leading to calls for change, but that won’t be enough to improve the industry.

Moving beyond talk

Confessions can be freeing but are worthless without action. Digiday’s anonymous sources mostly hold executive and management positions at ad tech and media companies but seem unable to disrupt the industry from the inside.

This could be due to ad tech’s deference to the IAB to set best practices and control members. However, the IAB is funded by the same companies that created and reinforce issues plaguing publishers, audiences, and advertisers. It’s like going to a nutritionist that’s funded by a candy company.

In a recent confession, an ad tech developer pointed out that the IAB still hasn’t set standards for ad clutter or server calls, two major user experience problems created by exchange advertising.

There is this understanding that the IAB is a legitimate organization to control media and facilitate best practices. But the publishers, advertisers and tech firms, the big guys, all pay for this organization to be there. (Source)

For the IAB to actually improve ad tech, its members would have to lead the charge and overhaul their business strategies. This is incredibly unlikely as large technology and media companies are the first to gain from the current state of ad tech.

Changing digital marketing for the better requires advertisers and publishers to demand more than black box solutions and diminishing margins. This can be done through public conversation, reviews of ad budgets, and publisher-owned ad tech.

1. More on the record conversations about ad tech failures.

This year, Procter & Gamble’s chief brand officer called out the industry for shady practices, deceitful measurement, and crappy placements. This was notable as Procter & Gamble is the world’s largest advertiser, making him the highest ranked person to shame the industry so blatantly.

The speech spurred frank, difficult conversation about ad tech’s failures to adapt to marketers’ needs. More high-ranking, public disapproval of the current state of ad tech will help push large companies to improve user experience and respond to transparency issues.

2. Advertisers speaking with their money.

Advertisers can also voice their disapproval of transparency issues by cutting off funding from broken exchange models and spending ad budgets elsewhere.

Marketers that switch from RTB and exchanges can invest in direct campaigns to book high-quality placements at guaranteed rates on trusted websites. Programmatic direct buying comes with added perks of serving ads in context and not worrying about accidentally funding hateful or fake news sites.

3. Publishers controlling inventory.

Publishers continue to serve ads from open exchanges despite being repeatedly ripped off and ignored by ad tech’s major players. Publishers need to wake up, separate themselves from these exchanges, and reclaim control of inventory value.

(Programmatic is) completely removing the value of your content and shifting it to the consumer’s cookie and retargeting. (Source)

This can be done by investing in owned ad tech and opting for programmatic direct sales. Through these, publishers earn more revenue by setting rates instead of letting auctions decide impression value independent of context. Programmatic direct also allows publishers to focus on producing quality content rather than cluttering pages with exchange ads and attracting more traffic to increase revenue.

Confessions to action

Digiday’s confession series has gone a long way in opening marketers’ and publishers’ eyes to the dismal possibilities of ad tech’s future, but we can’t only wait for the industry to improve from the inside.

Marketers can send a clear signal to ad tech by publicly stating disapproval and shifting ad budgets to more transparent platforms. Publishers can remove themselves from the circus by investing in owned ad tech to realize audience value and control inventory.

In other words, it’s time we moved from repenting to action.

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