Don Marti

Sat 17 Aug 2013 12:07:58 PM PDT

Hijacking the Internet

Who's really hijacking the Internet?

Back in the day, the "agency discount" for advertising was 15 percent. That means that every time your company bought a magazine ad, the publishing company got 85% and the ad agency got 15%.

For a typical business or tech magazine, the subscription price paid for the printing and postage, and the advertising paid for the reporters, editors, photographers, and designers. And things pretty much worked. Business or tech media wasn't the most lucrative job in the world, but people could make a living at it.

Now let's look at the publisher's share for web ads. It's about 25% to 45%. Instead of an ad agency spending 15% of your ad budget on salaries, rubber cement, and three-martini lunches, you now have a bewildering array of adtech middleweasels spending 55-75% of your ad budget on Macbooks Pro (is that even the right plural—hell with it, copy editing was the first thing to go) artisan coffee, Big Data, and gourmet food trucks.

It's an example of the Internet making an industry less efficient. Which should be in an Economics paper somewhere, but really, we need to find honest work for software developers now stuck in adtech. And for real advertisers to quit the adtech-captured IAB, but you knew that.