ADOTAS – On the heels of his evocative presentation last week at the IAB Advertising Technology Marketplace event in New York City, I sat down with Seth Demsey, (pictured) Senior Vice President, Global Advertising Products and Strategy for AOL Networks, to talk about the problems facing the ad industry. In his presentation to industry pundits, Demsey talked about the “chaos” in the marketplace and the perplexing lack of focus and unified metrics among the advertising community. His take is that the market is extremely overcrowded and duplicative, and that the industry is hemorrhaging money left and right with little to no end in sight. But with emerging technologies like programmatic ad delivery and ad verification, there may be a silver lining.
ADOTAS: How did you get started at AOL and what do you handle there?
SETH DEMSEY: I came to AOL from Google and was excited to work for the ‘best kept secret’ in ad tech; the fact that AOL is the only company in the world that has both a complete tech stack and a large stable of premium owned and operated website brands is something many people don’t know. All of the learning and expertise we generate as a top 5 publisher informs the products and services we build for the thousands of publishers and brands we work with. It was just too amazing an opportunity to pass up.
Today I run global ad products and strategy for all of AOL and AOL Networks. What that means is that I own the product vision, strategy and execution of all our individual ad products (ad server, SSP, DSP, retargeter, mobile network, data platform, creative platform, network, self service ad products, sponsored listings, etc.) as well as how they work together to solve the larger problems our publisher and advertiser customers are facing.
Talk about your recent presentation at the IAB conference. Why does ad tech need a wake-up call?
I’ve had the pleasure of working at a lot of large, successful technology companies in my career – Google, Microsoft, NASA (crazy times). The one thing they all had in common is that they used the power of data and platforms to create vibrant ecosystems that made richer products. Unfortunately for the most part, the ad tech sector has engineered itself into an ‘anti-ecosysem’ both technologically and from a business perspective. I’m convinced that if we can apply the same open innovation that has powered the explosive growth elsewhere (think software-powered businesses and services), we will increase ad-tech value and accelerate market growth.
How does our current paradigm make it difficult to have ad technologies work with each other to create a truly integrated system? Is this even feasible?
Anything is feasible, but it’s not a giant leap that can be made in one day. I’m envisioning a somewhat decentralized but coordinated effort where the different pieces of the ecosystem that should be connected get their act together and connect — tag exchange, data interchange, RTB, and so much additional potential exists. The feasibility really comes down to people’s willingness to cooperate with each other and then ‘stick to the standard,’ because standards lose their power when there are players who ‘almost’ adhere to the standard. What we’re looking for is something that dramatically 1) enables discoverability of compatible services 2) decreases integration times 3) reduces manual effort and 4) explodes creativity.
How does programmatic play into the picture? AOL CEO Tim Armstrong mentioned this in his ad:tech San Francisco keynote earlier this year.
Programmatic is a critical piece of our strategy. We like to talk about the Barbell – where premium, high-value brands are on one side and highly scalable technology is on the other. Programmatic is key because it is in fact the automation of things humans shouldn’t do. Many people think programmatic is the opposite of premium. But really, it’s just the opposite of manual. We automate more so that we (and our clients) can spend time on highly creative problems that machines can’t solve. This is the only way our industry achieves the growth it is attempting.
Talk about waste within the ad ecosystem. Are you talking about the sheer number of ineffective ad placements, impressions without targeting? Provide an example.
When I think about waste I’m really thinking about a few things. First, any process that has to be done repeatedly in a manual way is a form of waste – for example, the operational procedures around campaign setup, tag exchange, data exchange, etc. It would be a whole lot easier to click a few checkboxes and have all the wiring happen behind the scenes. Doing so would enable the creative people in our industry to focus on developing innovative experiences for clients rather than wiring up campaigns.
Second, I think there’s a lot of waste in terms of how ROI is being measured. Whether it’s in-view, in-demo verification, or attribution, what’s missing is the yardstick you’re being measured against and real-time feedback of data. Satisfying customer objectives is what we’re all here to do -– to surpass what they thought possible. However, without a rich, even real-time feedback loop, the playing field is slanted.
One of the things that we in the digital space have as an advantage over linear TV is our ability to reduce out-of-target impressions and thus better optimize both publisher yield and advertiser pricing. Ironically, I see the exact opposite happening in the marketplace today with many people telling me they have to deliver sometimes 3-5 times the impressions required for the client to hit the ‘in-target’ numbers. This situation is wasteful for publishers, advertisers, and everyone in between. If we all knew the target, we’d serve to it and everyone would be able to extract more value from the budget and traffic within the system.
What is the future of advertising?
Nothing like a simple, easy question to end our discussion.
The future I see is one where machines enable creativity through doing what they do best (automating the hard math) and people do what they do best (creating innovative, engaging, and effective experiences that support those same objectives). We’ve got a lot of tools in the arsenal today that are just too cumbersome to use, but will be extremely successful when they are used at scale: personalization through dynamic ads, rich format capabilities, cross-screen targeting to allow messaging to follow browsing, and ever-enhancing optimization that allow us to scale more quickly and more effectively than ever.
It’s really the balance of humans and machines — one that address both premium and scale. That’s the future I’m excited about.
