Just in time for Halloween, there's a nightmare developing for the online ad industry. Unless I'm mistaken, the clown act that is digital advertising is headed for a train wreck.
Up until now they have thrived on the stupidity and gullibility of marketers, and the venality of agencies. Marketers couldn't guzzle the swill fast enough and agencies couldn't cash the checks fast enough.
But I have a feeling the big con may be coming to an end.
First, some background.
According to published reports, online advertising fraud and corruption are rampant. It is generally thought that there is fraud associated with between 30 and 50% of online ads.
But corruption and theft haven't dampened the hunger for this stuff one bit among the dimwits in the marketing world. They've been throwing more stupid money at online advertising every year. It's been growing at double digits.
Now, you might ask yourself why sensible people would continue to do this when they know that half their money is being stolen? The answer is, sensible people wouldn't do it. It takes a CMO to be this clueless and irresponsible.
But if I'm not mistaken, something big is about to happen.
Kraft, one of the world's largest advertisers, announced yesterday that they are rejecting 75 to 85% of the online impressions they are being offered. Kraft's director of data, content and media said...
"Think about what this means for us as an industry. When we're rejecting 75% to 85% of the impressions available, that's a problem."Ya think?
"...75% to 85% is either deemed to be fraudulent, unsafe or non-viewable or unknown"According to Ad Age...
"Kraft only dug into this analysis last month..."Here's what I want to know: How the fuck can a company that spends $35.9 million a year on online advertising have waited until last month to do an analysis? Everyone who doesn't have his head up his ass knows that online advertising is a corrupt freak show of cosmic proportions.
Now that the dam has broken with a huge advertiser like Kraft, every CEO and CFO that isn't brain dead will start to ask questions about online spending -- "Are we buying the phantom impressions that Kraft is rejecting?"
CMOs and their agencies are going to be working nights and weekends hysterically throwing together misleading Powerpoint decks to save their asses.
And when they're not doing that, they'll be busy throwing each other under the bus.
This could turn into the most entertaining shit show in years.
By The Way...
...you know those people who say "I hate to say I told you so?" I'm not one of them.
24 comments:
And nobody seems to be asking the question of what happens to the digital economy when all this advertising funding disappears?
And let's not get into the reality of TV ratings data. No one wants to go there.
Advertising today brings to mind William Goldman's quote about the movie making business: "Nobody Knows Anything."
Doesn't your argument assume that brands are spending that money without any measurable return? Because if they were getting return on the investment, then it would make sense for them to keep spending, right? I don't know many brand marketers in the last 5-10 years that have just poured money into something that wasn't working, at least to a degree.
Mind you, there is spam in the online advertising world. There's always someone trying to game the system or pad the stats. But if a company that spends $35.9 million per year on online advertising and has been doing so for a while is, in fact, spending that kind of money, it's not because they're stupid and have seen no return. No, their money is not as efficient as it could be, but if they weren't getting something, they wouldn't be there.
Hate to piss in your Cheerios, Bob, but maybe you should assume the world isn't black and white and more gray matter. ;-)
Yeah, Jason. They're getting something - fake clicks and fake reach.
When someone who spends $35.9 million per year on online suddenly does a study and then rejects 75-85% of what's offered them, they must be just thrilled with what they're getting.
Wake up, Jason.
Ecommerce guys get a measurable return and use sales as the KPI to analyze results. However, Kraft is a brand advertiser. They measure things like reach and impressions that can be faked easily. This is the problem.
Note that this is specific to banner ads, which have never performed well for ecommerce plays. Some digital marketing does work: email, paid search, etc. But banner ads were supposed to be the digital medium that "creates" demand, rather than just harvesting it. And they have never, ever done a remotely reasonable job of that.
Bob...
It takes us old geezers to see that the world really is black & white... Why am I not surprised that Jason Falls describes himself as a "Digital Strategist." Nuff said. I have my take on this fiasco on today's "AdScam" As I point out, the Poisoned Dwarf has spent uber-millions buying up every digital agency in sight for WPP. Never forget, the little fucker said we are no longer "Mad Men" we are now "Math Men." I guess Kraft just peed in his Cheerios!
Cheers/George "AdScam" Parker
Digital advertising is dead! There. I said it.
Ecommerce guys getting a measurable return isn't quite the rosy picture that it keeps being painted either. It would be fine if display ads were assessed like search - on a click through to a sale - but they're not, because nobody clicks on display ads.
Display is routinely assessed on 'view-through'. I.e. you saw an ad and then made a purchase, so the ad gets the credit. If you're unscrupulous, the game becomes how many people's PC's can you expose to ads? It doesn't matter whether the user actually *saw* the ad, as long as the PC loads it at some point - legitimately or not - and gets cookied.
Splurge ads all over the internet and chances are, a load of the people turning up to buy will have "seen" them. It doesn't mean they're causing anything to happen.
Here's what i don't understand. It all comes down to effectiveness. Please show me one example of a company that ONLY used on-line advertising to succeed. And NOT for some high-tech device that's ordinarily investigated on-line. i mean for a regular product or service. Because in my experience,
there are no on-line success stories. I have--at clients' requests--diverted good money to on-line buys, and have seen no evidence it works. Basically, on-line is kinda the new Yellow Pages. It's where folks go AFTER they've been sold, not before.
Big difference between measurement of TV (and other offline media) and online is that it's transparently managed by third party research cos to industry standards. Is it the absolute truth? No. In the UK BARB estimates it misses 6% of viewing - but that's fine for a currency. Brands invest because it works, as long as the analysis is done properly. The really scary thing about some online ads (we shouldn't treat it all the same) is not the corruption of exposure metrics but culture of dodgy ROI using the last click mentality. And this is driven by the silos in companies where the marketing director often has no control over programmatic incl brand-damaging re targeting. This is managed within online trading or acquisition ie people with only a short-term focus.
It works, if it's in the right place for the right brand. Which doesn't have to be digital. I think what this suggests is that programmatic buying using ad networks where buyers don't really know where a lot of their money is going, could be not long for this world. But that might be a good thing for agencies because their knowledge of the actual consumer and the real value of an "impression" will again be something worth paying for.
Hi George, don't forget that your favourite French man, Maurice, not content with blowing $100 million on his aborted penis enlargement procedure with Omnicom, is now pumping even more money into turning Publicis Groupe into a digital giant.
First of all I have seen digital work - at least based on tracking and MMM results, both for impact on brand and sales. I have also seen it do absolutely nothing. It depends on the category, the creative, the formats bought etc. Whether it works on its own is another debate, but it can fulfill a few business objectives, especially in between bursts considering most brands don't have the budget to have always-on TV budget. Second of all as much as I like Bob I disagree with online being just the yellow pages. Some of it (search and e-commerce in particular) is, but not all of it. At the end of the day a great creative idea can resonate, whether in traditional or digital media. I have even see small mobile display banners do REALLY well for high end products.
I'm a strategist for a media agency, so I'm not going to be one of these who pretends TV is losing, it's not. But personally I never watch TV (not plugged in), and never open a printed magazine/newspaper (I only read digital versions). If you want to reach me, you better have an online strategy or some sort of out of home format. I'm still an exception, but for how long? If digital is able to reach a lot of people (and it is) the question is not whether digital is effective but how can we make that channel effective.
NB: Bob left out the part of the interview where the Kraft lady stated that the cost effectiveness was still acceptable despite the issues they found.
Let me get this straight...
Kraft just came in and said: we have a media channel where we can effectively identify what doesn't work for us (not viewable, probably fraudulent, or don't know) and only buy what does. We can spend close to 36 millions USD a year doing that filtering and this doesn't impact our ratecard much.
And everyone is pissing their pants because this is proof this channel is dead?
If the headline was "85% of what we buy turned out to be fraudulent and we have no way of avoiding them" I'd be with the angry people in this thread, but this is NOT what this woman is saying.
I plan traditional channels where things like a "post buy" don't exist because well, you just can't say anything other than "it was printed" or "it was put up on the street". Not a fucking clue if people flipped the page or looked up the wall (and in the world of magazine, there is huge over inflation of circulation numbers, in some extreme cases it's a 100 to 1 ratio). Digital viewability / fraud needs to be sorted. It's essential. But fuck let's not throw the baby with the bathwater here, because in the world of digital we can actually do something about it.
Look, there goes the emperor! By golly, he's mighty underclothed considering the weather...
Good point, Neil. View-through is the same scam being sold to Kraft, et. al. I personally refuse to look at view-through metrics.
Yet you're selling ad space on your website...
I most certainly do not
That's what I thought. Could be something built in to the blog template maybe?
So, I have a digital media campaign, with a robot audience.
The next step is to automate my buying too, by going 'programmatic'.
So the whole thing is now untouched by human brain.
I have a question: if we're cutting out all the middlemen, wouldn't it be simpler for me just to wire my entire digital media budget directly to your numbered account in the Caymans?
Actually brand marketers regularly and continually pump money into mediums or outlets that used to work, that they think or have been told statistically should be working, that they have been told will eventually work, that competition is pumping money into and so this brand marketer does as well...
When the acknowledged and now accepted redemption rate on in-print coupons is 3%, you have the cajones to bring this up, JasonFalls? 3%? 85% fraud or fake in digital? If that is all tv and radio generates, they are escorted out of the building... permanently! Yet the bar or threshold for coupon outlets and now digital are so low, expectations are so minimal that billions are pulled from marketing budgets to support them.
'Not as efficient as it could be' is the understatement of all time.
It's stupid on a sandwich. Everything else is held to a black and white standard, to real measurement. And it's gray matter that should determine the outcome - not hopey-feely cool technology.
totally agree. I think that programmatic is the problem, not the Internet.
Blogspot is free and therefore stuffs his blog with ads. Does not benefit Bob at all other than free platform to publish.
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