Last week was Advertising Week in New York, the historic home of advertising and media. But while always a cause for parties and drinking, the annual citywide meeting of agencies, publishers and brands has evolved into a cause for hand-wringing as well. Some of the event titles gave away the uncertainty that afflicts the ecosystem today: there was “What Keeps CMOs Up at Night,” “Why Your Viral Video Strategy is a Waste of Time,” and “Are We There Yet?: The Journey from TV to Video.”
What has caused all this turmoil? Digitization, of course, and the follow-on disruptions. The advertising industry has suffered through nearly two decades of change from the predictable revenues of publishers and expenditures of brand advertisers to the current programmatic (algorithm-driven) real time environment, which can often look like chaos to the end-users. It all started with Netscape, and now it’s as if no one really understands the industry in which they operate.
Here are the changes the changes digitization has wrought:
1)Print publishing has essentially perished, and with it the revenues of legacy publishers. But every danger presents opportunity, and there are a nearly infinite number of online publishers, some of them quite successful on a mass level like Facebook and Buzzfeed, and others quite successfully operating in niches like that of the Washington Post.
2) Mysteriously, ad agencies have nearly perished alongside publishers, with their commissions and fees eroded as brands come to realize their trusted old agency doesn’t know a damned thing about all the new publishers with whom your brand could advertise
3) Nor do they know much about many of the new formats in which today’s mobile consumers like to receive their ads — inside apps, through video, and as “branded content” or straight information.
By far the most troubling piece of the disruptive pie is the part the ad tech industry plays in rendering the transactions between publishers and advertisers obscure and difficult to understand. While the work flow has been automated, which was long overdue, advertisers are now often unaware of where their ads are running and when, or in the case of RTB, even of what they bought. And each uncertainty is an opportunity for another startup. When it emerged that most ads were served too quickly, one on top of the other, or in other circumstances that made them invisible, new companies arose to measure viewability. New companies also arose to help with targeting, with advertising inventory, and with publishers’ audience demographics. We now have a surfeit of acronyms to describe what those companies to, and that in itself is troubling.
In Phoenix, our local agencies don’t do much in the way of large scale brand advertising as New York agencies do, because we’re not the home of many consumer brands. Nevertheless, the changes that have hit the agency world in general can’t help but affect our local companies, nor can the publishing environment be unaffected. Just take a look at the size of the Arizona Republic and you can can see how far-reaching these changes have been.
