AdTech is an Interesting Place to Be

If I’m an investor, the love for anything adtech-related has faded and I’m already looking to put my money anywhere else that makes sense.  Most adtech companies are only around because, as Luma Partners founder and CEO Terry Kawaja has stated, "There’s a substantial amount of guaranteed digital advertising spending each year, and therefore a substantial number of startups eager to get that cash.  But it doesn’t necessarily translate into sustainable business models.” That’s the signal that the adtech gold rush is over. Those companies in it for the big returns stuck around too long.

On the plus side, most of the VC money is funding companies that don’t offer enough value. These companies add to the “adtech tax” and in the process make advertising less effective for buyers and generate less revenue for publishers. Perhaps most of the companies that remain will offer a differentiated product of real value. Hopefully funding is there for companies offering real innovation in adtech.

What is getting investors’ attention is martech or “marketing technology.” New developments in martech allow marketers to create a relationship with a consumer and truly measure what marketing efforts lead to desired results. This level of analysis and attribution will transform how marketers use all their channels to reach people -- including adtech.

Dave Helmrich of LiveIntent said in VentureBeat, "If you’re in this industry right now, you want to be martech.” No doubt that all the fun (us tech types consider this fun) is to help integrate a multitude of martech systems, but the road ahead is going to be hard. eMarketer reports that according to a survey of marketers worldwide by the CMO Council and RedPoint Global in Q1 2017, only 3% of respondents said all of their automation, engagement and deployment tools are fully connected, with data, metrics and insights traveling freely between different technologies. Only 34% have limited connectivity.

Most martech systems aren’t ready for such integrations. Marketers are finding they must clean up their data or that they don’t have the data they thought they did. Marketers will learn like publishers before them that they don’t know their customers as well as they thought they did. Not all customers want a relationship with a brand. Martech is poised to do amazing things that both brands and consumers are going to love but it won’t be enough to eliminate the prospecting and wide reach approach of adtech. Together, however, martech plus adtech will make for some very compelling storylines going forward.

With adtech funding drying up and all the cool kids moving to martech, it appears that Google and Facebook are now in control of the adtech space. Often referred to as a duopoly, for publishers it's being stuck between a rock and a hard place. No one should secede as much control over the value of their companies as publishers have to Google and Facebook. These two companies alone will not provide sufficient revenue to publishers who need to invest to provide high quality journalism. Publishers are going to have to rely on others in the adtech space to survive. They are going to have to diversify their revenue streams across subscription models and ecommerce.

It is the stories of how these companies innovate that will populate the pages of AdTechVillage.

The detractors predicting an end to adtech may have a point. But, while much of the time we deliver a poorly targeted ad to too many bots, I've also seen the industry evolve over the past two decades, making amazing strides towards putting the right ad in front of the right person at the right time. The piping is there to do more that is right, but we need to reconnect the original partners of the whole advertising game. Brand advertisers and quality publishers need to start transacting together in a more direct way.

If that begins to happen, AdTechVillage is going to be a great place to live.

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