AppNexus APAC boss: The adtech boom is over and publishers must be given a greater margin
Osborn warns of an ‘adapocalypse’.
The Asia-Pacific boss of AppNexus has declared the boom in advertising technology is over and warned that local Australian operations could face an “ad-apocalypse” as tech vendors consolidate.
Dave Osborn used his keynote at the Programmatic Summit today to challenge the adtech industry, particularly around the rates they were giving to publishers, noting: “Mid-men who don’t add value aren’t going to last”.
On the controversial question of publisher margins being squeezed, Osborn said: “In the post ad-apocalypse, consolidated adtech environment you should put massive downward pressure on rates.
“For the internet to be a better place for consumers far more than 40 cents on the dollar has to go to Australia’s media content makers.”In his speech, Osborn citing the work of Dr Nico Neumann from the University of South Australia to argue that: “The capital that funded the adtech boom has run dry.
“There are too many companies chasing the same dollars with undifferentiated product and confusing the hell out of everyone.”
“And when I say the boom is over I mean it’s over. There is a growing awareness among the people with the money… that programmatic, for the most part, has just shifted the margin from the pockets of ad networks to the pockets of ad networks with tech.
“Many of them don’t add material value and I think that’s a clear chunk of the adtech market.”
In a speech which argued that the adtech industry need to more clearly deliver value for clients and differeniate itself Osborn gave a number of “commandments”, which included not working with tech players who compete directly with media owners and agencies.
“The technology provider who powers your business can’t compete with you,” he said. “In medieval terms this is the same as buying a shield from the guy you are going to war with.
“If your technology partner runs a media business and uses your inventory to grow share at your expense then you shouldn’t work with them.
“If they go direct to your clients in an effort to disintermediate your agencies then you shouldn’t work with them.”
Nic Christensen
The horse has well and truly bolted. Not working with certain tech providers won’t make any difference. Time to pivot or completely change your biz model.
User ID not verified.
This guy talks some serious sense.
The programmatic market is worth say 300 million a year give or take? This means 180 million isn’t even getting a CHANCE to go to the companies that actually PROVIDE those audiences to advertisers. Publishers are the ones that produce local content, remember them? They are the ones that employ journalists, writers, actual artists, i.e the ones that make a difference through original and professional content targeted to actual people.
Seems like there is a staggering number of ad tech ‘gurus’ sitting in the middle that don’t just add no value, some do significant harm for the quality of the internet at large. No wonder publishers can’t recover traditional margins in digital, I don’t think the paper delivery guy or newsagent was taking 60% back in the day!
It’s really the advertisers that need to effect this change, because their ‘independent’ media agency advisers are way too conflicted. Go back to supporting content creators first, rather than the middle man with the sharpest deck and questionably low ‘CPAs’. And news flash clients: These customer acquisition numbers are usually the result of firing millions of cookies on crap sites with low viewablity in order to take the credit for every customer gained.
Hopefully this mans prediction comes true before Facebook siphons off the rest of everyone’s content for an even lower return.
User ID not verified.
Ahhh, Ok Andtrew, why don’t we just go direct to advertisers and create partnerships versus ‘adsales’. They would cover cross promotional opportunities at all levels including content and would only require possible SSP intergration – somehow feel they will be so much more appealing to all except adtech suppliers and media traders…..just sayin
User ID not verified.
[I’m a 15+ year ad tech veteran in APAC]
Well, an adtech exec talking about the wrongs of adtech and the poor decision of customers is not unfamiliar, but it is self-serving. Other than that…frankly, what do you do to make that happen? its really not clear….
Maybe a forthright articulation of how publishers regain that margin you talk of, and importantly adjust their business accordingly would be more helpful than Adtech tips.
User ID not verified.
Mr Osborne is right to be concerned about margins given his company continues to lose money …..Source: Goldman Sachs
User ID not verified.
Not surprising commentary from a company that has aligned with WPP. Of course he’s going to toe the agency line of “don’t go direct”.
So listen up AppNexus competitors !!!, you should all give up now, shut up shop cos AppNexus and WPP have decided that the direct model is not on. Ok ? Good.
or…rather than parrot agency bully rhetoric….why not explain how a customer is better served by an agency running a DSP than:
1. A rival DSP full service model
2. Taking the desk in house (Foxtel quoted 40% saving after moving from WPP)
3. Independent trading desk
User ID not verified.