When the Music Stops.

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When the Music StopsRecent industry rumblings describe widespread confusion about the many ad technology players crowding the landscape today.  More ominously, we’re hearing about the bloodbath-to-come when consolidation strikes the ad-tech sector.  Perhaps the only thing surprising or disturbing about either of these stories is that they would surprise or disturb anyone at this point.

Digiday’s recent multiple-choice, ad-tech quiz challenged industry know-it-alls to guess which tech vendors made which claims about themselves.  I’m pretty sure even the companies’ own marketing teams couldn’t have passed the test, since the slogans all played out like some bizarre Haiku competition in which all poets had to use the same half-dozen words:  “….platform…leading…real time…programmatic…transparent….”  There quickly followed Jack Marshall’s warning that the ad tech shakeout is coming, conveniently titled “The Ad Tech Shakeout is Coming.”  According to Jack, once-plentiful VC money is drying up and many of the big suitors – Google, Yahoo, Facebook, Microsoft, Amazon – have already chosen their ad tech prom dates.  Now where have I heard this before?  Oh, yeah!  From LUMA Partners CEO Terry Kawaja:  the entire reason he created the now-ubiquitous LUMAscape chart was to illustrate how wildly-crowded, incrementally-absurd and ridiculously over-capitalized the ad tech M&A market was.  And now it seems the music might be stopping soon and there aren’t so many seats left to grab.

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So what’s an ad tech company to do?  Well, first, nobody’s asking me for my advice; I’ve never spent a day managing a startup company.  But I do talk to a lot of people in this world and I’m a pretty good listener.  So for whatever they’re worth, here are a few suggestions for ad tech players looking to survive the impending chill:

  1. Figure out who you serve.  Fast.  Hedging your bets by trying to simultaneously serve every possible customer who could ever buy anything from you is no longer viable.  What used to be “versatile” is now just “unfocused.”
  2. Fewer logos, more activation.  Every ad tech player has a PowerPoint slide jammed with “partner” logos, but it’s debatable how much partnership is really going on.  Just because you dropped a tag or pixel in their stack doesn’t make them your partner.  Get focused on relationship yield and how you’re going to truly activate (and monetize) your best customers.  Then stop talking about all the others.   Nobody believes you anyway.
  3. Focus on the experience.  You might think it’s all about technical superiority.  And you’d be wrong.  Most of your potential “partners” are probably just trying to keep up with the technical jargon and nuance.  What they remember – and what they pay for – is a superior business experience.  Get stuff done.  Keep promises.  Anticipate.  Advise.
  4. Start with the customer and the problem.  Throw out all those “who we are” slides leftover from your VC pitch deck.  On slide one, tell the customer what you know about them. On slide two, identify a problem you think they might have.  You may think you have to first introduce your company and give them context but, again, you’d be wrong.
  5. Run it like you plan to stick around for a while.  You just might have to.

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