Publishers, Ad-Tech Firms, Marketers Need to Connect, Build Trust

/// Publishers, Ad-Tech Firms, Marketers Need to Connect, Build Trust

April 15, 2013  |  Blog

In the several weeks since returning to Federated Media Publishing as CEO, I’ve spoken to scores of brand marketers and publishers, as well as too many of the technology companies that make it their business to serve the media ecosystem (all have a tenuous grasp on some small parcel of real estate in Luma Partners’ increasingly crowded “Lumascape”).

Something troubling has jumped out at me. There’s an extraordinary asymmetry of information among these three important players in our industry, and a disturbing sense of distrust. Brand marketers don’t believe that ad-tech companies view brands as true partners. Ad-tech companies think brand marketers are paying attention to the wrong things. And publishers, with a few important exceptions, feel taken advantage of by everyone.

Here’s a representative sample of things I’ve heard:

“If I had it to do over again, I am not sure I’d be in publishing. You can’t win over the machines.”

“Brand marketers are wasting their money. If they’d just get smarter about data, they’d realize content doesn’t matter — what matters is leveraging what you know about a customer. They’ll never get it. ”

“The Lumascape has devolved into a pay-per-click machine. Tech companies are too full of themselves. I don’t trust them. It’s a “black box.’ ”

“Agencies and technology companies are leveraging their data advantage to arbitrage publishers’ inventory — and even their marketing clients’ spend — so as to pad their bottom lines.”

“I won’t put any of my inventories on exchanges — the last time I did, Cams were so low it was embarrassing.”

Failure of communication

This isn’t a pretty picture. But even as I hear statements like these, I also hear story after story about how data-driven marketing practices are working. Publishers like Forbes, Ziff Davis and Weather.com have seen revenue from “programmatic premium” rise to as much as 20% of total towline, up from 5% or so just a year ago. (Programmatic premium is the practice of running premium inventory through programmatic channels in ways that “protect” that inventory, such as building private marketplaces or adding publisher first-party data.)

Smart marketers are leveraging ad tech to drive real brand lift, conversion and sales. And a platoon of top ad-tech companies are preparing to go public in the next 12 months, hardly a sign that they have business models built on shady business practices. (We’d do well to recall that Google went public one year after “click fraud” was considered pervasive in the search marketplace.)

What we have here is a failure of communication and shared values. The brand marketers I speak with acknowledge that they don’t understand how to map their brand-building skills to the offerings of ad-tech companies. The ad-tech companies confide that they don’t understand the motivations of brand marketers (nor do they believe it would be profitable to try). And publishers, most of whom are operating on thin or negative margins, are unable to devote the resources necessary to build infrastructure that would allow them to be on equal footing with either the fast-growing VC-backed world or the massive agencies and brands who are driving billions of spend into the ecosystem.

This cannot stand.

For our industry to thrive, we must all share a longer-term vision than the next click, the last attribution, the successful exit or the highest CPM. We must imagine a world where brands, technology companies, and conveners of quality attention (what I call publishers) work together, rather than at cross-purposes. To me, this starts with a shared set of values. Here’s a crack at a few:

We believe in publishers. Those with voice, point of view and the ability to convene attention deserve our support.

We believe in an open ecosystem that anyone can join and profit from. We don’t deny interconnections into our platforms based on gaining temporary competitive advantage.

We believe in disclosure and transparency. No company in our ecosystem should build businesses on fraudulent inventory or undisclosed arbitrage.

All parties have the right to know if and how data they create is being used.

We believe in collegiality. We are in this together. That means we believe in getting to know each other, and in understanding each other’s businesses.

Get to know the other side

How do we get there? We get together and we get to know each other. At the annual IAB leadership meeting earlier this year, I was amazed to see how segmented our industry had become — the ad-tech guys were literally in one corner of the room, and the brand folks were in another. As I bounced between them (my company has businesses in both camps), I heard an awful lot of disparaging words directed toward “the other side.”

But we cannot be an industry of two sides. We are one industry, united by the desire to bring the most relevant and valuable information to our customers — the consumer. It’s time we started acting that way.

Link: Publishers, Ad-Tech Firms, Marketers Need to Connect, Build Trust

Ad Age – John Batelle, CEO of Federated Media Publishing

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