The vast global ad tech ecosystem which transacts 10’s of millions of dollars worth of advertising every day relies on a simple premise – the free flow of data about consumers between members of the ecosystem. And that simple, basic premise is now under assault.
All the tension from regulators, whether it be GDPR in Europe or emerging privacy laws like CCPA in California are pulling the rules in the opposite direction.
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In many ways, the market only has itself to blame.
The only answer to all this potential intervention is accountability, says Dominic Powers, CEO of CtrlShift. His company helps tame the disparate ad tech offerings brands and agencies reply by unifying media planning, activation, and analytics in one platform.
We spoke to Powers earlier this year during a visit to Sydney.
He told Which-50, “As an industry, we have to be accountable. But there are many places where accountability hasn’t been taken seriously. We also have to think about the endgame, which is reaching consumers and giving consumers choice.”
Powers argues that without choice, those consumers cannot make informed decisions.
“I think this is one of the things that from a regulator’s point of view, you also have to be thinking about. When the first privacy laws came in, I was very actively involved around Asia. The issue was striking that balance between not being Draconian, but not being too open. It’s about giving choice, and about unbundling consent.”
Indeed he describes as very interesting the proposition that consumers may take back control of their identities.
“Now, some may say that’s too hard. But you know what? If we think about how the consumers are now growing, becoming educated, the idea of them taking back control is a really interesting proposition.
“But it’s going to require collaboration, not just from the advertising industry and DSP’s and Google and Facebook, but also from the bigger ecosystem of the internet… For me, that’s something that we’ll be talking about in three, four, five years time.”
In a market like Australia, Facebook and Google are capturing up 70 per cent of the digital ad spend. Classified sites take about 15 to 17 per cent according to IAB figures and that leaves just a pittance – 10 to 15 percent – to directly fund all the other publishers and the ecosystems that support them.
We asked Powers whether the dominance of the duopoly indicates that the adtech system has failed and that brands have voted with their wallets.
It’s not that straight-forward he says, “You have to remember, within the Google network, a lot of publishers put their inventory into there. So a lot of money does flow to the publishers. For CtrlShift the question is, ‘How can you make it more efficient for publishers?’ Because a dollar goes in, they take only 25 to 30 cents out. So that is not sustainable, and that’s why so many publishers have been going out of business and looking at new models”
Those models include private marketplaces, where they can take their premium inventory, offer different ad units, and sell more directly, says Powers.
Whether it’s a native ad, whether it’s a takeover, not enough money ends up in the publishers pocket, he said.
“Again, most of the money flows down to the adtech sector.”