The Myth of the End-to-End Ad Tech Solution

“Data-Driven Thinking” is a column written by members of the media community and containing fresh ideas on the digital revolution in media.

Today’s column is written by Michael Greene, Senior Analyst at Forrester Research.

The term “end-to-end” gets thrown around a lot in digital advertising circles and is increasingly part of the conversations we have with advertisers, publishers, tech vendors, and investors. It is also a preoccupation of AdExchanger, with the term “end-to-end” resulting in over 150 search results, a reflection of the litany of vendors (beyond just Google) claiming a complete solution (even if it is often in a very narrow area, like online audience data management or the tricky world of mobile video hyper-local targeting).

“End-to-end,” so it would seem, is the perfect antidote to the highly fractured, point-solution dominated world of digital ad tech, not to mention the overwhelmed end users at advertisers, agencies, and publishers who are rightfully looking for somebody to deliver the holy grail of best-in-class features and best-in-class service all in one neatly tied package. To that end, some media and technology behemoths are clearly making credible runs at the end-to-end ad tech stack, even if some of their stacks suffer from a mix of “best-in-class” and “just good enough” technologies (Google), poor integration of disparate platforms (Adobe), or gaping holes in critical ad tech offerings (IBM).

But while these established vendors, or some other ad tech upstart, could conceivably solve for these issues over time through disciplined product management, innovative engineering, and thoughtful M&A, I’m convinced that the holy grail of end-to-end ad tech will remain universally elusive – at least for the foreseeable future. Why? The answer is deceptively simple:  ad tech innovation, for all its growth, continues to lag dramatically behind technology-fueled consumer media innovation, and that’s an immutable, natural truth.

Significant consumer media disruption is inherently unpredictable, and also stems more from art (selling the consumer things they never knew they needed but can’t live without) than science (building a solution for a concrete, articulated customer need). Ad tech thrives on the latter, turning advertiser and publisher frustrations into marketable product solutions. But ad tech can’t build towards challenges it can’t predict, whether they come from an Apple-led mobile revolution, a Facebook-led social revolution, or some new company prepared to change consumers’ lives and media behaviors.

In this world of significant consumer change, advertisers and publishers can try to latch onto an end-to-end solution, but the nature of ad tech development means that solution will inevitably always be playing catch up, engineered to solve the problems of a legacy time and place. Simplicity is still a noble goal, just one that’s never going to be achieved effectively over time through a single solution.

Advertisers and publishers will be best served to stop chasing a pipe dream and instead arm themselves to be highly adaptive and technologically nimble in a changing media environment.  This means learning from the best sorts of IT departments (believe it or not, they do exist) and embracing a few key technology non-negotiables (end-user data ownership and portability are good places to start) and developing deeper internal expertise for evaluating, on-boarding, and managing new technologies.  To what degree this means integrating a wide array of vendors, or just managing a handful of highly strategic vendor partnerships, will differ for every organization. But no matter where you sit in this digital advertising world, change is going to be a constant. Might as well embrace it.

Follow Michael Greene (@michaelgreene), Forrester Research (@forrester) and AdExchanger (@adexchanger) on Twitter.

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  1. wow, what a depressing piece. what advertisers want to buy is always predictable so i disagree with your thesis and our company stands as proof that forward thinking end-to-end solutions can in fact be built and work to create new markets.

  2. @Jonathan I don’t think this is depressing at all. The way I read it, Michael’s advice to pubs and advs alike is to setup the internal structure to manage change (and glue pieces together accordingly) as opposed to signing up for one provider who promises to do it all.

    For smaller shops likes yours and mine this is a good thing: showcasing our value to technical people on staff is much easier than doing so to a manager type who only gets by on marketing materials and signs up for the big guys “because you can’t get fired by hiring X.”

  3. Yael Avidan

    While I agree with the key idea that ad tech lags behind consumer media innovation – I still think that a good-enough ad tech stack is within reach.

    The reason is your usual “follow the money” answer: The operational costs of managing online campaigns in agencies today are high compared to the margins agencies can charge on them (margins on online are lower compared to other channels like TV). As long as that’s the case, agencies have no other choice but to streamline ad operations by choosing integrated solutions that are good-enough with the expectation that vendors will eventually catch up with the next big thing.

  4. Nice piece. Fortunately the concept of end-to-end is no longer necessary. Five years ago, the only way to get what you want as a buyer or seller was to try to hard-code a solution that might plug in some vendors on the back end. But those projects were massive IT solutions of the last generation of technology. The new world that’s evolved is much better.

    Every significant ad tech system out there is fairly open – and certainly their APIs are accessible. That means that a much lower touch integration process than ever before is possible. An agency could do a light touch mashup of a bunch of systems all bound together in a simple HTML layer with single-sign-on. That wasn’t feasible to do in the past without massive costs.

    I think that Media Ocean’s idea of becoming the hub of all activity – based on their footprint for financial data – is executable, I’m just not sure they actually have the culture or skills to pull it off. It’s almost exactly the strategy I tried to pull off at TRAFFIQ, but whoever runs after that needs enough cash on hand to weather the long sales cycle and the discipline to pull off the developer ecosystem work needed. Google’s slowly building out their own proprietary “stack” that can offer almost an end-to-end solution. But they’ve also at the very least kept each component open via APIs such that their components can plug into other solutions. Google has both the cash and the discipline – unfortunately culturally they want to have a relatively walled garden closed stack – and their discipline about their APIs has historically been rough from the outside – with constant changes requiring their partners to shift and adapt on a dime.

  5. David Weinstein

    Automated solutions already exist that provide specific solutions to certain market segments. However it seems that most solutions promise to be all things to all advertisers. That’s simply not the case, and it is the reason that some end to end solutions won’t stretch as far as others. SMBs don’t have (or need) the same levels of complete automation and integration as a digital agency. Until these offerings start segmenting to their core audiences, they will be labelled as ineffective or unreachable for one reason or another.

    Regardless of how deep a solution is, human interaction is needed to strengthen relationship and build value and trust.

  6. Thanks, Michael, for a thought-provoking and well-written piece. An integrated end-to-end solution has certainly been the “holy grail” – not just for ad tech providers, but for marketers in general. While some big industry players are making a run at this, a successful end-to-end solution needs to be built with the “reality of change” in mind; planning for the advancements in new touch-points, technologies, data, and communications which will only increase. Piecing together components though M&A can only work if there is an underlying integration framework in place, and the components are capable of “plugging in” to that framework. Unfortunately for marketers, this has not been the case…yet. But as innovative ad tech companies begin to build with integration into an “ecosystem” in mind, the chances of real end-do-end integration become greater.

    From our perspective, end-to-end integration requires a solution that not only addresses current market needs but can adapt to as-yet unforeseen advancements. This is precisely the approach we’ve taken, combining a central core integration of data and decisioning logic with open APIs and an integration layer that allows companies to “plug in” execution touch points. The result is that the central decision logic and the integration framework create a hub. The result is a platform that is nimble and flexible, so it can easily adapt to an evolving ecosystem and marketers’ changing needs – even if we can’t predict today what those needs will be tomorrow.

    – Pat DeAngelis, CTO [x+1]

  7. The other elephant in the room is that all of the companies trying to build an end to end stack or open solution today also offer parts of the stack themselves from their current business, which is conflicting. We have yet to see something that is not a walled garden.

    When they approach prospects or partners with a conflicting piece of tech, what happens?

    James Curran
    CEO Co-Founder, AdStaq