Steffen Svartberg, founder and chief executive of Cavai, reminisces about the moment advertising suddenly became a tech game. With tech fatigue setting in over the next 24 months, he predicts the record will soon change...
Can we pinpoint the moment when conversations about adtech began to overshadow the conversation about advertising itself? Presumably, it was at some key inflection point in the rise of Google – maybe 2004, the year when the search giant’s revenue hit $3.2bn, up from just $18m in 2000, and it suddenly became clear that the people with the technology had figured out how to win the game of advertising.
All these years later, the big winners remain largely the same, but adtech remains a stubbornly prominent part of the conversation around online marketing. We are a creative technology company ourselves, and it is normal that we should discuss the finer points of tech within our walls. But does the rest of the world really care? Shouldn’t tech be about more than just itself?
How long can we as an industry talk about the systems that are powering our digital ads? When print ruled the media world in the 60s, 70s or 80s, did we constantly ponder the printing technology that powered newspaper advertisements? Were aerials and cables and satellites our collective obsession when TV spots were the way to make the biggest impact?
As adtech approaches its own tipping point, I think we have an opportunity to change the record. I predict – I certainly hope – that we will see tech fatigue setting in over the next 24 months. And I think adtech may also be standing on the verge of a mega decade – an era of huge consolidation and large-scale roll-ups.
One result of this will be the rise of the software mega brand, just like those we see in every other consolidated industry, from CPG to travel to banking. In adtech, that phase is coming, and what it additionally ought to mean is that the service layer, the outcomes, will finally become more important than the back end we hear too much about.
I don’t believe I’m the only person who feels this. Look at the rampaging success story of S4 Capital and its “unitary vision” of a single, digital-only agency – “an engine of innovation and a source of agility” for its clients, in the words of Sir Martin Sorrell. This is precisely the right attitude. Clients don’t want a complicated roster of tech providers – they want their challenges met, their horizons broadened and their businesses improved.
What we are seeing here, and what we will be seeing much more, is platforms with a consolidated demand- or supply-side stack managing the overall communication and sales needs for a client. Advertisers and agencies want fewer partners, and those they choose will bring strong, unique proprietary tech to address a brand’s full array of communication needs.
Technology is everywhere in this new model. “Tech companies look at the sky ... others look at their boots,” wrote Sir Martin in S4’s 2020 annual report – but the point, both for brands and their suppliers, should be the service and the results it generates, not the tech itself.
This will be the decade in which point solutions that have been drawing headlines for so long will take their place among consolidated tech offerings; when we will stop talking about the way we serve ads, but rather where, when and why we serve them – dwelling on the science of advertising, rather than the kind of science that pushes technology along. And it will also be the decade when mature, newly mega adtech firms move into a position where they can grow and execute their own M&A strategies – rather than simply waiting for some bigger tech player to swoop in and add them to an already bulging portfolio.
This all means, of course, that adtech suppliers without a technical and commercial consolidation strategy will most likely be redundant within a few years. In a fast-changing marketplace, fancy one-trick ponies won’t cut it for long.
The same applies to all of us. So when, in concluding our recent funding round, we talked about “the big opportunity that lies within conversational”, we mean it, of course, but we know that the seeds of richer success lie equally in scale, infrastructure, tech development, new products and rapid integration.
It’s in that spirit that we contemplate a mega decade: thinking big, not small, and not just about the tech, but about the many, many more interesting things it makes possible.