AdTech Reboot

Judy Shapiro

Judy Shapiro

Editor-in-Chief at The Trust Web Times
Judy Shapiro

Judy Shapiro

Editor-in-Chief at The Trust Web Times

The last six months changed everything.

It has sharpened our visceral sense of how human interactions should work at a most fundamental level. By extension, it will also fundamentally change how Advertisers use AdTech to connect with consumers.

Six months ago, everyone agreed the fraud and chaos of AdTech is not sustainable for anyone – publishers, Marketers or consumers, but everyone wondered how do we stop the AdTech merry-go-round?

Now we have our answer with this rare time-out. It allows us the space to consider what actions we can take to evolve AdTech into a healthier ecosystem for everyone.      

The decade of dysfunction: 2010 – 2020

AdTech’s went awry when AdTech became more and more detached from the real world driven by VC’s uneducated preference for “scalable software business models” badly applied to marketing. This got translated by technologists (not Marketers) into “scalable impressions and data” that became the currency of AdTech irrespective of the fact that impressions represented fewer and fewer real people.  

The disastrous rupture with the real world made digital marketing an exercise in tech gyrations failing miserably for Marketers.

  • While AdTech could scale audiences, no one knew what percentage represented real people
  • All attempts to optimize Click Through Rates (CTRs) were pointless since clicks were often fraud  
  • Publishers amped up their traffic to attract ad dollars even if much of that traffic was fake
  • Verification tech firms make the situation worse by institutionalizing fraud with little interest in reducing number of impressions being verified (Ad Age – https://adage.com/article/digitalnext/traffic-authentication-nettlesome-issue-ad-tech/309485)
  • Mega-automation platform’s “broad but shallow” architecture left Marketers drowning in data but bereft of what is happening in the real world (Ad Age – https://adage.com/article/digitalnext/beware-siren-song-marketing-automation/304160)
  • Attribution models became virtually impossible because “scalable” reach doesn’t translate into predictable real-world demand    
  • More and more of media budgets went to tech tax and arbitrage fees so that less than 50% of media budget lands in active media
  • In the final insult, virtually all of AdTech seriously crossed every ethical line in terms of user privacy

The dysfunction of AdTech became obvious by second half of the decade with the collapse of major “scale” DSPs and Data ventures that were sold at fire sale prices or were investigated for fraud.

The verdict on AdTech v1.0 is clear. Now what?

AdTech v2.0 will be about trust-based technologies, standards and systems.  

AdTech V1.0 exuberance was based on the idea that technology could take some of the guesswork out of marketing but AdTech was created in a tech bubble, ignorant of a Marketer’s real challenges.

Now we can transform the untrustworthy AdTech machinery into a trust-based ecosystem using five foundational principles:  

1) No AdTech firm is too be big to be held accountable.

If we believe it is impossible to hold Facebook or Google accountable, then we condemn ourselves to that fate. Driving accountability in this case is, technically, easy because Marketers can speak very loudly with their budgets. That said, Agencies and Advertisers are addicted to the “rush” they get from the immediate “traction” these platforms deliver even as outcome are less and less predictable.  Key to solving this is to wean Marketers off these platforms in favor of newer contextual media platforms that redefine scale in human terms. Once people-centric metrics like privacy and predictability dominate, then the speed of execution will be far less necessary or valued.  

2) The Agency business model will fundamentally change in the coming decade.

Of course, Agencies aren’t going away but their business model is.

The trust gap between Agencies and their Clients is gaping, stemming from Agencies’ early absence in AdTech. When they finally got in the game, the best Agencies could do was a messy version of; “if you can’t beat ‘em join ‘em.” Larger Agencies snapped up expensive yet, “monetizable/ scalable” ventures, willfully ignoring the ethical issues. In an ironic twist, Agencies spent oodles on ventures just as Clients were losing faith in AdTech.    

Redemption is straightforward. Agencies should go back to their traditional and deep credentials around Brand Custodian but translated in a modern integration innovation strategy that animates a holistic user experience:    

  • Reunite media and creative to ensure advertising lands with real people. The great uncoupling created decades ago badly serves Clients today because media is now part of the message.
  • Merge proprietary Agency tech and fee services through a new class of “productized services” that uses tech within the context of managed services versus the weaker “self-serve” model where Clients are “on their own.”
  • Unify technically challenging acquisition marketing from Search and Branding to lead gen. This “Brand to Demand” marketing model means Agencies can nurture the whole Brand experience. Clients would welcome this.  

3) AdTech fraud is solvable – for real.    

Too many people think that traffic verification firms solve the bulk of AdTech fraud. This is patently untrue as an ex-employee of a traffic verification company confessed in a Reddit post recently. AdTech fraud persists so stubbornly because it quietly enriches so so many players so easily – from Agencies to buying platforms and this revenue that can’t be replaced easily.

If complexity created the spaces for fraud to thrive, the antidote is technical minimalism; reduce the number of intermediaries that touch media.

Best practices are new, transparent, single supply chain platform that offer proprietary data, media buying and attribution – all integrated. This approach reduces tech tax and fraud while increasing predictability of outcomes.     

4) Attribution will become a real thing.   

Attribution remains the most challenging marketing problem due to the complexity of data, systems and platforms. To thread the attribution needle, we need to abandon our attachments to demo/ cookie/ look-alike targeting in favor of a new approach centered on topic intelligence – an emerging space being covered by major analysts like Forrester. Once you pivot to topic intelligence targeting, you can efficiently map the topic journey to conversion while eliminating messy issues around cookies. This radical approach is eminently more profitable than chasing CTR and CPMs.  

5) Data in a trusted tech landscape requires consent and proof.     

AdTech has no verifiable data supply chain as a deliberate strategy of technologists to build their businesses as fast as possible. There was little concern for data provenance, so Marketers are left to struggle with these privacy issues alone even as Brand risk increases given consumers’ deepening privacy concerns. There is no easy answer but to pivot to a first party data strategy as the only way to adhere to new standards around data provenance, compliance and privacy. This painful transition is unavoidable but ultimately will lead be better and more economical (less data fees) results for Brands.     

The current crisis put a halt to many activities giving us a moment to reconsider what AdTech should be for the next ten years. Do we want more of the chaos and dishonor of the last ten years or do we create a new value chain around trust; between Advertisers, publishers and consumers; even if this means less impressions, less data, less fake “engagement,” and less vanity stats.

If not now – when?

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