As the industry rallies around a shared commitment to data-driven marketing and a cross-screen ecosystem, consolidation and disintermediation of the value chain are a given.
Every quarter, marginal players fall out, and ad tech solution providers acquire or stand up to be acquired. It all works toward a fully integrated stack: one that delivers on targeting, ad serving, measurement, verification, and attribution. It’s where we’re all headed.
Doubtless, the majors--Facebook, Google, et al--will prevail, given their capacity for scale and reach. But what of the rest? The set of independents who may have the wherewithal to deliver across the value chain and on that full-stack proposition? What are the keys to survival or the marks of a winner?
Coalesce Or Fall Away
When we look toward a future committed to cross-screen marketing, total data orientation, and a complete stack, it’s fairly easy to see which layers of the ad tech ecosystem are weak and what kinds of companies are not self-sufficient enough to exist on their own. They are ripe for acquisition. Re-marketing, verification, dynamic creative, attribution--take your pick--have all been fledgling cottage industries that must become part of the greater whole. Which among these has the agility and staying power to remain independent?
The Winning Marks
The “super majors”--Facebook, Google, Yahoo!, AOL--will likely duke it out on their own terms. That’s less interesting than what happens with the remaining turf not occupied by these behemoths--and it still represents an enormous swath of territory.
In the coming quarters, there will be a race to serve the “independents”–both Web and apps. The publishers not controlled directly by one of these majors, but independent operators looking to distinguish themselves with quality content and a clean monetization model. Those that offer consumers innovation around how to connect with the right brands, bring relevant and compelling ads in multiple formats, and offer differentiated tools to help these publishers monetize their content will also win. This will take both scale and creative and technical ingenuity.
Staying power in this environment will have nothing to do with “marketing” position and everything to do with authenticity. Companies that deliver real value to consumers, advertisers, and content owners are the ones that will thrive and win. So what specific traits must the long-term winners embody?
• Comprehensive: A full stack with integrity and value is one that delivers all components of the value chain--while streamlining and removing the need for point of service or niche players. As a natural result, cottage industries that have delivered such point solutions in isolation will fall away or must be consolidated as a feature in the stack.
• Cross-screen: Whoever professes the full stack to solve for the cross-screen puzzle is also going to have to deliver a verifiable end-to-end proposition. This is a major undertaking–standing up to truly reach people anywhere, anytime–associating engaged audiences, not just demographic profiles or implied audiences, while taking care of all other associated requirements. These requirements add up to the true end-to-end proposition that operates and delivers targeting as well as measurement, optimization, anti-fraud protection, and ultimately attribution, association between audiences, and devices. “Cross-channel” and “omnichannel” are going to become synonymous.
• Core innovation: At the same time, those that “win” must commit to innovation at a fundamental level. The winners are going to distinguish themselves either by unique supply, rare targeting ability, or innovation around cutting-edge, high-return ad units that delight consumers whose expectations on quality only continue to rise. That depends not only on innovation in advertising, but on the content itself.
• Committed and clean: Of course the bottom line remains simple: Clean inventory becomes the point of entry as the industry continues to mature. There is shrinking tolerance for anything less than clean. This is true at the supply level, not just as a reporting overlay. Ultimately though, brand marketing will need to be measured directly by return on the spend, not just through proxies.
The Journey Or The Destination
As we achieve holistic stacking and delivery on the full value chain, we can be certain of a few things. The majors and a select set of independents that coalesce to provide a simple and complete full stack will prevail. Cottage industries borne of point solutions will have fallen away. End-to-end will actually mean end-to-end–with sourcing, targeting, measurement, optimization, fraud, and engagement-centered device-level frictionless attribution that are fully realized.
Fraud will be contained, and the industry’s tolerance for bad inventory and bad actors will be in the rearview mirror. In 2016, we will hopefully get closer than ever before to this destination, led by a commitment to consumer choice, impactful advertising, and sustainable access to digital content--and we will be wiser for the journey.