In a tribute to the irascible Andy Rooney (for those too young to know who Andy Rooney is look here), I always wondered what he’d say if he knew a little bit more about the ad tech industry and used it as a subject for 60 minutes. In my head, it sounds a little like this…
You ever wonder what all this ad tech stuff really means? From the looks of it, it all seems like the same thing to me, an ad network. I used to know a newspaper was different from a radio and that television was different from them all. Sure. It was media but to me they were a lot more. I never really thought about the advertising or how it got there. I was more interested in the content.
The new hipsters of all this ad tech wizardry are very impressed with what they can do but everything seems to devolve into an ad network. Google has an ad network, they call it AdX, Facebook is an ad network. Yahoo I guess had an ad network but I’m not sure what it is now because advertisers don’t seem important to them yet.
Then the new breed, Criteo, RocketFuel (isn’t that what took the astronauts to the moon) and now a company called the Rubicon Project came along.
People have been telling me ad networks are going to die but they don’t die or fade away, they just spawn and create new names and go back to their old ways…except with new technology which makes them better than the older ad networks.
But at bottom, they are also ad networks.
Is everything in online advertising then really an ad network in sheep’s, DSP, SSP, Trading Desk clothing?
From the outside, online advertising sounds like this to me: the seller sells as much as he can and then gives it to an ad network or gives it to something he calls an SSP, a sell-side provider, which is an ad network who then sells it to a DSP, an aggregator of buyers all demanding to buy lots of inventory from the DSP that is made up of inventory from ad networks and other publishers and when they can’t sell it all, they also send that inventory into exchanges which is like a super ad network where the same buyers may try to buy it again. All of this buying is supposed to raise prices but it doesn’t seem to.
I guess the real question is how long will investors go for public ad networks? Look at this thing called the Lumascape. Everyone on this list calls themselves leaders. Does that mean they are all Chiefs and no Indians? Can we still say that on television?
I don’t know technology but this ad network thing seems a little suspicious to me. How many times are buyers buying the same low quality inventory using different algorithms that raises ROI and lowers CPA? If ROI was so high, advertising should be the most efficient medium around but looking at the Lumascape, it doesn’t seem efficient, it just seems like one dollar is floating around the technology and everyone is taking pennies and making it up on the volume.