Commentary

Sometimes, Choice Can Be A Bad Thing

There’s an old saying that basically goes, “if you give a consumer too many choices, they’ll choose not choose one.” In other words, if you make it too hard for consumers to make a decision by overcomplicating the process, they’ll get frustrated, throw up their hands and simply go back to the previous way of doing things.    

The ad-tech space is experiencing this issue right now. Coupled with the challenges around data and the current Facebook controversy, there could be some blowback on the rest of the LUMAscape and the ChiefMarTec landscape.

Across the board, every marketer will agree the marketing tech landscape is a bloated mess.  I have yet to attend a conference and see a session where someone doesn’t throw up one of those landscape charts and make a sly comment about what a disaster this is.  They then, almost inevitably, throw a lightbox over the entire landscape and simply highlight Google and Facebook to make the point that all you really need do is focus on these players and you can be successful.  

There are too many companies vying for the leftover 20% of the budgets not currently spent on Google and Facebook.  While this has become the norm, there’s an existential risk to the whole category.  In fact, there are two.  The first is that marketers simply say, “This is too complicated, I’m only working with Google and X,” with “X” being either Facebook or one large publisher the likes of Disney or Viacom or even a large telco like Verizon.  The second existential risk is that when they do this, they perform as well if not better than when they did things the complicated way!

Think about this in terms of the aforementioned Facebook data controversy.  Facebook announced it’s no longer taking third-party data in from a number of providers.  This has the effect of decreasing spend against those third-party providers and brokers.  That means advertisers are likely to focus on the data that Facebook has for targeting.  This is in effect a forced consolidation and simplification of the ecosystem for advertisers.

Now, let’s think through what happens if those campaigns still perform as well as they did with the third-party data. If performance with or without that data is the same, why spend the time and effort in working with those third-party companies?  Simplification could yield the same results, and marketers like things simple and successful.

What if marketers did say, “I’m only working with Google and Disney to reach our audience,” with the understanding that Google gives them the foundation and Disney gives them cross-channel, highly differentiated publishing channels with quality content?  The combination of these two companies would also provide a lot of options to balance general awareness with direct-response tools. If that simplification provides options and they see success, what does that mean for the rest of the channels and companies who they may have been working with before?

This is like the time when advertisers were trying to determine how to use the web and were shifting their dollars from TV and print.  They tested and tested, and things were complicated.   There was no self-service back in 1998 and 1999 and the dollars were managed manually.  Campaigns were hard and had little effective ROI, so many advertisers pulled back and we had the dot-com crash in 2000. 

Things resolved and the industry invested in proving the creation of value for advertisers and marketers.  It also simplified, consolidating creative sizes and doing more to ensure that it was easy to create stronger consumer relationships. Then things took off.

The data landscape and the broader ad-tech ecosystem is going to have to simplify, or marketers are going to go back to the way they know: which is to work with Google, maybe Facebook, and a couple of other players.  In a world such like that, how do you rise to the top of the list?

1 comment about "Sometimes, Choice Can Be A Bad Thing".
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  1. Paula Lynn from Who Else Unlimited, April 4, 2018 at 1:21 p.m.

    As you will find, the older you get, the less choices you have. You rise to the top with exquisite service by humans and not share or sell information.

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