ADOTAS — In the opening keynote at ad:tech San Francisco today, AOL CEO Tim Armstrong discussed the rise of programmatic advertising and its role in shaping the future of the industry. As this automated, technological approach to the art of advertising takes the steering wheel, it is forcing a compression in the current ad landscape that cannot be ignored.
In the ad ecosystem, one advertiser dollar translates to about 45 cents to publishers after with DSPs take their 15% to 20% cut and SSPs also getting their 15% to 20%. Pressure for performance comes from both advertisers and publishers, making automation a highly sought after commodity, as long as it is implemented effectively.
“Best is a mix of programmatic and creative. The future is about a high level of creativity in marketing services to solve big problems. Programmatic is starting to bleed into everything but the future will balance the two.”
Armstrong describes programmatic technologies as the bar of a barbell that connects both acquisition marketing and deep marketing services. The question that comes is where should advertisers spend dollars? Online advertising can do a better job of connecting the dots since advertisers want both.
In order to draw a bridge, advertisers need to find a better way to tap into the mounds of data that exist across all mediums like: television, desktop display and mobile. As Armstrong posited, part of the solution is providing an All Access Pass to all data, all the time. The real question facing advertisers is how to gain access to all the data including display, television, etc to drive the entire ecosystem forward.
“The goal is to have structured data influence across all channels,” said Armstrong. “We first need transparency as a base and then we can build strategies on top of that. From publisher perspective, then we can determine how to determine and allocate Tier2 and Tier 3 inventory.”
According to Armstrong, as another driver of for the industry, live advertising that is content driven provides tremendous opportunity, serving to make the content better and better. Consumer interactions are all through the roof due to technology and advertisers ability to publish content almost in real-time with layers of advertising. Marry with creative messages, mobile has ability to be lights out.
AOL Networks also announced the launch of its SSP, Markerplace by AdTech, rounding out its advertising technology stack to offer a full-service solution to premium advertisers and publishers. Marketplace delivers online publishers more demand stability and liquidity to and maximizes the value of their non-reserved ad inventory. The launch of Marketplace marks another step in AOL Networks’ mission to simply digital advertising at scale with robust solutions for publishers and advertisers. Armstrong made this announcement at ad:tech San Francisco.
“The industry is currently at inflection point, at the highest point of opportunity and lowest point of competition. Companies need to ask themselves what is the core differentiation they are bringing to the marketplace and what does it look like. How many cookies get loaded on your machine? Today it is not unusual to get 10-40 cookies just from a couple session. As you slice and dice it, customers need to see the difference in results one company gives you over others. In the offline world, the post office will stop delivering mail on Saturdays, imagine if we did offline delivery to people and offline competition is going down. In 5-10 years, all offline will move to online. That is the future.”