Industry Insiders Warn Of An Ad Tech Brain Drain

Ad tech talent is packing up and moving on.

Longtime ad tech insiders – many who started before the dot-com boom – see their peers moving to other industries or fleeing for safety into the arms of the duopoly.

When Ari Paparo, founder and CEO of Beeswax, tweeted, “The best people are leaving the business or moving to Google/FB,” on June 12, dozens responded.

AdExchanger reached out to people participating in this debate to find out where they see their friends and colleagues going.

Away From Ad Tech

Both senior and mid-level talent are leaving ad tech.

“Ad tech has been a hot and rapidly evolving field for the past two decades. That’s a long time to focus on very similar problems,” said Ana Milicevic, co-founder and principal of Sparrow Advisers, which offers consulting services to many ad tech and mar tech firms. “It’s natural for them to want to focus their energies elsewhere, especially if they’ve had the rare experience of working for a high-growth company.”

Many people leaving ad tech apply their skills to non-advertising use cases, though some move to adjacent areas like AI.

Notably, BlueKai founder Omar Tawakol left Oracle and created an AI startup, Workfit, last year. Many of the 12 employees on LinkedIn come from advertising backgrounds.

LiveRamp founder Auren Hoffman also founded an AI startup, SafeGraph. Dstillery’s product SVP moved to Carto, which gives industries like banking and real estate access to location intelligence.

Other former ad tech staffers tackle completely different areas, like life sciences.

After selling Invite Media to Google in 2012, Nat Turner and Zach Weinberg turned to using big data to evaluate cancer treatments and began Flatiron Health. The startup raised $175 million last year and plans to go public in the next couple of years.

“In my circle of friends and peers, I see folks migrating to life sciences and health,” Milicevic said. They want to apply their expertise in real-time tech and data to other areas besides advertising.”

Some former ad tech employees are moving just outside the ad tech Lumascape.

“What we define as ad tech has a pretty narrow focus,” said Eric Franchi, an ad tech founder and investor. “There is so much growth happening on the edges that define and create the marketing stack.”

Franchi now invests in areas adjacent to programmatic advertising, like analytics, mobile, data, identity, computer vision or machine-learning startups.

Neal Richter, the former CTO of Rubicon Project who played a role in setting up early programmatic infrastructure, is also eyeing a move to an adjacent industry.

“I think the future is to move on to marketing tech,” he said. “I think ad tech will get swallowed up as an execution arm of marketing technology.”

It makes sense some want to leave ad tech completely, Richter said: “As industries mature, entrepreneurs move off to the next frontier. This is the natural order of things.”

The Facebook and Google Effect

Not everyone is leaving ad tech, however. On the contrary, many are jumping to Facebook and Google.

“People moving to Facebook or Google are usually incredibly talented but severely underappreciated in the organizations they are a part of,” Milicevic said. “They think, ‘I could be making twice as much money with a fraction of the hassle.”

Independent ad tech companies need to step up their efforts to reward employees, Milicevic advised. “Kudos to Google and Facebook for being able to attract that kind of mid- to senior-level talent pool, but shame on the organizations where these folks are engaged for not providing more options.”

Employee departures can accelerate companies’ downward spirals.

“If your mid-level managers and contributors start to leave en masse, particularly if companies are struggling, that will put even more pressure on the company,” Franchi said.

Some ad tech experts are fleeing to Facebook and Google because they see trouble ahead at their companies. They don’t want to be in the position of Audience Science employees, whose company shut down, or Yahoo and AOL employees, who face the threat of layoffs.

“When you look at the Lumascape, anyone will understand there are a lot of companies there that won’t make it,” Milicevic said. “If you are in a position where you can see the writing on the wall, and it’s not going as well as the company is publicly saying, now is the time to make that move.”

5 Comments

  1. Two thoughts, if I may comment as one who has served numerous industry verticals applying information technology: First, Neal Richter is spot on about technologists (not just entrepreneur types) in general; moving on to the next frontier is pretty much standard procedure once you've got technology in place in an industry that didn't have much of it prior. Second, the layoffs at some ad tech firms may be cause for alarm, but since other companies, including clients and corporate brands, are building their ad tech staff, the vendor firms become a source of talent. Again, that is typical of tech industry maturation in different verticals.

    Reply
    • You're absolutely right that there are a lot of opportunities coming at their clients, corporate brands and ad agencies building out their programmatic teams.

      The issue is that compensation and benefits rarely compare. Ad tech startups always had to compete with Google/Facebook for talent. These other verticals never really faced this type of talent competition. For example, campaign managers at DSPs often make 20% - 50% more than programmatic directors at ad agencies for Fortune 500 brands, while often getting more flexible hours, catered lunch and generous stock options.

      Reply
  2. Sylvester Phifer

    Great article... thank you. Conversely, Eric Franchi, co-founder of Undertone wrote an interesting piece on why he plans to invest in ad tech and mar tech start-ups. Despite the adoption of programmatic data driven targeting, a swelling duopoly, and constriction in the Lumascape he argues there is still more to be discovered. While it might be a good career move to join one of the big five, I would concur, and add that with looming questions around viewability, measurement and standardization, to name a few, innovation is still upon us.

    Reply
  3. Industry Evolves, the people stuck in the dying business model mindsets become obsolete as their years of experiences in the old models no longer works... Now, a number of new more efficient business models are rising up to fill the void. This has happened in many Industry's and is a natural process.

    Reply
    • Good informative article and comments thank you. One of the key struggle is the integration of ad tech within the governance (and generational) structure of businesses. FB and Google are the land where data is king, but even these two companies are supporting governance models which are, basically, not ready to let the tech guy manage the whole thing. It's a power struggle, and soon or later it's the choice of ad tech professionals to go either to tech paradise (fb and google) or go on and try to fit their skills to support or work around the existing inefficient systems. It's a power struggle.

      Reply

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