May 02, 2013
Time To Clean Out The Stables
Earlier this week I posted a piece called Online Advertisers Getting Hosed.
In it, I discussed the alarming amount of fraud being perpetrated against naive and confused online advertisers.
But there's more. Not only are online advertisers getting screwed by crooks, some of them are also getting screwed by their agencies.
For those of you who are too busy having a life to follow the arcane goings-on of online media buying and selling, I'll try to make this simple. (Actually, I'm making it simple because I don't understand most of it myself. Trying to understand what these crooks are up to is like trying to understand what the hell a hedge fund manager does.)
Anyway, it's like this. Some of the big agencies are both buying online media and selling it. If they were hookers, we'd say they're working both sides of the street. Except hookers have more integrity than these guys.
They buy online ad space at one price and then sell it to their clients at another price. And guess what? The price they sell it at is higher than the price they buy it at.
As far as I can tell, this is clearly a conflict of interest. But somehow the agencies have convinced some dumbass clients that this is perfectly okay. Here is the excuse they use:
After they buy the online media, they "add value" by slicing and dicing it in different ways that make it more targeted, then they resell it to the client.
This doesn't even pass the giggle test. First of all, their brilliant targeting can't even find human beings. As we discussed earlier this week, they're pissing away client money on bogus websites whose bullshit numbers are driven sky high by bots.
And second, what do they think agencies are supposed to do with media? Isn't analyzing and optimizing media their fucking job? They want extra money for doing what they get paid to do in the first place?
So here's the big question. Who's interest comes first? The buyer's (client's) interest in paying the lowest reasonable price? Or the seller's (agency's) interest in obtaining the highest reasonable price? It's got to be one or the other.
Everything about online advertising is corrupt.
The promises are corrupt. The data is corrupt. The suppliers are corrupt. And the buying and selling is corrupt.
This industry is in desperate need of investigation.