Entering the Post Ad Tech Era

The Sell-Sider” is a column written by the sell-side of the digital media community.

Today’s column is written by Jim Spanfeller, CEO, Spanfeller Media Group, a new age media company.

It is inevitable that we will move into a post ad-tech era. Not to say that ad buying technologies will go away, but that they will plateau as marketers discover which methods are necessary and cost-effective in achieving their goals and which are not.

Today the very segment of the industry that was created to make the advertising ecosystem more efficient has succeeded in doing just the opposite.

Billions of dollars have been invested in building the stoutest, most comprehensive advertising data and targeting technologies imaginable. Often the amount of money spent on measuring and analyzing data approaches the cost of the advertising itself – hardly an efficient model. What’s more, questions linger about the actual effectiveness of these ad-targeting technologies.  Retargeting seems to work well, in part because it is often the easiest to do. After that though the slope gets steep and very cloudy. Do behaviorally targeted campaigns against specific audiences have a better ROI than contextually targeted programs? Well, as it turns out, it depends on what you are targeting for…clicks?  Sure they do, since the behavior targeted is in fact clickers. For most everything else, not so much.

Ad technology does offer the ability to buy big swaths of impressions in a single interface. There is clearly a value in this.  But is that a value achieved on behalf of the practitioners of the art, or is it significant to entire process? Does it really produce a better ROI? As with most such questions, the answer is neither black nor white, but rather grey.

The fact that we need to ask the question at all is the real point of this piece.  Ad tech is not the silver bullet it was promised to be.   Billions have been invested in its name and much advertising is pushed through its pipes but the realization of the all programmatic buying and selling future remains an elusive vision on the horizon.

Ad tech will be a part of the future no doubt. But it will be only a part.  We now stand at the beginning of the next chapter of digital advertising.  A chapter that will no doubt be made up in parts of direct-sold, video, mobile, social and programmatic segments.  Who knows what percentage each of those segments will take, but clearly none will be 100%.

What is clear is that the faster that we focus on the future, on true end-to-end ROI and real simplicity, the faster digital platforms will be rewarded with increases in the overall marketing media mix.

Follow Jim Spanfeller (@JimSpanfeller) and AdExchanger (@adexchanger) on Twitter.

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  1. Having come from 10+ years in online display advertising, I can definitely agree with Jim here. Marketers are soon going to realize exactly what this article states – the ROI just isn’t there in ‘predicting’ behavior and retargeting with display. Forget about the fact that most people just don’t click.

    However, the solution to allocating your ad spend to experience the highest ROI comes in the form of search. Having made the ‘switch’ over to search at an innovative company called BloomReach, I have seen the impact of being able to reach people who have expressed specific intent for your product or service. Search just doesn’t have the same limitations that display advertising is facing because in search, the predictors of intent/conversion are much higher. So high in fact that I would argue that with the exception of being bucketed as ‘online ad spend’ the two can’t even be compared. There is no guessing in search. No magic formula. In search, we know that that user is interested in your exact product. As a marketer, your challenge then becomes making sure that your users discover the content that most closely matches their search intent.

  2. Maybe the issue isn’t the ad technology, but rather the ads themselves. Who clicks on display ads anymore?

  3. Hey Jim…

    I’m not getting your point…. If you are saying that programmatic buying will never be 100% of the equation, well ok. But so what? The fact is that data and technology are transforming the way that we market to consumers at an astounding rate. Programmatic buying is a piece of that. But data-driven targeting can be easily applied within the context of direct-publisher buys. Private exchanges allow negotiated media to better meet advertiser targeting needs. Enterprise DMPs allow better creative targeting within the ad server. New attribution analytics that pierce the veil of true media effectiveness are now accessible to any marketer who cares to know the truth…even for branding.

    The REAL truth is that the use of targeting and analytic technology DOES deliver dramatically better ROI…not just a little better…but measurably, dramatically better. Not just for retargeting, and certainly not just based on clicks.

    Client after client, if you look at the analytics, and you will see that the basics of media have not changed…the things that count most are 1) targeting the right people 2) having a relevant message 3) managing to an effective frequency 4) buying smart…paying the right price for the inventory 5) surrounding the consumer with a multi-touch point portfolio of investments

    A strong underlying technology platform that supports all five requirements is the single most important media investment any marketer can make today.

  4. Marc Rossen

    Jim, good article and agree with some if your points as it seems that you are talking about display only. If you are referencing display only, why is Adtech only limited to this channel? Adtech does include multi channel and even direct buys. Having the ability to handle all pipes of the marketers mix is essential.

  5. Charlie B

    Jim: love the article and agree that there continues to be a gap between the increasing complexity of online technologies and ROI. However, it seems that the train has left the station and won’t be coming back any time soon. Further, you have to wonder if the gaps-to-date will be closed as the technologies get smarter and better.

  6. To delve into how you are framing the question Joe, I do agree that hyper targeting can value…WHEN THE DATA IS CORRECT. As has been widely discussed of late, more often than not the underlying data used in the targeting process is simply not all that accurate. How many new car intruders are there in the US at any given time? I’m told you can buy north of 20 million unique cookies with this modifier but there are only 14 million or so new cars sold in the US in any given year.

    But even putting poor data sources aside…there comes a point of diminishing returns on hyper targeting, on being truly predictive, on knowing exactly when a specific person is going to do a specific thing…except, as another commented suggested, in the search funnel. And of course here we have the most powerful predictor…self selection. And at its core, self selection is what context targeting in display is and always has been about.

    So will data targeting continue? Of course. But so will contextual and so will many, many top of the funnel practices. Just look at network TV. It is hardly based on hyper data targeting even now.