Ad Tech Poses A 'Grave Threat'

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Ad Tech Poses A 'Grave Threat'

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Last week, long-time MediaPost columnist Bob Garfield offered his “swan song.”  In his final column for MediaPost, Bob, ever the provocateur, discussed “grave threats” to the business MediaPost covers.

The top one? Ad tech. No surprise there. The sector is imploding. Its less than transparent practices are catching up with it. One might go so far as to characterize ad tech as a “cesspool.”

But Bob put it this way: “This is a force in the media economy that is something like Wall Street in the general economy. It takes money, but adds little value. It is instead a middleman, consuming ever-larger percentages of media spend (with astonishing lack of accountability) at the expense of marketers and media alike. But after 15 years, has it boosted the underlying consumer businesses? The answer is plainly no.”

While that sentiment hits with a kind of blunt-force trauma, is there anyone who would take issue with it?

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Moving on. The second threat? “Native." It’s interesting that Bob didn’t mention content marketing as a whole, of which native advertising is a subset. What he did say is that “native” is a “conspiracy of deception."

Bluntly put: “Whether the ‘content’ is good or bad is irrelevant. What is relevant is that it can win engagement only if it camouflages itself as editorial matter. Anyone who tells you differently is lying. It also doesn't scale. So the best it will ever do -- while it steadily, inexorably barters away the dearly won trust of audiences to media brands -- is a labor-intensive, low-margin adjunct source of revenue. It's like turning tricks to help make ends meet….but still not covering the light bill.”

There’s no place to take cover from that statement. And whether you agree with that view or not, it cuts to the heart of the matter, which is consumer trust. But is native really only a “low-margin adjunct source of revenue”? Perhaps Bob didn’t see the eMarketer forecast on native ad spending released in late March. The research firm points out that the majority of U.S. native display ad spending is allocated to social networks like Facebook. In 2017, eMarketer projected that native social network display ad spending will reach $18.59 billion, or 84.2% of all U.S. native display.

In addition, eMarketer projects that native mobile display ad spending will reach $19.50 billion this year, representing 88.3% of all native advertising. The research firm points out that nearly all U.S. native display ads are purchased programmatically; in that vein, it projects that native programmatic will represent 84.0% of all native digital display ad spending, or $18.55 billion. Those numbers, if borne out, don’t really seem like “adjunct” revenue.

Finally, the third threat Bob calls out is the Facebook and Google duopoly, which is hoovering up of all the advertising cash. However, Amazon and others are quickly ramping up and may pose mini threats to the duopoly.  Bob writes about Facebook and Google: “They are simply too big, and increasingly too dominant both vertically and horizontally. Simply on economic-power terms, they need to be broken up, like Standard Oil of Ohio and the old AT&T.”

Between fake news, brand safety, digital ad measurement snafus, transparency, and data security issues, the duopoly is on everyone's radar.

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May 31, 2017 at 12:29AM