Ignorance Is Bliss… Until It Isn’t

joannaoconnell6415"Marketer's Note" is a weekly column informing marketers about the rapidly evolving digital marketing technology ecosystem.

This week it is written by Joanna O'Connell, Lead Analyst forAdExchanger Research.

I read this recent WSJ CMO Today piece, which explored the proud anti-ad tech stance a number of young digital publishers are taking, with a mix of interest and incredulity.

According to the article, companies like Refinery29 and Vox Media have decided to “just say no” to ad tech, poo-pooing concepts like programmatic media as… well, just not right for them. Reading between the lines, the implication is that “ad tech” and “programmatic” should be beneath any self-respecting content creator/provider. Being generous, I’d call it a “disruptive” stance taken by a group of companies that have positioned themselves as disruptors. However these very disruptors are the ones who will be disrupted. And this is why.

1. Programmatic is here to stay. Programmatic today is very different from its humble origins, when publishers inelegantly juggled handfuls – or even dozens – of ad networks to offload unsold inventory through an increasingly complicated indirect sales channel, and where those same ad networks were buying and selling inventory from each other (a phenomenon unknown to the buy side at the time).

That was a great business for those networks, yes. Not so much for the publishers, or the advertisers or agencies on the receiving end of such convoluted transactions. But that’s simply not the programmatic of today. While some real challenges with transparency and inventory quality remain in certain pockets of the programmatic ecosystem – particularly for those buyers and sellers not actively involved in the management of their media – today’s programmatic is transcending its beginnings.

Talk to a smart marketer or agency employee about how they see programmatic and you’ll find that the value isn’t in bulk, untargeted buying at low CPMs. It’s in being able to do data-driven advertising at scale. It’s about efficiency (great performance in the form of business results) over cheapness, achieved through a marriage of human intelligence and machine-learning systems. It’s about direct relationships with their best publisher partners, where negotiations may head in new directions (think data sharing) and both transactional and executional functions are facilitated by technology. And, by the way, the biggest marketers in the world are on board with the concept*.

2. “Ad tech” is not the enemy. Ad technologies are tools that can make buying and selling smarter, faster and better if used effectively. And that’s the key – it’s all in how you use these tools. (Go ahead, call me Captain Obvious.) For publishers, ad technology can help streamline processes, give them the keys needed to more intelligently manage overall yield, and in the process free up expensive salespeople from (often menial) manual labor to let them focus on the smart stuff. “Ad tech” fatigue, I get. No one wants to spend her day looking at a LUMAscape. But writing off a category as the problem misses the point. (And, by the way, how on earth are these publishers managing the day-to-day business of yield management, trafficking ads, selling audience targeted inventory and more without ad tech?) Perhaps the problem here, instead, is the conflation of “ad tech” with indirect or third-party selling. It’s fair enough not to be a fan of indirect selling. It’s not wise to assume that sticking to the good old-fashioned way of selling (even fancy, nontraditional ad units or packages) is a long-term answer as the rest of the world continues to evolve.

The point here is not to paint Refinery29 and the like as a bunch of arrogant contrarians – rather, it’s to encourage them to lean in to change by striking a balance between what’s new and possible in their world with what’s new and possible in the world outside their walls.

Joanna

*Allstate, Kellogg, Procter & Gamble are just a few that immediately spring to mind. I have a whole report that looks at marketers’ programmatic attitudes and behaviors that’s coming out soon, but, spoiler alert, they’re bullish on its future.

1 Comment

  1. Hi Joanna, I agree that publishers shouldn't turn a blind eye to programmatic, but the sell side has not been simplified very much by the changes of programmatic. It's the same as it was a decade ago, only there are more mediums... it could be argued that it's worse. We see that publishers need to use all 3 SSPs, multiple ad networks, video exchanges, mobile exchanges AND build relationships with the top DSPs in order to get closer to the direct budget. While the buy side can put all it's budget into one DSP and simplify if it wants to, the sell side cannot unfortunately.

    P&G is a good example, where unless a publisher is working with an exchange that is closest to P&G's top tech partner it has simplified under, or it has a direct relationship, it misses out on the budget of the world's largest advertiser.

    Pubs spend a fortune and enormous amounts of time testing and launching new partners to find the ones that are closest to the budget, for display, mobile and video.... and native too now. They don't see Ad Tech as the enemy, it's just necessary. Most publishers embrace what you're saying and have programmatic divisions, but it's very expensive to handle it, just like it is on the buy side.

    These publishers are just taking a stance against that constant dance the market has forced everyone into by needing 20-50 partners in order to do business, that's all. They may miss out on budget, A LOT of budget. But programmatic hasn't made it any easier for publishers, it's still the same game... just different names, only we're all just transacting in real-time now.

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