Digital growing pains for online advertising

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Ebiquity’s Head of Communications Insight, Martin Broad, cuts through the hype about digital that assaulted marketers in 2016.

Over recent years, the marketing community has been subjected to a large number of sensationalist headlines which have eventually been revealed to be only partly true. “TV is Dead!” – TV isn’t dead: it’s changing; “Social Video is The Future!” – tell that to the likes of Vine; “YouTube Ads are 80% More Effective Than TV!” – effective in what way, and for who?

I say ‘eventually revealed’ because the nature of the advertising business often means that predictions and broad statements take time to prove, or disprove, with a tangible sense of uncertainty left hanging in-between. Nowhere is this uncertainty felt more than in online advertising – the mixture of an ever-evolving landscape, and predictions that are often as incorrect as they are correct, means that many tackle digital with trepidation rather than confidence.

Yet the juggernaut rolls on; the plaudits of online advertising are heralded more and more, and the promises they make grow ever larger. The questions are, with still so much confusion about digital, where does the line lie between fact and fiction, and did digital overpromise in 2016?

Transparency and problematic programmatic

Two worries of digital cited more than any other are transparency and quality, particularly with respect to programmatic buying. A survey by Strata in August last year found that just over 50 percent of respondents were concerned with the transparency of programmatic buys, with nearly 60 percent worried about the quality. The Internet Advertising Bureau even offers marketers a free Programmatic Fee Transparency Calculator – its very existence pointing to the sheer scale of the transparency problem.

The moment transparency is mentioned, an immediate undertone suggests that agencies are intentionally trying to ‘cheat’ clients – undoubtedly an unfair view. Through our Marketing Effectiveness practice, we have seen good examples of where digital can work well if done right.

The entire programmatic universe – especially difficult topics like visibility, fee allocation, and bot fraud – must have clearer signposting for clients.

Nonetheless, the entire programmatic universe – especially difficult topics like visibility, fee allocation, and bot fraud – must have clearer signposting for clients. In March 2016, a report by Forrester revealed that 31 percent of companies have expanded to handle more programmatic needs in-house – a trend sure to continue unless confusions around programmatic are cleared up.

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Muddled measurement

One of the most vocal critics of digital is Mark Ritson, Adjunct Professor at Melbourne Business School and prolific Marketing Week columnist. Whether claiming that “Facebook should hang its head in shame for measurement errors” or highlighting the little-publicized diagnostic discrepancies between digital and traditional TV views, Ritson’s message is clear: digital measurements demand closer scrutiny.

Poke’s Head of Strategy, Bogdana Butnar, echoes the view that analytics need to be improved, although she highlights that current analytics are outdated, rather than outright dishonest. At last September’s APG event Noisy Thinking, she commented: “The problem that we have is that the metrics we use [like impressions, views, and clicks]aren’t bad – they’re supposed to measure something else. They’re supposed to measure transactions, which is different from what we’re trying to measure, which is building brands and share.”

Whether metrics are clumsily deceitful or simply need updating, the incongruity between the promises they make and real-world results is harming the digital industry.

Micro-targeting: missing the target altogether?

Next comes the question about the necessity – if not the application – of micro-targeting. One of the frequently hailed accolades of digital in recent years has been the ability to drill down through reams of consumer data to a highly targeted level, often able to reach individuals.

Unfortunately, micro-targeting had not-a-little wind taken out of its sails when P&G, the world’s biggest advertiser, pulled back on its amount of targeted Facebook ads in August 2016. Global marketing officer Marc Pritchard stated that “we targeted too much and went too narrow.”

Let’s be clear; ‘pulling back’ is not the same as ‘pulling out.’ P&G will continue to invest heavily in Facebook advertising, as it should. But the decision does suggest that full-scale micro-targeting may not be entirely necessary, and with Mars and Unilever following suit into what’s been dubbed ‘sophisticated mass marketing,’ marketers are looking at micro-targeting with a more critical eye.

Ad blocking … Ad unblocking … Ad nauseam …

2016 also raised the seemingly intractable issue of ad blocking. Whether you see ad blocking as illegal ‘vandalism’ of a publisher’s digital property, or a necessary roadblock that makes advertisers work harder to create better ads, ad blockers are understandably vilified by the big digital players.

Facebook took measures into its own hands last August, announcing that “[we’ll] begin showing ads on Facebook desktop for people who currently use ad blocking software” in a move to outmaneuver ad blocking.

In response, Adblock Plus launched a new filter to bypass the technology … with Facebook introducing new code to beat the filter … only for Adblock Plus to roll out ANOTHER update … followed by a reply by Facebook. This cat-and-mouse game shows no sign of slowing down.

The notion of overpromise applies when you consider the extent to which Facebook knows it may be impossible to block ad blockers. Whether down to browsers’ capabilities for personalization, or the fact that any kind of clouded approach to ad labeling won’t be allowed by the U.S. Federal Trade Commission, it could be said that ad blockers are here to stay. Indeed, as Princeton Assistant Professor Arvind Narayanan has said: “All of this must be utterly obvious to the smart engineers at Facebook, so the whole ‘unblockable ads’ PR push seems likely to be a big bluff.” This is just one more overpromise that Facebook knows it can’t commit to in the long-term.

The days of online advertising being prescribed as a marketing panacea have come to an end.

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Summing up

Significant and market-impacting challenges – challenges that have continued to grow in 2016 – can be summed up in three words: lack of clarity. Whether it’s clarity of how ads are bought and sold, how the metrics are working, what they are measuring, or who will see ads, the failure of the industry to have a bipartisan discussion of digital’s weaknesses as well as its strengths has led to a sense of distrust.

The days of online advertising being prescribed as a marketing panacea have come to an end. In 2017, adland needs to be honest, upfront, and clear about the strengths and the limitations of digital in equal measure. It is only in this way that the promises digital makes can, at last, be kept.

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About Author

Head of Communications Insight

Martin Broad is Head of Communications Insight at Ebiquity. His team provide strategic insight into the Paid, Owned and Earned comms of leading brands around the world, working regularly across sectors such as technology, alcohol, finance, mobile and skincare and cosmetics.

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