Online Advertisers Getting Hosed

Here at Ad Contrarian Worldwide Headquarters,  one of our axioms is that there is no bigger sucker than a gullible marketer convinced he's missing a trend.

We're starting to think that the same can be said of the entire advertising industry.

Our industry has been desperately trying to convince itself that the web is a fabulous advertising medium. We share each others' anecdotes about the handful of meager successes (amid the thousands of failures.) We go to conferences and listen to case histories that are two standard deviations from normal and try to convince ourselves that they are typical.

But we can't erase the facts. And the facts are dismaying.

Click-through rates are abysmal. The odds of breaking through on YouTube are in the million-to-one range. Facebook is a big fat turd that seems to have a new ad scheme every week. QR codes are a cruel joke. Content and social media are sounding more like religion, and less like business.

And now we're starting to get a peek at massive advertising frauds being perpetrated on the web.

Listen to Mike Shields, senior digital editor at Adweek...

If you spend enough time in the murky world of ad exchanges, ad tech middlemen and real-time bidding software, you might come away wondering why any major brand even bothers with online advertising.

Not only are banners dull and clickthrough rates low, but all the technology flooding the industry promising perfect targeting perfection can't even deliver real human audiences...

According to Business Insider...

...armies of computers unknowingly infected by hackers to drive fake traffic through ads, generating up to $400 million a year in fraudulent clicks. One botnet, dubbed "chameleon," consists of 120,000 machines driving traffic to 200 dubious publishers, who then bill the likes of  American Express, AT&T, Ford, McDonald’s, and Petco for displaying their ads.

Solve Media says, 29% of mobile ad traffic acted "suspiciously" in first quarter of 2013, and 14% was "confirmed" as bots. The truth is, no one knows the extent of the fraud being committed on web advertisers. But one thing we do know -- it's huge.

• 40% of all "captcha" traffic (those annoying words you have to type to prove you're human) is suspicious.

• 29% was bot traffic

• Suspicious activity was up 44%

• Spider.io claims that the above mentioned "chameleon" is resulting in a minimum of 9 billion phony ad impressions served per month.

To get a feel for the extent of the fraud, you really should read the abovementioned Mike Shields' excellent Adweek pieces. They are eye-opening and very damning.

Of course, the online advertising industry continues to turn a blind eye to the fraud. There's too much money in it. The IAB (Interactive Advertising Bureau) has formed a "task force" to "raise awareness" of this problem. Ohmygod, a task force!

If you want to get a sense of what a joke this task force is going to be, all you need to know is this. They already have a bureaucratic bullshit euphemism for the fraud -- NIT, Non-intentional traffic. Gag me.

This reminds me of another useless initiative the IAB undertook two years ago called "Making Measurement Make Sense" in which they set out to create a common "currency across the ecosystem." Thud. And two years later that common currency would be...?

If TV viewing were to drop 1% we would hear all kinds of wailing. But fraud of 25 to 40% in online advertising? No problem, we'll appoint a committee or something.

When you take a gullible industry that has acted in an irresponsible and foolhardy manner to sell snake oil to its clients, add to that some very sophisticated crooks who are way ahead of the naive buyers and sellers of ads, and top it off with indecipherable metrics that are intentionally designed to confuse and mislead, you have yourself a very toxic blend.

Try not to be there when it explodes.

Being Right And Hating It

Over three years ago, on December 28, 2009, I published the following post:

How About the "Terrorist Differentness Ecosystem Dashboard?" 

Regular readers know I like to divide the people of the ad world into two species: simplifiers and complicators. This also applies to the non-advertising world. 

I evaluate the potential efficacy of social and political activities by whether they are making things more simple or more complicated.  Generally, things that make the world simpler succeed, and things that make the world more complicated fail. 

This was called to mind this weekend when a God-inspired maniac tried to blow up an airplane over Detroit. Apparently this guy's father specifically warned officials about his son's proclivities just a few weeks ago. The warning was ignored. 

As I was reading an article from The Washington Post a phrase caught my eye.

"...Administration officials acknowledged Saturday that Abdulmutallab's (the maniac's) name was added in November to the Terrorist Identities Datamart Environment... maintained by the Office of the Director of National Intelligence at the National Counterterrorism Center..."

The "Terrorist Identities Datamart Environment?"

The list of homicidal psychopaths who want to blow us up is called the "Terrorist Identities Datamart Environment?"

Are you fucking kidding me? That's all you need to know about it to know that it will be a massive failure. If you wanted to, could you possibly invent a more stupid, complicated, bullshit name? 

Assuming the idiots who named this thing are the same idiots who are running it, it has no chance of success. None. 

According to Reuters,  guess whose name was in the "Terrorist Identities Datamart Environment?" Tamerlan Tsarnaev.

Sometimes being right really sucks.

Fake Is The New Real.

Apparently, the market for fake Twitter followers is exploding.

According to The New York Times...

"There are now more than two dozen services that sell fake Twitter accounts... there are now as many as 20 million fake follower accounts."

Being the Luddite that I am, I am way behind the curve in attracting my fair share of fake followers. As far as I know, I don't have any. I mean, unless you count Cinderella and Barney the Dinosaur as fake.

It seems that anyone who's anyone has fake followers.  Mitt Romney, Rachel Maddow, Lady Gaga and even President Obama have been known to have thousands of fake followers. But stupid me? I'm stuck with these annoying real ones.

I think fake followers are way better. The fake ones retweet everything you send out. They don't ridicule your stupid tweets or call you a douche bag.  And, according to The Times,  they only cost about 18 bucks a thousand. That's about what I make from my book at Amazon.

I think fake followers are the greatest invention since inflatable girlfriends. By the way, do they sell inflatable boyfriends? Or just battery operated boyfriend bits?

I think fake followers make great gifts. Let's say you know someone who's having a tough go of it. Can't find a job. Nobody pays any attention to him. Just send him five thousand fake followers (only 60 bucks!) and pretty soon he'll have his own social media company and be speaking at marketing summits.

One of the great things about the web is that fake is realer than real. When I read something on the web, how do I know if it's real or not? I don't. I just assume that because it's on the web it's total bullshit. It's fake. It's fabulous!

It seems like only yesterday that a fake tweet from the Associated Press reported that there were two explosions at the White House and temporarily wiped out $136 billion in investor equity. Hold it. It was yesterday.

It's not like fake boobs or fake hair. You look at them and in about a nanosecond you know they're not real. The girls with fake boobs always look like they're about to topple over and the guys with fake hair look like they found a dead cat and slapped it on their head. But the web? Oh no, on the web, fake is just enhanced reality.

I think we need even more fake stuff on the web. Wouldn't it be great if we could have fake "likes?" Oh, wait a minute. We have millions of those.

Well, how about fake emails that tell us we won the lottery and fake scam stuff from PayPal and eBay and...oh, yeah, we have a ton of that shit, too.

Okay, but what if Facebook did an IPO with a fake value of $100 billion? Oops, they tried that.

I know. I'll start a fake blog. It'll be huge! I'll talk about how everything that's supposed to be real is fake. And all the names of the people who leave comments on the blog will be fake. And I'll focus on all the crap you read by fake experts...

...wait a minute. I already do that.

Who's Missing The Big Picture?

A very typical -- and typically muddle-headed -- piece called John Hegarty's Missing the Big Picture By Saying TV Ads Stink appeared last week in Ad Age. It was written by the ceo of a “video content marketing agency.”

The article lamely tries to take on John Hegarty, founder of BBH. Hegarty recently contrasted tv advertising with the resurgent excellence of some tv programming and found it wanting. He said…

“Our work is not matching the quality of writing and thinking that's going into all those great TV productions.”

…which I think is about as self-evidently true as anything you could say about advertising.

Nonetheless, anything intelligent that is said about advertising these days has to be contradicted by someone with a bonehead ideology. Usually the ideology is centered on either the web or metrics or data. The guy trying to take on Hegarty is one of these flat tires who thinks that creativity is dead and advertising is now about data. He has this to say...

“...clever data usage is the only real hope advertising has left.”

Yeah, right. This is the cry of the wretched philistine who believes that the only hope for literature is bigger book stores and the only hope for art is cheaper paint.

In fact, the only real hope for advertising is better advertising. Which, I believe, is Hegarty's point.

According to the writer...

"John Hegarty's rant... fails to recognize that advertising is now witnessing its most creative dawn. Never before has marketing been so exciting and innovative. It's why now is such a fun time to be a part of this industry."

It's advertising's "most creative dawn" but "the only real hope is data." Huh? Make up your mind pal.

And it's "such a fun time" to be in advertising! Give me a break. The ad industry is a pile of consolidated, globalized, homogenized Wall Street excrement and this guy thinks it's prom night.

(By the way, have you noticed that when you publish something it is judicious and brilliant, but when someone who disagrees with you publishes something it's a "rant?")

I’ve been around the ad business for forty years, and here’s what I can tell you for sure:

1. Every era has its myopic nitwits who think this week is the most exciting, innovative, creative time ever.

2. Advertising today is no different than it ever was. It’s mostly mediocre crap with the occasional light dusting of brilliance.

Here's some more nonsense from the article...

"The world's biggest TV networks can't guarantee brand advertisers 18-34 year olds. YouTube and Facebook can and they do it through data."

Really? Please name me one major mainstream brand -- just one -- that has been built by advertising on YouTube or Facebook. Just one. I'll name you a thousand that have been built by television.

Second, targeting 18-34 year olds is the antiquated obsession of people who have reams of data and don't know what any of it means.

Here's more.

"Now that marketing has taken a paradigm shift and is entering the abyss of the unknown, brands and their agencies can no longer rely on such conventional ways of marketing; it's now all about data."

Ohmygod, the fucking "paradigm shift." When can we get these jargon jockeys in one room and give them all the undiluted paradigm shaft?

That quote is a pitch perfect demonstration of the baloney these guys are peddling --  we have entered an "abyss" and we know nothing about marketing. Bullshit. We know more about marketing than we’ve ever known. We have more data than we've ever had. If advertising isn't working very well it's not for lack of information or data. It's for lack of ideas. It's because the data and metrics monkeys now rule the world and they wouldn't know an idea if it sat on their head and fired missiles.

And finally there's this...

"Consider that the only ad being talked about at media conferences two months after the Superbowl is not a TV ad, but a tweet created by Oreo during the game."

Let me tell you something, pal. The Oreo tweet was a creative idea. It had nothing whatsoever to do with fucking data. Which totally undermines your boorish assertions and proves Hegarty's point to perfection.

Social Media Morons

There is no describing the stupidity of some people.

While there are imbeciles in every field and at every level, for some reason marketing and advertising seem to attract a disproportionate share of them. And of all the disciplines within advertising and marketing, social media seems to be the one these people gravitate to.

In a completely inexplicable display of ineptitude and injudiciousness some idiot at the food website Epicurious sent out the following tweets:

In honor of Boston and New England, may we suggest: whole grain cranberry scones!

and

Boston, our hearts are with you. Here's a bowl of breakfast energy we could all use to start today

Yes, the advertising and marketing industries have been guilty of stupidity, insensitivity, and just plain cluelessness for years. But social media maniacs have taken brainlessness to a new level.

This is a display of stupidity that transcends the periodic attempts of marketers to cash in on tragedy. This is sickening and inexcusable.

Mobile Everything Everywhere

There is nothing dumber than a magazine with a vision. And there's no kind of magazine with a vision dumber than a trade magazine with a vision. And there's no kind of trade magazine dumber than an advertising trade magazine.

So today we are going to discuss an article that wins the triple crown of dumbness -- an article with a vision of the future, from a trade magazine, in the advertising field.

The article is called: "MasterCard's Vision for a Cashless, Cardless, World" and it appeared in Ad Age last week.

Like all these pieces it takes the flavor of the week, in this case "mobile," applies no perspective, and elevates it to the status of earth-shaker. The guy who is peddling this nonsense escapes from the article unchallenged, and we are left with the impression that sometime in the near future we will be living in a "cashless, cardless world."

Perhaps you are old enough to remember the 1980s when we anointed the "paperless society." That was a real winner. In 2012 the U.S. Postal Service alone handled 160 billion pieces of mail.

Then in the 1990's the visionary geniuses announced disintermediation -- brick and mortar retailing was dead. All our retail transactions would be done online, directly with the manufacturer. Just one problem. According to the latest U.S. Dep't of Commerce report, about 95% of all retail spending is still done in stores.

The newest breed of hysterical futurists are the mobile maniacs. You can't swing a dead QR code without hitting a dozen articles about how "mobile" is going to "change everything." 

A headline on c/net's website recently screamed that "Shopping via mobile devices increased 81 percent in 2012." Ohmygod, 81%! 

Let's see exactly what this means.

Mobile devices accounted for 11% of all online purchases last year. And online purchases accounted for 5.2% of all retail sales.  So mobile purchases accounted for a whopping .57% of retail sales -- not even 1%. If that represents an 81% increase from the previous year, then it rose from .32% to .57%. Stop the freakin' presses!

(I have edited out a paragraph here which is offensive in light of the horrible events that occurred in Boston after this was posted.)

So now mobile devices are going to make money and credit cards disappear and we're going to have a "cashless, cardless world." 

Yeah, when monkeys fly out of my butt.
 

We're Number One!

Every morning and every evening I check where 101 Contrarian Ideas... is on Amazon's advertising book chart. And every morning and every evening it's the same -- #2 behind David Ogilvy.

This has been going on for months. Every now and then it will drop down to #3, but then it pops back up to #2.

Obviously, with 19,352 books in their advertising category, there's nothing wrong with being #2. Whining about it is just evidence of being stupid and self-absorbed. Especially if it was you. But it's not. It's me.

And then tonight it happened.

A few minutes ago I checked and there it was at #1. I don't know why the hell this is so important to me -- I don't make any money on these fucking books and no one gives a shit about them but me -- but I have to admit, it is.

By the time you read this it will probably drop back down. But I don't care. For one shining moment I had Amazon's best-selling advertising book.

Thank you to all the people who have bought the book and recommended it to others. To those who have not bought it, WTF?

The Biggest Advertising Opportunity Ever

How would you like to be the next Steve Jobs? The opportunity is sitting out there waiting to be taken.

All you have to do is find an effective advertising use for the web. It's that simple.

The web is an enormously powerful medium, but no one has figured out how to make it a great advertising medium. It's as if TV existed for 20 years and no one had invented the TV spot.

We have all kinds of lousy ways to use the web, but no reliably effective way.

An article in Digiday this week entitled Banner Ad’s Creators Dismayed By Its Current State laments the condition of display advertising. Display is the dominant form of web advertising. Despite a growth rate of 20% this year and almost $20 billion in sales, no one seems to be satisfied with banner advertising.

"Publishers in particular rue how commoditized it has become in a sea of 5.3 trillion annual impressions. Advertisers and agencies lament the lack of creativity typically given banners, which some see as on their way to becoming a purely direct-response tool,"

Worst of all is consumer reaction -- universal disregard. I have never once heard two people talk about a display ad. It is the one and only form of advertising that I can say this about.

But banners are only the most obvious failure.

The reason it's so clear that banners are a dud is that they are easily measurable. Every form of online advertising that can be easily measured has been exposed -- banners, podcasts, QR codes, blogs...

The only forms that are still retaining their cred are the ones that are not so easily measurable, like social media and content. This is not because they are any more effective, it's just that it's a lot more difficult to prove their ineffectuality.

This allows the online ad industry and web zealots to pretend that their ideological commitment to these modes has a basis in real world success. But this is a fantasy.

The web is almost 20 years old and the ad industry has still not figured it out. Maybe it will be like the telephone -- a universally used medium for which a brilliant advertising purpose will never be discovered.

Frankly, I doubt it. Someone is going to figure out how to use the web wonderfully. It might as well be you.


Follow-up:
If you read the comments below, you'll see what an idiot I am. Vinny Warren clears away the weeds. Someone has already figured out advertising on the web and made zillions -- Google. Doh.

Success Is Never Final

We like to think that history has an inevitability to it. We like to believe that there is an arc that goes from the bad old days to the good new days; that things move toward virtue; that freedom and prosperity will inevitably triumph and evil and depredation will ultimately be vanquished.

There is absolutely no reason to believe this. And yet we do.

It's the same type of silly belief we have about evolution. We believe that the purpose of evolution was to lead to a grand conclusion -- us. Nothing could be further from the truth. We are just the result of thousands of little contingencies. The world existed for 4 billion years very nicely without us, thank you.

Winston Churchill came as close as any one individual ever came to saving the world. Without him, the Nazis and their pals might very well have won WW II.

He was hailed as a hero. But was promptly evicted from office when his party lost the elections in 1945.

But Churchill was a realist. He said, "Success is never final."

The point is this -- you never know. You think you know, but you don't.

How else can you explain the astounding failure of Ron Johnson as ceo of JCPenney? Johnson was fired yesterday.

You couldn't possibly draw up a better candidate to lead that company. He had a bachelor's degree from Stanford in economics, an MBA from Harvard, he lead Target out of the dark ages, and headed up the most successful retail juggernaut in the history of retail juggernauts -- the Apple stores.

And yet his 17-month tenure at JCPenney was a disaster of unprecedented proportions. According to Business Insider, Penney's performance in the 4th quarter of last year was "probably the worst quarterly performance ever in the history of major retail."

Johnson took everything he learned at Stanford and Harvard and Target and Apple and applied it to JCPenney. And it was a catastrophe.

Success is always contingent. It has to do with where you are, who you are with, what the circumstances happen to be, and which way the wind is blowing.

The people who speak at conferences and write blogs and books and think they know something universal about advertising and marketing are all full of shit. What they know is what worked at one particular moment, at one particular place, under one particular set of circumstances.

To believe that anything about business, or any other human endeavor for that matter, is universally true or all-embracing is a philosophy for fools and a prescription for failure.

The Hidden Danger Of Precision Targeting

There is very little difference between your customer and your competitor’s customer.

And get ready for a shock. To them there is very little difference between you and your competitor.

Most consumers are oblivious to the positioning subtleties among major brands. The average consumer has no idea why Coke is different from Pepsi, or Crest is different from Colgate. They see no difference between Jif and Skippy. They are unimpressed and uninformed about the arcane positioning distinctions between Bounty and Brawny paper towels.

Most of their purchasing habits are just that -- habits. Interpreting their behavior as some sort of ideological commitment to your brand is a delusion.

In fact, most of the positioning and differentiation work done by advertisers and marketers are academic exercises that are lost on consumers. Consumers have more important things on their mind.

This is why trying to draw precise targeting differences and grand strategic insights between your buyers and your competitor's buyers is such a fruitless endeavor. Being too precise in your targeting means you are missing one of your biggest prospects – your competitor’s customer.

Heavy users in your category are promiscuous. They may have a favorite brand, but they are generally not fiercely brand loyal.

Advertising vehicles that allow you to “engage” and have “conversations” with your brand's heavy users by promising precision targeting provide very limited opportunity to grow your business. In fact, they often distract you from your proper objective – attracting new customers.

This is why social media have proven to be highly suspect in building sales. Who follows you on Facebook and Twitter? They are mainly your committed customers. They are not your primary source of growth. Should you ignore them? Of course not. But neither should you be obsessed with them, as is common practice in the world of social media.

One of the great benefits of mass media is that it lacks precision targeting. It reaches all the users in your category, including the users of your competitor's brand.

These people – the ones who are not your loyal fans – are the ones who can grow your business.

Opening Day 2013

Today is Opening Day for the World Champion San Francisco Giants. Here is my traditional Opening Day post.

The economy is still in the toilet. Somewhere, asteroids are heading toward Earth. Web pornography is warping the minds of our children. Grown men and women are relentlessly Tweeting each other. Yes, my friend, the end is near.

But who gives a damn?

It's Opening Day. I'm going to have a hot dog and a beer. I'm going to sit in the sunshine till the back of my neck is red and raw and my ass stings like a shot of tequila on a bad patch of strep throat.

What the hell, I'm having two hot dogs.

Once a year, every aspect of life should have an Opening Day. Every business should have one. Every friendship should have one. Every family should have one.

A day when everything starts over. When all of last year's successes and failures go into the record book, no longer a matter of life and death, just a matter of history. A day when the slate is clean and the possibilities are unlimited. A day when you call in sick-and-tired; when you leave the iPhone in the glove compartment; when you go somewhere where the grass is perfect and the people are unaccountably cheerful.

It's Opening Day. Let's play some fucking ball.

The Data Delusion

Systems in extremis often delude themselves into believing they are something they are not.

Our educational system has convinced itself that it's not really in the education business. It's in the "self-discovery" business or the business of "celebrating diversity" or other such nonsense. The result is that it is very successful at not educating our kids.

Pepsi decided a few years ago that it was no longer in the business of selling soda. It was in the social responsibility business. The result was years of disastrous sales.

The advertising business is currently going through such a cycle. We are no longer about making advertising. In fact, making ads is looked down upon as a quaint, out-of-date notion.

Unfortunately, we can't quite decide what business we are in.

For a few years we were in the "branding" business. The "branding" business posited that consumers had deep connections to brands, and that sales results were in direct proportion to brand "meanings." The result was the marketing equivalent of empty suits -- mundane products with silly, high-minded philosophies and vacuous advertising.

Then we were in the "conversation" business. This meant that instead of making ads, our primary purpose was to generate "conversations" between buyers and sellers. The rationale behind this fantasy took the aforementioned belief that consumers care deeply about brands to a new level. Now they wanted to interact and have relationships with us.

Our newest delusion is that we're in the data business. "Big data" is the big thing. The theory behind this latest dead end is the hypothesis that the key to marketing success is precision targeting. In fact, precision targeting has thus far proven to be a dispiriting bust. The poster child for precision targeting is Facebook, which has more data and knows more about us than we know about ourselves.

And yet advertising on Facebook has been uniquely ineffective. An astounding experiment done several months ago showed that ads with no content and no targeting performed 60% better than "precision targeted" Facebook ads. Major brands have stayed away in droves.

So what is all this confusion and misdirection in the advertising business about?

The answer is quite simple. About 15 years ago our industry decided that traditional advertising had run its course. We had run out of steam and were searching for new ideas. The web was the perfect solution. It was a brand new medium in which anything was possible.

It represented everything we were searching for -- new technologies, new creative possibilities, and a youthful new "branding" opportunity for the tired old ad business.

There's only one little problem: it ain't workin' very well.

No one pays any attention to the ads. No one wants to have conversations with us or read our self-serving content. But we are ideologically committed to the web. It is still our precious baby -- regardless of the discouraging facts.

Our latest web pipe dream is data. But data is a solution looking for a problem. The fact is, we now have more data about consumers than we ever dreamed possible. We know where everyone is every minute of the day. We have no trouble reaching people efficiently. Our problem is not lack of information. If anything, we are overloaded with information.

Our problem is finding something interesting to say to people that will get their attention.

As John Hegarty, founder of Bartle Bogle Hegarty, said recently,

"I've spent my life dealing with people who've got all the data in the world and yet they can't invent anything."

We will continue to imagine new varieties of web magic until such time as our clients'  need for results catches up to our industry's ideological commitment to chasing rainbows. Big data is just the latest rainbow.

As usual, the ad industry is focused on everything but the problem.

10 Rules For Happy Living

Today, I begin a new life as an irresponsible drain on the treasury of the United States.

It's a career I've always felt well-suited for. I'm afraid it's not going to last long because I'm already drawing up plans. But while it's here I'm going to enjoy it.

I am kicking off my new situation on a positive note. I know, it's not really my brand, but what the hell.

Having lived now for a couple of hundred years, I've developed some convictions about the subject. This seems like a good occasion to express them.

Why you should listen to an old ad guy's notions about life, I have no idea. Nonetheless, I've finally gotten my sorry ass out of the agency business and I'm feeling very chirpy and agreeable and there's always the dim possibility that this will all turn out pleasantly.

So here are The Ad Contrarian's 10 Rules For Happy Living.

1. Marry a cheerful person. There's no joy in waking up with a whiner.

2. Have a hobby. I don't care what it is -- yodeling, checkers, luge, whatever. Something you love that takes your mind off the horrors.

3. Secretly do nice things. You'll feel better.

4. Avoid pop culture. It's a cesspool that will make you anxious and stupid.

5. Ignore politics. The people you think are heroes are assholes. And nothing works anyway.

6. Stand up straight. You'll look better.

7. Question everything. Especially your own strongly held beliefs.

8. Work hard. Success is very pleasant.

9. Have kids. And pray for the best.

10. Don't be afraid to tell assholes you hate them. It helps everybody.

Today is the first day of the rest of the week.