How Useful Is All This Ad Tech?
It raises the question of what exactly all of this technology is supposed to do, and how effective it is for advertisers. For all the attention and media coverage, it would seem programmatic platforms are the most important piece of technology in digital advertising, but what are they doing? They may make buying media more efficient and save on the bottom line, but what does that matter if an advertiser is buying garbage inventory?
If we really want to change the conversation around ad tech, then we need to start thinking about what these technologies are actually capable of, and if they align with the goal of advertising.
The ad-tech sales pitch often centers on efficiency and algorithms and access to exclusive and premium inventory sources. This sounds good to a buyer, but it doesn’t translate to something that advertisers (or even publishers) actually find valuable. Does the technology make my publisher inventory more valuable and more profitable? Does it flat-out make advertising more effective? Rarely do you hear substantial answers to these questions, because most of the time the technology is a very expensive ad server that connects a buyer to the inventory, albeit in fewer steps than in the past.
At this point everyone knows that audience targeting is the smartest way to advertise, but when that is the focus of every pitch, it doesn’t really tell the buyer anything new. Algorithms, for all intents and purposes, are garbage, especially if used on sub-par inventory. Even if a NASA scientist designed the proprietary algorithm, using it to to buy bad inventory in real time is like putting truffle butter on top of dog food. No matter how you dress it up, the result is never satisfying,
So what’s the end goal of ad technology? Performance. Some marketers could find a great deal of value in introducing more efficiency to their buying tactics, and for those who just want to plaster the Web with ads for awareness, low price inventory is a great deal. But what everyone wants are ads that actually elicit a response, which brings up another issue in ad technology: How do you define performance?
It’s probably not clicks. Any marketer who automatically equates clicks with sales probably won’t hold onto their job for very long. Besides, what good is it to optimize around clicks? Now you have marketers who shell out for targeting algorithms, plus the cost of third-party data resources, and they’re optimizing off clicks, which means they’re spending a lot of money to go chase people who aren’t necessarily buying the product. On top of that, many of the clicks are bots or fraud -- anyone touting advanced technology already knows this.
Consider a brand like Schick Razors. What’s their key performance indicator for an online display campaign? Because CPG brands like Schick don’t normally sell directly online, the best course is to track post-click performance. There might be a coupon to download or print out after the click. Even if the consumer simply looks at a larger image of a product on the landing page, that’s a measurement of the ad’s performance. A consumer spent time looking and thinking about the product -- that’s a win, and it’s easier to understand than the click alone.
Boil it down, and ad technology needs to be about performance. In some cases, that’s a direct conversion, and in others, it’s setting a reasonable KPI. It’s a brand saying, “We want our ads to get the attention of our audience, and to understand how effective we were at capturing that attention.” I should be preaching to the choir, but it surprises me that so much of the technology conversation hides performance behind other buzzwords.Technology should be a means to an end, not the end itself. Paying for a fancy ad server or buying stack may hand an advertiser the algorithms and targeting they think they need, but it rarely answers the performance question. Advertisers need to refocus on the performance to make full use of the available technology and tools.