Digital Advertising verses Digital Ads

As some readers already know, I make my living working in ad tech. For those unfamiliar, ad tech is shorthand for the internet advertising industry. I suspect most outside the industry think internet advertising as strictly banner ads, but ad tech actually encompasses all advertising that is delivered via software over the internet. So for example, while NBC running a commercial on your local station does not typically involve ad tech, them running that same commercial on one of their websites or apps does. Given this example, a better term commonly used to frame the this industry is simply “digital advertising”. This is as opposed to the “traditional advertising” industries of print and broadcast. That said with traditional advertising shrinking, at some point any remaining print and broadcast activity will get relegated to the “other” category of an “Advertising” industry that will be synonymous with digital.

Outside of massive traffic when compared to traditional media, the benefits of digital advertising are many — better tools, better reach, better analytics, better inventory. Unfortunately these benefits have been tainted with fraud, ignorance, and a widespread lack of taste. The problems go all the way back to the start of digital advertising and one of its most basic concepts — the click-through.

Why Digital Advertising is Great

Imagine it’s the late 1990s and that you are a marketer working in the entertainment industry trying to create buzz around some new Rob Schneider movie. Obviously you have previews in theaters, print ads in magazines and newspapers, and commercials on television. You think you have all your bases covered, but then some asshole from the internet shows up and says you are missing out. Why? Because in all of those other places, the people exposed have only one outcome that inevitably leads them away from Rob Schneider. Previews and commercials end, and printed pages can only be turned. If you’re lucky, some will actually remember your otherwise forgettable movie exists just long enough to go see it. Now you’re told that advertising on the internet is different, that instead of moving on, people who are interested in your film can simply click on Rob Schneider’s face and be immediately brought to even more movie marketing material.

I would keep going with this little exercise, but it’d all be moot as your late 1990s marketer brain just exploded.

Never mind digital advertising is better. Never mind that all advertising will be digital. The idea that anyone can instantaneously get more information about something of interest is great regardless of whether that something of interest is an ad.

Why Digital Ads Suck

Not long after the idea of the click-through came the idea of tricking people into clicking ads via Punch the Monkey-esque1 scams. From there a long history of other scams and fraud have been pervasive in digital advertising. In my opinion though, Punch the Monkey is really just an outcome created by other factors in the industry. Let’s assume fraudsters gonna fraud wherever fraudulent gains can be had, so what makes digital advertising so ripe for defrauding?

Digital Ads Are Cheap

If you were a traditional big media company or publisher encountering the internet in 1997, your complete lack of understanding of what it was ultimately left you picking from a bento box of likely outcomes:

The internet is a(n)… …and we should respond by…
…hobby… …outsourcing to the same unknown company as our competitors.
…fad… …do as close to nothing as possible.
…enemy… …lawyer up
…free… …selling ad inventory at a discount.

Because a majority of those who would have had the most to gain failed to identify the internet as a huge and disruptive opportunity, inventory for digital advertising was immediately relegated as the “cheap” alternative rather than be taken as a serious part of the business.

Digital advertising being synonymous with cheap has had many consequences, but I would like to focus on just two:

  1. Because digital inventory has little-to-no value, the status quo is to show a bad ad before showing no ad. Always showing an ad means cheapening content to the level of the ads available instead of elevating ad inventory to the level of the content. This means even reputable publishers and media companies now try to make up revenue on volume via clickbait and listicles. Once you’re a site doing clickbait and listicles, it becomes much harder to call yourself reputable let alone command a higher price based on content.
  2. Lack of strategic investment means publishers have largely outsourced the technology to manage their ad inventory with minimal oversight. Most ads served actually have access to the page, meaning they can literally do anything the publisher can. Imagine if McDonalds let franchisees do whatever they wanted with only a lowest common denominator of requirements. Say what you will about Big Macs, but at least people in a pinch can rightfully trust McDonalds to be consistent and not give them food poisoning in way they can’t trust publishers to not infect their PC with some virus laced ad.

While scammy ads permeate all forms of media, they’re mostly harmless and usually relegated to less desirable inventory. Cheap digital ads means Punch the Monkey isn’t quarantined off to some dark corner of the internet, but instead can afford to land a spot on your favorite major publisher. And thanks to a general lack of oversight, it can also pop up a nice little survey asking you how great Punch the Monkey is, just like those actual brands advertising on that same page. This takes me to my next point.

Digital Ads Favor Data Over Taste

While click-throughs may be the greatest thing since sliced bread, measuring them has had some adverse affects. Don’t get me wrong. Data is perhaps the biggest benefit to digital advertising. Advertisers can optimize their campaigns from an assortment of metrics not available anywhere else that include click-throughs, interactions, video playback, reach, conversion and attribution, viewability… the list goes on and on. The problem isn’t data, but the emphasis on data at the exclusion of taste.

For example, consider those video ads that appear between paragraphs in an article. It’s a good bet that not a single person outside of the industry would have anything nice to say about these video ads. They disrupt the reader twice (on both expand and collapse) to deliver a message they didn’t ask for in a format incongruous to the content2. Most people in the industry I talk to don’t like them either, yet these video ads are thriving. Why? Three reasons:

  1. They’re cheap to make because they simply repurpose existing video made for broadcast.
  2. Video ads are more lucrative for publishers.
  3. They force engagement.

You may be thinking “how do these ads force engagement?” While different companies have different implementations of this type of ad, I strongly suspect some happily round up any event to an engagement. So in this case, the video expanding after the user scrolls could be considered a “user engagement”, the video auto-playing is considered a “video engagement”, and even the user closing the video could be considered another “user engagement”.3 So this ad that no one really likes is considered a top performer in the eyes of advertisers, who blinded by data inadvertently encourage publishers to further inflate their statistics with disruptive ads while sacrificing the remaining goodwill of their readership.

Just like Punch the Monkey.

Finally many data metrics, such as attribution and our friend, the click-through, primarily benefit direct advertising. Direct advertising refers to ads that want you to perform a specific action, like buy a movie ticket. This is as opposed to brand advertisers whose main goal is to generate awareness of a specific product, brand, or company. For example, Frito-Lay’s Superbowl ad isn’t to get you to run out and buy more Doritos in the middle of the big game, but rather to keep them top of mine so that you think “Doritos” the next time you’re feeling noshy. So while knowing which ads and media are driving more click-throughs and conversions is critical in direct advertising, these metrics shouldn’t really be a factor in brand advertising. More often than not though, they are, because we can measure these metrics just as easily for brand advertisers as we do for direct advertisers. So what’s the harm? In my opinion, this is a good example of when data has adverse affects. Now brand advertisers, spurred on by an industry touting the importance of data, are supplementing brand metrics such as reach and lift with clicks and attribution. But because branded ads aren’t designed to drive conversions, they don’t perform according to the data. I suspect this is just one reason why a vast majority of digital ads are direct4.

What’s Next

As I said at the top of this post, digital advertising is not only great, but the future. While this industry is full of smart people who are trying to make digital ads better, I am increasingly having a hard time seeing improvement happening without some turmoil. Whether change comes through evolution or revolution, better digital ads will require publishers beyond search companies and social companies to take more of an active role with their ads. Additionally, while data is a tentpole of digital advertising, more people in the industry need to look past data to start thinking about the types of digital ads that they themselves might actually click on and maybe even the types of digital ads that don’t need to be clicked at all.

  1. I am referring to a type of animated banner ad that poses as a mini-game that promises a reward (like 20 dollars) if the reader can click on(or “punch”) some moving target (like a monkey). The earliest reference to “Punch the Monkey” I could find was from 2000, but I am certain earlier versions exist. ↩︎

  2. I’d further wager that people are less effective at processing information that doesn’t match its surroundings. ↩︎

  3. There’s probably also another engagement for those who intended to close the ad, but mistakenly click through. ↩︎

  4. Another is that there are more cheap direct ads… lose belly fat… get low mortgage rates… punch the monkey. ↩︎