That being said, I do think the space is getting a bit of a verbal beatdown right now, and it deserves a little love. So rather than be a downer, I wanted to write something with a more optimistic point of view:
Online will continue to be built on value, not volume. First off, this is positively the year that ad tech will become a business built on value rather than volume. Spanfeller makes a great point that we are finally coming to understand there is not an infinite volume of inventory in online. There is finite, quality inventory available to marketers, but the volume is definitely higher than in TV or other top tier forms of media.
I’ve been saying in this column for years that the demand should and will outweigh the supply of “premium” inventory -- and when you remove fraud and bots and un-verified, nonviewable impressions from the mix, that’s exactly what happens. Quality inventory with a highly valuable, targetable audience is precious, and should be priced as such because it brings measurable value to your campaign.
Measurement is here, and it’s available to you -- just look. This brings me to the second point: That we positively have the tools to measure value in many forms, and this is the year marketers will be truly taking advantage of these tools.
My predictions for 2016 stated clearly this was a year of letting the dust settle and allowing marketers to get a better understanding of the tools, technology and data they have available to them. For almost every category of customer, there are tools to measure actual impact on sales and revenue if you simply have the partnerships in place.
There is no need to optimize to clicks, and it’s about time marketers stop lazily reporting on clicks. You can find other actions to report on, and transactions are the most valuable. First-party data (data that you own) or second-party data (data from a partner) enable you to get a direct read on the impact of your messaging to drive the growth of your business.
Data defines your audience and makes media more valuable. Much of the discussion around data has been that marketers use it for targeting and personalization, but it can also be used to verify that there’s a real audience worth targeting in the first place. Publishers are starting to use data to verify their audiences, which means they can prove to marketers the value they bring to the table. This is a huge step because it speaks to the first point: that the online medium has value beyond volume.
This year will see online surpass TV as the number-one place for advertisers to spend their money. This will happen because we know who the audience is, advertisers can target with little to no waste, and we can prove the value of each impression. This is about as positive a statement as you can make -- this is amazing! Data is being used on both sides of the equation: to whittle away the garbage, as well as provide a narrow focus for your marketing dollars.
All that being said, I also agree with most commenters that the business is going to go through a minor slide. I think this is a good thing. It will be much simpler to use ad tech in 2016, and by the time we get to 2017 this will be a well-oiled machine of an industry. The landscape is going to thin out a bit, through consolidation and closure, and marketers will settle on the ecosystem of their primary partnerships. Once they settle on these partners, they will focus their attention on making those partnership work well, setting the stage for even more growth in 2017.
These trends have me thinking very positively about the future of the business.