What trouble at Turn and Pubmatic says about the ad tech business

Grace Liau

2016 will be a year of further consolidation for the programmatic ad space, and this week’s news of restructuring at Turn and Pubmatic is a reality check, says Grace Liau.

The programmatic landscape has been undergoing some major shifts in the past couple of years and I think it will get more pronounced next year.

While the “programmatic kitchen” has been running more smoothly this year, the progression we’ve seen so far has been from reactive decisions from a number of industry players, to a greater amount of understanding and cooperation within the industry.

However, as the industry moves forward, we should expect to see a shift towards consolidation (that many in our industry have been predicting for so long).

At the moment, the programmatic industry has a multitude of players – both small and large – that have similar value propositions. The distinction between these players is who actually has the technology, which contributes to the trend of major players such as Google, Facebook, Amazon, AOL, Yahoo and so on, buying up smaller companies and/or build their own stacks and walled gardens.

Providers such as Turn invested heavily to go after client-direct money (as opposed to working with clients and their agencies) and have come to the realisation that this is as much a people business as it is a technology business. Most can’t just turn to a platform singularly, they still need hand-holding and consultation.

For companies such as Pubmatic – it is about to what extent they diversify their product suite instead of focusing on their core offering; not just being an sell-side platform but venturing into the demand-side platform space).

Additionally, with this trend of consolidation – and the consequent simplification of a complex, crowded industry – this over-investment has been unsustainable. As smaller players emerge, larger ones are left either looking for buyers or more client-direct money.

If technology companies with direct deals between clients and DSPs are not prepared to service clients at the levels they are used to, then things start to unravel as clients see the benefit of working with agencies who offer a wider scope of tech partners.

The power, so to speak, is in the hands of those that have the most clout; it’s a control issue: is not working with the likes of Facebook and Google really an option? How would you create a balance of power as a marketer in creating your own stack in light of all the walled gardens that are being formed?

Either way, the moral of the story for us is that clients and advertisers need to be aware that working with a sole partner has its pluses and minus, but mostly minuses. For example, do they get access to all their data when the relationship ends? How is the data they have pooled into these silo-ed Google or FB stacks being used?

There are a lot of interesting problems that still need to be solved which will make our space all the more interesting. We’ve had disruption – now we’re seeing disruption + interruption and adjustment.

Grace Liau is the general manager, APAC, Vivaki


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