This is a free article from The Annual 2017. As part of the Perspectives Series AdNews asked industry leaders from marketing, media, advertising and tech to reflect on trust. Every issue of the monthly magazine has exclusive features, profile interviews and content that isn't usually available online. You can download a digital version of AdNews or subscribe to the print edition here.
Let's talk about the big grey elephant in the room. There's been talk in the industry that 'ad tech' is dying or dead. That frankly isn't true.
I have two perspectives on this and what the future will look like.
Firstly, ad tech is essential to ensure advertising and brand messages reach the user in digital campaigns. Technology that ensures this happens will always be integral in a highly fragmented market and with the ever-nuanced digital campaigns agencies and brands are investing in annually. Put simply, ad tech is an enabler, not an amplifier. It is a channel to provide value, and if it's not value adding, then it's a commodity.
The challenge is that as early-adopters, our industry has made digital technology overpriced because we didn't know what the price of ad tech should be. Brands shouldn't be ripped off by these early-adopters; agencies and ad tech companies that make their money from vulnerable clients should know it isn't sustainable.
Some people think ad tech is winding down due to the fact that they are looking at dwindling company valuations; they're no longer $1 billion companies but $200 million companies. People are valuing the category of ad tech products based on their market cap, which isn't the right way of looking at it.
The challenge over the next 12 months will be how ad tech and media companies can differentiate themselves from the ad giants, namely Google and Facebook (and soon Amazon). At the moment, they're all fighting for the smallest of ad dollars.
Mobile platforms need to showcase more value than the data, reach and network effect that the large tech giants can deliver to brands and agencies. Unlockd, gets labelled as ad tech by some of the media because they aren’t sure how to categorise us, however we white-label to our enterprise partners and create our own inventory we well and truly drive a competitive advantage in the value chain. Add the enterprise software with monetisation back to consumers and you get an attention-based virtual currency.
The history of media shows that anyone that arbitrages media impressions will die a slow death; anyone that creates content and their own value, will end up winning. And so 2018's conversations will revolve around content. Any publishers that don't create their own content or have scale will not be in a good position in years to come. Companies that create inventory or content own the power in the relationship. Look at Apple, Amazon, Disney, Netflix and YouTube. Look at how they are shifting their strategy to one that focuses on creating original content to attract consumers to their platform. DSPs, DMPs, RTBs, SSPs, and other annoying three-letter platforms have been feeling it; as all they do is trade on everyone else's inventory and owned assets.
Clients and agencies really need to evaluate what they are spending on ad tech and digital platforms and look for ways to drive competitive advantage not just short term volume. Success shouldn't be just about reach, active impressions and CTR engagement. Success should be about results with high efficiency and a niche or value exchange that differentiates from what the big three offer. Let’s also hope clients finally start valuing the differentiation of products and services publishers and agencies provide, to ensure a sustainable ecosystem for all that try and garner a win-win-win.
By Matt Berriman, CEO and co-founder of Unlockd
This is part of the Perspectives Series - Reflections on Trust from The Annual 2017.