Brandscreen demise a reminder there is no silver bullet in automation

The news Brandscreen has gone into administration proves we are still a long way from getting media automation right argues Matthew Hunt.

I was as surprised as anyone else to hear the news on Friday that one of Australia’s newest independent advertising technology companies, demand side platform (DSP) Brandscreen, had entered into administration.

As the MD of cross channel advertising platform Adconion, I have constantly been hearing that DSPs are meant to be the future of the industry. Exchange based ad trading has been delivering double-digit revenue growth and with aggressive leadership controverting all who challenged the strategy,the outward veneer certainly looked good.



There is no question in my mind that this news signals a critical juncture for the programmatic advertising industry. It does not spell the end of the DSP, but it does signal the first big chink in the armour of the model.

The halo effect is starting to fade, and reality is setting back in after the irrational hype of the past 24 months. But why is this seemingly bulletproof approach to online ad trading starting to show signs of being vulnerable? In my view, the answer is quite straightforward. It wasn’t about the technology; it was actually about the audience all along.

So what does that mean? Whilst technology undoubtedly brings a multitude of benefits, on its own it is not enough.To be successful, most trading desks, publishers and ad networks are beginning to understand that a tech layer in isolation can’t deliver the end result-reaching the right audience in the right channel at the right price.

From what I can see, it is the companies managing media businesses on top of robust technological platforms that are the only ones delivering real sustainable margins. And this is important because it allows a company to reinvest in its technology, it’s partners and it’s people.

Google and to a lesser degree Facebook certainly know this, managing to combine tech, media, data and people to build long-term value for advertisers and publishers.

The technology can be an enabler, but brands don’t care about how advanced your circuitry is. They care about investing to connect with the audience most likely to interact and convert with their product.

This takes more than an algorithm to deliver, especially in such a fragmented media industry.

And it’s not only the technology that can’t survive in a vacuum; genuine scale on a global level is also becoming non-negotiable. Pure tech players have very little room to expand margins, with growth limited to running more inventory and data available across the platform to as many clients as possible. Even at high revenue levels, the cost of engineering and R&D make it difficult to drive profitability unless you can secure market share at scale.

Subsequently low margin ‘software as a service’ solutions can only guarantee a sustainable business model through scaling across multiple international markets. Single market and regional players are always going to have an Achilles heel when looking to compete on a level playing field.

Of course, this means Brandscreen was operating in a far from level playing field and the ability of global companies on the buy and the sell side to collaborate was inevitable.

But when all is said and done, the demise of relative startups such as Brandscreen is a reminder that there is no silver bullet to automating our media future. Technology is an important part, but technology only allows you to more effectively connect with your audience.

It is only when people use this technology to combine media with data that advertisers achieve results at scale through programmatic trading.

Matthew Hunt is the managing director of Adconion Australia


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