The future is bright; the future is ad tech. Ahead of taking the stage at ATS London on Monday, 10 September, where he will join a panel to discuss why the future is independent ad tech, Ari Lewine (pictured below), co-founder and CSO, TripleLift, gives his take on the future of ad tech.
ExchangeWire: There’s been a lot of negativity around ad tech over the past 12 months, but what aspects can we be positive about?
Ari Lewine: I’m optimistic about the future of ad tech. Here’s why:
We’re (finally) starting to win the fight against fraud and arbitrage:
Fraud and arbitrage were among the most critical challenges in programmatic, casting a dark cloud over the industry while driving up prices and driving down ROI. Compared to walled gardens, where fraud and domain spoofing don’t exist to the same extent, these issues made programmatic investments hard to evaluate head to head against social. Until this was fixed, there was no way to see the true potential of programmatic and how its ROI compared to the ROI of other channels.
The adoption of ads.txt, with most major publishers and DSPs adopting the standard in just two quarters, is nothing short of extraordinary. More than just publisher adoption, the decision by every major DSP to not buy from supply paths not included in a publisher’s ads.txt file became the catalyst for massive spend allocation changes, driving out fraudsters and arbitrageurs from the marketplace overnight. While ads.txt isn’t a panacea, and there is still fraud to clean up, this was an enormous leap forward. This type of industry-wide improvement indicates a healthy, thriving ecosystem that can collaborate and solve problems as one.
The duopoly may have (genuine) competition on the horizon:
There is a balance of power emerging to counter the trend of spend consolidation with Facebook and Google. Examples include Amazon, AppNexus/AT&T, The Trade Desk, and others.
Consumers will dictate the future of ad tech; and this year saw consumers approach platforms like Facebook with greater scrutiny than ever before. Google limiting exportability of the DoubleClick ID is leading marketers to ask hard questions about how they want to access and own their data and manage attribution. Generally, fewer companies in an industry results in decreased competition. However, with the data and scale investments necessary to compete with the duopoly, consolidation in ad tech will lead to increased competitiveness in the space.
OTT is going remake the entire ad tech industry:
OTT represents the single most exciting opportunity for ad tech. In these early days, OTT advertising looks much like it does on linear TV, translating the same ad experiences and buying methods over to this new channel. However, in the future, the OTT advertising experience will be redesigned from the ground up, leveraging data and user-centric ad experiences that don’t resemble 15- and 30-second TV spots. OTT enables complete interactivity, from e-commerce within video content, to programmatic product insertion tailored to each viewer.
There is a new era developing in advertising, with heightened transparency, control, data privacy, for example, as well as the path to everything becoming addressable – how does ad tech stay relevant in this new era?
GDPR and the California Consumer Privacy Act are just the beginning. We are ushering in a new era where the consumer’s needs come first, and that starts with data privacy. This is important for the long-term health of our industry for several reasons. First, the trend of increasingly pervasive data collection on consumers with limited guardrails in place was bound to end poorly. Second, the time and energy previously focused on data collection can be placed on other areas that contribute to marketing success such as creative, attribution, and user experience. The increase in complexity that data privacy regulation creates increases, rather than decreases, the importance of ad tech to meet increasingly complex compliance needs and meet customer’s requirements.
Will the consumer come back to being king? As publishers and marketers think more about their relationships with consumers, how will this affect buying strategies?
The consumer has more power now than ever before. They can order any goods or services they can imagine from the palm of their hand.
The clearest example of how focusing on consumer relationship is changing buying strategies is with ad experiences. Previously, clients were heavily focused on KPIs like video completion rate. Now brands are asking: “If my customer is forced to sit through my ad in order to watch the content that they actually intended to watch, what effect does that have for the consumer on my brand? Is it is worth having interruptive ad experiences for the sake of higher viewability, completion rate, or more clicks?”
The data continues to pour in on how consumers want and expect better ads. Research from Kantar says that 71% of U.S. internet users find ads are more intrusive now than they were before. Many of these users have resorted to ad blocking, where according to GlobalWebIndex 51% report downloading an ad blocker as they find ads “too annoying or irrelevant”. There are great, non-intrusive ways for video content to be monetised, such as the product placement in Netflix and Amazon Prime Video, that lead to a better user experience.
What is the future of ad tech?
The future of ad tech is:
User-centric: The consumer of today is empowered and has a low tolerance for interruptive ad experiences. Ad tech companies of the future will be building ad experiences that delight consumers with relevant, engaging content that’s delivered seamlessly.
Vertically integrated: Media companies are becoming ad tech companies and vice versa. The future of ad tech is combing media, data, technology, and distribution on a single platform.
Consumer-controlled: Consumers are beginning to understand that they, not platforms, own their data. The future will bring complete transparency to the consumers on what data is shared with whom and the power to control it.