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InContext / An inside look at the business of digital content

It is high time for digital media to heal itself

June 21, 2016 | By Jim Spanfeller, CEO & Founder—Spanfeller Media Group @michellemanafy

Our business is a mess … and seemingly getting worse by the minute. This is a sad statement but, unfortunately, more true today than it was a year ago or a year before that.

While many have stated their commitment to increased transparency, we seem to be moving in the opposite direction. While others have talked about efficiency, we are getting less efficient as an ecosystem by the day. Just about everyone talks about respecting consumer privacy as well as their experience, yet we continue to dig deeper and deeper into consumer’s habits without their permission and offer up a growing cacophony of misguided messaging despite these invasions.

From transparency to understanding
It really does not matter how we got to where we are; the unfortunate fact is that we are here. What matters is the how … and how fast, we can right the ship. I think the key is going to be less about transparency and more about understanding. For me this is a refinement of thinking because I’ve been advocating increased transparency for some time now. And, while transparency is a good thing on the whole, the more important issue in this situation is getting all the key players a better understanding of how the system is currently set up.

The saying goes that complexity breeds margin and to some extent that has proven true here; at least at the gross margin level. The bottom line is another issue, given the crazy estimates that AdTech companies are taking between 40 and 60% of every media dollar (depending on which study you look at).

What’s more efficient?
Crazier still is what is being done in the name of efficiency. Consider third party data targeting, for example: Not only does this practice fail to work but it can lead to massive amounts of fraudulent impressions when done using open ad exchanges, which is really the only way to do it and get any scale.

Marketers looking for magic bullets are continually offered up bait and switch opportunities made palatable only because of the truly great performance of a small fraction of their buys. While other such efforts may achieve tolerable performance, this is hardly worth the byproduct of consumer adoption of ad blockers (in part to avoid the kind of tracking that makes these campaigns possible).

So sure, transparency will help in the sense that consumers will gain an increased understanding of when and where their data is being collected and how it is being used. But at the end of the day, without full understanding of the process by all the participants, it will be very hard to move our industry—and the state of digital advertising—to a better place. The self-interest of the middle is simply too overwhelming.

Learning our lesson
Of late, publishers—the supply side of the equation—have begun to get a better sense of what is happening but real change cannot happen without the marketers, the real demand-side also becoming much more learned about this new medium. (Let’s keep in mind that agencies and their trading desks are supposed to be agents acting on behalf of their clients.) Marketers need to be fully up to speed on what is happening, how it is being done and how it is doing on a granular basis.

The ANA’s recent efforts around this goal are to be lauded. They have worked hard to bring some very unsettling information to light in a highly charged environment. This kind of work is always hard and it takes great courage on many levels. ANA President and CEO Bob Liodice and his team are to be congratulated for what they have done so far and encouraged to keep at it.

As is always the case in free market environments, the folks with the initial dollars are the most important part of the financial ecosystem. I say “financial” because in general, the end-user really holds the most power. But unfortunately, educating end-users will take a lot longer than educating the marketers. Having said this though, one could argue that consumers have already begun to speak loudly with their aforementioned uptake of ad-blockers.

We have a truly amazing platform to work with. Digital media has so much going for it: It is incredibly flexible, it is interactive, it is not limited by form factor, it is multi-media and it should be extremely trackable. Unfortunately, as an industry we have done a lot to limit these assets. The fact that it still works as well as it does is amazing. Just imagine what it will do once we take the shackles off.

So let’s all do what we can to educate, well, everyone about the current state of the ecosystem. It is through this knowledge that the industry will find the right way to live with and deeply respect consumers while using technology and tracking in ways that allow marketers to use their dollars in more and more efficient ways. But beyond efficiency, increased understanding will lead to value being put where it should: With the outlets that generate the most consumer involvement and provide the best environments for messaging rather than a wide and growing group of “platforms” and other third parties that hijack the engagement of the media properties and also the trust of the consumer in the name of efficiency.

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