Although the vastness of the ecosystem speaks partially to its health, the mad crush of LUMAscape companies has also created an imbalance between the needs of advertisers and publishers and the ad vendors that serve them – or, in a lot of cases, gouge them.
A lot of the “funky stuff” – viewability, ad blocking, et al. – that’s happening is “more of a symptom of publishers not being able to monetize as well, and when they do, completely ruining the user experience,” said Michael Katz, CEO and co-founder of mParticle.
It’s part of what makes Facebook feel like a safer option, even though some marketers and publishers are starting to get a little uncomfortable with their growing dependence on the platform.
“If you look at the LUMAscape, there are so many people who are trying to get a slice of each dollar that gets spent,” Payne said. “Ultimately, that should be from marketers to the publishers, but there are a lot of people in the middle looking to get their 30% or 40% cut – and obviously, there can only be so many cuts.”
Which is why if the programmatic ecosystem is going to keep growing, the margins have to start shrinking, Payne said.
“Facebook is basically consolidating all features into one single platform because they know everything about everyone and they can pull that off,” he said. “The only way to counterbalance that is a more efficient alternate ecosystem.”
Story updated to add “incremental” to the first sentence.