“Data-Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media.
Today’s column is written by Mike Seiman, CEO at CPXi.
Wired Magazine served the first banner ad on the web on Oct. 27, 1994. It prophesied a new revolution with the words: “Have you ever clicked your mouse right HERE? YOU WILL.”
That prophecy has certainly come true, as “clicking” became as ubiquitous as “changing channels” and online advertising grew into a $140 billion global industry, according to eMarketer.
But for all the revenue we have driven, how far has the digital media industry truly come in two decades? Has it accomplished what it set out to achieve? Do we still have a chance to prove ourselves to the powers that control the campaign purse strings?
How did we do?
While $140 billion is nothing to sneeze at, ad tech represents just 11% of overall global advertising spending – a fraction of the dollars it should be receiving this far down the line. Rather than representing a go-to position in the average marketing plan, amazingly, we’re still spending time convincing media buyers that we are a safe and viable alternative for their business. The opportunity costs of ad tech’s failure to more quickly mature and take a more stoic and realistic view of itself is sometimes staggering. Rather than being the advertising industry’s savior, digital has all but accepted its role as crashers at the gate or, at least, the young upstarts that are simply in above their heads.
I believe that some of our own failings still have roots in the big boom days before the initial dot-com crash. In those days many behaved as though the industry were a casino: ante up, win big, cash out. They favored point solutions and ignored long-range planning because they were more interested in making money than solving problems. In those early days we began casting the die that would label digital as something to be taken less seriously than its predecessors, to be paid less respect and to be thought of as a short-term play. Encouragingly, while some still play faster and looser with the industry’s core values than they should, there is a more clear focus on building rather than cashing in.
Another reason we’ve fallen short of our potential is that too many ad tech businesses originally focused on the wrong goals. When the industry should have pushed to differentiate itself from traditional media, ad tech often allowed itself to be measured by old-school metrics that were meaningless in our world. Today there is a growing call to “let digital be digital” and to reassess the criteria by which it is judged. If the idea of “engagement” as brand building can truly catch on, then I believe that the digital media industry may yet achieve its deserved role as a primary piece of any fully realized marketing plan.
Of course, there are some factors falling in our favor. The TV juggernaut is finally showing cracks in its façade. As so many eyeballs shift to on-demand programming on desktop and mobile, it seems only a matter of time before the money will follow. It may take a while for ad spending to surpass traditional media, but in the short term, parity is both a worthwhile and reachable goal. And from there, it’s only going to get better.
The Final Report
Despite my criticisms, I’m very excited about the opportunities in front of us. If I were to give the ad tech space a 20-year report card, I would call its performance disappointing, but the optimization points are clear and it holds the keys to hitting its KPIs.
Overall grade: B