Cocktails In The Morning

Let's face it. Most of what we ad people do is really dopey.

I wasn't much of a creative person, but I've had the good fortune to know some great ones. There is one thing about them that I love.

They work hard and have high standards, but they also have an enduring sense of how silly the whole thing is.

It takes a special kind of intelligence to be diligent about what you do and yet keep that part of your brain alive that realizes it's largely ridiculous.

There is a great deal of nonsense in the advertising business and I think it's very healthy to appreciate the absurdity. All the somber imbeciles who think that what they're doing is terribly important need a good solid whack in the golden globes.

I think I blame it all on conferences. There are way too many fucking conferences. I go to a lot of these conferences because I'm one of the speakers and I get paid. But if I didn't, I wouldn't (I think this is what's called "biting the hand...")

Most of the people who speak are so fucking serious. I'm sorry but after sitting through 8 hours of “The Programmatic Real-Time Digital Insider Summit” you can't help but want to go to your room and watch a good hockey fight. Or go to the bar and start one.

I suspect the reason we lost the war on drugs can be laid at the feet of marketing conferences. How can thousands of people every day sit through these things if they're not high?

I know why people go to conferences. They think anything's better than a day at the office. But they're wrong. They wind up getting the worst of both worlds. They pay for the conference but wind up standing outside the ballroom all day talking on their cell phones to the same bozos they were trying to escape in the first place.

I know what my great creative friends would do to solve this problem. They'd have backwards conferences. They'd start the day with the cocktail party and then have the presentations.

That way, instead of presentations called...

• Real-Time Bidding Algorithms In An Optimized Content Management Environment

we'd have presentations called...

• Boosting Your Personal Brand Through Naughty Videos.
• The Open Plan Office: What Asshole Dreamed Up This Shit?
• Millennials: Pathetic Narcissists Or Unsufferable Bedwetters?
• Working From Home. Yeah, Right. 

Sounds more fun, no?

Why Ad Fraud Thrives

If you're like me, you probably wonder how ad fraud can be so pervasive and harmful while the ad industry -- with billions of dollars at stake -- sits on its fat ass and does nothing.

The aha! moment came to me a while back when I came across and posted the chart below (which I've been using a lot lately.)

It comes from the World Federation of Advertisers and if you think about it, it explains why the ad industry doesn't give a flying shit about online ad fraud.

What this chart shows is that the flow of money within the advertising "ecosystem" (everything in grey) is exactly the same whether agencies are buying real traffic and real clicks or fraudulent traffic and fraudulent clicks.

The fraud doesn't enter the money stream until we get to the green area, by which time everyone in the agency/adtech world has already cashed their checks and is halfway to the Hamptons.

There are two groups of people getting royally screwed by ad fraud. One is too stupid to understand what's going on. The second nobody gives a shit about.

First is dumbass clients who astoundingly are still buying the bullshit they hear from their agencies about "systems they have in place" to identify and prevent ad fraud. You'd think that with all the recent headlines about ad fraud they'd start to connect the dots. But like all suckers, they always think it's the other guy who's getting screwed.

Second is online publishers who told us "information wants to be free" and are now reaping what they sowed. Advertisers are lining up to give their money to Google and Facebook and could not give less of a shit about the million other online publishers out there. In fact, take away Google and Facebook and digital advertising is actually in decline.

The stupidity of the advertisers is beyond explanation. I can understand how they won't listen to half-wit bloggers like me, but how can they continue to ignore the overwhelming amount of evidence that is coming at them daily that shows they are being fucked blind?

I guess they must think there is someone somewhere who's looking after their interests. There isn't.

Their agencies aren't protecting them. It's not that agencies are complicit in the fraud, it's just that as the chart above shows, they have no incentive to do anything about it. As long as clients keep pressing them for lower and lower rates they'll continue to use programmatic methods for buying crappier and crappier crap i.e., fraudulent traffic.

Their CMOs aren't protecting them. It's largely these geniuses who've been ramming digital horseshit down their throats for a decade.

The 4A's (American Association of Advertising Agencies) isn't protecting them. The 4A's has become the lapdog for the Big 6 holding companies, and the Big 6 are feasting on online debauchery.

The IAB (Interactive Advertising Bureau) is a cruel joke. 

The ANA (Association of National Advertisers) seems to know they're getting screwed but have no idea what to do about it other than issue whiny press releases.

So who's going to protect dazed and confused brands from themselves?

To understand this better, let's take a brief detour and talk about basketball and hockey.

Basketball is a game with rules that greatly favor offense over defense. If you're playing defense and you breathe too hard on your opponent you're called for a foul. Consequently, basketball is a game with a lot of offense. You usually have to score over 100 points to win.

Hockey is the opposite. In hockey, the defensive player has some very substantial advantages. You can pretty much maim or kill your opponent, as long as you don't do it with a tire iron to the windpipe, and not be penalized. The result is that 3 goals are usually enough to win a game.
 
In ad fraud, all the advantage is to the offense -- that is, the fraudsters.

Fraudsters have tremendous incentive to be aggressive. They can make enormous amounts of money. What incentives do agencies, ad tech companies, or the 4A's have to play defense? Are they going to make more money? No. It may even cost them money.

The only people with an incentive to play defense are 1) the advertisers, who still don't understand the connection between demanding the lowest possible rates and getting the worst possible crap, and 2) the publishers, who can only make a living by feeding advertisers "non-human" traffic.

It's a clown show extraordinaire.

Display Ads: My 3¢ Worth

My New Years day Type A Group Newsletter drew some attention. Being a lazy-ass bum, I thought I'd kick-off the blog year with it. Check out the numbers -- as you know, copywriter math is always suspect, but I used sources that are usually reliable. Here we go... 

Turning Ad Dollars Into Pennies
 
First let me wish you a Happy New Year.

If you're any fun at all, you probably have a massive headache right now. But if you don't, don't worry, I'm about to give you one.

Today we're going to "follow the money" and watch as a dollar of your online display advertising budget magically evaporates into 3¢ of value. I'm going to provide a shitload of links to all the sources of this information so you can stuff 'em down your cmo or your agency's throat... not that you're that kind of person.

Kindly step into my lab...

First we start with a dollar. We give it to our media agency to buy some display advertising for us.

According to the World Federation of Advertisers (WFA) here's what happens next:

• First, your media agency takes about 5¢ in service fees.
• Then their trading desk takes about 15¢.
• Then their Demand Side Platform (DSP) takes about 10¢.
• Next, some other ad tech middlemen take about 25¢ for targeting, data, and verification.
• Then an Ad Exchange takes about 5¢. 

This chart which I have excerpted from the WFA sums it up nicely.

So before an ad appears, 60¢ of your dollar has already been spent on...something. I don't know what. I guess "technology" or "process" or something equally vague.

All these middlemen will say that they add value to your media buy by precision targeting your ad at your perfect customer at the perfect time. Right. So maybe instead of 6 clicks per 10,000 ads (yeah, that's about average) you'll get, who knows, maybe 8. Break out the champagne!

On the other hand, Proctor & Gamble, the world's largest advertiser, says that all the precision targeting actually got them fewer customers.

Well, the good news is, you still have 40¢ left.

But the problem is, you can't get 40¢ worth of advertising for your 40¢. You see, according to The New York Times, Digiday and other reliable people, only about 50% of online ads are "viewable." 
 
This is because online ads often don't load in time for a person to see them. Or they appear "below the fold" where they are not visible. Or a fraudster sends a pixel that says it's an ad. Or ads are stacked behind one another where they can't be seen (it's a nasty game, this.)

So sadly, we're now going to have to mark your 40¢ down by 50% to 20¢ to account for the  "viewability" problem.

Now we have 20¢ left. 

But, darn it, other kinds of fraud also have to be taken into account.

You see, some of your ads are very likely to run on make-believe websites that have make-believe traffic and make-believe clicks. Of course, you didn't ask for that, but that's what you get. The one thing you don't get are make-believe invoices. Those things are real.

Your agency will tell you that they have protection against fraud. They have cyber-security this and 100%-guaranteed-ad fraud-protection that. It's all horseshit. Do some reading. You will find there are are NO RELIABLE METRICS on ad fraud.

Ad fraud is estimated to be between 2% and 90%. In other words, no one has a fucking clue. Most knowledgeable people (including the WFA) believe it may easily be 30%. No matter what your "cyber-security team" tells you, nobody knows how much fraud there is in online advertising. But everyone agrees it's massive.

Since we accounted for a little ad fraud in our last step, let's be conservative and say that only 20% of your remaining 20¢ will be eaten by fraud. That leaves us with 16¢.

 Let's recap. So far we've discovered that for our advertising dollar we have probably gotten about 60¢ worth of fees and technology, 20¢ worth of viewability issues, 4¢ worth of additional fraud, and 16¢ worth of "viewable real ads."

But our next problem is that not every ad that can be seen is seen. According to Lumen, a research company that measures this stuff, only 2/3 of viewable impressions are actually looked at by someone. Sorry, that just cost us another  nickel.

Well, we're getting down to the end here and we have 11 cents left. There's  just one more value killer we have to account for - people. According to the above-mentioned Lumen group, 75% of the time people don't even spend a second looking at online ads. Even the clowns, I mean, professionals at the Interactive Advertising Bureau won't accept an ad that isn't in view for a second as an "impresssion." This is not helpful to our value calculation. It takes our 11¢ down to 3¢.

So, at the end if the line, on average, it looks like you are probably getting somewhere about 3¢ worth of actual ads seen by actual people for every dollar you spend on display advertising.

I know you may be feeling a little depressed by all the money you've been pissing away. But it's a new year. Please, look at the big picture. You're on the web. How cool is that!