Fragmentation Continues in Ad Tech

Two major announcements shook the digital advertising market. First, Disney announced a new  partnership, bringing its inventory to The Trade Desk. Included in the deal is Disney’s immense 1st party data that will bolster The Trade Desks Unified ID program. It is a huge win for The Trade Desk in its quest to rival Google’s dominance in the ad tech/programmatic ecosystem. Second, Microsoft came seemingly out of nowhere to land the Netflix ad inventory business.

While there are many details to be sorted out, one underreported but crucial aspect of these announcements is the continued fragmentation of ad tech. When I first started buying programmatic media, Facebook had an ad exchange and I bought my ads via DataXu. It could be a bit clunky, but it was nice to be able to manage so much media buying via one console. In fact, I was very bullish on the future of programmatic. The promise of a fully open marketplace to buy all forms of digital media leveraging all datasets publicly available proved fascinating. We all know how this story ends as FBX shut down and ever since we have slid further away from the original promise of programmatic advertising. 

Unfortunately, the implications of this fragmentation go beyond programmatic and strikes at the heart of digital media in general. I think it’s safe to say that there will never be a fully open digital media platform. If you want to access all of the premium ad inventory out there, chances are you’ll be running 10+ ad buying platforms. To maximize the targeting of your first-party data you’ll likely be using several ID solutions. Finally, I think you can pretty much kiss the idea of a reliable attribution system for omnichannel media buys goodbye. 

The outlook isn’t all doom and gloom. Out of the ashes of chaos there will be opportunities for savvy media buyers. Since buying media at scale is virtually impossible for any organization to do effectively and efficiently, there will be a lot of opportunities to find alpha in the digital media marketplace. There will be tremendous opportunities for boutique, specialty agencies/consulting firms to continue their growth by providing expertise across all of the platforms necessary to manage an ad tech stack at scale. Brands are already beginning to seek out these niche experts to exploit the opportunities in all of the nooks and crannies of the digital media ecosystem.