Concerned About 'Ad Wreck' Or Sales Automation? Not Me

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Last week was an interesting week.  During a 7-day period, I heard more concern for the future of the Internet and digital media than I had heard in the previous 10 months.  While I don’t agree with much of it, it’s worth hearing the arguments for and against.  Let's recap, shall we?

One commentary, “Ad Wreck,” blamed the VC business for nothing short of an impending collapse in the advertising technology business.  The collapse would/could/should come as the result of overwhelming, yet poor, investments in companies that have littered the landscape with a morass of ill-defined businesses.  The takeaway:  Too much money has been spent on too many companies in a space that is too filled with too many similar ideas. 

At its core, that’s a very sane argument, explaining how large brands avoid getting involved with the Web simply because of confusion. As the old saying goes, “If you give someone too many choices, they will choose not to choose one.”  If you give brand managers too many options for digital ad spend, they may tend to default to what they know: TV.  

Of course, the numbers don’t lie: Digital marketing is more and more often proven to be the most effective means of engaging with a potential or current customer.  There are stacks of whitepapers and research surveys to prove that point, so while the landscape may be overwhelming, I would argue it's not that much more overwhelming than the network vs. cable TV landscape.  Nor is it more confusing than the landscape of print or outdoor options that are available.  And don’t even get me started on the landscape of direct marketing opportunities.  Any good media person worth her salt is knowledgeable enough to gather the information, sift through the swampland and get to the key partners.  Nobody starts with the Lumascape and says, “Let’s put together a plan."  They do their own research and they develop a strategy that can work.

Of course you can’t have concern if it’s all one-sided, which brings me to the news that Federated Media released its sales team in favor of monetizing its platform solely through RTB.  I count myself as a fan of Federated Media and the business it has built up, but that shift is less likely to be indicative of an industrywide move than it is a singular business decision.  Federated Media probably looked at the business generated from direct sales vs. sales automation and said the ROI simply isn’t there to sustain the direct sales team.  That implies either the content was not valued highly enough by the market, Federated's salespeople could not effectively sell the properties they represented, or their attempts at “native advertising” and “customized solutions” were not getting the traction they would have hoped for.  In any case, this is a decision for their business rather than the industry as a whole.  Many other companies are successful at driving ROI from direct sales, and will be for some time. 

That all being said, there is definitely going to be a segment of the industry that prefers to be sold through RTB and automated platforms.  Not every sale requires a hand-to-hand transaction.  Why shouldn’t we shift to a more efficient and accountable model?  How many times have media buyers and sales reps engaged in issues around revising IOs, spending cycle after cycle and seemingly endless hours revising documents that could have been automated?  That part of the business absolutely needs to go away, and this is one example of how to do that.

I do not share the concern of an impending “ad wreck,” but I do say that the times, they are a’changin’. Our entire industry will benefit from the integration of technology that will enable us to think before we do, and establish a clear system for engagement that becomes an industry standard. 

As for me, I don’t have any concerns.  I have a VERY optimistic view for the future.  What about you?

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3 comments on "Concerned About 'Ad Wreck' Or Sales Automation? Not Me".

1. Max Kalehoff from Syncapse
   

   commented on: November 14, 2012 at 1:47 p.m.
   I am very optimistic. And I think that a looming consolidation will be a very healthy thing for the digital media industry overall. Consolidation means that resources and talent will be channeled more productively, resulting in better products and solutions coupled with lower friction and complexity in ability to invest in them. This consolidation will have the surprising outcome of actually accelerating compounding growth.
2. Jim Calhoun from SocialMoms.com
   

   commented on: November 14, 2012 at 5:03 p.m.
   Hey Cory, hope all is well and great piece - I share your optimism. I wanted to just note that the original "federated shutters salesforce" PR debacle was very likely blown out of proportion in the trades. The reality is this: Federated doesn't see the logic in funding a staff to sell banners via the RFP grind. The sales staff that doesn't focus on proposal generation will focus on on selling custom solutions based on larger, more custom, more integrated deals (and more creative ad solutions) for their brands. So, for the commodity eyebealls by the slab stuff, they're giving people access to inventory programmatically. And why not? Why get into a race to the bottom, when you can offer something different? The move certainly resonated with my world view, as you're probably aware. That's the "ads by the slab" mentality is a problem the industry - publishers, brands, and agencies -- suffers from as a whole.
3. Christopher Sanders from BUZZMEDIA
   

   commented on: November 16, 2012 at 3:29 p.m.
   I share your optimism too . . .I recall you actually being the moderator of a SFBig breakfast 3+ years ago where the topic was "automation putting agencies out of business" or something like that . . .you're opening remarks to the room to paraphrase, "Things are shifting but no one should be worried agencies or premium publishers are going away" . . . it's still true, may be even more so now . . .

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