February 22, 2016

Why Online Ad Industry Can't Reform Itself

Online advertising has a very simple problem with a very simple solution. But it's a solution that will never happen.

Like all advertising, digital advertising is annoying. No sane person voluntarily signs up for any kind of advertising, but we tolerate it in other media. TV ads and radio ads and newspaper ads may be a bother, but they're a minor bother.

Online advertising has gone way beyond that and become a plague. It hounds us, tracks us, interrupts us, slows us down, costs us money and is more than just a nuisance, it's a scourge.

The result is that there is a rebellion going on among consumers. Two hundred million of us have downloaded ad blockers. This is causing a big problem in digi-world.

The solution is simple. The online ad industry should do what all other media do and show some mature restraint. They should voluntarily end tracking, they should limit the "load factor" of their ads so they don't cost us money, they should ban auto-starts, page takeovers, pop-ups and other forms of ultra-intrusive ads.

The result would be beneficial to all. Consumers would be much more tolerant of online advertising, and online publishers could sell their ad space at a better price by not having to compete with the sleaze merchants at the bottom of the internet cesspool.

But this will never happen. The reason it won't happen can be found in a logic principle called the "fallacy of composition." The fallacy of composition says that something that is good for the whole is not necessarily good for the individuals that comprise the whole.

For example, it may be a very good thing for the online ad industry to stop tracking, but it would be a disaster for Facebook. Facebook sells its ad space to advertisers based on its ability to know who you are and what you want. How do they know that? They track the shit out of you.

Consequently, the idea that a web publisher will voluntarily give up his "value proposition" for the good of the industry is a fantasy. It will never happen unless and until some organization or agency imposes standards on the industry.

The online ad industry has a lot of problems. They say they can't do much about online fraud. Maybe that's true. They say they can't do much about unscrupulous publishers. Maybe that's true.

But they can do something about "worst practices" and they are not. Leaving it up to individual publishers, or individual agencies, or individual clients is not working and never will. The fallacy of composition will see to that.

Online publishers, greedy agencies, and clueless marketers are creating a nightmare for themselves. When it all blows up in their faces they'll have no one to blame but themselves.

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