AdTech is Going Back to the Future

I'm fortunate to call Lynda Clarizio a friend, mentor, and advisor. We were talking about #adtech2023 last week and joked about how history was repeating itself throughout parts of our industry. History and experience are wonderful teachers: they have no bias to those learning the lessons. Let's see what we can apply based on what we've learned from our past.

#streaming #ctv Headwinds - When 美国在线 purchased Adap.tv in 2013, I was given a front seat view of Video's Wild Wild West. The top 20 video publishers were brands I'd never heard of, and the exchange was doing 4x the daily traffic of YouTube . Seemed legit. Within the greater #video industry, #fraud was rampant, there was little #measurement alignment, #transparency was limited and the marketplace was saturated. 10 years later, we seem to be in a very similar situation.

• Measurement - Comscore, Inc. , Samba TV , EDO , iSpot , 尼尔森 , 605 | an iSpot company , VideoAmp are all vying for a piece of the measurement pie for streaming (some larger than others). Marketers deal with inconsistent, fragmented reporting across various CTV media, as well as the general lack of congruence with additional channels, such as linear TV and other walled-garden environments (source: Croud.com). Uniformity and alignment are key to scale. Fragmentation will only lead to less efficiency for buyers and sellers.
• Fraud/Transparency - Arbitrage and non-transparent reselling practices create a myriad of issues for CTV marketers and supply sources. Between 2020 and 2021, CTV ad fraud schemes rose by 70%, siphoning off an estimated $140 million from the marketplace (source: AdExchanger). Fortunately, companies like HUMAN , DoubleVerify have seen this before (10 years ago), and are closing in quickly to deploy tools and services to help. The IAB has also taken a more aggressive, proactive stance to provide clear governance for streaming. The bad guys will always find a way in, but they're up against an educated resistance that will close their window of opportunity quickly.
• Saturation - Last week, IAB in partnership with 普华永道 released the 2022 Internet Advertising Report. Users now have upwards of 7+ streaming services versus 2-3 from one year ago. We're seeing subscription fatigue and general confusion as to what show is on which streaming network. It happened a few weeks back live on the Today Show where Savannah Guthrie thought a show was on Hulu when in fact, it was on NBCUniversal 's very own Peacock. D'OH! We have a sum zero rule in our house. Add a streaming service? Sure, as long as you delete another. Humans thrive when they're spoon-fed. The current cafeteria style of streaming isn't sustainable. (credit Rob Deichert for the spoon-fed/cafeteria line from a long time ago. I don't forget)
• CABLE TV IS ALIVE! - Well, we call it #fastchannels now. 300+ Fast channels, awesome! And you can add packages for those shows you really want. This is really no different than adding HBO back in the day. One more charge on the old cable bill so I can watch movies and Mike Tyson's heavyweight matches, yipee!

We're fortunate that we literally wrote the instruction manual for video not too long ago. I stress to you use the term 'new', but Streaming/CTV/OTT was forced to grow up quickly as a result of COVID. Its accelerated expansion created some holes in the foundation, but fortunately we know what to do.

Agencies still have the hardest job! - Its my opinion, you can disagree. New mediums are being introduced at rate far greater than the rate of increase for advertising budgets. I would argue agencies are dealing with more new avenues versus what we saw 10 years ago. In the past few years we've seen Streaming, #dooh, #retailmedia, #audioadvertising fired out of the gates. Pile on SPO, DSPs circumventing agencies, new social platforms and plenty of other challenges. Media plans now have chapters... Yet agencies continue to evolve and innovate to create the best outcomes for their partners.

• 阳狮广告 is putting on a master class on how to create the best partnership with nearly any brand. Acquisitions of Sapient , Epsilon and Profitero , along with existing brands like CitrusAd , Conversant , Razorfish create an end to end solution for marketers. Publicis has essentially created a path for digital transformation, targeting, transparency, measurement, data enrichment, retail media/commerce, streaming and literally any other avenue for its partners.
• 群邑 introduced Nexus in April of last year to accelerate innovation for partners and to simplify its overall operations. Seeing a need for SPO, they launched Premium Marketplace a little over a year ago in partnership with PubMatic and Magnite to provide a more efficient means to high quality supply.
• Omnicom Media Group took an aggressive stance with eCommerce in 2022. They partnered with Amazon to share insights, tools and help train teams. They also launched the Supply Chain IQ Score, the industry’s first supply-chain based media activation tool, in partnership with Crisp, an open retail data platform. (source: Omnicom.com)

The best lessons we can learn from agencies is to never be complacent. Whether its on their own merit, or reactionary based on client needs, agencies continue to pivot and move forward, showing resilience against an ever-changing cast of headwinds.

The Tech Tax is Heavy! - Luma Ventures 's Lumascape may very well be the defining document for our industry. I've seen countless models where we start with $1 on the left side (Demand) and the net to the pub is anywhere between $.05 and $.90. Since the first edition of the Lumascape, there's been countless efforts to CUT THE MIDDLE MAN OUT!!! When researching some of this, I found articles back to 2016 on Publishers trying to become agencies, Agencies doing direct to Pubs, DSPs going direct to pubs, etc... We're all trying to figure out what part of the ecosystem is like the appendix or gall bladder. Nice to have, but you can live without it. The Trade Desk 's OpenPath has been live for a little more than a year, Magnite just launched ClearLine, OpenX partnered with Horizon , and there are several others live and to come, all with the idea of creating efficiencies for marketers and publishers. But how many unique efficient avenues can we have? One way streets are great for short trips, but navigating all one way streets makes for a long road journey with lots of 90 degree turns... The jury remains out for how successful these partnerships/solutions will be, but the future will have consolidation, and survival of the fittest as key themes. We should also remember that ecosystems are dependent on all parts. There is room for evolution, but elimination/extinction could wreak havoc.

The Government is Stepping in to Help - Oh boy, its just a matter of time until one member of Congress asks an AdTech figure where in fact, the 'Any Key' is during a hearing. Fortunately the CAN Spam act has been 100% successful, as I haven't received a spam email in years. Oh wait... I don't envy our government's role in trying to institute laws to help our industry. I do wish there was more collaboration. COPPA needs rewriting, CPRA somewhat amend's CA's CCPA, and now Virginia, Colorado, Connecticut, Utah are throwing their hats in the ring with state privacy acts. We've been hearing about The Data Privacy Act for the past 2 years, and I'm hopeful AdTech industry leaders can collaborate with our government officials to modernize the bill in such a way that we can operate across a shared set of principles. Introducing 50 individual State Acts only further fragments the industry and limits efficient, scaled growth. Targeting TikTok Tok doesn't solve the 'TikTok' problem. Introducing legislation in close partnership with AdTech, which clearly states use cases for privacy, data collection, data sharing, transactions and all other relevant scenarios solves the overarching data issues and provides a clear, detailed runway for companies like TikTok and others to operate.

#mobile is the Next Big Thing! - There's a meme or line that said something like: 'We have access to unlimited information and knowledge along with the means to communicate with literally anyone in this world through one device, yet we use it to look at cute picture of kittens falling asleep.' Ah yes, mobile at its finest.

• Apple - I'm not going to write more about how 苹果 is changing the mobile landscape with its privacy, tracking and targeting changes. I will mention that Apple is well on its way back into the advertising realm. I would expect a stronger hold on the #mobileadvertising landscape when compared to MoPub at its height.
• Mobile is CTV or is it? - This plays into transparency line from earlier. My kids watch Netflix on their phones and laptops. They consume the majority of their content via their phones, whether its reels, shows, movies, etc.. They do not watch Martin Scorcese movies on the smaller screens.
• Are SuperApps the future? Elon Musk wants to turn Twitter into a Weixin/WeChat competitor. Every brand in nearly every industry has an app. You still look at the same 4-5 apps on your phone, don't you? Consolidation continues to be a key theme in our industry and the app world is primed for change given monetization constraints and app download fatigue.

The Black Box is Alive and Well - Back when I was younger everyone had proprietary algorithms that would lead to the best outcomes for both publishers and advertisers. Then came the infamous article around 2004-ish about how Ford campaigns were running against fake and fraudulent web sites across exchanges. The call for transparency rang loud through the halls, and the notion of set it and forget quickly vanished. Yet here we are again:

• PMAX - Duh
• Generative AI - Machine learning is only as good as the inputs it receives, so we educate modern black boxes in hopes of output consistent with expectations.
• CTV Buying - covered earlier (above), but buyers continue to play into some of these black boxes. Device spoofing, mobile screens and plenty of other 'trust me' scenarios have led to unfavorable outcomes. Transparency is key, never trust the black box when buying supply.

Everything is cyclical, and sometimes we can't help history from repeating itself. We can learn from the past and institute measures to prevent catastrophes, or simply make transitions a bit easier. There is never a dull moment in AdTech, but that's a good thing, as we will never stop learning.