March 15, 2017
The Ad Tech Shakeout Will Deliver Relevance For Brands
Australia is often touted as one of the most advanced markets in the world for programmatic advertising consolidation, but is it over-fished?
We know that most of the US and European based ad tech companies choose either Singapore or Sydney as their launch pad to break into the Asia-Pacific market. Australia is often used to evaluate and test expansion into new markets.
Despite the high degree of sophistication in Australia, can the ad tech industry do better?
Some estimates put the number of ad tech companies operating in Australia at close to 250. They are fighting over a small pool of budgets and many of the new companies setting up in Australia are only single product plays with short term IPO or acquisition plans.
I fear these players are too late to the game in Australia, or simply won’t be able to secure a sufficient customer base, given their focus on a small piece of the pie. When you look where the bulk of advertising investment is coming from in Australia, the agency holding groups are all discussing consolidation of tech partners.
This tells us from the 250 odd tech vendors in market, holding groups and agencies are trying to simplify the ad tech space for their teams and clients by reducing the number of partners in their stack.
The US merger scene might influence this market, but I wonder if Australia will experience its own epiphany in the next few years, underpinned by the fight for quality. What does that mean?
A recent World Federation of Advertisers survey reported that 90% of advertisers want to change the way they do their programmatic advertising. That report should be a wake-up call for any fledgling ad tech startup or new market entrant.
Are you helping deliver real business outcomes, bums on seats, burgers flipped, test drives etc. How is your business not only integrating with other technology providers, but collaborating to solve marketing challenges, to build trust between our industry and brands, between consumers and brands.
The good news is that we are not heading back to the traditional ways of RFP management and the manual implementation of I/Os. The truth is the advertiser wants technology platforms, media and creative to do the work, and do it well, in an open and transparent way.
Building walls does not encourage integration, and does not allow great strategy to be executed to it’s fullest potential. Consolidation is a contstant, creating operational efficiencies for all.
Advertisers also want easy execution from an impartial tech vendor that doesn’t constrain them to using certain tools, exchanges or marketplaces. They want open ad management, not walled gardens, and full visibility into the transaction cost and the destination of their digital creative.
Our own research shows that the average person is bombarded with more than 3,000 marketing messages a day, and that 74% of consumers are frustrated by content that is not relevant to them. Enagement rates from a personalised ad is actually 5.5 times higher, compared to static mass audience digital advertising.
However, in Australia less than 6% of the billions of impressions that are served are dynamic, or targeted to the right audience.
There are challenges across the digital advertising landscape, for sure, and you can read about them any day of the week. However, digital advertising investment by brands will continue to increase, underpinned by the sheer scale of audiences that now live online.
The Australian market is certainly over-saturated. My feeling is the next winning battlegrounds will be brand relevance and creative performance.
How many programmatic players even talk to the creative agency until the very end of the production process? At the recent Programmatic Summit in Sydney, in a room of 400+ when the question was asked how many creative agencies are here, I counted less than ten hands.
That needs to change, because at the onset, the people who are building the creative need to know what data options are available and how technology can enable their creative strategy in a programmable world.
The businesses that will continue to prosper are ones that can truly collaborate and deliver a solution encompassing data, technology, media and creative delivering relevant advertising to the consumer.
This post originally appeared on AdNews.