The good news is that the advertising industry loves ad tech and has found plenty of applications for it. The bad news is that some love the tech blindly, a fact that could catch up to them sooner rather than later.
Consider that a report from AdExchanger Research found that publishers say “vendor complexity” -- including the sheer number of vendors and links in the chain -- is the biggest challenge with programmatic this year. But at the same time, the number of tech partners each publisher uses is increasing.
“I was surprised by the willingness of publishers to integrate many more technologies than they may actually need because marketers are asking for it,” said Catherine Oddenino, analyst at AdExchanger Research and author of the report. “While programmatic is frequently viewed as cutting out the need for as many people to be involved, these sorts of integration requests by marketers can actually make programmatic selling require as much human involvement as direct sales at the launch of a big ad buy.”
Perhaps publishers are getting in over their heads. While they say vendor complexity is their No. 1 concern, they're using more and more of these complex vendors. But the answer is obviously not to add more vendors, which seems to be more of a short-term fix. Obviously, we can only speculate on the long-term impact, but if the industry is still chiefly focused on understanding the tech, it can’t wholeheartedly deal with other concerns, such as transparency and impression quality.
We could be heading toward a cliff where transparency rears its ugly head, commented Paul Benjou from The Center for Media Management Strategies.
At the moment, however, the general impression is that publishers have no choice but to spread themselves thin. AdExchanger Research found that publishers are using multiple vendors because it’s helping them capture more immediate revenue.
“As long as the buy side keeps spreading out the budgets the way they are, we have to be in all these different playing fields,” Jason DeMarco, director of yield optimization at A+E Networks, is quoted as saying in the report. “If my strategy is going to be being where the money is, then I have to be there.”
Similarly, Andrew Berstein, senior yield manager of Time Warner Cable, said in the report: “Technology doesn’t meet the need of both the buyers and the sellers. It’s skewed more toward the buy side. There needs to be more systems in place to help the publishers.”
The industry could be attempting to juggle too many balls at the same time. There are enough people working on different projects -- the ANA is looking to bring more transparency to the market with a forthcoming study, several group are forming to fight fraud and clean up inventory supply, and the vendor landscape is consolidating (at least among bigger players) -- but getting everything to come together neatly in the end is where the real challenge rests.
This post was previously published in an earlier edition of RTBlog.