Commentary
Why Can't The Ad-Tech Industry Speak English?
- by Max Kalehoff , May 8, 2012
A trade report features an excellent “confessions” series of anonymous Q&As with professionals from all over the ad-tech industry. The common themes in each confession are
disgruntlement and an airing of the industry’s dirty laundry.
According to the series, it seems like the ad-tech world is doomed. The industry is challenged with an explosion of
poor advertising inventory, commodity technology and services. Other problems are clueless agencies, clueless tech vendors and clueless brand marketers. There are ethical dilemmas, like excessive
gift-giving and boondogles -- even summer houses, vacations, and Super Bowl trips. Buyers are too complacent to invest in important channels like social and mobile, and all the unsustainable LUMAscape
businesses are propped up by VC money that has nowhere else to go.
Indeed, these issues paint an ugly picture. But they are only temporary symptoms as the world of digital marketing goes
through its ugly adolescent phase.
The truth is we have a far bigger problem: The ad-tech industry has forgotten how to speak English.
As MediaPost editor
in chief Joe Mandese said, “the exclusionary nature of online media always talking to itself only
divides the world of marketing, advertising and media services.”
I doubt anyone disagrees.
For those who do, let’s consider a Q&A with an anonymous ad tech
executive cited in that trade report. When asked “What’s the biggest problem in ad tech right now?” this “leader” responded: “It’s crappy inventory for
audience buying. You have a finite amount of quality inventory, and there aren’t too many ways to access it. You could be buying via an exchange and you could have a frequency cap of three, but
some other exchange or network or DSP is already seeing that same page with 13 impressions. Frequency capping occurs at the platform level, not the publisher level. Everyone is trying to reach the
same user multiple times, but nobody understands where they sit in the ad-delivery stack, whether you’re No.1 or No. 24. Another huge problem is cookie bombing. It keeps shit inventory in
business. You have publishers who pass their tags to exchanges at the lowest CPMs to drop cookies on as many users as possible. You can buy dog-shit impressions for 25 cents and finding users who will
purchase what you’re selling at some point down the road so you can take the credit and get paid. It perpetuates the bad inventory.”
Now if you work in the trenches of an
advertising network, exchange or demand-side platform (DSP), you might understand what this executive is trying to convey.
But if you’re a normal person -- or anyone who
doesn’t work at an advertising network, exchange or demand-side platform -- you’re most certainly left scratching your head.
I tested my hypothesis by presenting
this same passage to three different people who work in various parts of the digital marketing industry. They all laughed at me; none could decipher every single sentence with 100% confidence. How can
an industry progress if it can’t communicate? How can anyone accomplish anything? The story and the lingo reminds me of the subprime mortgage industry.
But I think I have a general
sense what this executive meant, so I’ll attempt to translate: There is limited high-quality media inventory to run ads online, and third-party ad networks and exchanges have poor access to it.
Moreover, there is such a complicated web of intermediaries in the buying, selling and delivery of online advertising that nobody is truly certain where their investment goes and how. And then there
are media buyers who will purchase the abundance of low-cost ad inventory and blanket the Web to reach enough interested prospects, and there are abundant publishers and networks who will comply. This
ends up eroding all attempts to position any online advertising as premium and scarce. Therefore, the industry is going sideways.
Did I translate that correctly?
Please
weigh in.
And please speak English.
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GREAT article Max. You are shedding light on a significant problem which has led to an unhealthy industry. Obfuscation and techno-speak exist to mask simple methods being used to glean data from quality publishers in order to repurpose in an arbitrage fashion on lower quality publishers. It's not technologically difficult but it does lead to suspect business models.
The good news is the light is being shone to the quality publishers about what is truly happening and why we've seen so much value destroyed in the last few years. The future won't be the same as the past as the pendulum begins to swing back in favor of creativity, quality and value-creating business models.
When people have neither knowledge nor solutions they tend to use complicating language. I have found that anyone with the word "digital" in their title suffers from the assumption of expertise where there is none. None. It's all new. It's all beta. But it's embarrassing to say, "I don't know." So they make stuff up. Fabulous piece. Walter Sabo walter@sabomedia.com
I'm with Walter. When I used to sell supercomputers to scientific fields, I developed a truism: The more complicated their language the less they understand about what's important.
NOW, that's now always true and I know some brilliant people who need translators. But those people are usually obvious and that's okay.
And the reverse is NOT true (that the simpler the language the more they understand). Except that people who use simple language and don't "get it" are quite obvious.
It's the same as "The Emperor's New Clothes." As long as we are afraid to force people to explain themselves in terms we can understand, we deserve to be fleeced by them. http://bomgusa.com/blog/never-be-afraid-to-be-ignorant/
Max, you have highlighted two big issues here.
First, we have a language barrier, as you point out.
Second, we have a major industry issue. The way online advertising is "measured" is creating an opportunity for publishers and networks flood the market with inventory (and serve banners that are off the page and never seen) because they ultimately get "credit" for the success.
As long as online advertising buyers and providers accept the second issue, they have to keep perpetuating the first. Hiding behind jargon is the only way to keep the rest of the marketing industry from calling them out on the current practices.
Great article Max. Very refreshing.
There are lots of VCs waiting for their return on the promise of "quantifying and automating" the process of purchasing ad inventory. If it were a blackjack table in Las Vegas the amount of chip ante in the middle would be ridiculous. It seems though we are coming full-circle in the sense that content marketing is giving 1st tier content publishers a center-of-gravity lately. Obviously, there is no silver bullet when chasing 2nd & 3rd tier unsold inventory with technology that promises to convert at a lower price. Forget "Content is King". I say "Content is the Dictator." - Bob Sacco co-Founder Travora Media & QuickAirlink.com
The fact is that wherever there is a new business opportunity people will come in and exploit it. This is just one example. Advertising and marketing has always had more than its fair share of opportunists. It's up to the rest of us to monitor their visibility and to call them out when appropriate. And, whenever anyone starts throwing out that much jargon, I get skeptical. Just remember the fiasco around the financial industry's obsession with subprime loans and their counterfeit bundled product derivatives.