If you’re a regular reader of Digiday’s Confessions series, you know we tend to uncover some of the biggest problems in the media and marketing industries. Innovation is smoke and mirrors, agencies don’t take care of their talent, influencer marketing is a mess and media is just one massive arbitrage system. All very true, but sometimes a downer.
For this edition of Confessions, in which we grant anonymity for honesty, we spoke to an industry veteran who is — gasp — positively giddy about its future.
Edited highlights appear below.
What’s the state of the ad business today?
One of the big headlines is how this space is really growing. Digital advertising in the U.S. is growing 16 percent a year. It’s taking share from television, mobile is growing, video is driving growth. There are so many things growing. One of my beefs is nobody talks about that. Everyone wants to talk about drama and disruption. What is overhyped is the death of this space. How can you not be bullish on digital advertising?
Let’s get specific. What are you excited about?
Three things, at least. New technology, especially machine learning and AI. Yes, there are things where folks aren’t doing it for real. But when I spend time with companies who have data scientists who are really building cool applications, I feel excited. The things that concern me are where companies who were programmatic DSPs last year are AI-driven platforms now. But there’s interesting stuff with AI happening.
Give me an example.
There’s optimization and all that. But think about the creative. There was this thing done using Watson, using it to write ad copy. And because these things are getting better at a compounded rate, it was creating ad copy that you couldn’t discern from a human. So it started applying it to audience segments and getting better. Imagine what a computer can do with computer capabilities versus your typical creative director who needs sleep — and needs rest. That’s one example. Computer vision, tech that can classify and extrapolate things happening. That stuff will revolutionize brand safety. It’ll put ads on surfaces you wouldn’t have thought of.
What are the other things?
No. 2 is modern data platforms. That gives marketers the capability to collect, organize and get data for interesting uses. People are taking marketing data and using it for customer service. We’re about to be in a world where marketers can finally do one-to-one marketing. It just opens the door for a marketing experience. No. 3 is measurement. Yes, there are measurement issues. But now, there are truly full views of the customer. I remember talking about attribution 10 years ago. But now, we have this ability to identify real people, not cookies, and have a much fuller view of all of the digital activity happening. If you believe that marketers have to follow the customer, and consumers are spending more and more time on digital, then we can finally start helping marketers understand how digital drives ROI. Is that peak positivity?
Mobile changed so much. Mobile put the computer in everyone’s pocket. And we can use real identity and connect with all of those devices in everyone’s pockets.
What you’re saying is there may be a silver lining to most of media and marketing’s issues.
What about how broken trust is between brands, agencies and vendors?
Well, the trust stuff is bad. It’s come to such a head. It’s hit bottom. If you look at some of these statistics, I think it’s forcing everyone to take a hard look at business practices, which they’re undergoing with each other, and questioning if those have put us in these situations. People are having difficult conversations.
So much of it is preventable. If you understand good business practices, and you understand incentive structures. If you start understanding the root of the problem, you could pretty much eradicate it. The good example was Chase getting blown up for ads against awful videos. Then, they were motivated to look at business practices, saw they were running ads on half a million sites. They reduce it to 5,000 and see no degradation of performance. Not only have they eliminated unsafe content, but they’ve eliminated fraudulence as well. The silver lining of bad inventory and unsafe inventory is the visibility of it making people take action. Also, that spend is now going to legitimately good publishers.
What is overhyped?
Ad blocking is completely overhyped. I think ad-blocking companies are basically dead. Google and Apple are taking things into their own hands. The death of ad tech is overhyped. If you study all of business and technology, most startups fail. Fact. In every market, there are disproportionately some winners. People just kind of look at our market and point to things that where it’s like this crazy anomaly, even though it’s perfectly normal. What goes on here is perfectly normal, and I wonder why people don’t realize. Do people think the world is going to get less digital? People are going to spend less time on digital devices? Is the need to innovate getting smaller? This space, and particularly the new guard with companies who have expertise in data, are going to be massive successes.
What about the duopoly?
I question the duopoly. I know they’re big. We’ve never seen anything like this today. But you know what? Ten to 15 years ago there were a set of companies so extremely strong that nobody thought would topple: Microsoft, AOL and Yahoo. Where are they now? You can make an argument that it’s going to be hard for the duopoly and triopoly to lose. But nothing is guaranteed. There is promise everywhere.
Spoiler: Our confessor is Eric Franchi, who recently left ad tech firm Undertone and is now a full-time investor.