Digital advertising. Where did it all go wrong?
Eaon Pritchard argues the current obsession with adtech and data-driven advertising doesn’t help brands, publishers or consumers, and is actually doing more harm than good.
By 1971 Manchester United’s Irish star George Best’s hectic off-field celebrity lifestyle had began to take its toll on his effectiveness on the pitch.
Arguably the most talented footballer of his (or just about any) generation George had lost interest in the game, developing a reputation for general unreliability and missing both training sessions and matches.
This erratic behaviour was connected to Best’s developing problem with alcoholism. He eventually parted company with United (and football) during the 1973/4 season, at the end of which Manchester United were relegated.
George Best was only 27 when he quit – an age when most players are usually regarded as being at or near their peak – and the ‘wasted genius that threw it all away’ narrative was never far from the tabloid headlines.
Without the distraction of football, George was free to pursue his other interests – namely drinking, gambling and glamorous women.
One night in 1974 George spent the evening in a casino with a former Miss World.
They won a silly amount of money, went back to their hotel room and ordered the hotel’s best champagne, which was shortly delivered by an Irish room service waiter.
The waiter looked at George, Miss World, the piles of money scattered all over the bed, the vintage champagne and said to Best:
So tell me now George… Where did it all go wrong?”
On the surface, George didn’t look like he was having too many problems.
Similarly, looking at the numbers, online advertising seems to be in rude health.
PwC forecasts that global total internet advertising revenue is set to grow from (US) $135.42bn in 2014 to $239.87bn in 2019, a Compound Annual Growth Rate over the period of 12.1 per cent.
They go on to predict that as the segment captures an ever-larger portion of advertising budgets, it will exceed TV to become the largest single advertising category by 2019.
Here in Australia the digital advertising market also continues to grow with the latest IAB/PwC Online Advertising Expenditure Report (OAER) noting that it generated $1.15 billion during the March quarter, another 5 per cent increase year on year.
That’s a lot of money scattered over internet advertising’s bed.
It’s had a few good nights at the casino but the real problems are only now starting to unravel.
A basic problem is the widespread acceptance and assumption in the industry that ‘advertising online’ almost exclusively means ‘highly targeted direct response advertising’.
Where did it all go wrong?
There is also widespread acceptance and assumption among web users that ‘advertising online’ must mean tracking.
It’s easiest to point the finger at adtech (or programmatic) the spoiled problem child of direct response marketing, given far too many toys to play with.
Adtech’s parents (Direct marketing) knew their role. They were there to make the phone ring after brand advertising had done its job.
But that wasn’t good enough for for the adtech brats. They wanted the whole game, and the internet – led by their big brothers and sisters Google, Facebook et al, allowed them to play it.
But if – as adtech asserts – people are demanding and responding to more personalised and relevant ‘advertising’, why isn’t ad-blocking adoption going down instead of up?
It turns out that people don’t like the idea of being tracked and profiled.
They don’t like being followed around the web by ads for stuff they have already bought (this has a knock-on effect in that it harms those brands that are doing the following. It looks desperate; it’s creepy and does nothing for ‘signal’)
And people don’t like their mobile data allowance being spunked by ads.
So naturally they start installing adblocking software.
And everyone loses.
While adblocking solves one consumer problem – they don’t see intrusive ads – it doesn’t solve any privacy problem.
Even if a human user doesn’t see the small portion of ads served that are actually viewable (most of the page views and clicks reported are fraudulent anyway) they are still being tracked, for the most part, and the adblocker may have done a deal with a ‘white-list’ anyway to allow its ‘preferred’ ads through.
From an advertisers point of view, and also for agencies and publishers, the failure with ad tech (aside from fraud, data-leakage, invasion of privacy) is that it is simply not able to deliver the necessary brand advertising part of the equation.
The internet’s inability to deliver on brand advertising means it is (today) no place to be if you want to build a brand over the next 10 years, and no amount of adtech is going to fix that because we have set up the web to only deliver direct response marketing in advertising clothing in the form of impressions and clicks – coincidentally the easiest things to fake and to track – and an ecosystem that rewards crap.
We’ve forgotten that brand advertising creates demand and direct response fulfils it.
A model in which the high quality sites, with high quality audience do their own deals with high quality brand advertisers, extracting (at least) the highest quality parts of their available inventory from the programmatic space, might be a start.
Costly signals are reliable. As researchers Tim Ambler and E. Ann Hollier found when applying signalling theory to brand advertising in their landmark study The Waste in Advertising Is the Part That Works.
…High perceived advertising expense enhances an advertisement’s [persuasiveness] significantly, but largely indirectly, by strengthening perceptions of brand quality’
What if publishers were to restrict their premium inventory, creating scarcity and an opportunity for ‘signal’ or brand-building conspicuous waste.
(I pitched for the web work with a premium fashion title a couple of years ago and this was their exact model. There was no way they were going to sully their web presence with anything other than premium ads or premium native – the same strategy as for the print magazine).
And us – in agencies – need to stop pushing adtech and data-driven solutions as the answer to every digital advertising problem (in fear of looking not-up-to-date), and instead perhaps look towards signal-driven strategies through premium advertising, premium content and premium native.
A final thought…if account planners still cared about being present in the minds of consumers rather than the latest gizmo then we would never have got into this mess in the first place.
Because poor old Stanley Pollitt is turning in his grave.
Reflecting on his career George Best famously noted:
“I spent most of my money on booze, birds and fast cars. The rest I just squandered.”
Well, we’ve squandered a lot of advertising money on dubious adtech and direct response advertising that’s created no value for publishers, advertisers or consumers.
Time to spend some on booze, birds and fast cars.
- Eaon Pritchard is head of strategy at King Content, Melbourne
If consumers had access to Ad Blockers on their Televisions decades ago would a subset not have blocked TVCs too?
User ID not verified.
Well put.
User ID not verified.
@MIke C I agree with you. Consumers have the choice nowadays. Previously they didn’t. Take magazines as an example. The first 6 pages can often be adverts. (It is why I do not buy magazines.)
2015:
I can follow people, companies, things that I like on social networks and get info from the horses mouth.
‘Where did it go all right’, don’t you mean?
– Slowly a correction is occurring. Getting rammed McDonald’s, Coca Cola and other awful companies’ messages is unethical, annoying and doesn’t help our society.
It isn’t wrong that a large multi national cannot push it’s anti-society agenda. It is a good thing. ‘Purpose’ is what it is all about today. If your brand can change the world, people will love it and flock to it like Christians to Jesus.
User ID not verified.
A great read and whole heartedly agree. Having worked in digital ad sales for a long long time it never ceases to amaze me the brands that judge success on clicks and measure every morsal of a digital campaign just because they can. Yet it’s completely fine to accept the millions of dollars TV receives but can’t be measured because they think it works and have always done it.
User ID not verified.
I thought there were adblockers for TV ages ago….. called ‘Remotes’. And yet some people did not bother to avoid the ads. Weirdly they sat glued watching shiney messages they could relate to, listening to jingles that repulsed them whilst singing along inside their heads…..
Had TV ads been the size of most web ad formats, overlaid on your TV screen across the content you wanted, then advertising would not have taken off in the first place.
Thankfully we’re coming full circle and video is becoming the prime activity for people online, so we can get back to decent advertising content. Can we please leave out the jungles this time around!!
User ID not verified.
Let’s look at some other forms of direct marketing that supposedly gets the phone ringing: email marketing (anti-spam laws got introduced), telemarketing (do not call register), direct mail (no junk mail signs or it goes straight in the recycling). Similar to Mike C’s comment, people would use ad-blockers on TV if they could. It’s one of the reasons more people move to digital viewing content – where there are no of fewer ads.
Brand marketing helps create awareness of a brand, but if you’re not present when a consumer is actually in market for the products or services you sell, those brand marketing dollars go to waste.
To get the most out of digital marketing brands should be looking to implement an integrated strategy that involves a combination of brand marketing, prospecting/direct response, remarketing and life cycle/retention marketing. This can also involve a combination of such activities offline as well.
One of the biggest errors in digital over the years has been the focus purely on last click, and a siloed view of digital channels, where brand activity is never going to have the ROI of programmatic/direct response, which in turn won’t have the ROI of search.
It would not be an uncommon situation that a consumer would potentially see a brand ad on their favourite news site, later be searching for products in Google to see that the brand they saw earlier actually stocks those, so they click to the site. However, 98-99% of the time, that person will leave without purchasing. They then may get retargeted, and return to the site through SEO, and sign up for an email newsletter. Which comes with a $20 off voucher which they then use to make a purchase.
The last click view would give total credit for that purchase to email. However, without the investment in brand, search, retargeting and SEO, the consumer may never have come to the site or signed up for the email in the first place – yet those channels get no credit.
Having an effective attribution tool that allows a company to see the impact that each channel has on the other can really help a brand to understand the true impact their individual digital channels are having, and attribute value accordingly. This way you can most effectively invest in channels that are driving the initial brand engagement, and those which help to push people through the buying journey to purchase – whether that be online or in store.
User ID not verified.
Since when is brand advertising the only way to build a brand? The fastest growing brands today rely on product and experience to build brand. When they deliver excellence, it’s their customers telling their brand story, not advertising. That’s how you build a brand online today.
User ID not verified.
“If your brand can change the world, people will love it and flock to it like Christians to Jesus.”
No, they won’t. Most people lie and will happily buy the cheapest product, environmental or other issues be damned.
User ID not verified.
This is a very interesting article.
I can’t help but feel that EVERYONE is confused and no-one know what direction to take. It kind of like the Matrix “where not sure who struck first, the humans or the machines” in this case it’s “the client or the agency”.
Everyone appears convinced that traditional “advertising is dead” but so is digital advertising, no one wants it!!
So what happens when GFC V2 hits? (which it will sooner rather than later). No-one will have any money, consumers or clients and brand building has become a thing of the past in favour of story telling and trying to create a following.
I can see a lot of scrambling, panic and brands (backed by huge VC dollars) folding.
User ID not verified.
I wish I had 57 minutes spare to watch the George Best Video, but I’ve already had a pub lunch.
User ID not verified.
I really like the George Best reference as it’s quite apt. Especially given that his reason for quitting football was that he’d become disillusioned with the game.
I feel the same way sometimes, especially when I see “digital” being treated as a box ticking exercise or somewhere to attribute a smaller budget as it’s simply easier to buy an audience and then report back on clicks and impressions whilst forgetting that advertising’s main job job is to get people to spend time with the brand.
If you are going to do that then you need to be thinking about the experience you provide your customers first and then think about how you might communicate that to them.
Like George Best, the correct measures of success are not being focused on. We need to start moving the goal posts before the game is up.
User ID not verified.
There are now a number of TV ad blockers in market – their names are Presto, Stan, and Netflix.
Excellent article though
User ID not verified.
TV vs Digital: Cold vs hot. Lean back vs lean forward. We keep forgetting not all media is used or consumed in the same way.
User ID not verified.
@comment #8.
May I refer you to comment #7
User ID not verified.
thanks – I read the entire article
User ID not verified.
Chiming in from the States here.
I think the issue isn’t so much the use of tech but how well (or badly) it is used. The hammer can’t be blamed for bad carpentry. Ad tech is a tool which I believe has great potential if well used. If every ad I saw was relevant to something I need right now, I would be far less likely to block it, whether by use of the remote control when watching the telly or ad blocking software online.
That having been said, I agree with your perspective on traditional, untargeted ads. As Henry Ford said, if I asked people what they wanted, they would have asked for a faster horse. Global warming aside, the point is that as Steve Jobs said, people don’t necessarily know what they want until advertising tells them, thus generating demand.
Fashion is one of the few print ad markets that thrives. I believe this is in part due to the perceived ad expense syndrome you describe–in effect, the glossy ad in exclusive magazines is part of the product experience; the stuff that dreams are made of.
In US pharma advertising to healthcare professionals, premium online inventory is very slow to adopt ad tech. I suspect this is the case with many other BTB publishers.
User ID not verified.
Its a shame really
This is a story about the accountant v,s the creative and unfortunately is these times of conservative austerity and the ability to measure so called response the accountants have been on top.
Time to re-balance marketing industry as this is our future we are talking about here.
Does the US population look to ad block during the superbowl???????
Is the next Qantas campaign going to slip by without a wide range of commentary and concern from the broad Australian population.
What would a more effective political campaign look like in Australia if it wasn’t so nasty and negative?
The accountants have one single tool that our industry has let them use to beat marketers into bland and now online oblivion. Numbers. Numbers can be measured. And you know what they say. If it cant be measured it cant be managed.
Those accountants are managing marketers into irrelevance.
Now they have robots doing the numbers instead of media buyers.
I remember those days in the 90s when agency and marketing folk would say we need to get to the executive table to argue how effective our marketing is so we can argue for a larger pie.
Well look what happened. You got to the table and you got beaten by the numbers man. Hes the one at the end of the table with a blue tie and spreadsheet.
Eaon has done a fair job in describing where we are at although I don’t think the George Best analogy is all that helpful. It makes the ad industry look like its looking back to days of the past glory and all of that lost opportunity when really there was a lot of lost opportunity as a result of our own actions often whilst on the juice.
This is an argument the marketing industry is going to have with the CFO and financial analysts about why they (the numbers guys)won the battle and lost the war.
in this new low growth environment where robots can do the planning according to the numbers it will be those that are creatives that can come up with the campaign killer that will demonstrate that at the end of the marketing supply chain are people that buy things with money that can be measured.
Time to change the conversation to what we as an industry do best and that is to create emotional messages that connect with consumers that want to spend their hard earned on that you create because it makes them feel better. Thats a conversation that the numbers guy in a blue tie wont understand until he sees the sales numbers that he can measure but he will see them.
Now whos up for that conversation?????
User ID not verified.
The article is spot on (once again).
The issue isn’t the use of adblockers, the issue is the use of incredibly shit advertising formats which do nothing but encourage horrible advertising.
I don’t care how much info you know about me, how much you track me, whether you know I pour milk before the cornflakes, if your ad is shit, I’ll ignore it. Just like I do when I flick quickly through magazines and newspapers, or fast forward through ads.
Fix the advertising, find an idea, give the punter something worth watching/reading and we might get through this mess. But there is no holy grail, no wonderful way to avoid having talent or skill, we can’t automate or force feed brands into the hearts and minds of people – and we should know, because we’re people.
User ID not verified.
Faaaark… this is great. About to share widely.
One of your best Pritchard.
User ID not verified.
Thanks for the comments and debate everyone.
Extra special thanks to the commenters who actually read the article.
User ID not verified.
There appears to be a complete disconnect between ad tech and consumer behavior.
Here’s an example: At 2pm one day our washing machine finally spun its last cycle. I went online to look at product reviews for a comparable machine and narrowed down 2 options. Then visited 2 retailer sites and compared best prices and found the nearest stores and visited both that afternoon. I mentioned the online prices and both gave me a better deal instore than online. I arranged the delivery and received it at 9am the next morning. Less than 24 hours from first search to delivery.
My online search had captured heaps of information about my preferences and for the next 6 weeks (!!!) The Good Guys bombarded me with ads and supposedly hot prices inviting me to purchase online now!
I’m sure someone in an agency somewhere was proudly presenting the success figures of their latest search campaign to a client who was incredibly impressed. The truth is that by the time their online campaign started to kick in I had long ago purchased it from a Good Guys store at a far better price.
It seems to me that consumers are using online to purchase quicker whilst agencies are still in the sand pit playing with their latest bright new shiny ad tech toys making promises to clients that are completely ridiculous!
User ID not verified.
George Best was British, not Irish.
User ID not verified.
@Ann Onimous I doubt Best would have identified as British. Although technically you are correct. I am Scottish, and therefore also British.
User ID not verified.
No question this is a memorable and incredibly considered piece – thank you Eaon.
I suspect the culture in media agencies though to be one of often taking the path of least resistance plus those internal trading desks need to keep printing the money between the inventory bought for the client at a low price and the agency margin(s) added to this.
These elements alone minimise developing a culture of pioneering and I’m sure stifle most folk who may think in this way. Unless there’s a true shift to leading with a big idea comprisiing of decent ad creative and native done well, most attempts most commonly bolted on as an after thought will continue to be vanilla and yield unremarkable results.
User ID not verified.
It seems to me that all the media agencies now are just pushing clients towards their trading desks, and it’s all just for the sake of the margin they get. There’s no thought put into it, and agencies can no longer work directly with publishers to think outside of another bloody m-rec that follows people around based on what they have clicked or searched a week ago. Ever recommendation with a digital component comes back with a trading desk element.
User ID not verified.
Great article and yes, I read it all… AND the comments. Eaon I think you were spot on with your very first line and even more so with these three words…”the current obsession”. I firmly believe the industry has indeed strayed from the path of advertising righteousness with its “current obsession”… but more than that, it actually does this repeatedly in what could be described as a blind race towards the latest shiny thing in advertising, whatever that may be… Cast your mind back (if you’re old enough) to:
– 1999/2000 building insanely complex massive websites for clients for $300k+, but conveniently ignoring the fact there was insufficient web traffic to merit the investment, no Google to find it (ok, so there were directories) and a pathetic $5k online media investment you begged the offline buyers for.
2005/6/7/8/9 etc The Year of Mobile… and see above re stupid investments
– 2007 to 2015 It’s ALL about social… (so forget mobile) and Adland gets suckered into (arguably) the largest advertising con in history by paying large sums to build Facebook communities they could then reach for “free” only to see FB screw down the organic reach to almost nothing and force you to pay to reach them all over again…
– 2012 to 2015 now its all about Programmatic… an obsession which has led to the data driven obsession
2014 to 20?? Let’s all build massive content hubs focusing on the inspired insight that consumers will flock to read 600 pages of content on getting grass stains out of jeans (don’t ask).. and then head over to read 50 pages on dandruff..all before breakfast. If you aggregate all of the content now being produced by companies at huge expense (ok.. I know it doesn’t have to be that way…)
My point being NOT that any of these “obsessions” above were not predicated on the introduction of new tech or ways to connect… BUT that the industry over-invests time, energy, budgets… at the expense of what we already know works. The baby has been thrown out with the bathwater on so many occasions we should be locked up for child abuse.
Perhaps the reason we seem to be not much better (perhaps we are worse?) than we were 30 years ago in selling products for our clients, is that we have failed as an industry to learn, iterate and improve. Maybe instead of always chasing the shiny new thing and forgetting that TV (for most audiences) still moves the dial more than any other medium (fact), that mass marketing still drives brands because it drives scale quickly (which hyper targeted niche digital does not do), that story telling is what really engages consumers… maybe then we will claw back some of the ground we have lost with clients.
User ID not verified.
Me, consumer, points and says “What Darren said!”
User ID not verified.