Reposted from AdAge, December 7th, 2011
By: Alan Pearlstein
Ad technology companies want to prove the value of their offerings to advertisers, and more often than not they’ve turned to the media-selling business as a way to have their technology, algorithm or special sauce adopted by the market. But selling media distracts from the core goal, which is developing innovative technology that helps advertisers deliver on their campaign goals.
To better serve the advertiser, tech companies need to forget about media and start focusing on what matters most: innovative technology that drives results.
Media drives technology, but ask anyone in this space, and many will tell you that dealing with media delivery is a headache. If companies eliminate the distraction that comes with bundling technology with media, they can approach technology head on, pushing my team to develop our technology and adapt to market demand quicker. As a CEO, I can build more products around my data to generate tech driven revenue at greater scale, rather than worry about selling media to drive the top and bottom line.
Several companies moved in this direction this year, either pivoting or killing off their media-selling branches to focus on developing data solutions and technology that can better serve their clients. The tipping point in this evolution may have come earlier this month, with AppNexus’s recently launched ”app marketplace,” an open platform for both digital media buyers and sellers.
The program, called AppNexus Apps, makes it possible for data providers and other tech vendors to simply plug into the AppNexus exchange through an open API, and buyers can select the vendors and technologies they want to work with on a campaign-by-campaign basis.
Ari Paparo, AppNexus’ SVP of Product, said this move was designed to help ad tech providers develop their business and focus on creating new technology, rather than burden themselves trying to distribute their offering. This is exactly the kind of thinking the industry needs to produce better results for advertisers.
I hope this format is the beginning of a big change across the entirety of the tech landscape, for a number of reasons. It’s going to encourage technology creators to get more creative, it will help innovation flourish and, more important, concepts like this will free technology companies to do what they do best, which is build technology.
That focus on technology pushes innovation forward. Platforms like AppNexus may not be the end-all solution, but APIs will undoubtedly become a key part of ad technology as interoperability becomes a focal point. The use of APIs encourages technology creators to get more creative with their offerings, and the more they learn about the API and its capabilities, and the more the platform expands these capabilities, the more innovative the offerings will get. Removing the burden of working on media means tech companies can diversify their offerings and develop more creative products that will help advertisers drive better results.
Another benefit to this approach in general is that it simplifies the process of accessing and utilizing technology for advertisers and their agencies. Working with and coordinating multiple tech partners for an individual campaign is time consuming, highly inefficient and a pain in the neck. If an advertiser buys media through all the partners, it needs to look at all the results separately. Technology partnerships without a media offering streamline the process for advertisers, giving them access to greater capabilities and bringing more advertising dollars to the online space.
The API methodology is a no brainer for this RTB-driven advertising category, and I hope all of the other players in this market adopt the same approach. Relieving the pressures of selling media is going to speed up innovation in this space, so much so that technology companies with a dual focus will likely get left behind. Plug-in platforms democratize the ad tech landscape, but the goal is easier ad operations and better technology. Only then will we drive more advertisers into the siloed world of real-time advertising, which is beneficial for everyone.
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