In today’s adtech landscape, where everyone is beating the drum on transparency and self-service, there are still vendors out there with sizable businesses that operate as fully managed services. But this model has undeniably been on the downswing. Why? And does this mean that the future of the industry will be dominated by self-service? That’s what many pundits predict. But I want to present an analogy that points to an alternative future.
Fully managed models have a compelling value proposition: they sell the end result vs. the means to get there. They sell performance vs. self-service. They sell Uber vs. driving yourself. What’s fascinating is that while the ride-sharing industry is exploding as an alternative to renting or buying cars, the adtech industry is moving in the opposite direction, towards self-service.
While many of the pros and cons of both approaches in each respective industry look similar (i.e. cost, convenience), there are some interesting differences:
- In adtech, there’s an entity in the mix called the agency. And boy can the agency muck things up around trust, cost, and value. In the transportation world, customers are usually dealing directly with the ride-share company or the rental car / automotive company. The cars / drivers are analogous to the publishers and their inventory. There’s no entity involved with as much leverage and as big of a business to support as an agency.
- The outcomes in adtech are variable – performance, brand, awareness, reach. In the transportation world, the outcome is simple – get me to where I need to go.
- Because digital advertising is made up of intangibles like impressions, clicks, conversions, there is a lot more room for fraud (as we’ve seen). While mistrust and fraud can exist in ride-sharing as well, given its technological nature (ever had Uber send you a receipt for a ride you never took?), at the end of the day you’re getting in a car and going to a destination. Which is a very tangible, real-life action and outcome. In addition, the major players are generally trusted to do what they say they will do and make good on when they don’t. And that leads to my final point…
- In the ride-sharing world, there are only a couple of dominant players (Lyft & Uber in the US). This creates tremendous simplicity for consumers and an understanding of exactly what they are getting from providers.
The common theme in every point above is that transportation is much simpler than adtech. And as a result of this simplicity, there is greater transparency and trust between consumers and providers. That doesn’t exist in the adtech space, where there is a ton of complication, and as a result, confusion and mistrust between buyers and sellers. Which is why the industries are driving (ha!) in opposite directions. In adtech, marketers want the keys to the car because they don’t fully trust the car or the driver.
This makes me think – as adtech continues to consolidate (which will lead to simplification) and the industry continues to put more energy and resources into tools that will grow marketer trust, will the pendulum swing back the other way? Will marketers eventually feel confident enough in fully managed models to reap their benefits? I can see it happening.
After all, it is a lot easier to get in an Uber than it is to drive yourself there.
