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Nils Winkler serves as Managing Director and Senior Vice President of Sales for the American office of ADTECH.info, one of the global leaders in the Digital Marketing sector working with clients like AOL, SKY TV and Clear Channel.

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The State of Digital Advertising: Planned Inefficiency

Written on
December 28th 2006
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by Nils Winkler  |
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Those who turn to ad-serving and digital marketing solutions do so to maximize their ad inventory, to get the most out of their ads by spending as little as possible. What these people may not be aware of is that some of the biggest names in this industry have not made significant upgrades to their systems in 8 or 9 years. These solution providers have overhauled their front-ends to appear new and user-friendly while their back-ends remain clunky, stuck in the last century. This is not an attempt to denounce ADTECH’s competitors but rather to lay bare the politics in the digital marketing world that stifles development so that decision-makers are armed with all relevant information. Although what follows is tacitly understood in the industry, it is rarely discussed.

The status quo:

While the purpose of ad-servers is to increase productivity and maximize efficiency, there are some involved who prefer the status quo to migrating to a new system that would cut time and costs. The reason for this is fear: fear of being rendered obsolete and losing his or her job. A complex system requires training; depending on the system, this training can be fairly extensive. More complex systems require users to input commands manually as opposed to more advanced systems that perform these operations automatically in the back-end. This leaves more room for human error and consequently loss of revenue.

All this points to an inescapable trend: more work for the CTO and traffic managers. Suppose company A migrated to a more efficient, easier-to-use ad-server. Little training would be needed and a strong IT presence would not be necessary. The system would cause fewer problems and sales people would be able to use the ad-server autonomously, eliminating the middle man that is technical support i.e. traffic managers, IT, etc. The upshot of all is that a better system would make some tech people redundant. If the new system optimizes inventory and delivery automatically, fewer traffic managers are needed. If the new system is intuitive, IT support would be minimal.

Technical staff have a vested interest in the type of system a company uses because it affects their livelihood. Because of this vested interest, their opinions and recommendations, while ostensibly professional, are ultimately compromised by self-preservation. Therefore, decision-makers would do well to bring in consultants for objective recommendations.

Development is not cost-effective:

Unfortunately, the main objective for many companies in this industry is not to provide the best products and services possible but rather to create viable revenue streams. Some of the bigger names in the industry have their fingers in a lot of pies. These business models do not require product development because the return on investment is not as promising as other revenue streams. Some of the market leaders, for example, make most of their money by selling licenses. Or even by competing with their customers.

Market share also plays a factor in the lack of product development. Companies with a significant market share face little competition and so spend their time building on their market share and creating new revenue streams rather than fine tuning their products, because that is more cost-effective.



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