And, if all that weren’t enough, the supply chain enables billions of dollars of losses to fraud, bots and un-viewable ads. By design, it provides virtually no transparency to the only true principals in the ecosystem, the marketers and the consumers.
As Terry Kawaja’s LUMAscapes or Scott Brinker’s Marketing Technology Landscape make clear, most digital ad and marketing tech players do not directly serve either the marketers or consumers. Some serve “direct” intermediaries to marketers or consumers, like DMPs working with agencies. Most, however, just serve other indirect intermediaries, such as trading desks trading with exchanges or data-management platforms serving sell-side platforms.
This is not sustainable in a world where marketers are aggressively seeking more transparency and control over their media and marketing (Walmart firing MediaVest this week, for example), and consumers are taking more control of their ad experience (hundreds of millions of active ad blockers now running, for example).
It’s necessary that, like a poorly built building in the middle of a crowded city, the supply chain will collapse with minimal collateral damage. It’s also important that what replaces it is thoughtfully designed. Specifically, we need:
Market vision from the marketers and consumers. While I don’t believe that we will see a top-down, grand redesign of the supply chain, I do believe that industry trade associations should study the chain’s problems and issue directives for those companies desiring business relationships with their members.
This will help establish “true north” guidance for companies hoping to serve future ecosystems. It will identify areas of misalignment between principals and intermediaries, which could lead to resolutions (or not; see the current tussle between the ANA and the 4A’s over agency transparency guidelines, for example).
Tech players to focus on serving the needs of consumers and/or marketers — not other intermediaries. Winners in the digital marketing supply chain’s future will get there because they had a relentless, maniacal focus on serving the needs of consumers, marketers — or both.
Companies will no longer win because they have non-transparent relationships with other intermediaries. Most likely, those companies and their technology and services will be absorbed into successful direct intermediaries.
The days of marketers’ dollars and consumers’ data passing through dozens of daisy-chained opaque indirect intermediaries — each taking a piece of the action, of course — to deliver a single ad impression will end soon, and it won’t be pretty.
How might this ending play out?
I believe we will certainly see vertical integration of marketer-focused intermediaries. Media agencies will add significant capabilities in content, technology and data, enabling them to better serve their clients and truly deliver complete business-outcome-focused marketing solutions, not just deliver commodity media outputs. Media sellers will invest heavily in direct-to-marketer selling and solutions.
Digital giants Google and Facebook have been doing this for years, and large TV media companies like Turner, NBCU and Viacom have been explicit about their plans to create and deliver new data- and audience-driven products directly to brand marketers.
Consumers’ needs have been an assumed afterthought in the plans of most intermediaries. The thinking has been, put up some valuable or interesting content, consumers will show up, and you can cookie and track and bombard them to your heart’s content.
That won’t continue. Instead, I expect us to see the rise of true consumer-focused intermediaries. Some companies will start to realize that doing right by consumers, protecting them from ad bombardment and data promiscuity, can be a good business.
Of course this strategy has been tried before and ended in some spectacular failures in the 1990s with PowerAgent and AllAdvantage. However, respecting and supporting user-centricity is clearly the core driver at merchants like Amazon. They provide a controlled user ad experience. They don’t sell data. They return value with personalization and discounted media.
Certainly, hardware companies like Apple get this, which is why it’s in a tough public fight this week with the FBI over requests to hack its data encryption protections -- even though fighting this request makes Apple look like it’s trying to protect a ruthless murderer.
I don’t understand why the vast majority of media and content companies don’t get this, Facebook being a significant exception. Most digital publishers have been diddling for years on how to respond to data leakage and ad blocking, to no real result.
If they truly cared about their audiences, they would create clean, well-lit environments and provide ad blocking and data protection services as part of the quid pro quo for their attention and trust. Those who performed the best would have a larger audience, and the capacity to add more content and partners and become true platforms.
Will all this happen? I hope so. What do you think?