Commentary
The Terrifying Monster Called Digital Advertising
- by Maarten Albarda , Featured Contributor, October 3, 2016
The story — don’t worry, no spoilers — is about a nerdy boy who mysteriously disappears from a sleepy town in the 1980s, while at the same time a strange girl appears. It turns out there is a place called the “upside down,” a parallel universe where a terrifying monster lives. And now that the connection with the upside down has been established, the monster comes and goes…
There are many terrifying monsters, some set in ancient history, some living among us today, some as real as you and me, some as real as only your imagination allows. Almost all monsters have in common that they are huge and… well, monstrous.
Here's one we -- marketers, advertisers and the media -- have created. It fits the description perfectly: It is huge, and its size is just reason why it is utterly terrifying. Just like the monster in “Stranger Things,” it appears unbeatable and it seems impossible to put it back in its place.
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How big is it? Well, here’s just one of its gigantic limbs: Google serves 30 billion impressions per day, amounting to 900 billion per month, or 10.8 trillion impressions per year. Facebook’s 2016 ad revenue is estimated at about $6 billion, so I imagine its numbers to be something similar.
The monster has many heads and tentacles, who all seem to be spewing and clawing at the innocent victim in ever more inescapable ways. That poor victim is of course the consumer, and the monster is digital advertising.
If you let those Google numbers just sink in for a moment, you can begin to see what kind of a monster we — again, collectively — have created. And we can also begin to imagine what the chances are that consumers can escape the onslaught of the monster. Which is why it should surprise no one that the consumer is using weaponry and putting on protective gear to at least ward off the monsters’ continual attacks.
Do consumers have any allies? Not really, because the monster’s diet not only consist of consumers but also of something called ad dollars. And while the supply of humans is somewhat limited, the supply of ad dollars seems to be limitless.
The guardians of the ad dollars seem more interested in ensuring that those ad dollars end up in the multiple bellies of the monster in the most expedient way. Initially they did not fully understand the monster’s diet, so they used wardens to feed the scary monster, but now some have taken to feeding the beast directly. The wardens charge a fee for feeding the beast but that sweet deal is beginning to generate less and less income, so some unscrupulous wardens came up with a wonderful fake food for the monster called bots.
The guardians of the ad dollars and the wardens who feed the beast only think about their own interests. They have endless discussions and even fights over who is the most honest, smartest or most creative in feeding the beast its ad dollars and consumers. But no one in our industry seems to really discuss much what Google’s 10.8 trillion impressions per year means for the poor consumer. And so the monster grows and grows and grows and…
Interesting, Maarten, but we should place these kinds of numbers in perspective. Take your figure of Google's 900 billion impressions served per month. Assuming that these are real "impressions" and that they are all 100% "viewable"---which I doubt---that translates into about 2800 "impressions" per person in the U.S. per month---many of these ads are never even looked at by users; others probably go to bots. By way of comparison, the corresponding ballpark figure for TV, with every commercial 100% viewable and no bots, is something like 4500.
You are right, Maartin, "We are begging to be controlled."
Point well taken; although the tracking adds its another little monstrous dimension.
For purpose of interest, I'm wondering if you are speaking directly about Google DFP's ad impressions or Google AdWords? If you are referring to AdWords (or even aggregating both of them), then I don't think you can equate the two. Why? Because an AdWord link is fundamentally different than a banner from DFP. Google AdWords is, arguably, a beneficial link to the user who has specifically searched for a topic or a brand. If the AdWords ad is irrelevant, that's the search manager's problem. It should be relevant or it's simply a poorly run search program.
On the other hand, if you are speaking to DFP, then perhaps there's a good argument for impression glut. However, I beg to believe that advertising is only going to become more relevant, more targeted, and more helpful as we (finally) move away from banners to richer forms of content and engagement that, lo and beyond, consumers may actually find helpful and interesting.
I think your point is that this is a monster of our own making, those of us in the marketing & media business. Either the industry needs to take their guardianship seriously and begin to moderate the diet of said monster lest we all be consumed by it. Or in keeping with your monster metaphor we need a Hurculean champion or better yet a Persius to slay the monster in all it's forms and save the fair Andromeda (our consumer surrogate for those not up on mythology).
I agree that the digital media measurement needs to be clarified. The statistics in the article are very misleading. Digital simply does not have anywhere near that kind of impact. The minimal criteria for a so called digital impression is nuts. No sound, 3 sec, and in some cases only partially in frame. It can not be compared to a radio or TV imprression. If you used the same criteria for TV the impression would be astronomical. Yes, digital should have better more balanced criteria. However, the bigger issue is that digital needs to seen in perspective. It is a secondary medium to tradtional media.
Ed, even if you are right about the 4500 number, how does that number translate in terms of cash made from the Advertisement? If my broker tells me my stock went up by 4500 basis points I could calculate that into a cash valued price, and get the money. If Advertising can't do the same then perhaps Advertisers should stop paying money for with cash.
@Mark. The only answer that I can give you is that for enough advertisers their ad dsollars do produce a positive sales effect, though not to the precise dollar for dollar degree that you are promising with your guaranteed results" network". Some ad campaigns are more effective than others and many product sales are a function of other elements as well as advertising---all blended together. If a medium could really make money selling ads on a pay-for-sales basis, it would have to accept the fact that most sales can not be attributed exclusively to a single set of "impressions" and that for many brands share-of-market gains are not an automatic result of advertising. As a result, the "network" would probably not get paid in many cases---- which might pose a problem for those who run it.
@Ed, What do you mean exactly when you say, "most sales can not be attributed exclusively to a single set of "impressions"?
@Mark. Many factors are at play. For example, the effect of prior advertising on current sales, the overlapping impact of ads in other media for the same brand, the impact--positive or negative--of rival brand promotions, the changing economic climate, whether a brand is maintaining its distribution and availability in the stores, brand image, whether a brand delivers on its promises as this affects repurchase rates, word-of-mouth endorsements, etc. and, ultimately, how relevent the current brand campaign is regarding product positioning and execution. I have seen many ROI studies that attributed only 5-10% of a brand's sales to its current ad campaign---the rest being due to other variables and, in many cases, a significant percentage being impossible to account for. I believe that these understate the effect of current brand campaigns due to lack of appropriate data, however one thing is clear. For many campaigns, there's a lot more involved than merely the effects of a portion of a brand's current GRPs.
@Ed Papazian, You are correct. All of those factors, and more variables must all be accounted for and controlled in order for a broadcast network to offer advertisers guaranteed sales increases. Indeed, it is very difficult. But not impossible. Personally, I am excited and looking forward to all the wondrous possibilities in the next year!
I think we grossly over-estimate TV impressions ;
Sports bars - 40 TV's no sound
Home - pick up your smartphone (at least there is sound)
DVR post watch - skip ads entirely
Home - many nobody in the room ad impressions
The difference is digital is broadly measureable , you know what your not getting...
@Gary. Exactly right. Even though Nielsen tallies its national ratings down to an "average commercial minute" of "viewing", in reality all that this does is to eliminate DVR zapping. Nielsen has no way to know if people are actually "watching" commercials. When I quoted that fighure of 4500 TV ad exposures per person per month, I used a typical finding, based on Nielsen data. We also provide our "TV Dimensions" subscribers with the estimate that only 50-60% of the "average minute commercial audience" is probably in the room and fully or partailly attentive for an average TV ad. This makes the actually exposed figure about 2500 per month which is a more ralistic figure. If you calculate it on a fully attentive basis, the number drops still more---to around 1,300. Of course, the same point applies to digital ad "exposures", many of which are phantoms---even if the ad is actually on the user's screen.
Dig behind the numbers as Ed does and it seels there isn't a digital monster, but an aging gentleman in the corner pulling levers using numbers as a mic amplifying his voice as he says "I am the great and terrible Google"...