Mark Connolly is the newly appointed European Managing Director at AudienceScience. Here Mark talks about the issues and challenges currently facing the industry and the important role that technology will play in 2013.

I have been fortunate enough to have worked in the advertising space for 25 years and have experienced first-hand how audience data and programmatic buying technology have revolutionised the industry. I’ve also seen that, in my time, on both the buy side and sell side – for all the technological advancement – the industry still suffers from really expensive bad habits.

We have an ecosystem unsuited to do what’s best for the advertiser. Marketers pay for every layer of service and technology, including agencies, trading desks, vendors and publishers. Each player takes a cut from the marketer’s budget, creating a zero sum game. Worse, marketers pay for this with “percent of media” fee structures that encourage agencies and vendors to spend more, regardless of effectiveness, and avoid finding efficiencies for advertisers. Unsure of the right questions to ask, advertisers have entrusted budgets to agencies, with little or no visibility into how their budgets are actually allocated.

It’s crazy, but advertisers have been keen to apply platform-buying technology to long-tail and direct-response buys, but slow to apply technology solutions to the lion’s share of their direct spend. Few have been persuaded of the benefits of universal frequency capping and consistent targeting for direct, premium publisher buys. Advertisers have so many partners, often through an agency, who each tell them a different story, it’s very difficult to manage across, or even create accountability at any level.

This lack of transparency and co-ordination would be less worrisome if it didn’t come at such a cost for advertisers. Our analysis finds that 50%-80% of an advertiser’s digital media budget is either swallowed up by vendor and partner fees (including non-transparent network, trading desk, and DSP arbitrage) or wasted on out-of-target and out-of-frequency impressions.

To flip this scenario, advertisers need to regain control and make better informed media decisions. The sheer complexity of the digital media landscape, and the vast amount of data available to inform decision making, means that intelligent media decisions are unachievable on a manual level – technology HAS to facilitate the process. For this, advertisers need a consolidated technology built specifically for advertiser needs (not network or agency desires). This technology must offer full transparency to the advertiser and solve for vendor fragmentation by offering an integrated platform for audience data management and for exchange-based and direct campaign execution.

Solving the most complex challenges in digital media today – cross-publisher frequency controls; universal audience management and targeting; co-ordinated exchange-based and direct buying – all require technical capabilities and expertise that agencies and point-solution vendors do not possess. Moreover, this technology needs a pricing model free from conflicts-of-interest. Flat license fees allow advertisers to use the technology based upon their strategic needs, not the vendor’s monetisation requirements.

2013 is set to be a pivotal year in the industry. Big data has the potential to turn the digital marketing world upside down and drive huge value – ultimately putting the customer’s needs back at the centre of all brands activity.

However, this won’t happen unless the balance in the digital ecosystem is readdressed. Advertisers need to be supported with technology solutions that will put them firmly back in control of their digital advertising, and provide them with the tools and analysis that will allow them to ask the challenging questions that are required in order to deliver accurately targeted campaigns. It is only by removing the amount of the budget that is wasted on fees and out-of-target impressions that brands will be able to demonstrate their true potential and influence, and it is exactly this that excites me as we plan our strategy for the year ahead.