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Why Ads? An Advertising Manifesto

Ionut Ciobotaru
29 min readApr 17, 2024

Contents:

Love Hate Relationship

One of the first customers of my first business came via ads (adsense!). I didn’t give it much thought then and only recently remembered it;

Since then, it’s been 15 years, working in and around advertising in one way or another. Many people around only lasted for a couple of years working in the industry before moving on, while others are hardcore fans and have been going at it for far longer than I have;

I always wondered why there was such a divide. Why such a hate-love relationship with this industry; I haven’t yet managed to get to the bottom of it, but it did open up really interesting conversations. Debates around consumerism, capitalism, free markets, privacy and the use of personal data as well as the power of “free” content or the open web.

I won’t pretend I have answers for everyone, but I’ll share the answers (and the data) that keeps me invested in this industry.

From how it helps small and large businesses; to how it contributes to the economy, job creation and how fast it is moving (one of the fastest moving industries). Not to forget, from how fun it is (almost like a digital playground) and to how some of the smartest people I know work in this industry. Lastly, some answers on the adtech tax, that is actually a red herring.

Big(ger) Picture

Before we dive deeper, a bit of context: the overarching job to be done (by advertising) is to get products into customers hands;

“Poor distribution — not product — is the number one cause of failure.” — Peter Thiel

“The best product doesn’t always win. The one everyone uses wins” — Andrew Bosworth

via ReForge

More broadly it is part of the Marketing discipline; And while several marketing strategies and goals can be achieved through advertising, it is not the only means.

Depending on vertical, marketing can cover research/planning/PR/content and even community/social media management.

representation of diverse marketing topics

Where advertising shines though is compressing the distance between a product and its audience; This can be done across the “funnel” — which is composed of different stages starting from broader to narrower: Attention, Interest, Desire, Action. I like to think of the funnel more as a loop (see image below) — which makes it more intertwined with marketing and the modern martech stack especially when we talk about personalization/engagement/CRM for example)

representation of the marketing loop

LUMA Partners has a good overview of both the overlap and the different (listed) companies in each group — where AdTech focused on the execution of advertising tactics and its related ecosystem and MarTech is focused on content, analytics, CRM

As we focus on the latter it is important to look at advertising, much like any other human invention, as a tool (or set of tools in this case). As such, it can be used for positive (read value creation) use cases or for negative (value extraction or even destruction) ones; And we’ll discuss both at length in the next chapters;

The Good, The Bad and the Ugly

Let’s unpack that last statement. It’s easy to hate advertising. Especially in the digital age — when we are exposed to hundreds of ads per day, though the lingering myth is that it’s in the thousands.

More than that, they are either annoying, disrupting the experience, irrelevant or even downright misleading and / or inappropriate.

from the AppStore
from Reddit

Not only that but many times we hear about questionable privacy practices like in the Grindr case. While at the same time, there is always another side to the story.

Government regulations are meant to cover precisely these gaps (more on that later)

And that’s just the consumer piece; Even within the industry we have things like the adtech “tax” (meant to reflect the percentage share of ad spend that goes to intermediaries) or misuse of data.

For each negative story around advertising there are millions of requests per second; billions of ads per day being delivered either in the open web (13 million QPS according to TTD) or within walled gardens, that go unnoticed for the mainstream media, but that are noticed by consumers and (sometimes) interacted with (measure via KPIs such as CTR or CR; CPI/CPA);

The industry is relatively transparent and has been growing more transparent and more efficient each year. Starting with the Prebid open-source publisher stack to things like the IABs TCF 2.0 focusing on consent and user data management or the TTDs Open Path that focuses on supply path transparency/pricing; There are many more examples like this coming from associations, consultancies or even indie hackers.. that is.. If you want to go dig around it;

Of course where there is money there is fraud ($42bn at that according to Dr. Fou). However this is applicable to any industry, and in some, the narrative is quite different with the blame resting mostly on the users shoulders. At the same time in finance/payments it is accepted though it’s at even higher scales (MasterCard estimating $48bn). That’s just the obvious parts, if you look deeper there are MFA websites, bots on Facebook, review and click farms and so on.

But again those are drops in the bucket or ocean. Not only it didn’t stop Google, Facebook or Amazon but incidentally it even got Apple to jump on the bandwagon. Like the say for investments: it has been priced in. Of course someone pays for it but the whole industry is working to decrease that cost for its participants and it seems to be working. Meaning the industry is growing, delivering value to customers and consumers alike

As of this writing the LUMA Indices companies performed relatively OK in their category, but this is mainly the open web. The bigger gains have been made by Google, Facebook, Apple, Amazon and Microsoft (a lesser known giant with almost $ 30bn in ads business with Linkedin, Bing, and probably more with Activision). Each of them running top advertising businesses and dominating the advertising ecosystem as well as the S&P top performers list.

Many more are coming though, with Netflix being the latest significant addition (though not yet substantial in revenues). As Eric puts it, everything an Ad Network, and if it’s not, it will surely become in due time.

So if there is smoke (e.g. financial results) there must be a fire, right? As it turns out, entire industries rely on Ads; The AppStore Economy (or “Games Store” economy) relies relied mostly on UA (advertising) for growth — and we’re speaking of an annual turnover probably over $100bn. The overall Gaming industry (which is 60%+ mobile) is larger than Hollywood and Music combined (including IAPs and other platforms!).

Another industry, ecommerce, relies heavily on Facebook / Instagram, Google and Amazon respectively; Shopify Merchants wouldn’t reach $200bn in GMV without advertising. Similar things are happening on the Amazon platform where 80% of the sellers invest in advertising.

Not to mention retailmedia, which could be a topic on its own. Retail Media Networks expanded across categories — from traditional retailers like Walmart (doing $3bn+ in revenues) to mobility giants like Uber and gig-commerce leaders like Instacart and Doordash.

In the US the advertising industry spend represents around 1% of the GDP (wikipedia) — with an increasingly larger share of internet/digital advertising.

This holds true for most of the western world, and increasingly for the rest of the world.

On the investment side, like any industry that reaches maturity (read: IPOs) it cools down in some areas (web) while picking up in other areas (CTV, identity/ML), overall looking rather stable. YC seem to be less exposed, while on the other side we get specialized funds like First Party capital or targeted investment thesis as in the case of Greylock Partners.

You are the Product

Chatting with industry colleagues as well as unaffiliated friends & family members, I’ve heard this many times. Most of the time out of context; My response has always been that it’s a trade; a value exchange if you will; You exchange time (ads lasting anywhere from 1s to 60s) with money (you don’t pay for the content).

This works only at scale; That’s why niche products (ex: Headspace $12,99/month; almost as much as a Netflix subscription at $15.49) might cost relatively more (based on production cost/delivered value) than mass media products (Disney+, Spotify) on a per user basis. Which means the COGS vs price ratio might still be similar;

For example if an indie developers spends a year without producing any income and then their game only generates a few hundred $ (most of the times less) — that’s not really sustainable (this scales to companies — as revenues/nr of employees or as fixed costs) — which means they would start charging a license/fixed price for the game — as for an advertising model (let’s say 1$CPM) — they would need 5000 users per day, seeing on average 10ads per user to get the minimum salary in Germany (approximated to 1500$). That’s a LOT of users..

This is relevant because advertising has a minimum scale threshold (even for example TV/Broadcast) where it starts working as a business model. Data is not the new oil, but the new sand — and not all sand is silicon!

“Like silicon which makes up 28% of earth’s crust it is ubiquitous and is only made valuable by an enormous set of industrial scale processes” — The Information

And though distribution on the internet is practically free — that’s just the hosting cost;

The actual distribution is breaking out through the noise — and that is either through quality content (which costs time = money to produce) or well engineered campaigns / relying on algorithms/distribution platforms.

More than the hosting, the internet has accustomed us with “free” content. Now we’re slowly going back to the old traditional media days (read: subscriptions) — especially as buying power and disposable income increase; All is not lost though, FAST channels are coming to the rescue.

Soon enough, Everything will be a Subscription (once more) — maybe a future article by Eric?

With that context — what I see now is that the door is opening for user choice; Pay for Facebook? Or Youtube? Or any other previously “free” online service or tool?

Is it the best setup — hard to say — but at least it is the setup where the free markets and some regulation (platform + GDPR — more on that later) has gotten us.

Youtube and Duoling subscriptions

Same happens in the B2B world; Facebook started with organic reach for their business pages; Now it’s mostly paid with little to no organic reach. Brand name bidding (keywords) on Google or Apple Store search spark quite a bit of controversy; Amazon (Jeff Bezos) even originated the saying, now widely validated:

Jeff Bezos quote

All this to say that we’re all products of the economy and the economy is the product of our work/time. It’s a constant process of value creation, value distribution and value exchange; And though we say the costs are marginal (in the digital economy), personal costs/living costs are not zero and the machine needs to run/work continue buzzing to create the value we all rely on for our standard of living.

Life without Ads

Many times you (I) hear about businesses scaled without advertising (Elon being the most famous of the bunch)

Whenever I hear this I ask myself 2 questions:

  • How does your distribution work?
  • Are you leaving anything on the table?

Going through those questions I can’t help but wonder:

  • How much time does Elon Musk spend on twitter? (and what is the value of his time? Based on his net worth)
  • And how much money did he spend on the Twitter acquisition(and how would that look like as a cost center / investment on the Tesla P&L?)

If we sum those up we should get the value Elon puts in marketing + he already backtracked in the latest Tesla Q&A about trying ads

Another example is an entrepreneur close to me (Maor — are you reading this?), incidentally running an advertising/marketing company, who once said they haven’t spent one dollar in advertising. This, while they run a really nice weekly podcast and write extensive articles on their blog, while being relatively active on social media. Yes, this counts, as earned media vs paid media, but it’s still capital; social capital in this case, that plugs into other social capital via interactions, and those interactions = time; And time as we’ve just learned (though I hope we knew before) is money! (advertising is just one of the exchanges!)

The next myth to be busted is about advertising efficiency and waste:

My take is that the 50% is actually invested in learning; Arguably at the start we might spend 100% on the wrong audience or even wrong channel; I don’t believe we start fishing with the right bait and the right rod from the get go, I believe we perfected tools, invested time (=money), and over generations we’ve improved; Now arguably the iterations are much faster but.. We should always look at our goals: is it topline?is it bottom line? I am not saying we should waste money in places where we (or specialized teams/individuals) already learned not to.. BUT I am saying there is a price for learning, and we should not ignore it.

So how is life without ads? It’s like food without salt. It’s a critical tool in an important toolset; There are certainly ways around ads (ad blockers?) and there are certainly ways to make ads better (more efficient/effective) but in the end it all boils down to the same conversion. A conversion that is critically important and often forgotten.

Another example upon which I came up recently (though it has been on my mind) is Journalism. Turns out anywhere between most prominent news (journalism) outlets are supported by advertising in one way or another; sometimes majoritarily so — like Le Monde (45m visits vs 400k subscriptions); sometimes minoritarily so like New York Times. These well established names are already diversified by now with subscriptions, sponsorships/donations and sometimes state support. But a lot of the independent journalism — the mid/long tail — needs to self fund and in that process most of them revert to advertising for the majority of their income.

This brings a couple of thoughts to mind; First — if advertising would disappear — let’s take the example of Le Monde (with 500+ journalists) — would there be 70% less journalism? Less topics covered? Or would journalists just get 30% of their salaries? Would the best ones reconsider their careers? Things to think about…

Crossing the pond and traveling all the way to Silicon Valley we get another perspective:

“Marketing is like sex, only losers pay for it” — Antonio Garcia Martinez

Which is a quote from his book “Chaos Monkeys”, rephrasing in a spicier manner the startup mantra:

“if you build it, they will come”

One that note, Elon Musk said that advertisers are “killing” Twitter. Though I don’t believe that’s the case.. It does shed some light in the relationship between free information / distribution and advertising. (for better or worse)

Of course, the alternative is that users pay, but if 17% of France, for example, are at minimum wage and another 30–40% are middle class, but have different priorities (re subscriptions which tend to get out of control these days),is that a fair model for uncovering the truth? And distributing this info? (which is critical to an educated choice when voting?). As for Twitter, the numbers show a similar breakdown (though changing!).

Use Cases (Life with Ads)

Circling back to my own experience.15 years ago, Weebo was a company of 2 (or even one, before my cofounder joined me) and grew with ads. More recently, with Verve we’ve run campaigns for some of the largest brands,employing hundreds of thousands of people,such as McDonald’s. And across our portfolio we also helped SMBs (Match2One), app developers (DataSeat), covering almost the entire business spectrum or product lifecycle. There are many we didn’t cover, but I’ve seen work from friends or industry data, so I’ll share those as well.

  1. Zero to one (Early Stage)

This works, especially for digital products (ex: games), but quite well for testing physical ones, as well (eComm/D2C). You can test messaging, landing pages and even how your users react and interact with your MVP. Some have taken it a step further and test ideas (pre-MVP) and gaming concepts,where the creative (and targeting!) does the heavy lifting in understanding user intent through engagement. Soft launches are another example,which means launching a product in test markets like CA and AUS, that have similarities with larger markets. And those are just the examples I know, I am sure there are others.

2. One to ten (Working product)

Once the product is out the door fast iterations and improvements are the name of the game; This is mostly about scaling within the problem space and customer segment and setting the foundations for a growing and sustainable business. With a working product, a decent onboarding and a known set of customers,it’s time to put fuel on that fire.

Some ads will work, some audiences will not work, finding and understanding what works and which customers subset can be supplemented with advertising (especially due to it’s automated nature and especially for digital products, eg for it’s fast feedback loop)

For example, this works for games with good KPIs, for product led Saas businesses or for ecommerce products with validated market fit. Once you have a couple of paying customers the next goal is to get more of those customers. Advertising can be one of the most effective tools for that goal.

3. Ten to one hundred (Scaling)

With that said, once the machine is rinsed and working — that’s when the world of (paid) advertising truly opens: multiple channels (like CTV or Retail Media); multiple funnel stages (awareness, consideration, re-engagement etc.), etc..

Its goal? To explore strange new audiences; To seek out new creatives and platforms; to boldly go where no ad has gone before — PubNative circa 2017

In short: help a company maximize its market share and remain top of mind for its target customers.

Almost every great company I know relies on it and I don’t think there is a way to dominate the market without it. One great example supporting this hypothesis would be the SuperBowl ads. The other example being the amount of investment going into advertising (400bln+ yearly just in digital which is roughly half of all ad spend)

4. Giving Back

On flights, they ask you to “put your oxygen mask first”. Our industry is relatively stable and healthy. So it’s time to give back. And many participants have done so, and done so consistently. This won’t be an exhaustive list, but some of my favorite examples of #ads4good.

First of all we have AdTech Cares, which started as a consortium of companies donating inventory and time (creatives, media buying, etc.) to combat misinformation during COVID and expanded its focus against inequality, promoting diversity and other social causes.

Then we have Ecosia — an ethical search engine that uses all its profits to plant trees all over the world.

Third, we have Good-Loop, which incentivizes brands to the “good side” so to speak by facilitating investments (and messaging) into good causes.

Last but not least, we have companies like Scope3 that help the advertising ecosystem have a hard look in the mirror in regard to carbon emissions in order to start taking action. Many of the agency holding groups (that control most of advertising spend) have both sustainability and DE&I goals. (ex: WPP, Publicis, etc.)

An honorable mention that is less related to ads, but that did leverage donated ads (via PubNative) in its early days to grow- ShareTheMeal, have a look and I’m sure you’ll also start supporting.

This is not an exhaustive list,only the main initiatives I follow. I am sure there are many more.For a dose of positivity and “good” news, please do follow those companies.

Why NOT ads? (the case against ads/advertising)

“Advertising has us chasing cars and clothes, working jobs we hate so we can buy shit we don’t need.”- Tyler Durden, Fight Club — Chuck Palahniuk

First of all we should recognize that advertising is not a magic wand that creates business results out of thin air. Just like any other tool, it’s sometimes used as a hammer in search of a nail (ex: Casper, the mattress company) — but that can only get you so far.

Truth is there are times it works and there are times it should not be used (won’t solve for broken unit economics) while there are also times where the business model would not exist without it (D2C, Hypercasual).

There are ways to brute force your product into consumers hands via advertising (see The Good Bad and the Ugly chapter) — but that fits the same narrative (it’s a tool)

For example if you have an old game (or a niche audience that has already been exposed) — it will be impossible for advertising alone to drive growth on its own; If you instead couple it with content releases and graphic updates/ remaster — it might move the needle (re-engagement);

Additionally, it rarely works alone (see context!) — but rather in concert with other efforts such as sales, marketing (content, social media, etc.); Sometimes those efforts are enough (I’ve seen it myself!) and you can get decent growth and results without spending a dime; Many companies chose to focus on those and sometimes that’s the right choice — ads can be the last resort, or the final frontier if you may. A frontier that if passed may be hard to turn back from, so surely thread carefully.

In short, if you manage to solve the JTBD (Job To Be Done) via other means: direct sales, content, SEO/ASO, community/social — and you see enough growth there — you might not need ads, or at least not for the short to mid-term.

Not only businesses have alternatives, but consumers too; Facebook launched a paid version in EU, and there are search engines that run without advertising (Brave Premium, Kagi, and the now defunct Neeva). Most of these didn’t pass the test of consumer adoption at scale, or at least not reached anywhere near the scale of their ad supported counterparts; But this last point is less about commercial success and more about consumer choice; And the support we get in making the right choices or at least avoid the bad ones via regulation (for example Google forbids Tobacco Ads and same holds true for Facebook).

Black Mirror — Fifteen million merits

But regulation is slow, and sometimes misses the point (more on that next); In the meantime we see that research is catching up with the adoption of technology and the larger platforms implementing measures that temper the Attention Economy such as Digital Wellbeing and ScreenTime

Lastly — and to close this point — claiming that advertising influences us should be also taken in context of — word of mouth — other people influencing us, or media (TV, news, etc.) as well as Social Media. In that context, advertising (as measured as nr of seconds, or % relative to the other mediums — is probably the least influential in the bunch) — I believe in all of these we have (or should have) agency to make the right choices — and in the choices we can’t make right to be supported by (government) regulation.

Regulation

I’ll touch this only lightly as I am more of a practitioner than a theoretician; There are 2 points I strongly believe to be the role of regulation as it relates to advertising:

  1. Should foster competition and guard against monopolies (in the interest of consumers but also I would argue economy at large)
  2. Should help bridge whatever trust gap there is between the ecosystem and consumers (be it attention economy or surveillance capitalism) — help put that behind us and allow the industry to focus on creating more value

Europe focuses on the first, while US focuses on the latter, but they are intertwined; And there are some differences in regards to data privacy as well (opt-in vs opt-out)

“We want to ensure a digital ecosystem where people have a genuine choice over the service or product they prefer, with a clear understanding of how their data will be used to inform that decision. And we want businesses to compete on an equal footing to attract custom, with transparency in the way they operate to inform meaningful choices. “ — Quote UK CMA — page 3

The two main categories of regulation relevant to advertising are:

  1. Privacy Regulation (GDPR, CCPA) — focusing on how user data is obtained, stored, and transmitted;
  2. Digital Ecosystem Regulations (DMA, DSA — mostly in EU for now, though there is a DOJ case against Google in US) — focusing on large consumer platforms, digital marketplaces and online payments

On top of that we have what I call — Platform Regulations — which are mainly steps taken by the larger platforms to proactively adhere to upcoming regulations; For example:

  • SKAN & ITP — iOS — regulating the mobile ad identifier in iOS and cookies/IP tracking in Safari; it also includes basic features and technologies for advertising;
  • Privacy Sandbox — similarly regulating how/which data is available to 3rd party app developers and website owners in Chrome and Android: they also have multiple technologies enabling the open advertising ecosystem to remain effective after the transition

A. In terms of privacy regulation I believe there is no doubt that privacy should be protected and is a human right; Where I think there are doubts is in the implementation of such regulations; Is a pixel or a random identifier PII (personally identifiable information); And is the current push towards emails as log-in information the best way forward or are subscriptions the way? And until we have a better way, does it make sense to enforce solutions without understanding the downstream effects?

The internet works in different ways than old school media — from production costs to distribution costs and to pricing; regulation should not blindly follow old notions and definitions just to adapt them to the digital ecosystem, but I digress…

Few data points that are worth sharing:

  1. Worse consumer experience (annoying cookie banners recognized by EU, with 70%+ of users being annoyed — though in a small study sample in Germany)
  2. Big Tech benefits with Google and Facebook increasing market-share
    a. CMA UK- findings on the topic
    b. Nuanced view from IAB EU Report
    c. Digiday report on this
  3. Less money flowing to the Open Web
    a. 30% gap in monetization on Privacy Sandbox users and 60% worse for Safari users
    Note: this doesn’t mean less ads! (arguably it could mean more)
    b. iOS — not only CPMs are down by almost 30% but fill-rates also took a nosedive -
    - Which means the actual revenues for publishers and iOS developers decreased significantly
    - In this process FB reportedly lost 10 billion and while I don’t cry for Facebook missing those numbers — the impact has been felth more by App Developers and eCommerce businesses
  4. And users increasingly getting “paywalled” (eg subscriptions) as an alternative
    a. Washington Post — 90$/year for EU
    b. Facebook Subscription (9.99/12.99 EUR/month)
    c. Vox — calculated it at 35$/month — but that’s if everyone subscribes.. The reality is that the cost will be much higher
    d. And many many more..

B. In regards to Digital Markets Act — feels too little too late and seems that Apple is avoiding them already (charging a whooping 27% for out of store payments and making it grudgingly painful for the user experience) — which means — consumer are not winning (from a free market — which should: lower prices, better service) and monopolies are not dismantled (but stuck in definitions) — while value capture remains in the hands of a few companies;

There are many opinions on this; Coming from Eric Seufert to David HH and from Tim Sweeney to Daniel Ek.

None of them lauded Apple’s changes in the slightest. And I haven’t found anyone who did.. It’s still early though and the ball is in the EU’s court right now.

An old example I remember well: Internet explorer; I was a web developer back then and it was a subpar product not adhering to standards but owning much of the market share; And this was because of distribution (bundled into Microsoft Windows).

This is what happened after EU’s intervention in 2010 — and the subsequent browser choice pop-up in Windows:

Indeed these challenges are hard to even explain, and even more so to tackle. Still, we pay significant taxes to have competent people solve them for us (and the greater good?) — which means we should expect and demand more!

For further reading and if interested in the topic here are my top resources:

Lastly, I’ll close with a quote from Antonio Garcia Martinez which relates to both points while describing also the US/EU divide:

“Despite the fact that the entire continent was unable to itself produce even a single consumer Internet company of global scope, Europe did reserve the right to control how those (American) companies did business.”

Sustainability

In regards to self regulation — there is an adjacent topic brewing in the industry. In the long term this will serve all consumers and the economy (read: businesses) will equally benefit from it; We’re talking about sustainability (coupled with DEI); It’s a main responsibility for most advertisers and most companies that run on ads have made significant pledges

This goes to show that these tech companies (advertising giants) are spearheading the efforts required by the Paris Agreement. You can follow their early reports for detailed data.

Most of the large agency holding groups have made similar commitments; with WPP leading the charge and aiming for net zero from operations by 2025 and across the supply chain by 2030; Publicis is also aiming at 2030 for net zero emissions and similarly for Omnicom. These and many more are part of the AdnetZero Initiative — which aims net zero emissions from advertising activities and it’s supply chain / across the board

The independents have also joined the fray — and though not as bold in setting the deadlines already, a couple of initiatives have already started. From assessing the emissions of the supply chain to investing in green media and reducing waste

Here is how the AdTech Greenscape looks like, by Scope3:

AI — Advertising Intelligence

the machines that power the machine

This would not be complete without at least touching the technology part of the industry and how it intersects with every major technological shift; We’ve seen it in the OG internet — aka web (Magnite, Index, TTD, Appnexus) — we’ve seen it in Mobile (Applovin, Liftoff, Unity, etc.), somewhat in crypto (Spindl), and we’ll definitely see it in or with Generative AI.

Though Generative AI x Marketing is a rather new field, predictive AI/ML use is rather “old” (in digital / tech terms) probably close to two decades; Across the whole supply chain — from forecasting, to analytics, to delivery, audience modeling, to optimization/ recommendation and to measurement and fraud detection, almost every component of the adtech (and to large extent martech) is powered by ML and algorithms;

This is just a high level overview — there are so many others across the supply chain: supply shaping, bid optimizers, bid predictions, user value prediction, etc…

Almost every major advertising company has (or had) a strong tech foundation with similar characteristics or constraints:

  • High throughput
  • Low latency
  • High volumes or data
    - Sometimes low volumes and cold start challenges/trade-offs

One of the main reasons I hear my tech peers being excited about this industry is challenges and solving them at scale (PubNative had as many concurrent users across the platform as Twitter and Snapchat combined — at any given time).

At one point I was with Dirk (Freytag) and Martin (Karlsch) — if I am not mistaken on the stage of a Data Science event (Dataconomy) and we got asked:

“why do smart people (like you) work in Advertising” — conference attendee

Took me a while to write this article but I hope that it will find it’s way to whoever asked us that question — though I believe we shared the most important points during the panel also (which are highlighted above)

Despite the naysayers, advertising continues to break ground — especially on the privacy front; Sometimes led by Big Tech — see the Privacy Sandbox — and sometimes by small tech building on-device ML for example ATOM — which we’ve built with the team at Verve or Number Eight and Context SDK in which I invested in.

The recipe differs but the ingredients are somewhat similar:

  • Customer challenges (programmatic initially wanted to just solve a yield problem — via a marketplace of unsold inventory; One could argue that header bidding is a return to form — especially in mobile). These challenges span across different customer groups (advertisers, publishers, even consumers!)
  • Build robust infrastructure (cloud, on prem) and stable + scalable backend services
  • Advertising companies are probably responsible for a large share of compute (cloud + on-prem)
  • Process Data at Scale (understand which data is useful, which not; leverage feedback loops)
  • Make decisions in milliseconds!

Notice that advertising is merely a solution to certain challenges — and certainly not the only solution — as advertising (and marketing) interact with other business models (subscriptions, IAPs, etc.) and other facets of each business (like sales or finance or even HR).

Still, I am mentioning this for a couple of reasons:

First — that advertising does move at the speed of most bleeding edge technologies out there and sometimes even breaking ground (ex: in personalization)

And Second — that this technology is built by the talent pool in our industry; Talent pool that is both passionate about the technical challenges we solve as they are by the (positive) impact these technologies have on the economy and its constituents (businesses, customers/people)

The People — The Builders

Which brings me to probably the most exciting part of this piece. And that is taking a glimpse at its participants. I assume every industry has its highlights, but i know this one more than the others, so I’ll be happily biased.

We have builders from the early days — before digital advertising was even an industry. Some are loud and evangelize it, others are silent machines running in the background. Skills span across product, engineering, sales, marketing, account management, HR, finance, etc.. Everyone is a builder and the machine needs all its components to function properly.

I’ve selected (more via my memory rather than an objective process) practitioners, entrepreneurs, executives, consultants/freelancers, analysts, investors, journalists and so on.. Some I know from far, some I know from the other side of the screen and some I’ll forget to mention. These are people I get inspired from, some I aspire to be like; some I follow online and some I’ve worked with closely. The goal here is to give anyone outside of our industry a glimpse into its people. I’ve linked either their public profiles (linkedin or twitter) or some podcasts/clips or articles I found interesting.

So, in alphabetical order:

Alex Cone, Alex Pham, Alex Savelyev, Alex Yazdi, Allison Schiff, Antonio Garcia Martinez, Ari Paparo, Barry Adams, Brian O’Kelley, Chandra Hill, Ciaran O’Kane, Clair Rozanin, Daniel Heer, Daniel Nathan, Dilpesh Parmar ,Dirk Freytag, Ekaterina Rabe, Eran Udassin, Eric Seufert, Eros Ponte, Felix Braberg, Gosia Adamczyk, Hoi Ming, Ilya Baklanov, Jeff Green, Jeremy Bondy, Jordi de los Pinosi, Kostyantin Stephaniuk, Kristina Prokop, Maciek Wiktorowski, Maor Sadra, Mike Brooks, Moti Tal, Neil Richter, Oliver Dragic, Pan Katsukis, Paul bannister, Peggy Anne Salz, Ragnar Kruse, Sameer Sondhi, Shawn Riegsecker, Sylvain Gauchet, Thomas Petit, Tim Koschella

Additionally, a great list can be found on Liftoff’s Mobile Heroes initiative. Do have a look!

I probably forgot many, and though they are not in the list (which I’ll take the liberty to update from time to time) they are certainly in my Linkedin, email or phone contacts!.

And if you’ve checked some of them, I recommend checking some industry “literature” to go with it. We are what you eat read in the end.

In terms of newsletters I often read: MobileDevMemo, U of Digital, ExchangeWire, AdExchanger, Growth Gems, Growth Croissant, Next in Media, The GameDiscoveryCo, Digital Native, Stratechery and Benedict Evans (the last few are not advertising specific);

And in terms of podcasts I recommend: Marketecture, Two and a half Gamers, Mobile User Acquisition Show, Podrick the Podcast, BeetCast, Deconstructor of Fun, Level UP, MadTech Podcast, Paleo AdTech and AdExchanger Talks.

If there are great resources I missed and I should be reading/listening to, don’t hesitate to drop them in a comment!

Conclusion

Having covered the people part.. The only thing left to do is to wrap up this piece.

  1. Just a tool?

Advertising’s raison d’etre is to help businesses find their users and users find the products they need or want.

Is advertising (as a business model and as an industry) perfect? Certainly not, but just like democracy is the best system we have so far. Will there be better ones? I think so, and as our quality of life increases and together with our disposable income we make choices for a greener future, for sustainability and for an equilibrium between our needs, the economy and businesses, as well as the regulators.

Like any tool (manmade or not), it can be used for nefarious purposes, as well as for good (AdTech Cares) and at least based on its economic impact, I would argue its added value and it is definitely positive so far.

There are, of course, other tools that can achieve similar goals (subscriptions?),but each of them have pros and cons and so far the market (and consumer choice) has been leaning towards advertising in some of its larger platforms.

There are other options like state supported media via taxes, but so far we haven’t seen those pushing the boundaries of innovation or becoming a strong economic engine.

Another option is donations (see Wikipedia or ShareTheMeal),which certainly works in some cases, but it is hard to make it the main business model for almost any industry.

2. Regulation

And while regulation seems to always play a catch up game, we do have to trust in the process even if sometimes it seems we’re taking some steps backwards in order to move forward. This is just how learning happens in humans and in industries (stumble, fall, pick back up, walk/run)

3. Misunderstood

I sometimes feel it’s a misunderstood industry! Alot of it because of the media echo-chamber, which is a natural human echo chamber. In the sense that we are more attracted by sensationalism and click bait titles, rather than plain but objective ones.

For example, did you know that an ecommerce business breakdown looks quite similar to the adtech supply chain fees breakdown? Nobody calls that a tax 🙂

En Fin

Advertising is more than meets the eye. There are many ingredients that go into it; There is creativity, passion and a lot of technology behind the scenes. In the end it is a product of the free markets, a tool that is not for everyone — some people like cars, some like dogs… I like Ads: as a tool as a business model, as a career. And I know there are at least a few others like me out there.

Thank you to all who have reviewed my earlier drafts: Alex S., Chloe, Alex. P, Hugo, Eka, Sameer, Chas!!

Marketing
Advertising
Sustainability
AI
Regulation

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Ionut Ciobotaru

Written by Ionut Ciobotaru

247 Followers

blogging, developing, entrepreneuring - not necessarily in that order

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