Time to CTRL+ALT+DEL Digital Ads
If things don’t get fixed soon, it’s gonna get ugly.
The ad industry is at a tipping point. A fork in the road. A moment of truth. Whatever grand cliche you want to use that references a moment where decisions are made and long-lasting consequences are felt. We have arrived.
Ad blocking is on a meteoric rise. It’s happening so quickly and with such scale that the companies which dominate the medium are now integrating stronger ad blocking technology into their products. Ad spending is going down in some arguably important circles. Companies seem to have less than some idea of how to plan and measure the effectiveness of their advertising. Agencies are struggling with articulating their value to clients. It’s a mess.
How did we get here? What do we do now? These are important questions to answer, but to address them properly we need to take a step back and look at the underlying causes of the present predicament.
To be blunt, (one of) the primary outcomes of the Industrial Revolution is that we got a whole lot better —(more) efficient, sound familiar? — at killing each other…” — Ben Thompson, Stratechery
Eerie, isn’t it? That quote brilliantly encapsulates what is at stake for the ad industry, and really humanity at-large vis a vis technology. Let’s stay on the advertising topic, though or we’re be here all day.
Impressing Ourselves Too Much
Much of the current situation can be traced back to the early value prop of digital and advertising, specifically. We were enamored with tracking anything, everything. Clicks, followers, and the infamous impression. I’ve written about this before, but perhaps it’s best to just be blunt now — the impression is the single stupidest form of measurement ever devised in digital advertising, and maybe just period. It’s our version of listening to a serpent say, “bite the apple.” The best definition of an impression that anyone can muster is, “content that is 50% viewable on a screen for at least one half of one second.” Sigh.
Advertisers still tout impressions in measuring performance. If you work in advertising and you’re patting yourself on the back getting a bunch of impressions during team meetings, try this turn of phrase next time and see how many congratulatory backslaps you get: “I’m pleased to report our latest campaign was at least 50% viewable on screens for one half of one second X million number of times.” I’m sure it’ll go over really well.
Advertising can only work when you have someone’s attention. We’ve devalued human attention in the interest of tracking metrics at obscenely high counts to validate our work. It’s lazy, and it’s reckless.
Think of it in common sense terms. A person has 24 hours in a day that they could devote attention to any thing or things. On average, 6–8 of those hours are sleeping. Another 8–10 are spent working, so even if we assume (correctly) that people browse and engage online at work, let’s call 7–9 of those hours also unavailable for advertisers to earn attention. That leaves 7–9 hours of potential time where someone is awake and their attention is available online. We know most people are online about 5–6 hours everyday, but we also know that about 2–3 hours of that time is using social media, and the primary motivation is to connect and share events, news and entertaining content with other people. Given this, and given that ad revenue in places like Facebook and Instagram continue to rise, how are the media and advertisers justifying ROI?
As the number of impressions available on the internet keeps growing, and the number of ads being served, even in social media such as Facebook, keeps increasing we’re adding more ads for (relatively) the same amount of people. We have infinite space on the internet, and for years we’ve just assumed that as we fill more of that space, attention will rise as well. Only we don’t have infinite people or infinite attention.
“Nobody reads ads. A person reads what interests them, and sometimes it’s an ad.” — Howard Gossage
The Puzzle Pieces Don’t Always Fit
The same laziness that leads to focusing on meaningless metrics extends into understanding how best to evaluate any metrics. It’s no secret that the ad industry and its clients continue to struggle with attribution modeling. That’s because it’s hard. When all the data available shows that people do not travel a linear path to purchasing a product or service, the task of tracking people through their journey and properly assigning credit to marketing tactics along the way becomes exponentially more complicated. So most companies still use last-touch attribution modeling, which means they give full credit to the last thing a person clicked on before making their purchase.
Again, let’s use common sense. Think about your own daily life. How often is it that you see an ad somewhere for the first time, click or tap on it and buy whatever it is that advertisement is selling? I can count on one hand the number of times that I’ve done it. I bet you can, too.
What actually happens is something like this:
- You see converse with a friend and they recommend company/product/service X to us
- You go online and check out their website, maybe sign up for email if we’re curious to know more
- Life goes on. (Think of this as the intermission.)
- You see an ad online, probably in social media, and you click and go back to the website for company/product/service X.
- You browse around the site for a bit, but then you get back to work because you remember that thing on your to-do list for your boss/team/spouse/friend.
- On the commute home, you see another ad on another social network for company/product/service X and double-tap to like it.
- After work, you’re lounging on your couch watching TV, on your iPad and you see an ad on your favorite publisher’s website for the company/product/service. So you (finally) decide to tap and buy.
Now, explain to me why that last ad on your favorite website should get 100% of the credit for your purchase. Does that really make sense? Of course not.
Like human attention, we’ve devalued an understanding of human behavior. It’s been distilled down to numbers — impressions, clicks, conversion rate and revenue and the almighty ROAS. If those numbers from any given advertising medium aren’t all massive, then whatever advertising medium is getting those massive numbers will get more resources, while this particular medium has resources taken away.
What do you do about these situations, though?
- A medium drives a lot of people to your website/store, but not a lot of people are making purchases upon arriving.
- A medium isn’t driving a lot of people to your website/store, but a large share of those people are making purchases and at high revenue per purchase.
In either one of those scenarios, the issue may not lie with the advertising medium but with your brand and/or customer experience. Maybe the product or service the people were specifically looking for isn’t available. Maybe the medium’s audience is niche, and thus the lower amount of people it can earn attention from but who are more fervently interested in a particular product or service your company offers. In the former example, a logical next step would be to review the customer experience at the point of sale to uncover insights as to why all these people aren’t making purchases after visiting. In the latter example, you’d want to do the same analysis but for different reasons — why are people buying so much? If you offer multiple products or services, what is it their buying? Why might they be buying it?
That’s human behavior analysis. That type of thinking can help uncover insights that optimize marketing and advertising by giving companies a better understanding of who their core audiences are, how they identify and connect that identity to the company and its product or services.
Instead, many marketers just knee-jerk to “[advertising medium X] didn’t work because it didn’t drive enough [traffic/conversion/revenue/ROAS]. We need to cut funds and re-invest them in [advertising medium Y].”
To be fair, I’m not suggesting that advertisers’ be uncritical of performance measurement. At Uptown, we’re hyper-critical of every single client dollar we spend. That type of objectivity absolutely needs to be happening. It just needs to be re-focused on ways of measuring human attention and behavior, and with the context people typically do a lot of things and get exposed to a lot of ads before taking action.
“If you want to understand how a lion hunts, don’t go to the zoo. Go to the jungle.” — Jim Stengel
Hard Choices to Make
Let’s wrap this up, shall we? Up at the top of the article I asked the question, “what do we do now?” The answer is two-fold:
- Re-focus the ad industry towards human behavior measurement
- Regulation and reform the web and ensure consistent ad experiences
The first step is easy. If we start valuing human attention is the single-most important performance indicator, we’ll start to develop a better understanding of where people spend time, why and how best to connect with them. This will naturally lead to a better understanding of how people behave across multiple behaviors including search, social media, email and more.
The second step is admittedly harder, but equally if not more necessary. Fraud is rampant. Many points on the web are terrible experiences for consumers with banners everywhere, native ads attempting to disguise themselves as news, pop-ups galore and auto-play video. All of these elements are in service to the old way of thinking — bigger numbers equal better performance. We must take more steps to ensure consistent, quality experience across internet. Some companies are already making moves towards this model. Hopefully others will follow. The end goal will likely require regulation that boxes in bad players and provides greater opportunity to those who truly value their users’ attention and the experience of their platform.
It should scare everyone in the industry when a massive ompany like P&G pulls millions from digital because they’re not sure what the hell they’re getting from their investment. It should cause real concern when people like WPP’s Martin Sorrell are lamenting the state of the ad industry and in particular because clients want transactional measurement prioritized over relationship-building with customers. And it should make you scratch your head that as Facebook’s ad revenues soar, it’s growth rate of new users has slowed. They’re serving more ads to the (roughly) same amount of people. How is that sustainable?
Advertising used to be about building an idea in someone’s mind. Today, it’s become an exercise in Excel spreadsheets. It’s time to restore balance.
Our time is precious, our attention is priceless. Let’s act like it.
