Brands need to fire adtech

fireadtech

Brands are bailing from adtech, and news about it is coming fast and hard.

The New York Times said AT&T and Johnson & Johnson were pulling their ads from YouTube, concerned that “Google is not doing enough to prevent brands from appearing next to offensive material, like hate speech.” Business Insider said “more than 250” advertisers were bailing as well. Both reports came on the heels of one Guardian story that said Audi, HSBC, Lloyds, McDonald’s, L’Oréal, Sainsbury’s, Argos, the BBC and Sky were doing the same in the UK. Another Guardian story that said O2, Royal Mail and Vodaphone were joining the boycott as well. Wired and AdAge have weighed in too.

Agencies placing those ads on YouTube were shocked, shocked! that ads for these fine brands were showing up next to “extremist material,” and therefore sponsoring it. They blame Google, and so does most of the press coverage as well.

And Google admits guilt. Business Insider:

Google’s executives were summoned to appear in front of the UK government last week after ads for taxpayer-funded services were found next to extremist videos, following an investigation by The Times newspaper. Google must return later this week with a timetable for the work it is doing to prevent the issue from occurring again.

On Monday, at a breakfast briefing with journalists before he took to the stage at Advertising Week Europe — Brittin said the annual ad industry event gave Google a “good opportunity to say first and foremost, sorry, this should not happen, and we need to do better.”

Brittin added: “There are brands who have reached out to us and are talking to our teams about whether they are affected or concerned by this. I have spoken personally to a number of advertisers over the last few days as well. Those that I have spoken to, by the way, we have been talking about a handful of impressions and pennies not pounds of spend — that’s in the case of the ones I’ve spoken to at least. However small or big the issue, it’s an important issue that we address.”

Google also isn’t alone at this. They’re just the biggest player in an icky business. That business is adtech: tracking-based advertising.

Let’s be clear about all the differences between adtech and real advertising. It’s adtech that spies on people and violates their privacy. It’s adtech that’s full of fraud and a vector for malware. It’s adtech that incentivizes publications to prioritize “content generation” over journalism. It’s adtech that gives fake news a business model, because fake news is easier to produce than the real kind, and adtech will pay anybody a bounty for hauling in eyeballs.

Real advertising doesn’t do any of those things, because it’s not personal. It is aimed at populations selected by the media they choose to watch, listen to or read. To reach those people with real ads, you buy space or time on those media. You sponsor those media because those media also have brand value.

With real advertising, you have brands supporting brands.

Brands can’t sponsor media through adtech because adtech isn’t built for that. On the contrary, adtech is built to undermine the brand value of all the media it uses, because it cares about eyeballs more than media.

Adtech is magic in this literal sense: it’s all about misdirection. You think you’re getting one thing while you’re really getting another. It’s why brands think they’re placing ads in media, while the systems they hire chase eyeballs. Since adtech systems are automated and biased toward finding the cheapest ways to hit sought-after eyeballs with ads, some ads show up on unsavory sites. And, let’s face it, even good eyeballs go to bad places.

This is why the media, the UK government, the brands, and even Google are all shocked. They all think adtech is advertising. Which makes sense: it lookslike advertising and gets called advertising. But it is profoundly different in almost every other respect. I explain those differences in Separating Advertising’s Wheat and Chaff:

…advertising today is also digital. That fact makes advertising much more data-driven, tracking-based and personal. Nearly all the buzz and science in advertising today flies around the data-driven, tracking-based stuff generally called adtech. This form of digital advertising has turned into a massive industry, driven by an assumption that the best advertising is also the most targeted, the most real-time, the most data-driven, the most personal — and that old-fashioned brand advertising is hopelessly retro.

In terms of actual value to the marketplace, however, the old-fashioned stuff is wheat and the new-fashioned stuff is chaff. In fact, the chaff was only grafted on recently.

See, adtech did not spring from the loins of Madison Avenue. Instead its direct ancestor is what’s called direct response marketing. Before that, it was called direct mail, or junk mail. In metrics, methods and manners, it is little different from its closest relative, spam.

Direct response marketing has always wanted to get personal, has always been data-driven, has never attracted the creative talent for which Madison Avenue has been rightly famous. Look up best ads of all time and you’ll find nothing but wheat. No direct response or adtech postings, mailings or ad placements on phones or websites.

Yes, brand advertising has always been data-driven too, but the data that mattered was how many people were exposed to an ad, not how many clicked on one — or whether you, personally, did anything.

And yes, a lot of brand advertising is annoying. But at least we know it pays for the TV programs we watch and the publications we read. Wheat-producing advertisers are called “sponsors” for a reason.

So how did direct response marketing get to be called advertising ? By looking the same. Online it’s hard to tell the difference between a wheat ad and a chaff one.

Remember the movie “Invasion of the Body Snatchers?” (Or the remake by the same name?) Same thing here. Madison Avenue fell asleep, direct response marketing ate its brain, and it woke up as an alien replica of itself.

This whole problem wouldn’t exist if the alien replica wasn’t chasing spied-on eyeballs, and if advertisers still sponsored desirable media the old-fashioned way.

Fixing it won’t be easy, because the alien replica has been drunk on digital for so long that very little humanity remains. This is true not just for Madison Avenue, but for both the client and the media stages of the advertising supply chain. On the client side, old-school sales & marketing VPs have been replaced by data-obsessed CMOs who would rather hire an IBM to paint a portrait of a fiction called “the chief executive customer” than actually talk to a real one. On the media side, publishers and broadcasters have long since fired their human sales people and outsourced income production to dozens of third party adtech systems.

But at least we’re seeing brands start to wake up, even if they’re still fooled by adtech’s magic tricks. And consciousness is surely happening a level or two above the CMO. Those senior executives, whose brains have not been snatched by adtech, will still recognize the obvious: that brands are best made and served by sponsoring media they know, like and trust.

After all, sponsoring trusted media is what produced brands in the first place. It’s also what still what makes brands familiar to whole populations, and what still sponsors worthy publications and the journalism they contain.

If brands still want to do “interest-based” or “interactive” advertising (adtech’s euphemisms for what it actually does) they should realize five things:

  1. Adtech sucks at branding. Hundreds of $billions have been spent on adtech so far, and not one brand known to the world has come out of it.
  2. Yes, it works, about .0x% of the time, on average. The other 99.9x% of the time it produces nothing but negative externalities, including lots of tendentious math by agencies and platforms to justify the expense.Among those externalities are subtracted value from brands themselves.
  3. Yes, direct response marketing does work, and it works best when target customers have already opted in, consciously and deliberately. (Note that there is a great deal of ambiguity about how much being a Google or Facebook member amounts to deliberate and conscious agreement to being followed and targeted, privacy controls withstanding. The choices in those controls should be much more binary and clear than they are.) So if L’Oreal wants to get a conversation going with customers of Lancôme, Giorgio Armani or The Body Shop, they should do it by those customers’ grace, not because the robots they’ve hired guess those customers might be interested, based on surveillance-gathered personal data.
  4. Adtech starts with spying on people. This isn’t the elephant in the middle of adtech’s room. It’s the volcano about to erupt from under adtech’s floor. In that volcano are pissed off people who will soon get their own ways to kill off adtech. The rumbling under the floor right now is ad blocking. The lava that will pave over adtech is full tracking protection.
  5. Adtech’s rationalizations are all around putting the “right message in front of the right people at the right time,” and aiming those messages with spyware-harvested Big Data. Both of those are direct marketing purposes, not those of brand advertising. The difference is stark, absolute, and essential for everyone to understand.
  6. The only reason publishers go along with adtech is that they don’t know any other way to make money from advertising online — and no developers have provided them one. (But that will happen soon. Trust me on this. I know things I can’t yet talk about.)
  7. What Shoshana Zuboff calls “surveillance capitalism” is going to be illegal a year from now in the EU anyway, thanks to the General Data Protection Regulation, aka GDPR. Mark your calendars: on 25 May 2018 will come an extinction event for adtech, because here are the fines the GDPR will impose for unpermitted harvesting of personal data: 1) “a fine up to 10,000,000 EUR or up to 2% of the annual worldwide turnover of the preceding financial year in case of an enterprise, whichever is greater (Article 83, Paragraph 4)”‘; and 2) “a fine up to 20,000,000 EUR or up to 4% of the annual worldwide turnover of the preceding financial year in case of an enterprise, whichever is greater (Article 83, Paragraph 5 & 6).”

Ad choices won’t do the job. That’s adtech’s way to “give you control” over “how information about your interests is used for relevant advertising.” The link into that system is this little symbol you see in the corner of many ads:

While clicking on it does provide a way for you to opt out of surveillance, you have to do it over and over again for every ad you see with the damn thing, like playing a slo-mo game of whack-a-mole, and it still relies on the adtech industry keeping cookies in your browsers.

If there is a market on the receiving end for “interest based advertising,” let’s have a standard system that puts full control in the hands of individuals, and speaks through open code and protocols to any and all publishers and broadcasters. Anything less will just be another top-down adtech industry paint-job on the same old shit.

An open question is if agencies can be programmatic online without spying on people. I think they can, if they start by admitting that spying is where the problem lies.

It should be clear that spying is why Do Not Track became a thing, and whyad blocking hockey-sticked when the adtech industry and publishers together gave the middle finger to people’s polite request not to be tracked. (Which is all Do Not Track provides.) It should also be clear that ad blocking and tracking protection are not “threats” and “costs” to publishers and agencies. They are clear and legitimate market responses by human beings to having adtech’s digital hands up their skirts.

It also won’t be easy for the big platforms to fix their adtech systems. Consider, for example, the egg that was splattered on Mark Zuckerberg’s face by Facebook’s own adtech when he posted his insistence that “99% of what people see is authentic” and “only a very small amount is fake news and hoaxes,” and fraudulent ads ran right next to his post:

zuckegg

These ads are fraudulent in at least three ways: 1) the headlines are lies; 2) espn.com is not the advertiser; 3) if you click on them, you find they’re bait for switches to something else. (One I clicked on was for a diet supplement.)

And this is no isolated case. Medium’s Ev Williams also reported the same kind of adtech-aimed fakery.

Facebook is going to have a hard time fixing this, because it is entirely in the chaff business. With Google, even though it’s hard to tell whether any given ad placed in a Google property is wheat or chaff, at least some of it really is wheat. (I would guess most search ads are, for example.) It should be just as easy for Google to disclose those ads’ nature as wheat as it is for the company to use Ad Choices to disclose adn ad’s nature as chaff. (I suggest one possible approach to this in A way to peace in the adblock war.)

But fixing the mess needs to start with advertisers. They can do it by firing adtech and its agents and going back to sponsoring reputable broadcasters and publishers. Simple as that.

11 comments

  1. Mihai Pintilie’s avatar

    Interesting and useful article! Thank you for the informations provided!

  2. BB’s avatar

    Interesting, thank you.

  3. Dave Morgan’s avatar

    Doc, great piece. I agree that adtech does not serve consumers, nor advertisers very well, since it was built in the model of direct marketing, which tends to favor spray and pray. In the world of consumer-friendly media advertising, sending redundant, irrelevant ads is bad. For advertisers, hammering consumers with too many irrelevant ads is bad, and putting ads in bad content is bad. Adtech hasn’t lived up to its expectations – i helped build some of it.
    That is why I think that marketers have to step up and take control of the eco-system. They need to take control of adtech and run it for the only interests that really matter in the world of commercial communications, those who sell (marketers) and those who buy (consumers). Marketers’ version of adtech will be focused first and foremost on the consumers and earning their trust by creating a value exchange for data that delivers fewer, more relevant ads and gives them better offers on products.

  4. Tom Osborn’s avatar

    OTOH, Peer39 Brand Safety.

  5. Mark Pilipczuk’s avatar

    I have to disagree with Dave Morgan’s assertion that direct marketing was built as a “spray and pray” model. Every direct response marketer that I’ve worked for, or whose teams I’ve led, were decidedly not spray and pray marketers. A lot of analysis and modeling was done to constantly improve performance. After all, when you’re spending $1000-$1500/M for direct mail–which I did with $200MM+ budgets annually–it’s a quick way to go out of business if you don’t know what you’re doing.

    Contrast that with the $1-$2 CPMs being paid for digital media. At 3 orders of magnitude lower cost, one can afford to be awfully sloppy. Couple that with no real concern about privacy and an infatuation with flashy–but unproven–technology, and you end up in the adtech-polluted world we’re in.

    And, by the way, you can STILL make money with $1-$2 CPM digital advertising, as long as you don’t mind too much where your ads are shown.

    There is a solution. It starts with returning to marketing to people and ripping out the unnecessary technology that makes it impossible to understand where you’re running your ads and why. It takes advertisers to say “no” to anything they can’t understand and to use their dollars where the publishers and platforms are straight about what they do, and don’t do with data.

    The benefit gained is one of brand equity. Your ads will be shown in places where they are seen as part of the deal involved with receiving content. Content quality will go up, lousy and invasive ad units will go away and you won’t have to be tracked around the internet to make a sale.

    Short-term pain for advertisers and publishers? Yes. But advertisers and trustworthy agencies need to put their feet down and demand it. Marc Pritchard from P&G is off to a good start and we all should listen to, and follow, his suggestions.

  6. Robert Berkeley’s avatar

    Almost all advertising is targeted in one way or another. The billboards I see going into London are placed there because JC Decaux believe that people like me will see them – every day. They are different from the billboards you might see on the train or outside a supermarket.

    The difference now is digital ad tech’s razor-like focus. It’s *too* sharp and feels intrusive.

    So, like any other art, the best advertising (in terms of placement not content) treads that fine line between relevant and invasive.

    Finally, on a separate note, would advertisers pay a premium to Google to ensure that their ads only appears on a white-list of “acceptable” websites? What would be the unintended consequences?

  7. Californius’s avatar

    Love, love, LOVE this article as it validates everything that advertisers and publishers have secretly been thinking but not speaking about due to the cash rolling in. The term “surveillance capitalism” is now stuck in heads and it certainly applies. What a trippy business model indeed.

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