Prepare for the agency bloodbath as digital advertising matures
Armageddon is coming – I assure you. The way advertising is bought and delivered is about to change.
In the last six months, both Google and Apple have introduced measures across their browsers to block advertising. Leading programmatic vendors have moved towards a first-price auction model as opposed to the second-price system.
For an industry that embraces change, the key media buying organisations do not like this one little bit.
The industry talks about transparency, but there is still a long way to go. The ads.txt system, which agencies demand the major media owners use in the name of transparency and fraud reduction, is a move in the right direction. But it is in its early days and yet to be a proven solution, as invalid traffic is becoming more and more sophisticated.
It appears the ad tech vendors are taking things into their own hands. When someone like Google – whose core revenue is from advertising – blocks ads, it says something.
I’ve heard references about the ad tech bloodbath – well ladies and gentlemen, I introduce the agency bloodbath. Unless we practice what we preach, it is going to happen.
Based on the current decisions by Google, Apple and programmatic vendors, we need to work within these new parameters and ensure we understand what they mean and how we can still deliver the goods.
First-price auctions provide better yield for publishers and give the advertisers true perspective on value. If advertiser X is prepared to pay Y – then let them.
The biggest losers in this transaction are likely to be the agencies, as they have to pay what was actually bid as opposed to one cent above the second price.