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The Biggest Challenges Ad Tech Industry Faces in 2017

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Times are gone when a web publisher could just sign up with AdSense and be done with the business of monetizing their website. New breakthroughs in ad tech means that when it comes to making money from your publication, the options now are almost endless, but more choice often comes with more problems.

What are the biggest threats ad tech industry and publishers face this coming year and how can they best try to tackle them? Let’s start with…

The Complexity of Ad Technology

Managing online ad operations was never the easy thing to begin with, but with each year, new ad tech implementation just seems to be getting more and more demanding. For instance, just when publishers are coming to terms with header bidding and its adoption is rising, its successor, server-to-server header bidding is already in the offing. And header bidding is just one ad tech trend.

This is hardly news though.

In a blog post on Gartner, Martin Kihn explains Why Ad Tech is More Complicated Than Wall Street, and the first reason he gives is that well, because it just is.

Digital marketing technology today consists of at least 2,000 significant vendors – and those are just the ones we track in our secret database. Many of them touch in some way on the subcategory we can call advertising technology, including demand- and supply-side platforms, ad exchanges and networks, ad servers, media agencies and trading desks, data and analytics vendors, and so on.

But ad tech is not just commercially more convoluted than Wall Street. It is informationally more complex. Michael Driscoll, the brilliant CEO of Metamarkets and a former computational biologist, puts it this way: The world of ad tech processes about 400 billion transaction-like events per day, while the New York Stock Exchange processes a puny six billion trades; and programmatic ad trades use up to 100 data fields each, while a stock trade only has ten (you know, bid price, ticker symbol, etc.). So there.

[bctt tweet=”Ad tech is complicated and is getting even more complicated.” username=”adpushup”]

Things may be a bit easier if you’re a large publisher with a dedicated ad operations team, where you have people who are trained to do complex things such as finding the right demand partners, ad stack management, layout testing, network optimization, but small publishers often can’t afford to hire a team, or even a person, specifically for this.

The good thing? Even though ad tech may be complex, it’s not incomprehensible in a rocket science kind of way, and a lot of help is at hand. A good place to start if you’re a complete beginner is to join our free 15-day course on ad tech—it explains the basic concepts and terms associated with online display advertising.

To keep up with industry news and trends, here’s a list of publications and learning resources you should follow. Sure, you won’t become an industry “guru” in a few weeks, but you’ll keep up with the industry and use the knowledge to your advantage—one you’re clear about strategy, even getting help to implement things is easier.

The Threat of Ad Blockers

There are so many players, stakeholders, and belligerents involved in the business of ad blocking that it’s beginning to look like one grand Shakespearean tragedy. We’ve covered the evolution of ad blocking extensively on this blog, see here, here, and here.

Things are changing, for instance, now we have the acceptable ads program, which allows publishers to meet quality standards and get their inventory whitelisted, but many have been quick to point out how similar the operations seems to an extortion racket.

I have no argument against anybody using adblockers because there is a kernel of right when it comes to the impedance of user experience, but as I’ve said before, this is an extortion-based business and hurts publishers.

— Randall Rothenberg, CEO, IAB

Some larger publishers, ad networks, and even social media sites, such as Facebook, are actively engaged in a cat-and-mouse game against ad blockers, finding loopholes in their code and exploiting them with an intention to let the ads slip through—but PageFair advises against this strategy as it does more harm than good and the odds are always pegged against the publishers.

[bctt tweet=”The whole ad blocking landscape looks like one grand Shakespearean tragedy.” username=”adpushup”]

As reported by TechCrunch, in case of Facebook for instance, ad blocker quickly released a workaround which actually stopped users from seeing posts from their friends.

We’re disappointed that ad blocking companies are punishing people on Facebook as these new attempts don’t just block ads but also posts from friends and Pages. This isn’t a good experience for people and we plan to address the issue. Ad blockers are a blunt instrument, which is why we’ve instead focused on building tools like ad preferences to put control in people’s hands.

Other publishers have experimented with ideas such as asking users to turn off their ad blockers, whitelisting, and micropayments with varying levels of success. Recently, ad blocker Shine (whose CMO has been dubbed “the most hated man in ad tech“) did a complete u-turn and rebranded itself as an ad targeting solution called Rainbow.

In this state of flux, where things are headed is really anyone’s guess at the moment.

What has not changed are the heavy losses endured by web publishers: Ad blocking is expected to cost publishers $27 billion in lost ad revenue by the year 2020.

Still, there are steps publishers can take to minimise the damage, we’ve covered some such countermeasures before. There are also companies such as AdRecover that have partnerships with ad blockers and help publishers get their inventory whitelisted, helping recover some of that ad money.

Of Course, That’s Not All

If you think this picture is too simple, we’re not claiming otherwise, there are many other issues plaguing the ad tech industry now including ad viewability, ad fraud, banner blindness, low clickthrough rates, bad UI/UX, page layouts that are not optimized, but ad blocking and the complicated nature of ad tech itself are the biggest roadblocks before you can think of going ahead and tackling other issues.

If you just get a handle on those two, you’ll both get back some of that ad money that you’re losing and know how to approach the other problems.