Ad Tech Woes: Time For Change?

In recent years, the advertising technology industry gained a slew of new companies taking the “Me Too!” approach with tactics such as automated ad technologies or more analytical ad-targeting methods. Looking through LinkedIn data on ad vendors, research analyst Brian Wieser found a substantial decrease in hiring among the leading advertising firms. This stunted growth looms above the future for many traditional ad tech companies:

“Ad tech firms that have been around for years are now grappling with the reality that they haven’t achieved the rapid growth investors had hoped for and face the challenge of differentiating their technology in a competitive market. Many ad tech companies remain unprofitable as costs continue to mount and several ad tech firms recently announced sizeable job cuts.”

The current state of turmoil in the industry is a result of many factors. Fraudulent business practices, falsified user engagement metrics, and lackluster viewability are becoming an increasing concern for major ad vendors. In addition to the lack of transparency in the industry, consumers have widely adopted the use of ad-blocking applications, diminishing the success rate of ads even further.

In terms of the future for traditional ad tech companies, Wieser said “many firm’s ad tech products still ‘need to do a lot’ to gain the traction to turn into profitable long-term businesses.” Despite the current struggle among the industry’s top competitors, Wieser also found that innovations within ad tech lead to success.

“The companies in the ad tech and marketing tech space with the most significant sequential head count growth in the fourth quarter were companies focused on ad quality.”

Clearly, traditional methods such as tracking software, retargeting, or contextual advertising are not working. It’s time for advertisers to quit intrusive behaviors and focus on tailoring quality ads that consumers will actually value.

Source: http://www.wsj.com/articles/ad-tech-growth-hits-speed-bump-1451936427