If you need an indication that an industry is facing an existential crisis, you won't do much better than one of digital advertising's most familiar luminaries turning to gore to make a point. At his Digital Media Summit in May 2015, Terry Kawaja displayed his now-signature Lumascape. But, instead of celebrating its diversity, the ubiquitous illustration of the marketing technology industry appeared to be bleeding. Mr. Kawaja, predicting rabid and brutal consolidation, said pointedly: "There will be blood."
This is a sobering pronouncement, particularly coming from an industry prophet whose work is practically synonymous with ad tech diversity. Digital marketers have a reasonable worry: How will they be affected by what seems like inevitable industry consolidation?
The good news is that consolidation can be a positive move for marketers. Scott Klass, VP-global marketing at Sizmek, has previously outlined the trap of throwing a bunch of disparate point solutions into your ad tech stack and expecting an immediate lift. Consolidating innovation into a flexible, integrated platform can serve your strategic goals—as long as the consolidation itself is done strategically.
One Size Fits All Is Weirdly Sexy
According to eMarketer, the duopoly of Google and Facebook represents roughly 40% of all digital ad spending worldwide. Microsoft and Twitter eat up another 5%. So almost half of all digital ad budgets in the world are spent with four companies. These companies build effective tools, but much comes down to a path-of-least-resistance approach by marketers to technological strategy. Nobody wants to get fired for bucking industry trends, but neither should you fool yourself into believing that your market strategies are fully served by a single service. Digital marketing opens new opportunities for diversity that shouldn't be sacrificed to resigned inevitability.
Different Eyeballs, Different Campaigns
Locking in to a single platform means locking in to its reach. While ad tech giants boast large global audiences, carving those into strategic segments isn't as easy as an IP lookup. Different cultures bring different behaviors and expectations, and marketers need to plan for and reflect those traits in their campaigns. A DSP that serves the needs of a brand's Brazilian market isn't likely to achieve the same results in France or Japan. Your platform should instead allow you to merge regional partners for consolidated planning and analysis.
Similarly, while monolithic platforms may offer an array of reporting, the fundamental basis by which success is measured doesn't change. With one platform, you're locked in to the same root analysis, unable to adjust your technology for nuanced criteria. There's a large gap between the success of a general brand=awareness effort and a focused drive for direct responses. Layer on the unique needs of individual brands, the diversity of audiences and other intelligence, and a reporting platform open to different levels of attribution and scrutiny becomes critical.
Sandboxes ARE Giving Way to Walled Gardens
Functionality inside a platform can be not only monotonous but, in ad tech, it's often self-serving. Major digital marketing platforms also work to expand their market share in social networking, device sales, Web searches and user intelligence. Criteria for success include selling media and capitalizing on client data.
At its purest, an ad tech platform is designed to facilitate efficient campaign delivery and evaluation of media partners based on variable standards for success that brands and their agencies dictate. But in practice, the lines between campaign manager and media provider have blurred. Advertising technology is often developed to enhance campaigns on proprietary media, creating an echo chamber of trafficking and analysis that most benefits the owners of those media. Choice of audience and of content is a fundamental aspect of marketing strategy, but it's increasingly being surrendered for the ease of monolithic consolidation.
Further, the data being gathered about your audience is a valuable asset—and platform giants know it. By integrating their technology offerings with other consumer-facing services, these companies use your marketing efforts to gather and store enormous amounts of data about your audience for their own use. This "data-in, nothing-out" model is one that savvy digital marketers cannot afford to routinely accept.
Mr. Kawaja's prediction of bloodletting may indeed come true; but even in this environment marketers, need not surrender all choice. They must defend their needs, carefully evaluate the actual benefits of technological mergers and find tech solutions that fit their strategic needs instead of molding their strategy to limited capabilities provided by a single platform. Savvy marketers should instead look for choices that provide operational efficiency and data alignment without limiting access to custom functionality or reducing the number of choices of media, analytical data or audiences. This kind of open ad management platform won't solve all the problems that investors see inherent in diverse and disparate technology market, but it can staunch the bleeding.
About the Author:
As Director of Research, Andy Kahl is Sizmek's head data guru, where he is tasked with connecting billions of data points into compelling, relevant analysis to help Sizmek's customers navigate the complex reality of digital advertising. Prior to joining Sizmek, Andy used his knack for data most recently in his role as Senior Director of Transparency for Ghostery, and Business Planning and Operations Analyst at Yahoo. He has spoken at SXSW, RSA, and the Northside Innovation Festival, and been featured in the Atlantic, Wired, Huffington Post and on CNN International and Bloomberg's Street Smart.
About the Sponsor
Sizmek Open Ad Management brings freedom of choice to end-to-end advertising. With a single point of access to the best technology, data and strategic guidance—and the flexibility to choose solutions that fit their strategies—more than 42,000 advertisers, agencies, publishers and trading desks create inspiring, seamless advertising campaigns that connect them to their customers around the world easily and effectively. Open and independent, Sizmek's wide range of technology and data is bolstered by integrations with more than 100 partners, providing leading solutions for attribution, data management, audience measurement, search engine marketing, creative authoring and more. Sizmek operates in more than 70 countries, with local offices providing award-winning service throughout North America, EMEA, LATAM and APAC.