Venture-capital-fueled ad tech companies have convinced traditional publishing companies with rich and successful histories of selling advertising, that they no longer know how selling advertising works. The ad-tech collective calling card reads, “This new way is way better than your old way.”
Better for whom?
Media buyers and sellers don’t line up on the same side of the field. Their financial goals are diametrically opposed. One wants lower prices, one wants them higher. This “right price” the tech stack proclaims to deliver to publishers is a euphemism for “it’s more than nothing, but much lower than what you get the old way. But hey, look, no paper work.”
At a recent programmatic conference, a moderator challenged a panel of programmatic buyers and sellers by stating that while programmatic CPMs are rising, they are significantly below CPMs secured by salespeople selling directly. One panelist, a director for a trading desk, responded, “Well maybe those prices were too high to begin with.” The panel nodded in agreement.
That’s not how it works. That’s not how any of this works.
Premium publishers built their businesses by obtaining premium prices, and are now buying into ad tech that makes it easier to buy their product at lower prices. This combination produces revenue from what would otherwise be unsold product -- no argument there. However, it also produces something site visitors and media buyers notice, but premium publishers are ignoring: shitty-looking ad creative on their sites.
I see these ads all the time on premium sites, but the premium site I spend the most time on is Yahoo (my business email lives there). Yahoo, a leader in the online display ad space and a heavy proponent of programmatic, has become a litter box for online ads.
As a user, Yahoo services my email hosting needs adequately. When I venture out to its content, however, it could care less about my needs. That’s when I get hit with video pre-roll ads that auto-play as soon as I land on the page, home page rectangles that auto-expand like pop-ups, fake content galore, and an ad/edit ratio on my above-the-fold page view that makes me dizzy. Yahoo also has a suspicious tendency of asking me to re-log in three or four times consecutively, often on Fridays, and each time serving up full-page log-in ads I suspect are underdelivering that week.
Then, thanks to programmatic, Yahoo serves users the cheapest looking ad creative imaginable. And the company wonders why its premium direct sales business is suffering.
That’s not how it works, that’s not how any of this works.
What Yahoo and other publishers racing into programmatic ignore is that ads are part of the user experience, and the perceived value of this experience is affected by the quality of the creative. In turn, buyers and clients who see inferior ad creative running on premium sites see less value in buying that site.
Many will dismiss my claims as naïve or out of touch with today’s market. After all, money is flowing, but CPMs have been dropping for years. That is not how publishing should work, that’s not how any of this is supposed to work.
If you have a chance, pick up the most recent issue of Harper’s Bazaar. You will see over 60 ad pages before you even get to the magazine’s table of contents. These ads are as beautiful as the magazine itself, and no one ever clicks on them. Instead, readers trace them seductively with their thumb and forefinger while fantasizing about owning what is being sold.
That’s how this thing works.
We are so far from “that.” The smell from this collective online ad litter box (not just Yahoo’s) will keep brand dollars away until we scoop out the shitty ads. For that to happen, premium publishers need to remove the sign they just hung that reads, “All ads welcome,” and replace it with a velvet rope inducing clients to dress well enough, and pay more, to enter. Only then will we see quality ad creative that enhances the value of a site. A cheap entrance equals cheaper suits; a high cover charge causes lines of people dressed to the nines.
Getting back to how it’s supposed to work requires a publishing leader to rise up and show us the way back home. Sadly, I don’t see that happening.