What Has Happened?

Maybe it’s because the start of the year is also a time of reflection, but I continue to be appalled at the state of the online advertising business. It’s not so much about the fact that 2 players – Facebook and Google – gobble up the majority of money spent. In fact, in terms of ad revenue, Facebook by itself is twice as big as the newspaper business, according to eMarketer, and will be bigger than the entire print business shortly. Google is twice as big as Facebook. There’s a third player – Amazon – on the way to suck up a huge share of the ad pot as well.

While that isn’t the problem, it does mean that the rest of the industry is fighting over relative crumbs. When you’re desperate, you might do things that you know are wrong or foolish and that’s where I think we are. In fact, I think we’ve gone way over the line from foolish to criminal.

Some examples. Yesterday while I was reading an article via the web browser on my phone, up popped the screen you see on the right. Those of you who have an Android phone know that what you see looks very much like the Google Play store and it seems as if there is a critical app update I need to make. It is an ad, of course, trying to get me to install what I assume is malware. Had I not noticed that it was in a web browser and not in the native Play Store, I just might have clicked.

This is why the online ad business is doomed or at least the part that’s outside of the big 3. On the consumer side, people are forced to use ad blockers to prevent malware from infecting their devices as well as interrupting their tasks with annoying popups. On the business side, publishers keep pushing ads knowing that some percentage of them are scams or worse yet unable to do anything since in many cases they’re not the ones selling the ads. They’ve offloaded that to third parties and 74.5% of US digital display ad dollars transacted programmatically will go to private marketplaces and programmatic direct setups.

Speaking of those third parties, they might just be the worst thieves in the bunch. They claim to be there to help publishers increase revenues or marketers to buy efficiently yet they inject numerous fees, both known and hidden, into the process, siphoning off at significant (upwards of 25%) amount of the available money in the transaction. Those hidden fees, by the way, might just violate any number of local and federal laws.

So what has happened to the ad business in which I grew up? What has happened to agencies being honest brokers and nearly full transparency on all sides? Where is someone in the ad chain (looking at you, ad networks) saying “no” to scams, malware, and the other crap that serve no purpose other than to encourage adblocking or to harm someone? Anyone?

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