The Media Today

The media today: developments in ad tech, and why journalists should care

August 2, 2017
Image: AP

Ad tech, ad-tech, adtech. It’s one of those words journalists haven’t figured out how to punctuate yet. But it has a growing influence on the financial dynamics of the internet.

Advertising technology, broadly, harnesses the power of big data for the ad industry. When you visit and then start seeing Best Buy ads on Facebook, that’s the work of ad tech. By targeting specific audiences or demographics, rather than buying a time slot on TV for example, brands are able to use their dollars more efficiently. In some instances, such as with Google Adwords, advertisers only pay when potential customers respond to their ads.

How is this relevant for journalism? Ad tech has made the market so efficient that it’s squeezed out margins for content producers, pushing down the cost of impressions and continuing to drain publisher revenue. A famous line about advertising of old goes something like, “Half of all advertising is effective, but no one knows which half.” Now we know which half.

As digital ad revenue continues to grow, reporters who don’t follow these dynamics are like umbrella salesmen who don’t check the weather. At $19.6 billion for the first quarter of 2017, digital ad revenue is up 23 percent from the same period in 2016, but publishers are seeing a fraction of this. And 90 percent of growth in digital ad revenue over 2015 went to Facebook and Google, two of the monsters of the ad-tech space. Axios reported last week that ad tech companies, responding to regulatory backlash, are in the midst of consolidating and changing tactics as consumers migrate from desktop to mobile.

As Google and Facebook get better at connecting consumers and businesses via their platforms, publishers will also see a smaller share of attention on those platforms—that is, unless they “pivot to video.” Facebook has invested in prioritizing, targeting, and monetizing video on its platform. But if users see more video, which is literally time-consuming, they will see fewer pieces of content overall. Publishers have come to rely to social platforms to get their work in front of an audience of millions. But they can’t lose sight of the fact that the system was not built for them.


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Nausicaa Renner is digital editor of CJR.