Marketing Technology Will Collapse The Digital-Ad Supply Chain

Dave Morgan

Founder & CEO

I’ve written a couple of times recently about my views on the rise of marketing technology and its implication for our industry. Lots of folks have been reacting to it, so I’m taking that as a message that I should continue to push forward on this meme.

I believe that the rise of mar tech is going to have an enormous impact on the structure and operation of the digital advertising supply chain. Put simply, it will obliterate the supply chain as we know it today.

That the digital ad supply chain is problematic has been a top-of-mind issue among industry leaders for years. The supply chain is massively complex. It leaks tons of data. It leaks tons of money. It is a patchwork quilt of thousands of companies and different technologies and protocols that has been exploited by fraudsters, bots and zillions of redundant intermediaries for billions of dollars a year.

If that’s not enough, the supply chain’s end product, the consumer’s digital ad experience, has become so poor that tens of millions of consumers have turned to ad blockers in the last year alone to remove, declutter and de-clog their digital devices of redundant, irrelevant, annoying ads.

Most of the technology driving digital advertising today is designed to serve the needs of the ad ecosystem – but not necessarily the needs of marketers. Impressions, cookies, bidding, headers, etc. are bought and sold again and again. These aren’t necessarily things that explicitly drive sales and ROI for marketers. However, what they do always do is drive revenue for the people that buy and sell and trade things, and for the people making the technology to help them do it.

That is going to change. As Peter Drucker taught us, the purpose of marketing is to create customers: nothing more, nothing less. As more and more companies connect their back-end customer and sales systems to their front-end communication channels, activities that provably create customers will get more resources. Those that don’t will be starved.

That level of scrutiny and accountability is going to be applied across all marketing activities, the vast majority of which are now digital, or at least are now all digitally measurable, such as with TV.

That kind of scrutiny will have a clarifying and purifying effect on the digital-ad supply chain. Like gravity on the mighty Mississippi, outcome-based accountability will help marketers’ dollars find that fast and best path to customer creation, cutting right through the hundreds of dams, dikes and canals that ad-tech companies have constructed along the digital ad supply chain’s banks (to mix a metaphor here) to siphon off some of its money and power for their own purposes.

Over time, the hundreds of miles – and thousands of companies and their little towns and hamlets – of the meaningless, meandering watercourse that the ad tech supply chain has become, will be bypassed, left fallow to turn into ghost towns as ad-dollar nourishment dries up.

Sound farfetched? I don’t think so. What do you think?

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