The digital age has completely transformed advertising and marketing, but not always for the better. Now the industry faces some major challenges; most of which it has brought on themselves. For the B2B marketing world in particular, without a concerted, industry-wide effort to overcome these challenges, the future is worrying.

The digital industry is predicated on a B2C technology-orientated supply chain. A few years ago brands like eBay became the dominant players because of one thing; they had huge amounts of data, and it could scale. People were building tech that enabled them to work with the major B2C brands. But in their haste to capitalise on B2C, there was a failure to recognise B2B brands. Commercials for B2B brands were placed in the same way as B2C brands, without acknowledging that the B2B world is far more complex and the value of the audience far higher.

Much of this industry is also predicated on old ways of working, when things like print advertising, TV, advertising, and radio advertising, were straightforward to buy. You would negotiate with the agency that happened to have the most clients and the biggest spending power to get the best rates. If you bought your ad in a certain position, the ad would run. The supply chain was straightforward. The process was linear. Digital disrupted everything because it brought the ability to operate in real-time.

Before digital, agencies had small rebates of around 2% or 3% from advertising through traditional channels. Everyone knew about it. It wasn’t a big issue. Digital has made that 2% or 3% seem inconsequential. Now there is a multitude of ways for everybody in the complex digital supply chain to make money, in the process, making everybody a victim of the pace of evolution.

Supply chain complexity
In the digital marketing world, as many as 15 different companies in the digital supply chain can be involved, from the moment a brand decides to place an ad, to the moment it appears on a website. This is best illustrated by Lumascape, an online map categorising the most significant ad tech industry companies. For example, there are independent companies that do the ad verification, i.e., verifying that the ad has been served, so another layer gets added.

But it’s no longer just about the verification; it’s also about viewability. It was accepted that the problem with online advertising and the way that websites were built could mean a dozen ads appearing on a single web page and that they would only appear when users scrolled down. So the top of a web page, in ad terms, is the valuable real estate, compared with the bottom of the page. Was there a way for the two apps to have the same value, as long as viewability could be guaranteed for both ads, regardless of whether they loaded at the top or the bottom of the page? So then another tech company develops a tool that tells the client whether or not the app was ever viewable, as per the industry definition of viewability as having half of the ad in the frame of a user for one second. That’s not viewable. The result is a continuous build-out of more and more components of the supply chain ecosystem that make it more complex and more costly.

Disappearing revenue
As a publisher I’d spent decades selling to clients; brands I knew the value of. We realised that although the same clients were working with us, the revenue we received was declining quarter on quarter. And when you spoke to the brands, many were unaware of how much of what they were spending with you was being lost in that increasingly expansive process of asking the agency to run their ads on the likes of cio.com cio.co.uk and Computerworld, etc.

A PwC report exposed the staggering difference between what goes into the system and what comes out, specifically, what goes missing from what a marketer commits to paying a publisher and what the publisher receives. On average, only half of the advertiser’s money reaches the publisher. This isn’t a tax, stealth or otherwise, it’s people stealing from the market.

Data leakage or data theft?
Another major issue in the digital marketing supply chain is data leakage, created by technology companies offering publishers free tools to help them monetise their websites. People no longer share content by copying and pasting URLs and emailing them to friends. They expect to be able to share content instantly from whatever web page or social media post they’re on. So publishers started signing up for these new sharing services, oblivious to the fact that the goal of the technology companies wasn’t to sell them their product but rather to take the data acquired by the publishers through their platforms and use it to offer marketers a cheaper way to serve ads to their audiences.

So now you can sell on a viewable-only basis, or where there are social sharing tools. Trust is no longer going to bring more traffic to your site simply because it is easier to share content. The more people come to your site, the more you can monetise those eyeballs. But people still didn’t ask that all-important question about charging publishers and stealing data, or ‘data leakage’.

Data compliance
Contracts from tech suppliers in this industry are so complex in terms of what data they can take and what they can’t take. Regulation around data privacy is far from straightforward. The arrival of GDPR, for example, was a game-changing moment for this industry, but at the same time, wasn’t at all. I’ve seen contracts from very reputable companies that addressed the GDPR problem with publishers, literally as a single one-liner; ‘We can confirm that we are GDPR compliant’. The contracts are worthless because there isn’t such a thing as being GDPR compliant. There isn’t a compliance process for GDPR. All you can state is that you understand GDPR and have put in place all the policies that you believe you need to fall in line with GDPR and the expectations of privacy for users. But that doesn’t make you GDPR compliant.

Going cookieless
So much of the bad practice that’s been happening is based on cookies. When Sir Tim Berners Lee created the Internet he didn’t have a commercial thought in his head. It was about the ability to share information across the internet, a free-to-access platform. Yet, cookies became an incredibly easy way for people to make money. And it’s only now that the cookie is being removed by Google, Apple and Microsoft, but it will be replaced by another identifier. The likes of Google, Apple, and Microsoft. AWS and other ABM companies are building data walled gardens, closed platforms or ecosystems that give the provider of the platform total control over the content. Accessing them with new tools and mechanisms won’t be any cheaper than it was before. Once again, the whole industry is shooting itself in the foot.

In replacing cookies with an alternative three things need to happen simultaneously; more conversation with the market, not just marketers, but every one of us as consumers of data. We need more education that is not fear-driven, and we need more open conversation around what the internet gives us, and the element of a value exchange. You can’t expect content to be free. It has to be funded. For B2B brands and publishers in particular, their opportunity to win is by having that conversation with their audiences. They can produce high-quality journalism, as a result of charging subscriptions or monetising through advertising. But it needs to be a conversation that people fully understand.

Time for transparency
By far the most important conversation will focus on a market that for the last 15 years has been dishonest about the fees involved in digital advertising. Collectively, as an industry, we need to set authentic, robust standards that everyone adheres to. That’s a combination of being completely transparent about which bits of technology do and don’t work, what each bit of technology does for a client, and what they pay for it. We need clarity around what we, as an industry, believe to be the core components of the digital marketing ecosystem.

These conversations are happening but in a fragmented way. There is a huge disconnect between the three core elements of this industry; marketing, agencies and publishers. They’re represented by different trade bodies, all in the same industry, but with very little overlap, and therefore very little collaboration at the industry and regulatory level, between them. The only way to progress is by a series of honest conversations and education.

We also need to look at this from the client’s perspective. When we talked about viewability, for example, were clients ever involved in discussions about what viewability means? How many decisions are made in this industry in the absence of a client? The truth is that the vast majority of clients are wilfully ignorant.

A collaborative cleansing of the industry
The change that is coming will create opportunities to look at this flawed system with a fresh pair of eyes. For marketers, it will be an opportunity to look more closely at between 40% and 60% of your spend on delivering your messages and review a significant chunk of your marketing budget. Don’t walk away from it.

This is an opportunity for everyone in the industry, from the advertiser to the publisher, as well as the clients, to come together and embark on a cleansing process, to have what will be difficult discussions for the first time, and to act collaboratively for the future benefit of everyone. We’ve all been guilty of accepting what we considered to be good enough until now, but working together we can change this industry for the better.