Ad tech has a problem. Fixing it isn’t easy

July 14, 2015, 7:48 PM UTC
Joe Marchese,

1. Advertising technology has the potential to revolutionize the way companies reach users in new, targeted and effective ways. 2. Ad tech is flawed, inconsistent and not working.

Which of these two are correct? Both, according to a passionate panel about the sector at Fortune’s Brainstorm Tech conference in Aspen.

Almost everyone in the room, which included ad tech executives, brand representatives, retailers and more, agreed on one thing: the industry is not delivering nearly as well as it could be.

“Part of the problem is that online advertising is a bit of a cesspool,” said Joe Marchese, president of advanced advertising products for Fox Networks Group.

“It’s all about getting the right message to the right customer at the right time,” added David Christopher, CMO of AT&T Mobility. “But the reality is this new world is so nascent and uncoordinated and relatively unsophisticated– despite its sophistication.”

Among the problems, according to the panel and others in the room: the ROI on digital advertising is very unproven; the many platforms to track and measure it are not standardized and metrics are all over the map; and perhaps biggest, the conventional currency used to measure efficacy is based on quantity, not quality, leading to an onslaught of content created purely to drive traffic.

“The currency is based on tonnage—on how many one-second impressions can you get,” said Marchese. “It’s not quality.” And when you value tonnage over quality, he says, what you get are tonnage content producers.

Measurement capabilities are so ineffective that it’s led to an abundance of “spray and pray” efforts, bombarding consumers with messaging that may be off the mark.

The industry is also not taking nearly enough advantage of available data. “There’s a huge disconnect between the data science community and the brand community,” said Damien Patton, CEO of Banjo. “From the data science perspective, we haven’t done a good job of putting things together so people who aren’t in that community can figure out how to use the data.” Both sides, he says, don’t know the questions to ask of one another—“like, ‘How do we find content in a certain place in real time? And then how do we promote that and get out of the way—help facilitate that so our brand is getting out there in a way that will be consumed?’”

These answers were far from answered in the hour-long session moderated by Fortune’s Andrew Nusca. But one panelist pointed out that the problem is becoming bigger than just the ad tech industry: it’s becoming a C-Suite problem and a board problem because the investments and return on huge spending on marketing isn’t adding up. “If you’re a CMO and you have 50 programs happening and 50 vendors creating different ROI analysis, you add it all up and the company is twice as big as it is. And then you get your ass handed to you when you go to the executive committee or the CFO.”

That, the room seemed to agree, may be the nudge the industry needs to turn the complaints, glitches and flawed measurement abilities into actions, ideas and solutions.

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