The X Factor: How Legacy Institutions Impact Innovation

If our media business was based only on taking the most efficient path, programmatic buying and selling would stand alone as the ONLY option, and direct buying and selling would have already disappeared. While no-one can dispute the outsized impact of programmatic, direct buying and selling still persists. The more original and well branded a publisher’s content is, the more likely that direct selling is predominant, with programmatic as an option.

Now, I’m not here to debate the merits of one over another. What I do want to introduce is the outsized impact on legacy institutions – Agencies and Publishers – in impacting the adoption of this technology. And, I believe, you could say the same about any business sector.

Agencies have long provided guidance in media buying to their clients, weighing product, audience, creative and media choices to improve the standing of those clients in the marketplace. In return, publishers and media owners have built their own staff to respond by matching quality content and ad exposure to provide results for agencies and their clients. While programmatic has whittled away at this legacy, it will take years before it replaces the legacy institutions now in place.

Another example of legacy institutions slowing things down is the buying, selling and operational management of advertising across streaming platforms AND broadcast (linear). There are actually order management platforms that can handle both media channels, as well as standard digital display. You would think in the interest of efficiency, that consolidation be commonplace by now. However, in many cases media planning and buying are conducted by two different Agency divisions, and the trafficking and delivery process is different for streaming versus linear on the publisher side. So operational consolidation remains a potential that is still being held back for legacy institutions.

This opens up a broader discussion. How will legacy institutions impact other technical innovations? Will original thought and individual voices go away tomorrow because AI is a “thing” today? Certainly, it is going to have an outsized impact, but it will be more gradual than we believe. Will banks and the existing financial infrastructure go away overnight because cryptocurrency is a “thing” today? No.

This is only to say that in calculating the impact of new technology, consider the legacy institutions that are in place and the impact THEY will have on moderating the adoption rate, which will most likely take place over a longer period of time than it’s advocates predict.

If it has not been done already, it might be an interesting exercise to turn it into a mathematical calculation when considering the potential upside of any new technology. If that has already been done, please let me know.

(No AI was used in the composition of this post)