The ad tech renaissance
bokonads.com
bokonads.com
So essentially we've got a whole bunch of companies with no growth desperately vying for the attention of 23-year old media buyers who in turn are mostly interested in getting someone to take them clothes shopping and picking up the bill. These companies are doing it mostly by doing ever more intrusive things, since advertisers can't accept that the reason their ads don't perform is that nobody wants their stuff and keeps looking for a silver bullet.
I've come to believe that the only reasonable justification for most advertising is that it's in some sense a way for other industries to subsidize journalism. Since that's going away, I'm looking forward to the inevitable ad tech carnage ahead, and if a potential next wave actually brings higher quality advertising and better end user experiences I'll happily eat my shoes.
And they are fine with that too. That's the case of VC-backed startups: they accept a negative ROI to get the chance to start making money one day.
Then you have the less consciuous ones, which might be big brands who want to experiment a bit with new media/ad formats.
In any case, if you think about it, the real losers are...the honest publishers. Because the money on the table is not increased by fraud, it's just shared in a way that takes something away from good publishers to bad/fake ones.
I'd guess most of the big brands doing advertising look at it more from a brand building standpoint than a direct performance standpoint. You certainly can't compare it apples-to-apples against something like search advertising.
Ha ha, sure they do.
Brand advertisers, in particular.
You know that 1-inc by 1-inc 'video' ad playing in the corner of your screen, that vaguely has a car, but it's designed for TV and you really don't get to see 'what the product is' until the end of the spot, but by then, you've already scrolled past it?
That is 100% a waste of money for the advertiser.
There are tons of large companies with 'ad spend' and they just spend a lot of it without really knowing how effective it is.
Obviously, a lot of it it is, but many campaigns are a ridiculous waste.
They are definitely not doing that. The sheer amount of profitable arbitrage proves that point. Ad networks remain one of the best business models around, this is what Facebook is. The main problem is that there are no real barriers to entry or oversight which leads to thousands of poorly run, unscrupulous, spam/malware infested networks which make an outsized impact on both the market and consumers.
Ending it is necessary and possibly sufficient for Internet ads to stop being awful for both advertiser and publisher.
(I've worked in the space buy-side)
Outbrain/taboola style indiscriminate dealing doesn't add any value.
It would be interesting to know what proportion of total advertising spending this represents.
It seems that there's an increasing understanding among publishers that low-quality and intrusive ads encourage their visitors to use ad blockers or another site. Several relatively high-profile sites (like The New Yorker) have stopped using networks like Outbrain and Taboola. (Obnoxious ads from the latter, along with autoplaying video ads on numerous sites, resulted in me finally installing an ad blocker after resisting for years.)
Adblock Plus offered a way forward with its "Acceptable Ads" program but it seems like that has been roundly rejected by both advertisers and blocker users. Maybe publishers and advertisers could work together to develop a stricter set of advertising guidelines that show respect for users? I suppose such a program is essentially doomed without cooperation from Google and Facebook, and I don't know if they'd be willing to work with the little fish (or each other).
It seems like an intractable problem. I'm not convinced technology (machine learning! the solution to all problems!) is capable of providing the solution.
They are one of the many things driving advertisers to Facebook. (In-App ads in FB aren't blocked of course.)
No, I remain convinced that the most effective advertising I see regularly is the "Deals" type posts on Gizmodo. Those are written by the journalists, guaranteed to capture some of my interests or I wouldn't've visited the site in the first place, and difficult to block because they're real content. I actually read them, and am usually genuinely interested in the products, and this requires no tracking or privacy invasion whatsoever to accomplish.
Incidentally 5 years after moving into an apartment I still need a good curtain for the kitchen. If I see an ad for a place I can upload measurements and get the results sent to me I would be very happy to pay.
There's actually a great deal of effort towards improving quality and dealing with ad blocking at a high level in the industry. One recent effort this year is https://www.betterads.org/ but there are other initiatives lead by new adtech companies and other organizations.
As a result, I'm confident that ad quality will increase over the next few years overall. But like you say, its an intractable problem. Its not as simple as improving quality on the already reasonably good 75% of adverising that isn't so bad.
The bottom of the barrel inventory is likely not going to rise with the change of the tide, for example. If you're trying to stream pirated TV shows or watch porn you're dealing with the North Koreas of the adversiting industry--they're already cut off and live in their own world, and won't follow industry initiatives that publishers like NYT will want. Unfortunately many, many people have no problem with advertising generally but install ad blockers in order to access these sites, and the sites no one had an issue with are just collateral damage.
Moreover, many people install ad blockers because, lets be honest: why not? No more pre-roll video. Faster page loads. More premium consumption experience (most) everywhere you go. How do you address those users with better ads?
And the cat is already out of the bag anyway. 25% of people on the internet use ad blockers. If you improve ad quality, how do you get these people back? I think we're going to see a radical, unequal shift in the next fews years around the perceived value of content because of the growth of ad blocking. If you told me 10 years ago that everyone was going to be paying $10/mo for music, I wouldn't have believed you, yet here we are. I think if you ask me this time, I'd say in 10 years people will be more inclined to pay for digital content than they've ever been, because as ad blocking grows, the "anti-ad blockers" are going to grow too. More messaging to users about ad blocking, more paywalls, more access control requiring equitable value exchange across the internet. Eventually the middle will get squeezed out by the high cost of ad blocking. Users will choose to whitelist or subscribe for premium content, and the lowest cost publishers who steal, copy, or lie to generate clickbait are the only people who can survive when they've lost half their inventory.
> It seems like an intractable problem. I'm not convinced technology (machine learning! the solution to all problems!) is capable of providing the solution.
You're absolutely right. This is not going to be solved by machine learning. Ad blocking is an economic and political problem, and will only go away when publishers, advertisers, and users are able to come back into equilibrium. Publishers need more leverage to fight for user experience against advertisers' demands, and users need to understand the value exchange that occurs when they get targeted apple adaptor ads while they read articles about the latest iPhone. Publishers need to offer users more diverse but more firm and equitable options that make quality content sustainable and appealing to even the most privacy oriented audiences. Eyeo need to realize that profiteering on a protest movement is not a ethical business model. Easylist maintainers need to realize that they are not profits sent from god to punish publishers for protecting the value of their content.
Hopefully it's because ads are simply static images and text content, served by the target site.
Once that happens, I don't mind them. It's not seeing ads that I worry about, it's the ads seeing me.
What needs to happen is that both publishers and advertisers need to understand that the time when you could charge per click/impression or show "targeted ads" depending on who your viewer is - is soon over.
There has to be better content tools rather than better ad tools.
Paying zero dollars for news and content is a failed experiment.
I assume there is some legacy inertia or opposing force to this in the publishing industry - would be interested to understand the thinking, as it seems like an obvious win for publishers.
It did have to do a double-take as it looks to be part of Medium, which just shut down two major offices and laid off a bunch of people today.
Hoping for the best!
https://www.emarketer.com/Article/Digital-Ad-Spending-Surpas...
> The bottom of the barrel inventory is likely not going to rise with the change of the tide
Agreed. There are crap players in adtech. There are crap ads and crap tech. There are shady advertisers, publishers, creatives. There are good players and opportunities in each of those.
We're working to get DFP to filter out creatives that are too fat or complicated. That's not yet simple.
The "thoughtful inventory curation" noted in the article is not yet simple. Helping people combine stories, ads, and readers who care about both needs work. And there is money to be made.
> Publishers need more leverage to fight for user experience against advertisers' demands, and users need to understand the value exchange that occurs when they get targeted apple adaptor ads while they read articles about the latest iPhone.
Good advertisers, marketers, publishers want good UX because users leave without it.
> when publishers, advertisers, and users are able to come back into equilibrium
Indeed
Native advertising, which I'd re-phrase as 'sponsored content' or 'content placement', I can actually enjoy, if the sponsorship is made clear and the topic is genuinely relevant to the audience. After all, who better to tell what kinds of content readers want to see besides the publisher who puts it out there? But it has to fit -- out-of-place content will be painfully obvious, and cause further user aversion for ads.
But the thing is: all of this can be accomplished without ad networks that track your travels through the web. The client can engage the publisher directly or through a broker. Where does that leave today's adtech?
Other times you don't upload anything and just place a pixel. Then as conversions come through the audience builds and gets better.
Personally, I can't remember the last ad I've seen while browsing. The combination of AdBlock Origin (with a very generous combination of various blocklists), Ghostery / Privacy Badger and NoScript effectively renders most adtech useless. The few remnants that refuse to be blocked I happily skip outright rather than enable. As far as I'm concerned, the only acceptable form of advertising consists of things like hardware companies supplying free samples to review sites without any preconditions and even there a slippery slope exists, as evidenced by the sad state of the games "journalism" industry, where corruption is endemic.
And the best part is that, unlike many political and social issues, users really do have all the power here, and it's trivially easy to exercise it. Install a few trusted browser extensions and you've helped hasten the demise of a harmful parasite of an industry, and improved your own security at the same time. And nowadays it's easy to persuade even non-technical users to do this due to how disgusting and intrusive ads have become.
AppNexus is one of the major SSPs (sell-side platforms) but they still have major fraud and legacy tech issues. They are also one of the primary causes of miserable user experiences across the web. They will not be part of any adtech renaissance.
Google won't flinch if margins really do go down to single-digit margins. They're already built for worse conditions than today and are just pacing the market, as seen with the whole header bidding scenario. They also have Google Cloud rapidly scaling and will likely be a bigger source of revenue than their entire ads division in a few years.
Meanwhile AppNexus can barely survive on their current margins and will be out of business if it hits single-digits. The disintermediation mentioned in this article will also apply just as harshly to AppNexus.
The lame insights about machine learning and formats aren't anything special. This is why Google and Facebook get all the money already, because they have a much faster, cleaner, more relevant, and more effective ad experiences. The renaissance is already here and it's getting increasingly harder to compete with these data behemoths. It's not impossible though and there are several niche focused ad startups, but there's no big sea change about to happen. This is all just business as usual.
Can someone tell me what some of the things are that he refers to in this article?
- dfp, dsp, ssp, gdn, dbm, adx, dcm, dfp
Is there a good technical-minded rundown of all the players in the ecosystem and what they do? Internet ad industry information is impossible to google because it mostly turns up spam.....
DSP: Demand Side Platform, is the tool agencies and advertisers use to buy the ad spots automatically based on tracking profiles.
SSP: Supply Side Platform, is the tool publishers use to sell their ad spots (publishers push an impression to an SSP, a DSP will evaluate it and an agency will buy an ad on it - Google is main SSP and DSP [I think?] so people are wary about them.)
DFP: DoubleClick for Publishers perhaps, as in, ad tech for media sites to manage the display process (guess it could be called Google's SSP).
DBM: DoubleClick Bid Manager, is Google's DSP
ADX: guessing just an ad exchange, so a place advertisers and publishers do the deal.
GDN: Google Display Network, posh AdSense where you can place your ads across 3rd party sites, not just the SERP.
Then we get into the world of Header Bidding (which, as far as I understand it, is even more tech to bypass your usual SSP/DSP process to get the best deal from different ad exchanges) and that whole murky world...
I've only been on the advertiser end, speccing a programmatic campaign through a specialist agency. It makes me nervy as our only marketing attribution is last touch and that rarely works with broad reach display. Retargeting is a much more valuable one to explore.
If anyone would be interested in a guide, I can look to put one together with definitions and a few anecdotes from some players? Username @ gmail.
Are your readers the sort of people advertisers want to connect with? Great! Sell space and support to them. Or is your audience so diverse and ephemeral that advertisers don't care? Move into publishing stuff that's useful to an audience advertisers value, because when everyone else is slipping down the ladder, it's a great time to try climbing it.
Could not disagree more.
Advertising as a whole needs to die in ignominy. Obviously that'll never happen, but we should be working towards ways to make advertising obsolete or unprofitable, and we should be ostracizing people like the author who try to or want to make things better for advertisers.
The promise of the internet was users as first-class citizens, not users as mindless consumers of hostile advertising.
I'd be the first to point out that advertising has motivated a wide array of terrible things, especially in the last few years. But advertising at its barest sense can be and usually is a net positive force.
Plus if you could basically eliminate advertising, it would depress the entire economy because new competitive products and services would be near impossible to invest in.
Technically, yes, all communication is manipulation, but I'm concerned about the intention of communication/advertising. Although some ads could only be informative, the vast majority exist not to inform, but to disinform/mislead. The proportion of ads advertising new products/services (as opposed to simply reinforcing existing brands) is miniscule.
There already exist many services that allow exploration of new products. Things like ProductHunt and similar websites, various blogs, online communities like FB and HN, ...). Advertising is a net loss on the economy - it's a zero-sum game (people's attention is finite), so the more money my competitors spend on ads, the more money I have to waste on advertising as well, and I can't improve my product!
If value-adding enterprises are unable to market themselves, their business expenses can be forever lost to the world.
That is still marketing. You're not really arguing against advertising.
> Advertising is a net loss on the economy - it's a zero-sum game (people's attention is finite)
That's how marketshare works.
Are you sure?
The implementation of it online definitely needs work but advertising itself is just fine.
FTFY