Click Fraud, Ad Blockers And Fake News: How Programmatic Became Problematic
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Originally published by Digiday
April 25, 2017 - by Justin Choi, Founder and CEO, Nativo
If the programmatic advertising ecosystem were a terrarium, automation and data-driven audience targeting would be the fertile loam from which the promise of digital sprouts. Unfortunately, in today’s terrarium, healthy plants that represent “right person, right message, right time and place” are being crowded out by the invasive weeds of click fraud, ad blockers, and fake news. There is no clearer evidence that our ecosystem is out of balance than the scores of advertisers now boycotting YouTube. How did programmatic become so problematic?
Reach at All Cost
It’s helpful to remember that before programmatic it was impossible to deliver digital advertising campaigns in full. There simply was not enough supply to provide large advertisers the reach they demanded. By automating the process and empowering advertisers and their agencies to centrally buy across multiple inventory sources, digital channels were competing with broadcast and print almost overnight.
This “reach at all cost” mentality is where programmatic began to go astray. In the early days of programmatic, pacing (the ability a campaign can timely deliver the prescribed number of impressions) quickly emerged as the most important KPI. Simply put, a successful digital campaign burned through its budget, while unsuccessful campaigns didn’t deliver in full. As a result, publishers fell under pressure to prioritize volume over quality, and that lead to patently crappy user experiences (I’m looking at you, slideshows that are spread across multiple pages!). And ultimately, this degradation in the user experience lead to the ad blocking crisis we have today. We’ve learned the hard way that the carelessness of this approach leads to real collateral damage, and it erodes the value exchange between advertiser and consumer.
To make things worse, reach at all cost also set the table for click fraud. In a system where money must be spent, nobody is particularly incentivized to root out instances of abuse. Everyone looks the other way as publishers leverage cheap traffic solutions and arbitrage bad inventory. Even brand marketers – the clearest victim of these schemes – loath to cry foul.
Losing Sight of Context
The issue of brand safety is receiving a surge of attention today, as brands yank their ads from executions that appear next to controversial user-generated content on open platforms like YouTube. It’s a striking reversal after years of lax practices and turning the other cheek. But brands are shortsighted to think that adjacency and association to content only matters at some hard line of inappropriateness. It shouldn’t take advertising next to an ISIS recruitment video for a brand to realize that context is a central aspect of advertising effectiveness.
Programmatic targeting has exacerbated this issue by divorcing the audience from the publisher, and thereby decoupling an ad buy from any understanding of context. Context matters immensely to all parties in the value exchange, and the deprioritization of context has impacted everyone in turn. Something this basic was never an issue when humans selected where their ads should run.
Accepting Bad Impressions
As sophisticated as data-driven advertising models have become, they still fail to capture consumer complexity. Advertisers seem to forget that behind every cookie and every click–that isn’t a bot– is a living, breathing human who arrived on a publisher’s site to engage with the publisher’s content. There is an implicit exchange there, and advertising only works when it honors that exchange.
Success models that reduced consumer behavior to impressions and clicks made it easy to measure advertising performance, but difficult to understand the real effect the ad was having on a consumer’s overall experience. It made a fair value exchange difficult to find. Did that person even see an ad that was billed as an impression? Did they engage with the content after they clicked on it, and if so, for how long? Or did that preroll interrupt their experience and sour their opinion of the brand, impugn the reputation of the site that it was advertising on, and turn them off to online advertising in general? If .01% clicked, what impact did you have on the other 99.9% of users? Impressions are never just impressions; they are either good, neutral, or bad.
At the current pace, publishers can’t make money, consumers hate online ads, and brands are pulling budget. Despite all these issues, Programmatic still has the potential to be the root system that connects the shared interest of our terrarium. We can hit reset on programmatic by prioritizing inventory quality and context over impressions and clicks. By limiting the number of available impressions, premium publishers can actually increase the value of their inventory and honor the consumer experience with great content. If the programmatic ecosystem measures its success by this metric, maybe our terrarium can flourish.