Study Finds 'Transparency' Impedes Display Ad Growth
- by Joe Mandese @mp_joemandese, April 14, 2010
A major reason why display continues to lag the growth in paid-search advertising is that major marketers are concerned by the increasing lack of "transparency" among ad networks and third-party aggregators of online display advertising. That's the chief finding of a new report, "Beyond the Grey Areas: Transparency, Brand Safety and the Future of Online Advertising," released Wednesday by the Winterberry Group.
The report, which was commissioned by AdSafe Media, one of the companies marketing proof-of-performance and content safety solutions focused on the issue of transparency, estimates that U.S. advertisers alone have held back as much as $2 billion annually in online display spending due to those concerns.
"It's critical that advertisers and agencies understand the extent to which certain issues -- the possibility that ad will appear next to content that could potentially undermine its message, for example -- continue to present real threats," said Jonathan Margulies, a director at Winterberry, adding: "Our panelists resoundingly told us these issues persist -- and they bring with them real costs."
The study found that some of the key issues related to display ad transparency include "message misalignment" (advertising message appears out-of-context from surrounding Web page content) and outright "dangerous" placements (ads appearing on pages that defy good "taste, respect and basic courtesy").
"Anecdotally, marketers tell stories of botched campaigns, disastrous brand exposures and quick, last-minute media plan revisions," the report reads. "What they report far less often, though, is the extent to which they deflect ad dollars from the digital display channel -- or hold back from committing spending in the first place -- because of anticipated challenges with regard to risky placement."
The report did not disclose the base of ad executives surveyed, but Winterberry cited verbatim from a couple of key Madison Avenue media figures, including John Montgomery, COO, North America, GroupM Interaction; Baba Shetty, executive vice president and chief media officer, Hill Holliday; and Peter Gardiner, partner and chief media officer, Deutsch Inc.
I'm curious about the actual "increasing lack of transparency," you cited. Certainly not questioning your reporting.
It seems like the industry is moving in the opposite direction, at least in the rhetoric, towards an increase in transparency. There may be more awareness of the lack of transparency that existed previously, and there is certainly a bigger concern about it than there had been before. Maybe I'm just being naive, but most people claim to be working towards being more transparent, not less.
Does the report quantify (or qualify) their premise of an actual increase in the lack of transparency?
Corey, your not naive as I have been hearing the same thing. I work for an ad network for the outdoor category and we preach transparency to our clients (potential and current). I have had conversations with folks at digital shops across the US and transparency was a concern of theirs and has made them shy away from using them but in all cases (4 of them) they are all going to review ad networks for 2011 because of networks opening up lists of their sites.
I see part of the problem stemming from the agency/client side though - they should look at the network their buying and keep the buy tighter to the audience they want versus the generic A25-54 or M35-54 etc. That makes it tough for a network to know what you are and are not ok with your ads appearing next too.
You are both correct as evidenced by the number of companies jumping into the 'transparency' market. In addition to AdSafe who sponsored the study and primarily do ad blocking, there are several dedicated and independent verification metrics vendors (e.g., DoubleVerify, Adometry, etc). In addition to those vendors, there are at least a few networks offering some kind of transparency metrics on their own networks.
I think the problem is with the title of the article not the sentiment. If there was more transparency, and we knew where to best spend our budgets, there would be an inclination to shift spending in favor of display. At least that is the angle I would have taken when writing this.
Transparency is code for trust (http://www.adify.com/transparency-means-trust/) and every advertiser is going to prefer more transparency over less. There are a number of questions to answer:
(1) Is the advertiser willing to pay a premium for that transparency?
(2) Do the advertiser and agency understand that the use of demand-side platforms, real-time bidding, and behavioral targeting often leads directly to “message misalignment?” Their goal is to reach the right users when they are exhibiting purchase intent, often without concern for context.
Many large publishers use opacity to protect their direct sales efforts, effectively pursuing a hybrid sales strategy combining volume and premium, which cannot succeed long term. Adify Media is 100% transparent from start to finish because our publishers--all niche, quality mid-tail sites--have been hand-selected for their content, design, and context, and do not have sales channel conflicts.
Transparency is one of the key differentiators between broad “horizontal” networks, and more “vertically focused” networks. With the latter, advertising agencies and brands have a high level of trust about where and how their advertising message will appear. This is because vertical networks rigorously prescreen all publisher partners prior to adding them to their roster, as opposed to adding any site for the sake of increasing overall reach. And their advertising partners will hold them accountable with their budgets to ensure inclusion of only quality sites and their inherent high levels of performance. And by presenting all sites they represent, vertical networks avoid surprises in the execution of a campaign and the advertiser is ensured that their message will not run alongside inappropriate content. Thus, vertically focused networks (like our RGM Alliance) offer the reach and efficiency inherent in network buys, but also the targeting, performance, and “brand safety” typically associated with site-specific campaigns.