
The ad tech renaissance - taylorbuley
http://bokonads.com/the-ad-tech-renaissance/
======
oxymoron
I'll concede that the analysis isn't completely without merit, but having
spent the last few years in ad tech, I sincerely hope that there won't be a
revival. It's a race to the bottom. Publishers are struggling and are
increasingly willing to accept ever more outrageous ad products. Advertisers
are desperate for advertising that actually works, but will mostly only do
what agencies tell them, and the agencies are only interested in maximizing
their own margins. In the middle we've got any number of middle men scrambling
for some pieces of the cake, sometimes but usually not providing some value,
leaving the publishers with a pathetic fraction of the advertiser spend.

So essentially we've got a whole bunch of companies with no growth desperately
vying for the attention of 23-year old media buyers who in turn are mostly
interested in getting someone to take them clothes shopping and picking up the
bill. These companies are doing it mostly by doing ever more intrusive things,
since advertisers can't accept that the reason their ads don't perform is that
nobody wants their stuff and keeps looking for a silver bullet.

I've come to believe that the only reasonable justification for most
advertising is that it's in some sense a way for other industries to subsidize
journalism. Since that's going away, I'm looking forward to the inevitable ad
tech carnage ahead, and if a potential next wave actually brings higher
quality advertising and better end user experiences I'll happily eat my shoes.

~~~
vosper
All of this, plus the vast amounts of bot traffic that no one wants to look
too closely at, because everyone except the advertiser is making money off of
it...

~~~
ec109685
Bot traffic is accounted for in the price advertisers pay for ads. Advertisers
don't run unprofitable ads.

~~~
simo7
Advertisers do run unprofitable ads and marketing campaigns all the times.

And they are fine with that too. That's the case of VC-backed startups: they
accept a negative ROI to get the chance to start making money one day.

Then you have the less consciuous ones, which might be big brands who want to
experiment a bit with new media/ad formats.

In any case, if you think about it, the real losers are...the honest
publishers. Because the money on the table is not increased by fraud, it's
just shared in a way that takes something away from good publishers to
bad/fake ones.

~~~
ec109685
I agree honest publishers are at a definite disadvantage. Advertisers aren't
because the roi calculation they come up with judges their campaigns based on
its performance, which incorporates good and bad clicks over time.

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djur
I don't see any mention of ad blockers. Are these seen as having a significant
effect on the online advertising industry? Are there any serious proposals to
deal with them other than continuing the ad-blocker-blocker-blocker... arms
race?

It seems that there's an increasing understanding among publishers that low-
quality and intrusive ads encourage their visitors to use ad blockers or
another site. Several relatively high-profile sites (like The New Yorker) have
stopped using networks like Outbrain and Taboola. (Obnoxious ads from the
latter, along with autoplaying video ads on numerous sites, resulted in me
finally installing an ad blocker after resisting for years.)

Adblock Plus offered a way forward with its "Acceptable Ads" program but it
seems like that has been roundly rejected by both advertisers and blocker
users. Maybe publishers and advertisers could work together to develop a
stricter set of advertising guidelines that show respect for users? I suppose
such a program is essentially doomed without cooperation from Google and
Facebook, and I don't know if they'd be willing to work with the little fish
(or each other).

It seems like an intractable problem. I'm not convinced technology (machine
learning! the solution to all problems!) is capable of providing the solution.

~~~
tomjen3
The problem is that most ads suck. Facebook knows more about me than I do, but
they can't come up with ads for things I want. What possible chance does a
random newspaper have?

~~~
pascalxus
I completely agree. 99.99% of the ads I see on facebook are for things I don't
want. They really need to get more AI and more information about the user for
better targeting. They may have world class targeting, but it still sucks
compared to advertisement that can read my mind (doesn't exist yet).

~~~
pdkl95
A common misconception is that targeting is about _your_ interests. An AI
won't select ads for things you want. Instead, it will use all of that
tracking data to select ads that are more effective at misleading you or
_changing_ your interests.

~~~
tomjen3
What is easiest? Sell me things that I already want but don't know about, or
changing my interests and then convince me to buy a particular product?

Incidentally 5 years after moving into an apartment I still need a good
curtain for the kitchen. If I see an ad for a place I can upload measurements
and get the results sent to me I would be very happy to pay.

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niftich
_> The end of impressions and banners in favor of views and "publisher
rendered" (aka native) creative_

Native advertising, which I'd re-phrase as 'sponsored content' or 'content
placement', I can actually enjoy, if the sponsorship is made clear and the
topic is genuinely relevant to the audience. After all, who better to tell
what kinds of content readers want to see besides the publisher who puts it
out there? But it _has_ to fit -- out-of-place content will be painfully
obvious, and cause further user aversion for ads.

But the thing is: all of this can be accomplished without ad networks that
track your travels through the web. The client can engage the publisher
directly or through a broker. Where does that leave today's adtech?

~~~
andygates
That seems unduly optimistic. The content will be uploaded from the same old
terrible content farms, and be the same old rubbish only with a heavier local
server load.

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soared
Very interesting read, thanks OP! I've started using some platforms with
integrated ml, and it seems to be much better. Its difficult to get used to
starting a campaign, and instead of meticulously setting up targeting (males,
$50k income, denver, into football and skiing, etc) the ml lets you just ..
upload an ad and a web page. No targeting. Click GO and it will find your
customers. If Google or facebook can get into this space they'll succeed
greatly because they have so much data and users already trust them.

~~~
mars4rp
can you please name those platforms ???

~~~
soared
I'm at an agency and have access to some closed betas, but I've been pretty
impressed with StackAdapt for their native. They just added video and display
I believe but I haven't used them. You do a little bit of manual targeting but
their ml really does well.

~~~
fumar
When you say "does well," what type of goal or kpi are referring to?

~~~
soared
White paper downloads for elderly people. For some reason their interface
underreports conversions though. But we've tied their traffic directly to
purchases! One note though.. like some other channels you're buying a mixed
bag. There is a lot of low quality traffic, but the diamonds in the rough do
make up for it.

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keldaris
Since there's rarely any widely interpretable public data available, articles
like this and many others are my best gauge for noting that even the Internet
advertising industry itself recognizes that it's dying. This is very pleasant
to observe.

Personally, I can't remember the last ad I've seen while browsing. The
combination of AdBlock Origin (with a very generous combination of various
blocklists), Ghostery / Privacy Badger and NoScript effectively renders most
adtech useless. The few remnants that refuse to be blocked I happily skip
outright rather than enable. As far as I'm concerned, the only acceptable form
of advertising consists of things like hardware companies supplying free
samples to review sites without any preconditions and even there a slippery
slope exists, as evidenced by the sad state of the games "journalism"
industry, where corruption is endemic.

And the best part is that, unlike many political and social issues, users
really do have all the power here, and it's trivially easy to exercise it.
Install a few trusted browser extensions and you've helped hasten the demise
of a harmful parasite of an industry, and improved your own security at the
same time. And nowadays it's easy to persuade even non-technical users to do
this due to how disgusting and intrusive ads have become.

~~~
kirso
Congratulations! You are in the 10% of people who have adblock :) Within the
600B advertising industry. You get the point right? Normal people think
different. In addition, mobile is overtaking everything and adblocking there
is more tricky, thats why Facebook is generating 80%+ of their revenues via
mobile ads (fun fact, in 2010 it was 0%). You can ask your parents for
instance whether they know how to limit ad tracking.

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lcw
I _feel_ like another piece missing from why these companies are "flat" year
over year is the fact that they are running into a wall of what people will
tolerate. I don't think that there will be a renaissance like the author
concludes. As a guy who worked in ad tech these tricks have been exhaustively
tried. I think right now the industry trend is to pay for premium content
rather then be inundated with Ads especially when it comes to games, video and
music. I imagine we will see this pattern continue especially with the mobile
gaming industry figuring out the key to everyone's wallet: in app purchases.

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manigandham
This article is mostly bullshit.

AppNexus is one of the major SSPs (sell-side platforms) but they still have
major fraud and legacy tech issues. They are also one of the primary causes of
miserable user experiences across the web. They will not be part of any adtech
renaissance.

Google won't flinch if margins really do go down to single-digit margins.
They're already built for worse conditions than today and are just pacing the
market, as seen with the whole header bidding scenario. They also have Google
Cloud rapidly scaling and will likely be a bigger source of revenue than their
entire ads division in a few years.

Meanwhile AppNexus can barely survive on their current margins and will be out
of business if it hits single-digits. The disintermediation mentioned in this
article will also apply just as harshly to AppNexus.

The lame insights about machine learning and formats aren't anything special.
This is why Google and Facebook get all the money already, because they have a
much faster, cleaner, more relevant, and more effective ad experiences. The
renaissance is already here and it's getting increasingly harder to compete
with these data behemoths. It's not impossible though and there are several
niche focused ad startups, but there's no big sea change about to happen. This
is all just business as usual.

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awongh
This is a space I wish I knew more about- but it seems like it has it's own
sub-culture that to me, is hard to parse.

Can someone tell me what some of the things are that he refers to in this
article?

\- dfp, dsp, ssp, gdn, dbm, adx, dcm, dfp

Is there a good technical-minded rundown of all the players in the ecosystem
and what they do? Internet ad industry information is impossible to google
because it mostly turns up spam.....

~~~
wastedhours
I've tried to find a long form piece on it (ideally a physical book as
reference), but failed.

DSP: Demand Side Platform, is the tool agencies and advertisers use to buy the
ad spots automatically based on tracking profiles.

SSP: Supply Side Platform, is the tool publishers use to sell their ad spots
(publishers push an impression to an SSP, a DSP will evaluate it and an agency
will buy an ad on it - Google is main SSP and DSP [I think?] so people are
wary about them.)

DFP: DoubleClick for Publishers perhaps, as in, ad tech for media sites to
manage the display process (guess it could be called Google's SSP).

DBM: DoubleClick Bid Manager, is Google's DSP

ADX: guessing just an ad exchange, so a place advertisers and publishers do
the deal.

GDN: Google Display Network, posh AdSense where you can place your ads across
3rd party sites, not just the SERP.

Then we get into the world of Header Bidding (which, as far as I understand
it, is even more tech to bypass your usual SSP/DSP process to get the best
deal from different ad exchanges) and that whole murky world...

I've only been on the advertiser end, speccing a programmatic campaign through
a specialist agency. It makes me nervy as our only marketing attribution is
last touch and that rarely works with broad reach display. Retargeting is a
much more valuable one to explore.

If anyone would be interested in a guide, I can look to put one together with
definitions and a few anecdotes from some players? Username @ gmail.

~~~
ssharp
I think it's worth adding how DSPs and ADXs fit together. There are only a
handful of ad exchanges out there -- Google ADX, OpenX, AppNexus, etc. Some
brands and agencies are large enough to buy inventory directly through these
but for most brands and agencies, it's too expensive and cumbersome to do so.
This is where DSPs fit in. DSPs buy large batches of inventory from the ad
exchanges and resell them to brands and agencies and try to add value where
they can.

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intrasight
I've come to believe that this isn't a technology problem. It's a people
problem - specifically a "publisher people are lazy" problem. That lazyness
made them hand their value over to Google and Facebook, and now there's just
no easy way to get it back.

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cm2012
85% of new ad dollars are going to fb and google. Everyone else is fighting
for scraps.

~~~
kirso
Not actually true, these scraps are still worth billions => google AppLovin

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petercooper
I know it's not for everyone but I hope more publishers can work out a shift
to a no-graphics-needed-to-render-this "advertisers<->publishers" approach.

Are your readers the sort of people advertisers want to connect with? Great!
Sell space and support to them. Or is your audience so diverse and ephemeral
that advertisers don't care? Move into publishing stuff that's useful to an
audience advertisers value, because when everyone else is slipping down the
ladder, it's a great time to try climbing it.

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na85
>The internet needs an ad tech renaissance, one based on creating real value
for publishers and marketers,

Could not disagree more.

Advertising as a whole needs to die in ignominy. Obviously that'll never
happen, but we should be working towards ways to make advertising obsolete or
unprofitable, and we should be ostracizing people like the author who try to
or want to make things better for advertisers.

The promise of the internet was users as first-class citizens, not users as
mindless consumers of hostile advertising.

~~~
SerLava
Hostile advertising and advertising in general aren't the same thing.

I'd be the first to point out that advertising has motivated a wide array of
terrible things, especially in the last few years. But advertising at its
barest sense can be and usually is a net positive force.

~~~
na85
>Hostile advertising and advertising in general aren't the same thing.

Are you sure?

~~~
SerLava
Good point.

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monochromatic
We don't need an ad tech renaissance. We need to burn it to the fucking
ground.

~~~
HugoDaniel
^ this.

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majewsky
> The tracking tech renaissance

FTFY

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TheAdamist
I don't know if it was due to manual ad reviewers being on holiday or what,
but i was getting a bunch of ad hijacking or malvertisements over the weekend
from legit websites. If even legit sites can't keep up with this then no
wonder everyone is running ad blockers just to keep safe from legit sites.

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dedalus
really nice article detailing some nuances

~~~
dedalus
really surprised by the downvote without any reason. so much for tolerance of
opposite views. The author is an authority in adtech (CEO of App Nexus). I
expressed an opinion of the piece (which you are free to disagree with and
maybe the disagreement is downvoting??)

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fieryeagle
Very good read that highlighted the current state of the industry - G and FB
reign as kings. I'd expect the fraud cycle to restart in gaming industry
seeing that display and mobile are essentially saturated.

