The disruption of AdTech
The prospect of the disruption of AdTech is a very real prospect in 2018. However, back in in 2013, I gave a presentation at MediaTel about how the digital marketing landscape had to evolve. I talked about how personalisation in advertising is leading to an uncanny valley effect which causes negative brand associations with the customer. I argued, the only way to solve this issue is to provide more control to the user over their personal data and preferences. My talk followed a presentation by Yahoo! on the effectiveness of personalisation in advertising. The framing of Yahoo’s presentation added to the sense of “craziness” around my presentation.
Why AdTech is down a rabbit hole
Fast forward five years and the AdTech industry faces challenges it may never recover from. I recently talked about ‘Why AdTech is down a rabbit hole and how to climb back out’ at the highly thought provoking BreakOut event by Bora Co and the AdTech 2017 conference. This time the response was markedly different, there was a definite mood for change and new ideas. Here is the full write up of my presentation and my slides are below:
In summary, the issues I raised about AdTech were:
- Display advertising isn’t working because since 2010 the average click through rate (CTR) is 0.1%
- Ad fraud is a huge problem which is expected to reach $19bn in 2018. That’s second only to the drugs trade as an illegal source of income
- Big advertisers (like P&G) are calling for greater transparency and increased brand safety around their digital campaigns
- Ad blocking is going mainstream with 615m devices globally blocking ads. People are fed up of the tracking, abuse of privacy and very poor user experience of browsing the web
- The introduction of the GDPR (new EU data protection regulation) in May 2018 will ask existential questions of the data broking and tracking industries, key parts of the AdTech stack
The invasiveness and consequent creepiness of AdTech that I talked about in 2013 has unfortunately become a reality. The only way out of this rabbit hole, I argued, is to reconnect with the human behind the data and stop chasing eyeballs as a key metric. Advertisers need to use data to accentuate our humanity, not make humans more digital.
The disruption of AdTech? How?
Fundamentally, AdTech has lost touch with its core purpose: to create meaningful relationships with customers. The best way to reconnect with customers is to include them in the conversation and to add real value to their lives. Giving them control of their data, how they are contacted and by whom will make advertising (or more generally communications to the customer) more relevant and reciprocal. This is no easy task but their are products and solutions in the market that aim to shift the industry in this direction.
The new Brave browser built on top of the open source Firefox browser aims to strip out AdTech and deliver a far superior web experience for users. Headed up by the inventor of Java Script and long time CTO of the Mozilla foundation, Brenden Eich is well placed to deliver on the vision for Brave. The introduction of their cryptocurrency, Basic Attention Token (BAT), as a way for users to send micropayments to their favourite websites is an extremely interesting development. I asked Brenden at the AdTech conference if there were any plans for features that help consumers buy. It’s not something that’s top of the roadmap but there’s clearly great scope to use the browsing data and the crypto payments functionality to create a compelling proposition to help users discover and buy things on the web.
There is also a lot of emerging customer tech on the horizon, CitizenMe (disclaimer: I work for them) being one of them. These are next generation intermediaries that work on behalf of the customer, not the business. Through data, customer tech will help people to better understand themselves and help them make better decisions in the digital marketplace.
And of course the prospect of digital assistants helping consumers buy rather than advertisers sell will significantly impact direct response advertising. In the UK, Open Banking has gone live this month which means customers will have access, via secured APIs, to their transactional payment data. While much of the attention is focused on helping people better manage their money a key use case for Open Banking and PSD2 will be helping people buy and creating more direct to consumer channels for brands.
In 2018 onwards we’ll start seeing big developments in the evolution of AdTech. Whether it can get its house in order or better alternatives emerge is yet to be seen.