Why online advertising will get easier for publishers (and why it won’t)

The concept of selling digital ads is basic enough — offer up a piece of screen and invite brands to buy it. But for publishers, the ad tech industry can feel like a mix of quantum physics and witchcraft.

Instead of simple transactions between publisher and buyer, digital ad sales rely instead upon a bewildering degree of middlemen who offer competing versions of a lengthy technology product. Ad executives say, for instance, that there are now eight different technologies just to count if an ad has even appeared.

“How f’ed up is our industry? Even after you work with five or 10 companies, you have to hire two more companies to find out what you achieved,” said Ned Brody, CEO of AOL Networks, while speaking on Monday at AdExchanger’s Programmatic I/O conference in San Francisco.

The good news is that Brody predicts that the ad industry will consolidate and offer publishers fewer and easier choices. Instead of having to navigate a series of disparate SSP’s (supply side platforms), DMP’s (data management platform), ATD’s (agency trading desk) and so on, he says more companies will offer a one-stop shop. Brody also suggested that that fewer “mouths to feed” along the ad chain will result in publishers receiving closer to 80 cents, not 50 cents, on every ad dollar.

Alas, this promise of a simpler and more lucrative ad landscape may not emerge anytime soon. Speaking from the publishing point of view, the chief revenue officer of The Weather Channel, Curt Hecht, was more sanguine about the situation.

Hecht agreed that the ad industry was over-complicated but said the Weather Channel “embraces all these things” and looks for “market signals” — chatter from agencies, marketers and tech partners — to ensure it’s familiar with whatever technology its ad buyers request. In other words, publishers like The Weather Channel have accepted that the current cluster of ad tech companies may not untangle itself anytime soon.

Publishers’ hopes for simplicity may also be dashed by ad buyers’ increasing desires for cross-channel marketing — reaching potential customers on laptops, mobile devices and more in the same campaign. While this may deliver more effective marketing messages, it also has the potential to further complicate the current ad tech witches’ brew, especially on the measurement front.

As other speakers at the conference noted, ad buyers are still skittish about the tools used to measure online ad purchases on platforms like video. While the metrics are fast improving, publishers may not be able to promise that ad buyers are reaching more than 50 percent of a given video audience — let alone a cross-platform one. All agreed that the online ad economy will improve significantly with the arrival of a single Nielsen like rating, which may (or may not) get here by the end of 2013.

The bottom line is that the ad tech industry remains a fragmented industry with many moving pieces and that, despite the promise of a streamlined experience, publishers will have to wait awhile to see more daylight in the notorious LUMAscape slide.

(Image by nmedia via Shutterstock)