Revenue-Share Orgy: Why Ad Agencies Are in Bed with Everyone

Alright, folks, let’s talk about the elephant in the room that’s been tap dancing on our coffee tables while we all pretend it’s a pet cat. 

Gone are the days of good old-fashioned handshakes, transparent deals, and face-to-face negotiations. Now, it’s all about “camera-off” meetings, avoiding eye contact, and pretending our ethical compass isn’t spinning like a fidget spinner. We’re all being tasked to do more with less, and while data-powered analytics and automated platforms are undeniably crucial, they shouldn’t replace the dialogue and transparency that kept our ecosystem from imploding. Morgan hit the nail on the head: We’re not going to fix our industry’s anemic ad-driven sales growth without rekindling the critical thinking, transparency, trust, and communication that originally built our business. This isn’t just about dragging our heels on the return of in-person meetings—it’s about an industry-wide decision to stick our heads in the sand and hope the problems will just go away.

Remember when media ad sales were made between actual humans, not faceless algorithms? Buyers would scrutinize their purchases with a “post-buy” analysis, especially in national TV, making timely adjustments based on real-time GRP delivery. Sellers could spot deficiencies and rectify them on the fly, ensuring everyone got their money’s worth. Fast forward to today, and it seems programmatic buys rarely get this level of scrutiny—if they get any at all. These “strategic partner deals” are cloaked in non-disclosure agreements thicker than a mobster’s alibi. The people striking these deals don’t want campaign funders to know how the money is shuffled around. In the world of mystery, there is margin. The real shocker? These revenue shares often drive more profit than the base client fees. The tail is wagging the dog, with media, data, and verification vendors chosen to optimize platform profits, not client results.

Let’s call it what it is: cheating, lying, and downright sleazy. It’s not like each company only has one strategic partner they rev-share with. If anything, they rev-share with as many as possible—certainly, any willing to provide a significant percentage and guarantee it as well. The rampant opacity and revenue-sharing in programmatic advertising are not just frustrating—they’re damaging the very fabric of the industry. Advertisers, misled by skewed statistics and murky dealings, are left wondering why their campaigns aren’t delivering. This opacity often leads to less effective advertising, causing a cascade of blame-shifting. It’s like playing a game of musical chairs where the music never stops, but everyone’s still scrambling for a seat.

What’s even more concerning is the fiduciary irresponsibility of Boards and CEOs who allow this to continue for short-term gains. By prioritizing these rev-share deals, they’re sacrificing long-term client trust and effectiveness, driving advertisers away from agencies and towards in-house solutions. It’s a short-sighted strategy that ultimately undermines the firm’s longevity. This system breeds perverse incentives. Agencies and platforms are constantly juggling numbers to “prove” their methods are effective, contorting data into pretzels to make it look like they’re delivering value. The reality? They’re covering up the black box’s opacity, masking the true inefficiencies and failures of the system. This isn’t just dishonest—it’s borderline fraudulent.

Yet, here we are, still allowing it to happen. The industry is watching this train wreck in slow motion, convinced it’s some avant-garde performance art. We’re sitting front row with popcorn, pretending this isn’t a catastrophe unfolding before our eyes. The numbers game has turned into a grotesque charade, with everyone playing along to keep the facade intact. Agencies and platforms are more interested in keeping their rev-share deals alive than in producing effective, transparent campaigns. The health of our industry is at stake, yet we continue to prioritize short-term gains over long-term integrity.

Dave’s hope is that as Connected TV (CTV) grows and walled gardens like Amazon and Roku prioritize ad experience and yield, we might finally crack open these notorious black boxes. It’s a nice dream, but the financial incentives are too deeply entrenched in favor of opacity and short-term profits. The reality is that these walled gardens are more interested in controlling their ecosystems and maximizing their yields than in fostering transparency. They’re like the exclusive nightclubs of the ad world—unless you’re on the VIP list, you’re left standing outside, peering through the tinted windows. The allure of easy profits and the comfort of the status quo mean that any real push for transparency is met with the same enthusiasm as a root canal.

But let’s get real here. Even if the CTV giants decided to embrace transparency, they’d still be navigating a minefield of vested interests and entrenched behaviors. Breaking open the black boxes is like trying to clean out a hoarder’s house—there’s so much junk, hidden treasures, and downright garbage that it’s hard to know where to start without a complete overhaul. The system’s designed to be murky, with layer upon layer of secrecy and complexity that benefits those who know how to game it.

Dave’s optimism is commendable, but without a seismic shift in how we prioritize transparency over profits, we’re just rearranging deck chairs on the Titanic. The industry needs a radical change, a willingness to sacrifice short-term gains for long-term stability and trust. Until then, hoping for transparency in the ad tech world is like waiting for that rainstorm in the desert—occasionally you’ll feel a raindrop, but mostly you’re left dry and disappointed, staring at a mirage of what could be.

In the end, it’s up to us—advertisers, agencies, platforms—to demand better. We need to push for clarity, to shine a light into these black boxes, and to dismantle the perverse incentives that keep them in place. It’s a tall order, but if we don’t act, we’ll be left wandering the desert, chasing mirages and wondering why the oasis always seems just out of reach.