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The advertising agency giant Dentsu says it plans to work with fewer ad-tech middlemen when executing digital ad buys.
It plans on negotiating directly for ad space with major publishers as it looks to eliminate costly fees.
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That's most likely bad news for a slew of ad-tech firms that are already trying to survive in a pressured, cluttered marketplace.
Advertising agencies are under intense pressure to make sure their marketing clients' budgets are being spent safely, efficiently, and effectively. So they're cutting out the middleman.
Ad - Agency - Company - Dentsu - Aegis
The ad agency holding company Dentsu Aegis Network, through its digital subsidiary Accordant Media, is looking to buy more ads directly from web publishers, cutting out several layers of ad-tech companies that have traditionally acted as a go-between in digital ad deals.
Kenneth Brinkmann, the executive vice president for marketing and business development at Accordant, told Business Insider that the company was pushing for a level of preferred access to ad space on several top media companies' websites. The company is promising its clients that these arrangements will reduce fees paid out to ad-tech middlemen, particularly a collection of companies known as SSPs, or supply-side platforms.
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These ad-tech firms typically bundle together ad inventory from multiple websites and make that inventory — often coupled together with data — accessible to buy via powerful software.
But according to Brinkmann, these SSPs and other ad-tech firms have for years charged advertisers exorbitant, often hidden charges. So his agencies are starting to offer their own digital buying tools for minimal cost.
Fees - Amounts - Marketers
"We are taking out pretty massive fees and reducing them by staggering amounts," he said. Marketers, he added, will "know exactly what you are getting and why."
Brinkmann predicts that most of the other major global ad agency holding companies will follow a similar path this year, embracing what industry insiders are calling supply-path optimization.
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