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Understand the Advertising Ecosystem, Not The LUMAscape

Understand the Advertising Ecosystem, Not The LUMAscape

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Advertising industry insiders point to the LUMAscape advertising ecosystem map as proof to why the companies they represent simplify the confusing nature of the landscape. The sasquatch reality of logos proves very little without understanding the giants of industry and the context of how the money flows.

Advertising at its core is brand driven. Agencies are brought on as trusted relationship and money managers for advertiser clients. Technology is the platform for distribution of creative ideas, measurement, and delivery to digitally connected consumers. Somewhere along the way, audience aggregating publishers and enabling technology connectors offer to exchange consumer value for branded advertising dollars.

To build an end-to-end advertising solution from marketers to consumers requires enormous market share and reach. Google as an advertising technology vendor sees the largest share of impressions by volume. Google as a single entity controls roughly 70% of the online advertising market. This includes both search and display. With over $50 billion dollars in annual revenue, Google derives 95% of its overall revenue from advertising. It’s easy to understand the online advertising ecosystem when you’re in an unique position of seeing both sides of the market.

In addition, the advertising ecosystem is not a fluid horizontal distribution of dollars. Online advertising works from a top down waterfall approach starting with media buyers and trading desks then flowing into established relationships of ad networks, audience aggregators, and supportive publishers. Anything in-between is akin to a boulder attempting to hold back water in a rushing downhill stream. The middle of the landscape focuses on increased measurement and analytics deriving consumer insights, optimization technologies applying rocket science to deliver higher returns on advertising investments, and scalable infrastructure.

As a mobile advertising startup, technology advances can carve out space in the middle but established media relationships, and Google, won’t be going anywhere soon. Even Facebook had to build an audience before commanding advertising dollars, not the other way around.

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