How Digital Marketers Created A Broken Advertising Ecosystem

Everyone knows someone who prides himself on buying stuff on the cheap. I’ve been that guy from time to time. Three years ago, my then-five year old declared herself ready to learn to ride a bike. Not wanting to drop hundreds on a bike she’d out-grow in a year, I bought the cheapest model that would pass my daughter’s eye test.

That’s about all it did well. After just a few months of gentle use, I couldn’t calibrate the hand brakes. The bike shop technician I took to told me in no uncertain terms that it was not fit for riding. He wondered aloud how manufacturers could get away with pumping junk bikes into the market.

The answer to his questions stood right before him, peering back with a chagrined look on his face as he pondered the foolishness of trading his daughter’s safety for a hundred bucks.

My experience with my kid’s bike is a useful analogy for what’s happened to a significant portion of the digital marketing ecosystem.

I’m talking about much of the digital display market, which has penny pinched in order to achieve the illusion of quantity at the expense of quality. The result: a thorny thicket of problems that marketers are spending (or wasting, depending on your point of view) billions to tame. The problems include:

  • Ad fraud, in which ads are engaged illicitly. Read this fascinating story on how Google is fighting billions in fraud losses.

  • Ads that aren’t viewed or viewable

  • Ad blocking

  • Extrapolated audience identity

  • Measurability, especially across devices

In their entirety, they’re awfully discouraging. They’re also the product of the evolution of traditional media and a collective failure by many marketers to recognize how fundamentally the landscape has changed.

Twenty five years ago, marketers spent largely on television, print, radio, and out of home advertising to build awareness. Today, marketers spend in similar ways, even if the channels have changed. Display ads have supplanted print and billboards, and digital video threatens TV, but marketers still rely on these newer alternatives to achieve legacy objectives: to increase awareness.

Not only have the channels changed; so, too, have the problems. Twenty five years ago, marketers had few tools aside from imperfect ratings providers and pricey research to measure impact, but they didn’t have to worry about whether their ads would be viewed by people or robots. That’s because the advertising occurred in closed ecosystems, a collection of analog publishers that maintained full control over each ad the moment it left the agency.

Today, marketers have the measurability they once lacked and access to seemingly limitless impressions, but that has required working in open ecosystems in which vulnerable machines maintain spotty chain of command over each ad. Instead of buying NBC, for example, marketers buy into a digital ad network that may place ads on sites or mobile apps about which they’ll know nothing, not even their names, much less their audience composition.

The market needs two things to combat these problems. First, it needs more closed digital marketing ecosystems that reduce if not eliminate the risk of shenanigans afflicting ad chain of command. That would result in significantly higher quality inventory, with audiences known at the identity level, advertiser costs incurred only when real engagement occurs, and cross device measurement that captures changes in every stage of the funnel. Facebook is the best example today of this new ideal.

That brings me to the second requirement: advertisers that are willing to pay for quality and full-funnel opportunity. Producing platforms with Facebook’s advertiser benefits, and I haven’t even touched the topic of scale, requires massive investment. Someone needs to pay.

I began this blog post with the notion that eventually, Facebook and other social platforms will doom today’s broken, open markets for digital display to the evolutionary trash heap, but that’s not realistic. After all, everyone knows someone who prides himself on buying stuff on the cheap.

Just know that you have a choice; you can, in fact, significantly reduce marketing friction and generate higher quality outcomes.

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One comment

  1. […] long ago, I wrote about the broken digital advertising ecosystem. I really meant the traditional digital advertising marketplace for reach, frequency and […]

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