AdTech Fragmentation: Why Agencies Can’t Scale Digital Media
The core problem in digital advertising is that agencies need to achieve three things — performance, scalability and profitability — but they can only pick two.
Here, we’ll walk through agencies’ biggest hurdle to the scalability portion: adtech fragmentation.
Why AdTech Fragmentation Exists
1. Walled Gardens
Digital advertising is a duopoly between Google and Facebook. There are other players rising as well, like Amazon, AT&T and major retailers.
All of these companies have a vested interest in making people see things through their proprietary lens. They restrict the use of the third-party technology, so if you use a Google product, you’re incentivized to use all other Google products to the exclusion of just about everything else.
2. Nothing Speaks the Same Language
Raise your hand if you’ve spent the first ten minutes of a meeting setting baseline definitions for things like “Line Items.”
The fact that nothing speaks the same language in this industry is a huge problem when trying to compare performance. It’s like comparing apples to hammers. It’s that bad.
3. The Nature of Innovation
The digital advertising industry is a frontier, with all its positives and negatives. There is a lot of exciting things happening, but it’s also fraught with fraud, problems and unsavory practices.
This makes the whole industry a constantly shifting environment that’s incredibly difficult to make sense of. How do you know if you’re taking advantage of a fancy new technology or if you’re being taken advantage of by a snake oil salesman?
The Impact of AdTech Fragmentation
There are three ways adtech fragmentation makes scaling media efforts difficult for agencies.
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