Where will ad tech be in five years’ time?

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Julian Grainger headshot

Julian Grainger

Extreme data management will become increasingly important if ad tech is to evolve through an era of consolidation into an industry that adapts more effectively to the whims of a more unpredictable and fractured society.

With the ad tech sector’s main players consolidating their dominance through acquisitions, several companies are likely to face “carnage” as the current era nears its conclusion, according to Digital Consultant and Strategist Julian Grainger.

“Ad tech has always been focused on automation and personalisation over the long journey over 10 or 15 years that has taken us up to this point,” he says. “In five years’ time, I think we’ll be hitting the end of the current generation of technology.

“We’ve seen a lot of experimentation and big investment and we have already hit peak value as the prices have now started to come down, making it operational from a media-buying point of view.

“It’s still very application and solution-based and at the moment we’re seeing consolidation of that to marketing clouds.

“The future will be about integrating marketing and ad tech and the opportunity lies in getting data into a single place, which is where the likes of GeoSpock come in. That will be the next step of implementation for AI and machine learning in terms of getting access to what they need in this space.”

Data challenges for ad tech

GeoSpock is at the cutting-edge of data management, enabling clients to handle extreme data and open up new revenue-generating opportunities by bringing dark data into the marketing mix.

However, the challenges for the ad tech sector at large are clear.

A recent survey by media strategy consultancy ID Comms found that 41% of 229 senior marketing, media and procurement executives admitted that they are still using ad tech “ineffectively” or “completely ineffectively”. Only 15% of the advertisers said they believe they are using the medium “effectively”, while no one claimed to be using it “very effectively”.

Meanwhile, according to PageFair, 615 million devices blocked ads worldwide by the end of 2016 – a 30% year-on-year increase on mobile and tablet.

The onus is on ad tech to become more creative, but that is likely to be stifled, in the short term at least, with consolidation leading to smaller players being gobbled up.

“There does need to be consolidation in order for the next round of investment to come into this area, so there is going to be carnage for some companies.

“A lot of the promises haven’t materialised in the sector,” Grainger says.

“There does need to be consolidation in order for the next round of investment to come into this area, so there is going to be carnage for some companies. This round of technology has to scale to solidify the market. It’s Darwinism in action.

“However, there could be innovation issues, as well as speed-of-implementation concerns if only two, three or four players are so far ahead.

“We are starting to see everything being collected into a single point, especially with the DSP (demand-side platform, which allows buyers or digital advertising inventory to manage multiple ad exchange and data exchange accounts).

“The next obvious step will see more construction of data lakes (a storage repository that holds a vast amount of raw data in its native format). There’s a massive opportunity in data storytelling.”

Dark data

Exploiting dark data and being able to access and disseminate huge volumes of data quickly and easily is going to become crucial in the sector.

“As data lakes are built, the speed of access and speed of query is going to become more and more important,” Grainger adds.

“We’re still capable of running these systems by looking at dashboards, but as more data comes in, more will fall by the wayside. The industry is going to need to pull out data more quickly.”

Engaging with the target audience will remain a key obstacle.

With legislation like GDPR coming in, Grainger believes that utilising cookies and basic tracking tools could become increasingly difficult.

Perhaps more importantly, though, the changing demographics and desires of the population have to be considered by proactive ad tech companies – bringing the focus once again back to effective data categorisation and analysis.

“Where ad tech gets applied is where most mistakes are made,” Grainger adds. “It’s when it starts to make decisions for you that it can become invasive.

“A lot of the recommendation systems are average at best and I think people will start to question whether or not they want to be a part of it. When some people are faced with highly automated and average content, they start to go back to a more artisanal approach.

“For more emotional purchases of things that mean a lot to people, they are more likely to maintain an old-school approach, but then for things they don’t really care about – like toilet roll or toothpaste, for example – they might ask Alexa.

“Millennials don’t care and they will switch, so there will probably be an element of fracturing. The younger generation is a lot more clued up in terms of using technology, but they’re going to be more aggressive in their response to ad tech.”

New approach

Grainger predicts that the industries that are likely to benefit from this new approach to ad tech include the automotive sector, “because it’s highly focused on technology and offers a very emotional experience”.

He adds: “With cars, they are selling an experience rather than a product.

“Anything where you have original equipment stands to benefit over the next five years because they can build that experience layer on top of the product.

“However, for FMCGs (fast-moving consumer goods), how do you build an experience layer on top of that? It’s going to be tricky.”

GeoSpock’s efficient data indexing and management capabilities will be essential for the future of ad tech. For more information about how GeoSpock can help ad tech firms to engage more effectively with consumers, click here.

References:
ID Comms: https://content.idcomms.com/hubfs/2_Download_files/1_Reports/Files/ID%20Comms%202017%20Global%20Media%20Technology%20Report.pdf?submissionGuid=f5227f79-2864-4a82-8bef-4f76eb4b5e63
PageFair: https://pagefair.com/press-releases/2017adblockreport/
DSP: https://digiday.com/media/wtf-demand-side-platform/
Data lakes: https://www.kdnuggets.com/2015/09/data-lake-vs-data-warehouse-key-differences.html