This post originally appeared as an insight for Outsell’s customers. Republished with permission.

Tremor Video’s lackluster IPO is evidence that there are still issues to be resolved in the ad technology market, which creates a short-term opportunity for media.

Important details

Tremor Video has gotten off to a slow start as public company. After Tremor’s investment bankers said they expected “The initial public offering price of the common stock is expected to be between $11.00 and $13.00 per share”, they priced the company’s shares at $10 on Thursday. The stock was selling for $9.00 by the end of the day on Friday.

Other ad technology competitors are waiting for their turn in the market, but few seem to be excited.

The advertising technology business is fragmented (with dozens of named competitors) and multilayered. Trading desks, optimizers, demand-site platforms, sell-side platforms, exchanges, all flavors of networks, yield tools, and other technologies are all attempting to insert themselves into the value chain and keep a share of the value they create.

Outsell’s 2013 B2C Advertising and Marketing Study finds that business-to-consumer advertisers overwhelmingly describe advertising networks and exchanges as their lowest priority investments. Advertisers are more focused on their own sites, events, direct marketing, and social marketing. They are 66% more likely to cite plain-Jane SEO and SEM as an investment priority.

Implications

Advertising is still more about Don Draper and Roger Sterling than Wernher von Braun. While technology can create value by incrementally lowering cost-per-whatever, it isn’t delivering breakthroughs. The human touch in marketing and sales still matters.

In Outsell’s opinion, Agencies will continue to control a solid (changed from sold – think it was a typo) share of ad buying, as advertisers focus on what they do best. Agencies, as volume buyers, are in the best position to efficiently aggregate the marginal gains of ad tech’s improved targeting and buying efficiency.

Ad technology companies undoubtedly add value, but it’s marginal and surprisingly difficult to measure. This is especially true in the real world, where variations in product, creative, media, and context defy A/B and multivariate testing.

Consolidation continues to loom as the fate of the ad tech industry. Fragmentation and difficulty in differentiation call for integration. Recent acquisitions, as well as Google’s continued domination, suggest that vertical and horizontal integration will simplify the ad buying process in the long run. But the long run has been surprisingly long in coming.

Media have gotten a reprieve, not a pardon. Despite these complications, ad networks and network-driven metrics continue to influence the ad-buying process. Meanwhile, media sites deliver more third-party trackers than ads. This moment of confusion is an opportunity and a warning to increase the value of media beyond their ability to serve ad networks before it’s too late.

Successful strategies are likely to include some combination of products — sponsorships, subscriptions, mobile, memberships, events, vertical networks, digital products — tailored to a media property’s audience and market. Rapid product development and delivery are essential to getting off the ad network treadmill.