From ad tech to retail media—What marketers questioned most at the ANA Media Conference

Ad tech may be a growth industry, but it could be nearing its peak given the scrutiny it was receiving at the Association of National Advertisers Media Conference in Orlando earlier this week. While ad tech certainly took center stage at the conference, which included a fireside chat with The Trade Desk CEO Jeff Green, supply-side platforms (SSPs) and demand-side platforms (DSPs) were also the focus of scrutiny that was once reserved largely for ad agencies. Another big industry growth area—retail media—also got a big dose of skepticism. Adam Benaroya, senior director of global media excellence at Kenvue, the marketer of such brands as Tylenol and Neutrogena, made the case for cutting through media’s growing complexity through “strategic simplicity.” And in a trend-bucking move amid some ANA members pulling back on diversity, equity, and inclusion (DEI) policies, the organization—like in years past—dedicated much of the conference’s first day to diverse-owned media. Here are the key takeaways. Tough talk on ad tech After years of largely ineffectual industry complaints about the “ad tech tax,” marketers appeared poised to take concrete steps to do something about it. And with good reason: Ad tech costs are about the same as what media agency fees used to be. True, the open web, an $88 billion market per the ANA, is only about 10% of global media outlays, as Chris Kane, CEO of consultancy Jounce Media, pointed out in a presentation. And the ANA’s Programmatic Benchmark report noted last year that the collective take rate of DSPs and SSPs is nearly 30%. Thus, ad tech transaction fees on the open web alone amount to about 3% of marketers’ media budgets. That was the share of media budgets allocated to agency fees more than a decade ago, according to ANA member surveys—before marketers ramped up procurement efforts to reduce those costs. Kane, who has advised such clients as Procter & Gamble Co. as they built their digital media strategy and took buying largely in house, made the case that smaller marketers can do more to get their costs under control too. He recommended some radical cuts in the number of partners. That includes using no more than three to five SSPs, only one DSP and no more than 100 digital media publishers or aggregators. That compares to sometimes dozens of SSPs, a handful of DSPs and tens of thousands of digital publishers that many marketers, even small to mid-size ones, use now, per ANA research. Kane’s list could grow smaller still, he said, given moves by both DSPs and SSPs to disintermediate one another through direct paths to buyers. Kane also recommended eliminating resellers as an unneeded and risky extra step. “Not all reselling is ad fraud,” Kane said. “But all ad fraud lives in resold supply chains.” Green’s TTD, he noted, has mostly eliminated resellers from its operations. For those questioning whether ANA members can drive real change, Kane pointed to the group’s 2023 Programmatic Transparency Report, which spotlighted the rise of low-quality “made for advertising” (MFA) sites. He said the report led to a sharp drop in MFA ad placements—enough to push many of those thin-margin operations out of business. Now, purveyors of low-quality inventory are shifting tactics, turning to AI-generated content farms and driving up bids through duplication across multiple SSPs. That, Kane said, is where supply-chain optimization—like limiting the number of SSPs and publishers—becomes essential. Marketers take aim at ad tech Some marketers took issue with ad tech on other fronts. General Motors Global Chief Media Officer Shenan Reed said during a town hall session that while ad agencies have gotten most of the scrutiny regarding principal media trading—where they resell media to clients rather than buying it as agents—ad tech platforms also engage in the practice. “We have it in our DSPs,” Reed said. “We have it in other platforms. And so I think there’s a moment where every media buyer needs to step back and look at how the dollars flow for your business and make sure that you understand what the incentive is to the people you’re buying from. Because if the people you’re buying from are incentivized to go to certain places with their media purchases, they may not be the places that are working best for your business.” Advertisers should take control of their own ad tech contracts rather than buying through agencies, Mairi Fogle, performance media lead at Kimberly-Clark Corp., said during the same town hall. But ad tech platforms don’t make it easy, she said. Among the benefits of direct deals, she said: “You own your own data. You have the flexibility to use that data in multiple ways, whether it’s reporting, modeling, etc.” Direct contracts also provide “risk mitigation and full transparency into what you’re paying everybody,” she said. But marketers face disincentives from ad platforms in going direct, Fogle said. “They often provide the best terms to agency holding companies,” she said, such as insisting on 30-day payment terms, which is at odds with many marketers’ policies and is less favorable than deals holding companies get. “Secondly, the platform fee is typically higher” for marketers dealing direct than what holding companies pay, she said. “We as an industry are talking about data transparency and ownership,” Fogle said. “If you want to move in that direction, we need a little more parity in what’s offered to advertisers and hold cos.” Ad Age’s Data-Driven Marketing Playbook—what you need to know Transparency takes the spotlight—with some questions unanswered Transparency was part of the message Green wanted to convey in his fireside chat with Lou Paskalis, chief strategy officer of Ad Fontes Media, which rates news sites on bias and advocates for their place in the media market. “We partner with every brand safety company out there,” Green said. “But I believe that all of them need to up their game, and part of what they need to up their game is just better transparency of the supply chain.” Marketers still have control because digital supply exceeds demand, Green said. “We just increasingly have to put pressure together on the sell side to be transparent,” including in such areas as mislabeling out-stream video buys as in-stream and demanding metadata “so that we know what we’re buying.” Green also noted The Trade Desk’s role in supporting some social transparency by backing the News Navigator SSP in support of news sites. The effort has already generated $50 million in media deals since January and could reach a run rate of $500 million annually, he said. The Trade Desk has also faced recent criticism over transparency—specifically for not providing content-level URL data, as Amazon has begun to do, and for withholding user-agent data that could help ad verification firms block bots pre-bid. These issues weren’t addressed on stage, and no time was allotted for audience Q&A. That lack of Q&A was noted on LinkedIn by Tom Denford, CEO of ID Comms, who specifically wanted to ask Green how TTD might work with consultancies and audit firms given its growing role in media. Keep it simple Clearly, very little is simple in media anymore, but Kenvue’s Benaroya made the case that it should be. “Strategic simplification is a deliberate approach to evaluate what capability demonstrates real impact versus what is just noise,” Benaroya said. “Instead of asking what we need to develop that’s new, the question is where can we strategically be doing less?” That includes asking what approaches drive real impact for the business, he said. “This requires deliberate documentation of business objectives and evaluating every potential capability [and] sophistication against its ability to deliver that objective. What can drive real impact? If we’re talking about a pilot, can it scale? Or is our obsession with sophistication going to create noise for the business? I don’t think it’s a mindset that’s said out loud often enough in this industry.” Speaking the unspoken about retail media Speaking of saying the quiet parts out loud, that also was the theme for Kyle Shank, director of media technology, analytics and operations for The Hershey Co., in talking about retail media. Among those things, he said, is retail media’s role as a “budget disruptor” within companies, where sales organizations have a different set of priorities, such as making sure products maintain their place on the shelves and in retailer promotion strategies, than brand marketers who expect retail media to build brands the same way other media does. “Internecine warfare” over budget ownership also plays out financially in where retail media falls on corporate income statements, Shank said. When classified as trade promotion, it comes out as a reduction of net sales and looks generally less wholesome to investors than when classified as an advertising expense. As more money goes into retail media, it’s also harder and more expensive to get space on the prime inventory of retailer-owned-and-operated digital properties. So more money goes into programmatically buying media targeted with retailer data on the open web, Shank said. “This is like paying for a first-class airline ticket but getting a middle seat without a window.” Another often unspoken impact from retail media’s growth, he said, is how it dilutes brand-building efforts. “Retail media is generally used to drive conversions,” Shank said. “All the growth we’re seeing is coming from something, and it’s from what was traditionally brand, or whatever word we want to use to describe the thing that probably the total addressable market was built by. We sell product, but we also sell ideas and stories. And the more we move away from that … this is going to cause long-term impacts.” Ironically, big brands’ shift from brand building to performance marketing in retail media is the inverse of what happens with direct-to-consumer startups, he said. Once startups get enough venture capital, they generally shift from pure performance buys to more focus on TV ads and brand building, Shank said. Diverse-owned media still gets focus Numerous marketers—including ANA members—have pulled out of DEI efforts amid a growing backlash. That makes what ANA’s typical agenda, devoting much of the first day to diverse-owned media, suddenly more remarkable this year. Some companies have pulled back on spending policies to invest in more diverse-owned media, and even those that haven’t are often loathe to talk about it. Led by Lela Coffey, VP of multicultural business acceleration at P&G, the conference focused on case studies with strong business results from Black, Hispanic, LGBTQ+ and Asian-owned media companies. The point was that the investment is about business opportunities. “Right now at Procter & Gamble most of our big brands hold a No. 1 or a No. 2 share position,” Coffey said. “But we have pretty big share gaps with multicultural consumers, and that includes LGBTQ+ vs. white consumers. So there’s about a billion dollars just for us to close our share gaps. There’s another billion dollars that sits out there to get multicultural consumers to use our categories at the same rates that white consumers do, and another $8 billion to just keep pace with the market growth that we’re going to see from multicultural consumers over the next decade. So that’s $10 billion of business that is sitting out there. I guarantee you there’s not a Swiffer or Febreze or any initiative we have that is as big as that $10 billion.” Ad Age’s Data-Driven Marketing Playbook—register now

From ad tech to retail media—What marketers questioned most at the ANA Media Conference

Featured Stories