During the last ten years we have witnessed the growth and flourishing of ad tech.
Since then, many good things have been said about the roaring success of industry giants.
Now its time to unveil their fails and learn our lessons.
We live in the heyday of recently-born advertising technology.
Ads served automatically grew from 0 to 30 million impressions per day.
Every year something great happened.
Google, Facebook, and Amazon rose to their indisputable prominence.
GDPR kicked in, and now customers privacy is valued over everything else.
What has been often neglected in ad tech talks are the epic failures that led some companies to collapse.
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No single company defines the market.
It is the customer who defines the market, so even the trendsetters have to pivot on the fly.
No client is loyal to the extent that theyll stick to your services no matter how outdated they are.
An example of the wrong timing isthe case of Videology.
It quickly partnered with large ad buyer GroupM and made a bet on the ad connection business model.
Videology growth has stalled.
They decided to lean into building tools for programmatic TV, which still hasnt taken off yet.
Nobody needed advanced TV advertising tools in 2016, and frankly speaking, few advertisers need them today.
The rest of the existing problems of Videology were linked to the mounting Google and Facebook duopoly.
Google disallowed third-party companies from purchasing video ads on Youtube.
Facebook flooded the market of short video commercials by acquiring Instagram and launching ads in stories.
Were all suffering from the duopoly dominance.
The question is whether you are ready to mobilize and adapt or not.
Scaling-up too fast
Despite its dire end, there is one thing that Videology did right.
The brand focused on one single channel: video advertising.
Many young ad tech companies do the opposite.
Such extra moves may or may not lead to extra success.
In 2018, OpenXlaid off over 100 employees and shut down its ad server.
Instead, the company workforce focused on upgrading video and programmatic solutions.
Instead of being demolished, Bute Terrace was turned into a joke intended to be a beautiful architectural ensemble.
Thats what Id compare to wrong acquisition.
Something attractive and seemingly profitable, but in fact it is destructive to your company image.
The ad tech industry is replete with acquisitions.
Recently, Roku acquired Dataxu for $150 million.
Salesforce acquired Datorama for $800 million.
Sizmek acquired Rocket Fuel for $125.5 million.
And while the first two deals were successful, the latter one turned out to be fatal for Sizmek.
Earlier this year, Sizmek met the fate of Videology and filed for bankruptcy.
Experts named their acquisition of Rocket Fuel as one of the reasons.
Rocket Fuel provided outdated and insecure Javascript pixels that slowed down pages and left them exposed to data theft.
Although this is not the root of Sizmeks decline, this acquisition caused evident damage to their revenue.
On the one hand, Rocket Fuel had powerful AI algorithms for data collection.
But on the other is it worth it to trade your own image for algorithms?
Barely, at least for such a household name as Sizmek.
Lack of differentiation
The ad tech industry has one more global problem: The market is quite homogeneous.
They fail to make a difference.
This mistake may cost not only Sizmeks life but the lives of dozens in ad tech.
Partnerships with fraudulent DSPs
Worse than wrong acquisitions is unfortunate partnerships.
Aside from running into another black box, you have zero control over your partners intentions.
Before rushing into this, youll have to weed out the wolves from the herd.
Fraudulent companies may disguise themselves as well-known brands in the industry, so knowledge is power here.
One of the recent fraud cases is Amobi Inc., which sounds suspiciously like the Amobee advertising platform.
Neither PubMatic nor OpenX were partnered with Amobi, but its indeed a possibility for starters.
56% of marketers consider switching their DMP provider.
This all means only one thing: DMPs are off their game.
Marketers no longer see them as cost-effective data solutions.
Features offered at exorbitant costs and separately from the demand-side platforms are labeled overspending.
And as I mentioned at the very start, its driven by our customers.
The primary lesson to learn at first light of the 2020s is to listen to your clients.
Fake trends pop up and sink, while true trends lie in the words of your customers.
Implement whats right to your audience, and youll stay afloat.
The worst mistake any brand in ad tech can make is to pursue revenue over customer satisfaction.
