‘Digital supply chain is infected’ and ad tech firms will die off warns Simulmedia founder
The founder of US targeted television advertising company Simulmedia has warned that the American digital advertising market has become rife with media rebates and credits in way that has "infected" the digital supply chain.
Morgan: Digital supply chain has become infected.
The founder of US targeted television advertising company Simulmedia has warned that the American digital advertising market has become rife with media rebates and credits in way that has “infected” the digital supply chain.
Ahead of the looming ANA report into transparency, ad tech expert Dave Morgan warned that the number of players in the digital ad tech space was set to “shrivel”, due in part to the growing self-interest in the space.
“I have worked in advertising for 25 years,” said Morgan. “I really, really like this industry but it has started to be a lot less fun in the last five or six years.
“One of the reasons for that is that it became less about what the clients needed and becomes more about what would get the economics for the agency. It has infected the digital supply chain and it embarrasses me.”
Morgan made the remarks while speaking at the ANA financial management conference in Boca Raton, Florida, telling the room full of senior US marketers that the problem had been long running.
The ANA this week confirmed it would release two reports into transparency in the US in the coming weeks which are likely to have a global reaction with executives watching with interest to see what intelligence firm K2 reports on the controversial area of media rebates, credits and so-called “value banks”.
“Anyone who doesn’t think it is going on isn’t actually involved,” he said. “I am super excited about the ANA initiative because it is a really, really significant problem.
“I have worked all around the world but what has happened in America in the last few years is really unusual.”
Morgan told the room that accountability was growing through ad technology and that the industry should embrace this accountability.
“The Wanamaker problem – this idea that half my advertising doesn’t work – is going away,” he said.
“You can all be certain that five years from now no-one will be able to hide. No-one who is supplying media or marketing services will be able to hide from the exact impact of each and every communication or impression.”
He also cited the US programmatic Lumascapes, which show hundreds of ad tech players and warned that there we too many vendors who were serving as “intermediaries to other intermediaries” and that that this would soon have to change as venture capital, which had funded many of these operations, pulled it money out.
“What has simplified is the marketing supply chain. . . but 90% of the ad tech businesses are intermediaries to other intermediaries,” he said.
“They do not serve the principals who exist in the market – the marketer who is selling something and the consumer who is buying something – they are responsible for the growth of ad blocking and they are responsible for the problems with bots and ad fraud we have today.
“All of the intermediaries in the (supply) flow, exchanges, networks, demand supply platforms etc are going to go away. We are seeing a shrivelling of the intermediary’s intermediary business. ”
Nic Christensen in Boca Raton
So, “You can all be certain that five years from now no-one will be able to hide. No-one who is supplying media or marketing services will be able to hide from the exact impact of each and every communication or impression.”
Total bollocks.
Just tell me how (say for example) that FPC in Women’s Weekly will know who is looking at it.
Or as that highly credentialed media commentator, Darryl Kerrigan, put it – tell him he’s dreaming.
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Dave is right for all the reasons he cites..and lots of other reasons.
At the beginning, middle and end of the day, when it comes to the value delivered to marketers and users in the digital media supply chain, there is less..a whole lot less .. than meets the eye.
it’s not my line, but whoever said ‘where there’s mystery , there’s margin..nailed the digital media supply chain.
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