Happy SundayFunday War & Peaceniks! Welcome to a special weekend edition - with yet another prediction for the Media Universe in 2022.
We’ve all heard the old cliché, usually attributed to John Wanamaker:
“Half my advertising spend is wasted; the trouble is, I don't know which half.”
It may be a cliché. But no matter what era in which it gets quoted, everyone in the ad business who hears it, knows it’s mostly true. Except these days, Wanamaker may be off by 40%.
In the olden times of only three TV networks, half of ad money was wasted because during commercials, viewers went to the kitchen or toilet. In the new good old days, 10 years ago, it was wasted because people skipped ads, or looked at their smartphones, or scrolled through Facebook while on the toilet.
And then, with the creation of real-time bidding in 2007, programmatic advertising took hold. “Why spend all that time thinking about your ad strategy, when you can pay for an algorithm to do all the thinking for you?” is how it was sold. “Let the computers scour the internets for the cheapest way to reach every consumer you need – it’s fast AND cheap!”
Since, CPMs for digital advertising have plummeted – from $30 CPMs to $3 CPMs – and the entire ad economy, seemingly overnight, forgot another extremely relevant cliché: You get what you fucking pay for. This year $150 billion will spent on digital advertising, $133 billion on programmatic ads.
But here’s the problem:
The majority of the ads we buy are being shown to robots, not humans.
This year, the population of the planet will decline. The usage of the internet is not growing at nearly the same rate of a decade ago. Yet, the number of impressions being sold to advertisers continues to rise as if neither of these facts were true. Programmatic ad sellers (most notably Google and Facebook, who combine for 70% of all digital ads in the US, and both of whom are currently being sued by 15 states for ad market rigging) take every order for ad impressions they can, then magically find enough ad impressions to fill those orders, whether or not those impressions exist.
It’s as if Google were a bus, with a limited number of seats. Yet, no matter how many tickets are requested, Google accepts the orders. The bus never sells out. There are always seats to sit in. How? Because Google and Facebook (along with a network of long tail sites, resellers, and bot networks in dark basements somewhere) keep adding buses, driven by bots, which take their passengers ‘round in circles, on a road to nowhere.
This infographic uses a tastier metaphor, Pizza:
The coalition of programmatic schemers take the orders for impressions, regardless of how much larger the demand is than the supply. Because in the dogma of modern malignant capitalism, leaving money on the table is heresy. They take the orders, then they create traffic to fulfill them.
Here’s a less saucy version of how the ad fraud industrial complex works, from the International Conference for Engineering Sciences and Technology:
And with 70%+ of web usage now on mobile, the ability enact fraudulent versions of real human actions has exploded.
If you are a marketer, ask yourself: How has the ROI of your programmatic campaigns been trending? Not the click-throughs, but actual results – real sales, per dollar spent. With the death of cookies, these trends are headed in one direction, and it ain’t up.
“But agencies and platforms hire firms to measure and prevent ad fraud!” will be the response of many in the programmatic ad business – aka the platforms and agencies. And that is true. But this has led to a cottage industry of Lead Bots, Lead Farms, Deceptibots, Malware, Adware, URL Hijacking, App Ad Hiding, Fake Ad Sizing, Drive-by Downloads and a myriad of other Ad Fakes designed by resellers, botnets, and app developers to impersonate human engagements.
None of the major advertising trade organizations have commissioned a thorough digital/programmatic ad fraud study in over 6 years. Why? Because when your giant lives off the golden goose, the last thing you want to do is cut off the rich bird’s feed.
But fraud fatigue is setting in. More and more, and larger, advertisers are realizing that just because a CPM costs less, doesn’t mean it’s better; and not every click, download or lead is created equal. Additionally, with regulators and courts circling the Ad Duopoly of Alphabet and Meta (nee Google and Facebook), shit’s about to get real.
Which leads to the second ESHAP-BEST-BET-PREDICTION-FOR 2022:
2022 Will See the Beginning of the End for Programmatic Advertising
(Paid Only Media War & Peaceniks beyond this point)
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