Perfect storm for web ads in 2015?
Is it just me, or is all this stuff hitting the web
ad business all at once?
The market couldn't sustain a zillion different 8-bit
back when those were a thing. And it has always seemed
unlikely that the market can keep supporting a zillion
adtech firms. Jack
Marshall of the Wall Street Journal
A shakeout is under way in the online advertising
industry, where dozens of startups—often with
seemingly undifferentiated services and limited
scale— face the reality that there isn’t enough
room for everyone.
Google and Facebook are eating
ecosystem. Michael Eisenberg
Today, most adtech companies are exploiting
features that are missing on the core platforms of
Google, Facebook, and many of the already public
companies. They are optimising and brokering
between technology platforms (mobile and web),
exchanges and advertisers. However, information
is nearing perfection in this market, making it
difficult to build a moat around businesses and
that plan to make a living helping clients navigate a confusing list of
technology partners are probably on the wrong
side of the trend here. They're like Unix ISVs who planned
to keep building the same basic product on dozens of
basically identical but incompatible Unix variants.
A difficult feat of management and tech integration,
but not really the way that mature technology markets
tend to go.
You know how, when a lot of people
are starting committees to talk
about how something is an industry-wide
problem and it's everyone's responsibility to fix
that means the problem is about to go away?
Bob Hoffman explains this one
Blocking keeps going up, tracking protection emerges
Ad blocking is trending
but it's not for everyone. Many users have a basic
fairness expectation around advertising: if you look
at the content, you should also accept the ads that
that support it.
Tracking protection, though, is a
situation where fairness norms point away
from adtech. A 2014 survey found that
87 percent of users choose not to be tracked by
Tracking protection products such as
Disconnect and Privacy
using a different message from crude ad blocking, to
reach more users.
Disconnect is positioning its tracking
protection product as as basic Internet security
Join over 3 million people
who use our open source software to protect their
identities and sensitive personal info from hackers
and trackers—not a way to get something
Browser built-in tracking protection is coming along,
Apple Safari already blocks
third-party cookies, MSIE has tracking protection
(which lump adtech in with
malware) and Firefox is getting
its own tracking protection too.
The holdout is Google Chrome, and that's a whole other
story. Google as a whole would certainly do better on
an all-tracking-protected web, because if everyone's
less able to track users, Google's expertise in parsing
content matters more. But it's hard for information
packrats to walk away from shiny, tempting information.
The typical adtech/publisher relationship
has more in common with one-sided record
than with typical advertising. Publishers
haven't understood the technology as well as
adtech firms, and so have signed away their valuable
in pursuit of surveillance marketing woo-woo.
But that's changing. New publishers have
web skills from the ground up. Vox
Media is a good example.
And existing publishers are getting better at
defending their interests. Quartz,
an Atlantic Media site, runs ads that look and work
more like expensive magazine ads than like ratty web
display ads. And, most important, Quartz ads are
intact for users running Disconnect.
The near-term effect
of VC investment in web publishing
is that many publishers will have the breathing space
to turn down the short-term revenue from crappy,
targeted "click the monkey" or "one weird trick" ads,
and pursue other options. Tracking protection for a
site's audience is the kind of "moat" that investors
tend to look for.
Put it together
The fun part isn't any one of these trends, or even the
fact that they're hitting at the same time, but how
Fraud helps drive consolidation. Consolidation,
with more accurate tracking, encourages more users
to try tracking protection. Tracking protection
and fraud drive ad spending to quality publishers.
Success for quality publishers means more investment
in tracking protection. And around it goes.
What a fun year this is going to be.
Syndicated 2015-01-15 13:35:48 from Don Marti