The Death Of Ad Tech?

We’re turning a corner away from the eyeball economy; it’s time for ad tech to change.
It’s a banal corner of the internet that not many people are aware of, but almost every internet user is affected by it. “Programmatic advertising”, or the automatic delivery of ads to key demographics, is what gets a Toyota ad on an automobile publication’s website or an ad for makeup on a fashion blog.
Since about 2010, the nature and quantity of ads we see on the websites we visit has been largely automated and based on an algorithm that creates a kind of “transaction” each time a pair of eyeballs ostensibly views an ad. In essence, programmatic ads allow advertisers to buy guaranteed ad impressions on the websites of chosen publishers in advance of when they want them to appear. This process takes the place of human negotiations and manual placements between the advertiser and publication, which are time and resource intensive for both parties. In addition, this third party system allows ads to be shown to users with the knowledge of their search history and interests—or, in internet parlance, their “cookies”—thereby increasing the value of each impression from an advertiser’s point of view.
While this has been the status quo for some time, it is by no means a perfect system.
In a 2015 feature in Bloomberg Businessweek, the publication investigated the question: “How much of your audience is fake?”. That is, in the world of automated ads, are the eyeballs that are claimed to reach website—and thus the ads on it—actually real.
There are other problems with this kind of ad buying. Badly-targeted ads, low quality ads, and simply too many ads on a page are common complaints of publications who don’t want their high quality content being cheapened by seedy, irrelevant or down market advertising. This tension hit a fever pitch late in 2015 when several of the internet’s biggest and most millennial-focused publications including Mic, Vox, Refinery29 and Vice vowed to stop using programmatic advertising and ad tech completely. Instead, they announced that they will either sells ads directly to marketers—thereby cutting out the middleman—or develop their own in-house ad tech systems to deliver better ads to their readership.
Of the decision, Mic CEO Chris Altchek told The Wall Street Journal, “We are not running any programmatic whatsoever. If you look at how the mobile ad industry evolved, for example, you have these incredibly low [ad prices]. It’s not super effective, and not a lot of publishers and advertisers are happy with it.”
This was a huge hit to this industry, as those publications are primarily associated with a millennial and digital native readership, who are the golden demographic for advertisers.  With such prime internet real estate going the other way, this has the potential to change the ad tech world and bring better innovations along. This will, hopefully, result both in better ads and better delivery systems down the line.
On a larger level, this situation points to the general state of crisis the internet seems to be facing when it comes to ads and eyeballs. With new and ever-improving ad blocking software cropping up regularly, many internet users are opting out of the eyeball economy all together, but still viewing the content that their eyeballs are supposed to pay for.
It’s become somewhat of a moral question for some developers such as noted programmer Marco Arment, who controversially decided to take down his popular iOs 9 ad blocking software called “Peace” just one day after launching it, to much praise and many downloads. As he wrote in his blog post: “ Ad blockers come with an important asterisk: while they do benefit a ton of people in major ways, they also hurt some, including many who don’t deserve the hit.”
While the future of ad tech and the online advertising landscape is uncertain at best, one thing’s for sure: there are too many players in the game for it to be resolved without much controversy. Like most things on the internet, it will likely develop via a mix of trial and error.