‘They buy into their own Kool-Aid’: Confessions of a fed-up ad tech exec
The bewildering digital ad supply chain is said to benefit vendors, but for the latest in our anonymous Confessions series, we talked to an ad tech executive who views the complex chain as an elaborate lie. Here are the excerpts, edited for clarity.
What irritates you the most in ad tech?
Omission of how agencies and their ad tech vendors are taking media dollars off the table so that 30 percent or less of media spend is going to publishers is the biggest lie going.
Aren’t those outlier cases?
No, they’re not. And 30 percent might be generous. Because at the end of the day that is not telling them exactly what the ecosystem is charging. Most of the time, publishers don’t even know what the markup is.
Why is that?
It is not about margin, it is about markup. What can the behemoth supply-side platforms and exchanges mark up the supply to and not tell anybody? From a buy side, they don’t know if they’re paying $10 that publisher is perhaps getting only 30 cents. So it is not 30 cents on the dollar, it is 30 cents on what.
So publishers are getting less than 30 percent of the ad dollars?
A lot of times, yes. Let’s say a publisher sells a $1 CPM and the advertiser ends up paying $7. The advertiser is buying that inventory at 700 percent markup because somewhere in the middle $6 comes out. And that markup is exponentially higher if they can get away with it.
How do you know this is happening?
Because I know as an industry insider source and I have technology to prove this. When intermediaries can publish their net numbers and they are in the hundreds of millions of dollars, that is coming out of the ecosystem.
Can’t advertisers audit their vendors to see what is going on?
They can only audit if they have the contracts to do so and if the contracts are aligned with their purpose. In general, most contracts are not. But there is a movement to change that. So it is about getting the right contracts, reviewing what they currently have, assessing it and moving forward from there.
For being a tech vendor, you sound anti-ad tech.
I think players who provide value should be paid fairly. But tell the publisher, brand and agency what your markup is. And I get it, if they do that, people will go out of business. And the industry is dictating that and we will continue to see more consolidation.
Are vendors with high markups always trying to be deceitful?
I don’t know. Maybe people have been hiding the truth long enough that they buy into their own Kool-Aid.
Image via Creative Commons
‘The holy grail of e-commerce advertising’: Why DoorDash is bolstering its advertising offerings
Online food service company DoorDash is upping its advertising offering with pay per scale features. Industry experts say it could set a new precedent in retail media.
‘There are now a lot more boxes a role needs to tick’: Recruiters share how post-pandemic job expectations have changed
Employers must work a lot harder on improving internal culture and offering benefits beyond compensation if they're to win the talent war, say recruiters.
‘I’m embracing the discomfort’: Fashion brand execs share how their office style has transformed
For some — particularly those that get personal fulfillment from their style — the return to the office is, indeed, a good reason to go all out.
SponsoredHow advertisers are navigating advanced TV and premium video convergence
Nicole Schumacher, vice president of product marketing, Xandr Advertisers have a number of priorities and considerations as premium video content for viewers evolves. Media types are converging as audience behaviors diverge, adding nuance and complexity to each phase of campaign workflows. It’s the age of innovation for all types of video advertising, including convergence — […]
Marketers are going beyond the individual and using personality to sell at Advertising Week
During day four of Advertising Week, marketers looked to go deeper with their audience by showing a softer side of the celebrities and creators they work with.
‘Content and commerce are converging’: Kroger Precision Marketing svp Cara Pratt on evolution of retail media, new offering
More and more companies are getting into the retail media space. As competition heats up, a Kroger executive talks about the grocer's latest attempt to stay ahead of the curve.