Thanks for continuing to read my thoughts about the industry. Part 1/2 of the future of the RTB Digital Industry got a few hits.
So what I was saying in part 1?
The future is about tech companies that can deliver added value. Maybe a short synopsis for a lengthy article but the bottom line is that this is where the industry will be going. In the meantime ‘ad networks 3.0’ still have some added value, premium has value and the more complex the technology gets over the years, the more likely the agency can add additional value to the value chain again. Simple really. Wouldn’t you agree?
We are going in circles. And I don’t want to be misunderstood, saying the agency doesn’t add value. However, what seems to change our world more and more is DATA. BIG DATA. A few ZetaBytes of it. What it really means is that we have a lot of data available and need to try to utilise this. And some publishers do, and some publishers don’t. And some agencies try 3rd party data and utilise their clients’ 1st party data, and some don’t. But who owns the data? The adserver, the publisher, the advertiser? I believe that those companies that can utilise and analyse big data best and to the advantage of their clients will win! Simple. I spoke to a premium publisher the other day that achieves higher CPM rates than any other by allowing the first party data to be utilised down to the impression level. Amazing stuff you can do. And, once 3rd party data is more reliable in the UK and across Europe, we can do a lot more analysis and qualitative exploration of data. Stay tuned, a big topic. But don’t think the future is in data collection. It is in data processing. I wouldn’t be surprised if the EMCs and IBMs of this world will soon get (and partly already have got) involved in this part of our industry, because they can process data. They can utilise data. Online data. Offline data.
I also wanted to come back to my earlier comment about the end to end stack. It seems as if the whole industry is obsessed with the idea of a â€œone stop shopâ€? Similar to all companies in the space wanting to go public or being sold. I wonder how much VC is there to make it all work out for them….but that’s a topic for a different day. SSPs add DSPs and DSPs add SSPs. Premium becomes guaranteed and floor prices guarantee revenue for publishers. The end game is still to convince the end user or consumer and getting that person to perform an action/buy on the site. Or to proof that the exposure is leading to a brand awareness and sales. Whilst digital is a lot more traceable, it still has to proof its value and performance. Hence I believe that attribution modelling and de-duplication will become very much an essential tool as said in part 1. One probably goes in hand with the other, and the specialists needed for that, e.g. people with the knowledge of digital, data modelling and statistic will be well sought after. To all graduates, get in there, you could revolutionise an entire industry.
Of course, if you follow me on twitter, you would have seen the discussion I was alluding to last week. Should media brokers develop attribution models or agencies? I am not sure if you really want this kind of verification tools being independent. And that is where a lot of BS comes from in our industry. We are relying on a lot of tech that claims to add value without verifying it. We rely on our agencies to make the right decisions without realising how much goes into their back pocket. The lunches are fine but what about the brown envelopes? Yes, I am sure they still exists and the old “I help you and you help me” approach is surely still working. We are buddies in media and help each other. But do we deliver value?
YES needs to be the ultimate answer. Of course (attention: self promotion again) I believe that whatever product I am selling adds value to a client. And this is important to me. I am verifying that via my own ‘independent’ sources and if I am not 100% convinced, or know of limitations, then I address this with the client. Only a win/win situation, full transparency and the true state of your product or service will result in a long lasting relationship. And this is important in a small industry like ours. No ifs or buts. Not every product works each time but overall, you don’t want to end up working for one product and ruin your reputation. Your Linkedin network is a big asset!
So maybe a new IAB body will need to be formed to monitor the attribution models or clients will look at it themselves? A few years back we called it the holy grail and we are now holding it in our hands. We have to be careful about it. And the new holy grail is data as mentioned above.
One of my biggest question remains why an agency would use an end to end stack, or why an end to end stack exists. Whilst most agencies don’t want to develop their own tech, some are keen to rely on one technology or develop some of their own attribution modelling (or other tech). Would you trust your agency? You should I suppose but as margins are more and more squeezed, the independent technology companies are key on delivering transparency to clients and act as warrants to the agency. And if agencies own part of the technology value chain they could become end to end stack too in some way or another. Is that a thread or is the old ad network model moving to the agency side? So I will assume that independent verification companies will flourish over the next few years. Not because of demand from agency or supplier side but clients wanting to find out what’s really happening. There are a few companies out there but none have a profile like the big accountancy auditing firms.
How do I best summarise all my thoughts now?
To be honest, we will see a shift towards the use of more technology and more utilisation of data. Companies who do that well, will continue to strive. And that will be independent whether they are SaaS lead or media driven or tech driven or ad network driven or even end to end stack. It doesn’t matter as long as they deliver a value proposition that allows for easy use for agencies and advertisers alike. With the ongoing complexity of our ecosystem we shall see more independent verification and qualification of key players.
But as always, we are going in circles. Because I really believe that all technology is doing is creating a shift from specialist user to everyday/less familiar user, with some specialist service companies at the side which you might call agencies. The future will be in tech companies that understand to deliver easy to use, high performance, low margin tech, and those tech companies being able to offer a unique proposition like integrated attribution specialised in either DR and/or brand. The more niche and specialised the better the performance – that would be my take. Yes, the omni channel one size fits all DSP will survive. It will be the ‘Golf’, the model that everyone can drive. But the agency proposition and the value proposition will be down to the ‘Ferraris’ and ‘Porsches’ of this world: specialised, high performance driven tech at scale.
Happy driving 🙂
Now I hope this all made sense and I didn’t scare off any potential future employers 🙂 Or, if you liked it, give me a nudge and we talk about it in person.
Shout out and comment, let me know what you think?
What do you believe is going to happen?
Best wishes and see you around soon,