Razorfish’s Lanctot: Beware Ad Tech Middleman

The overloaded Web of VC-backed digital media intermediary companies is due for a shakeout, just like the ad network business, where only the truly innovative and value-creating companies have survived.

Jeff Lanctot, chief media officer at Razorfish, told Digiday’s Data Marketing Summit in Deer Valley, Utah, on Tuesday that the glut of data targeting, optimization, data management and other intermediaries is unsustainable in the long run.

“When there are significant shifts in an industry landscape, like the reinvention of online media, that invites a lot of new participants,” Lanctot said. The last time that happened was during the post-dot-com era, when publishers reduced sales staffs but were faced with a growing supply of inventory. In stepped ad networks to fill the void. Then you saw a backlash. Publishers got more educated on modern digital selling tactics and started to find their footing, while agencies started to build trading desks.”

Now, in the data/targeting/DSP/platform ad tech glut, he predicts the same sort of pattern to unfold. It already seems to be happening, as Yahoo moves to cut off re-targeters and other resellers. “With all the intermediaries in the exchange space, Yahoo and, I expect, others are going to want to squeeze that. So [these intermediaries] “have to be truly differentiated and ad value. A lot of others are going to be squeezed out.”

Below is a video interview with Lanctot on why he thinks there will be fewer ad tech middlemen.

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