Ad(tech) Men

[news]

[news]

Advertising agencies traditionally sell ads to broadcasted media - television, newspaper, and radio. It required intimate details about its clients, but relatively superficial knowledge of the market. Advertising has come a long way since the Internet could fit into our pockets. The reliance on chronic, repetitive effort is being replaced by machines, which could do what humans couldn't in fractions of a second.

I'm up all night just to get lucky.
- Pharrell Williams, "Get Lucky"

Ever received an irrelevant ad on your mobile? Such as tampon ad for a single guy? It's as if your best friend forgot who you were. Therein lies the problem with mobile advertising - ads are shotgunned to see if they hit something... anything. It's as annoying as that person who tries to get lucky by approaching everyone at a bar. They are simply playing the number game - given enough views, someone will convert. Chances are, if they happen to get lucky, it's usually by accident... like clicks on an ad.

Mismatched ads occur because publishers sell ad inventory to earn revenue, and publishers usually have an excess ad space. So rather than leave a blank space, publishers will attempt to fill the void with an ad, even if it was irrelevant for the user. The opportunity for monetization often comes at the cost of user experience.

The old method is also painfully inefficient because of the endless proposals, negotiations, amendments, and fulfilments required in filling ad space. In all, up to 42 steps are required before an ad would be displayed. Then the process repeats itself like a broken record.

Back to School
Solving this riddle takes us back to Econ 101: Supply and Demand. Publishers have ad inventory (supply) to sell to ad agencies (demand). Naturally, ad agencies want the best audience at the lowest prices. On the other hand, publishers seek to maximize revenues by selling to the highest bidder. At any given moment, a surplus for ad inventory exists (i.e. fill rate