Six Pixels of Separation - The Blog
August 21, 201212:07 PM

The Trouble With Online Advertising

Is online advertising any good?

Last week, DigiDay ran the news item titled, The Ad Contrarian's Reality Check. Bob Hoffman (CEO of Hoffman/Lewis) runs the blog, The Ad Contrarian, and leverages the platform as a place to debunk the over-exuberance that many digital marketing and social media professionals have when they're chest thumping or declaring the latest online platform that everyone is jumping on as panacea for brands and the future of marketing. Hoffman is direct and to the point. When DigiDay asked him if the digital ad industry was irresponsible, this was his response...

"...First is qualitatively. They initially sold us on 'banner' advertising by telling us that display ads would be so much more effective than static print ads because people would interact with them. Then when they found no one was interacting (clicking) they changed their story. Now, according to many in the industry, clicking (interaction) means nothing, and display ads are effective because of their 'branding' value. So the thing they were selling against is now what they're selling. Second is quantitatively. We still have no idea how many clicks are fraudulent or how many are mistakes. But we're paying for all of them. This has been a problem for years and no one seems to be in a hurry to fix it."

Ouch!

It would be easy to dismiss Hoffman as a traditional ad guy, doing everything in his aging power to hold on to the dream that tomorrow the mass population will wake up and stop using their DVRs to skip television advertising, or that cities all over the world will stop banning billboard advertising as visual pollution. Who knows, maybe if Hoffman has his way, the only way you can get the news will be rolled up on your doorstep each and every morning, or on the television at six and eleven pm (no time-shifting for you!)? Hardly. Hoffman's insights (while jarring to those of us who have been working in the digital advertising space for close to twenty years) should act as a catalyst for those of us who are trying to establish the next generation of advertising. In fact, you may be surprised to find out that Hoffman is not alone.

We're doing it wrong.

As if on cue, comScore (self-described as "a global leader in measuring the digital world and the preferred source of digital marketing intelligence") released a white paper last week titled, The Economics of Online Advertising, that looked at the state of online advertising. You would think that the findings would debunk any contrarian perspectives that people like Hoffman and the like may have. You may think that online advertising is the future, and that as media dollars shift to digital (because that's where the eyeballs are) that online will be able to better serve brands in terms of delivering higher relevancy with better metrics. It turns out, that after close to two decades since the first online ad was served, that our industry still has a ways to go.

It is early... very early days for online advertising.  

MarketingVox covered the release of the comScore white paper with a news items titled, comScore: Unlimited Inventory, Lousy Metrics Cheapen Digital Ads. Here's the crux of the white paper as described by MarketingVox: "comScore President and CEO Magid Abraham believes that two 'unfortunate byproducts' of aggressive innovation in the online ad ecosystem have been 1) to increase in the complexity of campaign delivery and 2) a virtually unlimited supply of inventory, both of which create significant waste in the buying and selling processes. 'We believe that moving the industry toward a 'validated impression' standard introduces an element of digital scarcity that helps match the value flowing to publishers and advertisers with the value being delivered by the impression.' In short -- higher standards makes ads more scarce and valuable. Use more exacting measures (like the ones comScore coincidentally offers with its Validated Campaign Essentials [vCE] offering). This would 'bring the forces of supply-and-demand in online advertising into greater alignment,' said Abraham. 'We introduce value to the ecosystem, accelerate the flow of ad dollars to digital, and foster a win-win environment for all stakeholders.'"

It's going to take more than the validation of delivered impressions.

Google is already working on different digital advertising models (and, make no mistake about it, they are not the only ones attempting to crack this Da Vinci Code). Look no further than YouTube and their TrueView model (where advertisers pay only if consumers choose to watch the video or when a video ad is played for more than thirty-seconds without being skipped). The challenge with this model is fraud and getting some kind of third-party validation. This doesn't - in any way - discredit the model (or Google), but it is tied directly to some of the issues that comScore has raised in their paper. 

But wait... there's more!

Hoffman and others (myself included) are right about the creative, as well. While we do see some diamonds in the rough when it comes to digital advertising creative at the annuals slew of award shows, there is still a vast majority of brands that are either copying their traditional advertising and pasting it into digital media or the adaptation is simply not performing within the new media channel. The macro issue still remains: is it at all possible that these new, digital media channels simply don't compliment the type of advertising we have traditionally seen in the more traditional media channels? It's a deep and philosophical question that few brands (and even fewer media companies) are willing to face. Ultimately, if it turns out that new media is not the best fit for advertising (as we have seen to date), this begs the question: now what? Clearly, we have not exhausted all of our creative resources or seen a busted bubble in the online advertising world to call it a day, but what we are seeing is a quickly evolving industry that is trying to keep pace in a world where advertising is no longer based on a scarcity model and the consumers are not clicking with the vigor and enthusiasm that the industry had promised to brands.

What's your take? Can digital advertising turn a corner or will it simply commoditize the value of advertising even more?

The above posting is my twice-monthly column for The Huffington Post called, Media Hacker. I cross-post it here with all the links and tags for your reading pleasure, but you can check out the original version online here:

By Mitch Joel


Comments Comments Feed
  • Another good post Mitch - I have to agree with you on the 'borrowing' of traditional ads and squeezing them into digital. The best advertising uses a strong message and the medium effectively - so, to that end, even moving a print ad onto TV would not be a good exercise.

    On top of that, the digital space keeps changing and being added to (but it all still falls into the realm of online). From static banner ads to animated GIFs, from expanding skyscrapers to AdWords - there are different forms and iterations.

    And then ad to the mix the ability for digital to soft sell through things like Pinterest.

    Reply
  • Posted by gstene
    Mitch Joel

    There might be an elephant in the room.

    Why not just skip ads?
    Since internet advertisement doesn't really work: for the brands, nor for the websites (such as news web sites) and certainly not for digital users. Why cling to it?

    Why not just get useful?
    Provide something useful, based upon something there is a need for e.g. If I'm into golf, I'll need a lot of golf stuff, travels to golf location and so forth. Why advertise this towards me - instead of skipping that step, and just provide it for me?

    Reply
  • Posted by Barrett Rossie
    Mitch Joel

    "The macro issue still remains: is it at all possible that these new, digital media channels simply don't compliment the type of advertising we have traditionally seen in the more traditional media channels?"

    In the long run, I don't think the language of disruption-based advertising will have a lot of success online. Maybe occasionally, but the exception will prove the rule.

    Some of the best online "ads" I run across are little product presentations on Amazon. But that's a whole different model. No reason why great content can't complement traditional advertising. But it can't mirror it in form and voice.

    Reply
  • Posted by John Carlson
    Mitch Joel

    Mitch,

    Thank you for both your insights and starting this discussion. I'm going to be super general to keep this short. I came to the world of social marketing from broadcast TV content creation. I made this move because what I saw was the internet politely embarrassing the capabilities of traditional broadcast media.

    As a rhetorician (by hobby) I assume the likes of Aristotle and Cicero would have a lot to say about this...oh, and Jay Heinrichs (possible podcast interviewee) because he's still alive.

    There's an overemphasis on the tools. Facebook, Twitter, G+, etc. They are great paths and channels by which to communicate, but i'm not looking for clicks, or impressions or even likes, I'm looking to persuade. To argue, seduce, and convince a conversion out of a group of people I want simultaneously to become evangelists of my message. You know it works, you see it work, because you know what your doing.

    Many pro's are out there telling you to just use the tools and don't stop and their manner and personality is the true money maker.

    Thanks again,
    John C.

    Reply
  • Hi Mitch

    I am a Hoffman acolyte. I come from a finance/sales background and entered advertising at age 40. So most of my life I was an advertising consumer or ignorer. I blocked all digital ads with Firefox 9still do on most sites). Then I changed careers and I started questioning what was being sold to me as the truth about advertising, even Nielsen for over inflating viewers. How do they know you are in the room or watching the screen? How can Rollingstone claim 6 ad impressions per issue. etc.

    But the biggest fraud I found from the beginning was refusing to ask the big question 'Do we want to see, interact, etc with advertising at all'. And instead I read 'If only we create advertising people want to engage with'.

    That is BullShit sorry for the french. Advertising comes in last in our lives. That will never change. We need it. We use it. We want it. But on our terms not the ad industries. And the flaw with digital is I am already online. Every brand and business has a website I can go to right now. Why do I need to see your ad?

    I view 99% of digital advertising the same as print ads now. Static ads for impressions. And they should be valued as such. And social is worse. We don't have time for brands in social. We spend per comscore in the US only 13 mins a day using social networks. I would be friends family work etc comes before brands on facebook or Twitter. You want to social media market? Buy facebook ads or sponsored tweets.

    Reply
  • Posted by James
    Mitch Joel

    Hi Mitch, Really a nice post with lots of information.
    i like the what Abraham said "We introduce value to the ecosystem, accelerate the flow of ad dollars to digital, and foster a win-win environment for all stakeholders." This is the benefit of Online Advertising.

    Reply
Add a Comment

Please complete all the fields below, including the spam filter (to prove you're not a robot).

  1. Fill in your email address to have your Gravatar photo included with your comment.
  2. Please type the word pixels here:
TrackBacks

TrackBack URL: http://www.twistimage.com/movabletype/mt-tb.cgi/2967