How to Fix Ad Tech’s Lingering Problem

By Mary Carpenter, independent consultant, Carpenter Media Group, LLC

As a proponent of ad tech innovation, it pains me to say this. Our industry is wildly inefficient, not automated, and not transparent. And we’re barely addressing these major faults.

Digital advertising is a significant driver of my consulting business, as it was in my previous roles throughout my career. Some might say that the problems I mentioned above aren’t a big deal. Ad tech companies are growing. And if you look at the ad tech IPOs and funding in the past 18 months, the industry seems to move along just fine.

But ask people who work in the industry, the media professionals who have their hands on keyboards activating campaigns, and their leaders running teams. They’ll tell you, as they’ve told me, that digital advertising is complicated, that it drives up costs and training, and that it’s opaque.

While the pandemic was an excuse for letting these problems go unchecked in 2020, I hope we’ve all had time to exhale so we can fix these solvable problems in ad tech.

Workflow Inefficiency

It takes way too many platform logins and steps to make a campaign run –not to mention the other tools needed to manage a media team and the finances. Even in the area of programmatic media, which was supposed to automate ad buying, ad professionals need many different platforms to perform their job. The industry was hoping so called demand side platforms (DSPs) would drive efficiencies – which it did for CPMs. But the cost of labor is going up, the use of accompanying technology (data platforms, exchanges, verification, ad protection, etc.) is increasing, and it takes more time to reconcile billing and payment.

Manual Labor

Related to my point above, highly specialized skills are needed to activate programmatic advertising. These roles are some of the fastest growing in the digital media space – there’s roughly 24,000+ jobs listed on LinkedIn with ‘programmatic’ in the title. But that’s not all. There have been signs of a labor shortage in the ad industry as professionals are migrating away from it. For an industry that continues to tout technology, we are relying heavily on people spending loads of time on mundane and repetitive tasks. It magnifies the lack of automation in the processes required to run campaigns and operate marketing enterprises.

Transparency

Roughly speaking, for every dollar a client pays an agency, the agency gets about 15 cents. The remaining 85 cents could go to the publisher. In reality, the publisher may receive closer to 50 cents. Where did the other 35 cents go? This is the mystery that the Association of National Advertisers is trying to solve when it put out a research RFP early this year to see how much partners are really getting in the programmatic media buying process. I believe that ad tech vendors truly deserve a cut of the ad buy – they all provide some kind of value. But the lack of transparency is damaging the trust that is needed from advertisers, agencies and publishers.

These are just some of the problems that continue to linger in advertising and it will get worse as this industry becomes more complex, fragmented and disconnected. And we haven’t even gotten to the full potential of the ad tech ecosystems in connected TV, digital-out-of-home or digital audio.

When businesses are inefficient, costly and opaque, automation should be the first step to mitigate these issues. Take a look at what automation has done for areas such as HR, where growing enterprises know the value of a centralized system to streamline processes for talent management, benefits and payments. If most advertising and media companies have invested in HR automation technology, shouldn’t they be even more vested in unifying the core parts of their daily operations for digital media, such as team communications, vendor contracts/RFPs, campaign data, reporting, employee utilization, and billing? Automation in digital media empowers companies to streamline processes, lower costs, and deliver a clear view into the work. Advertises and publishers need to invest in all-encompassing automation to operate profitably and thrive.

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