Monday 21 August 2017

Online advertising: lots of promises, but not so much delivery

(Stock picture)
(Stock picture)
Steve Dempsey

Steve Dempsey

Some pretty big promises were made about digital advertising. There'd be more data and more transparency, they said. The performance of online ads can be tracked and optimised in real time, they said. Return on investment would be clear, they said. The internet doesn't make mistakes, they said.

But a recent slew of errors in reporting, charging and a lack of transparency has undermined many of the promises of online advertising.

First, it emerged that Facebook was bumping up the numbers of the amount of time its users spend watching videos. Facebook favourably skewed its own metrics by failing to count video views of under three seconds. The result? Facebook may have overestimated the average amount of time people spent watching video - by up to 80pc.

Sure, a host of agencies came out and said it wasn't a problem because they care less about average watch time and more about metrics like impressions, completed views and views of over 10 seconds. But this happened at a time when the social network was trying to court video advertising money. Whether it was done knowingly or not, an overstated performance metric may have given the social network a leg up against its competitors.

The second great digital "Doh!" came from the Far East. Dentsu, Japan's largest ad agency, revealed it overcharged clients for online ads going back as far as November 2012. There were discrepancies in ad placement periods, false reporting on performance of ads and even examples of fees being charged with no ads ever going online. Dentsu will pay clients back an estimated 230m yen - that's around €2m.

The most damning thing about these screw-ups is no one seemed too surprised. There have been ongoing concerns around transparency in relation to programmatic buying, click-fraud, viewability and more.

The Association of National Advertisers in the US produced a report earlier this year that outlined some shady goings-on in US agencies. One former executive said about one quarter of his agency's digital trading was funnelled through the holding company's agency trading desk, regardless of what was best for clients. Another said that anything from 3pc to 30pc of impressions sold were unused or discrepant, but clients were still charged as if the ads were properly served.

So what's to be done?

The entire industry needs to get over the novelty factor of digital advertising. It's not a dark esoteric art, it's not something "for the kids". The levels of assessment in digital need to be ruthlessly assessed against the results it's delivering. The idea that online ads are more accountable and attributable than other media needs to be debunked. People need to stop jumping at shiny new baubles like Pokemon Go or Snapchat Spectacles as the apogee of commercial creativity.

The issues around transparency clearly need to be addressed. And this doesn't just apply to media spends with ad agencies and media buyers - anyone spending money with the likes of Facebook and Google should have access to independent verification of the performance of their ads. Speaking on WPP's earnings call in August, CEO Martin Sorrell pointed out that no one is examining how and when Google changes its algorithm or the effect of Facebook's news feed changes.

"We and our competitors want better measurement, not just offline but online too," he said. "The answer is not Facebook or Google data, we can't have the players being the referees. There has to be independence in terms of measurement, that is a critical issue."

But with these issues come opportunities. Everyone in the digital ecosystem should be asking themselves how they can step up to the plate as a trusted provider of digital services.

Perhaps those who could benefit most are publishers. US trade body Digital Content Next has realised this and is launching its own automated digital marketplace called TrustX.

TrustX will offer inventory on the likes of ABC, Conde Nast and ESPN from early 2017 onwards. It will guarantee that advertisers will pay only for ads that are viewed by real consumers. There'll be no charges for traffic from bots. There'll be co-operative development, testing and measurement of any new ad units.

And in an attempt to do away with fees, rebates and complex inter-agency arrangements, it promises to provide total transparency about the cost of campaign delivery. Now that's a promise about online advertising that's really compelling!

Sunday Indo Business

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