The Big Challenges For Ad Tech In 2016 Are The Same As In 2015

Last week, fellow Online Spinner Cory Treffiletti opined that the glass is half full for ad tech. He posited that, in short, ad tech in 2016 is looking up because of the following reasons:

"Online will continue to be built on value, not volume....
Measurement is here, and it’s available to you -- just look....
Data defines your audience and makes media more valuable."

Cory wrote his piece in response to an article published by Jim Spanfeller, CEO of Spanfeller Media Group, former CEO of and chairman emeritus of the Interactive Advertising Bureau. Spanfeller’s focus was on the negative industry issues that continue to plague ad tech.

Cory, however, is positive that the business of ad tech will blossom in 2016, after an initial “minor slide.” He thinks 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.”



Both Cory and Jim make many valid points, but I am slightly less optimistic -- ever the party-pooper -- and my concerns are driven by the marketers’ viewpoint on ad tech. Specifically, the fact that the average marketer doesn’t understand ad tech at all.

I think that online is going to continue to build on volume and not value, especially because margins within the ecosystem continue to be under pressure. WPP CEO Sir Martin Sorrell has predicted that the 2015 trend of  “mega pitches” will continue in 2016, so expect agencies to seek “cheap and simple” over value for at least another 12 to 18 months.

The supply side also will continue to compete on price. It’s true that there’s a finite supply of “quality online inventory,” but advertisers are under huge pressure to deliver more for less -- or, at best, more for the same. This means that cheap is still attractive, even though, rationally, marketers must know that cheap also often equals “crap” (a technical term for inventory that is the opposite of quality online inventory). Where there is demand, there is supply.

I agree that measurement has made leaps, and that knowledge about the impact of the average online media buy has improved.
The problem is that marketers for the most part do not understand what pieces they can (and should!) stitch together to get to a better understanding of ad tech. It is still way too complex, too fragmented and too technical for the average marketer to understand and therefore implement.

And yes, data defines your audience, but… well, see my previous point.

Another continued challenge is that, despite the attractiveness of (partial) in-house solutions for marketers, most do not have the man-power, or technical and operational capabilities, to do any of it.

Don’t get me wrong. Some marketers have actually addressed all of the above issues and created very workable, highly productive and cost-effective solutions that serve them really well. You will find the most progressive examples of such marketers among those whose income and sales rely in large part on digital.

But for the average brand marketer, ad tech in 2016 will feel exactly as it did in 2015: confusing, challenging and best left to the agencies they are paying less and less for doing more and more. I don’t see this changing in 2016.

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