Commentary

P&G Is Right -- The Party's Over For Digital Advertising

It is hard to think of a greater example of daylight robbery, however unintentionally inflected. But here goes. As Marc Pritchard, chief brand officer at P&G, made clear again last week, the digital media industry has a lot to answer for. 


If you think about the sums he's talking about it means an eye-watering $175bn of ad spend does not end up showing consumers a single thing. How can that be? Well, here's the thinking. Just 25% of media spend, he says, actually results in a consumer seeing anything. Take a $200bn global industry and that means just $25bn worth of spend ends up being seen by consumers.

This may be a good time to say it could actually be worse if you consider targeting. Research has shown that the majority of display does not reach the intended audience every time. Throw in a targeted audience and it's likely that Pritchard's gloomy picture could be even worse. At the very least, it is unlikely to be an exaggeration.

Out of interest, if you were to apply the same thinking to the UK, you start off with a digital display market worth GBP3.7bn. That's the IAB UK's figure for 2016, so we can easily assume we can round that up to the market being on course to be worth at least GBP4bn this year. That means just GBP1bn is getting through to consumers and GBP3bn is not. It's pretty staggering, isn't it? That's the equivalent of three Great Bank Train robberies every day, if my back-of-an-envelope calculation is roughly correct?

So where is all the money going? Well the latest suggestions are that -- in the UK at least -- viewability is running at around the 50% mark. So around half of what is pumped in at one end never ends up being seen on a page. Raise the bar a little higher and consider whether a message has been seen by a human being and we have the thorny issue of fraud. Estimates vary wildly for the percentage of display that is only viewed by bots or crammed into the same window where it cannot be seen. Pritchard is obviously working to around a quarter -- and from a lot of estimates I have read over the years, that would be about an average figure.

I guess it's difficult to know the actual figure, as it will vary so much depending on how media is traded and with whom. Given the news last week that IAB Europe's research shows that half of all EU digital display is bought programmatically, it is not too much of a stretch to think that with direct deals on the decline, ad quality will be challenged. Sure, there will be budgetary savings and a data feast for all, but if that leads to inferior placements or contributes to ads not being seen, that's not necessarily a great thing.

Pritchard is completely correct, then, to call out the digital advertising scene for this waste of budget. He is already on record, along with Unilever, for saying that adland must become more transparent and that FMCGs can get by spending a lot less with fewer agencies. The two big names in FMCG advertising are each doing exactly that -- slashing rosters, making assets work harder and reducing budgets accordingly.

When you think of the big drop in WPP's share price off the back of a prediction growth that would be, at most, just 1% this year, it isn't hard to imagine that it is simply the first big name to be on the receiving end of this new bullish attitude among the big advertisers. 

Pritchard is summing up 2017 so far as the year the bloom fell off the rose for digital advertising. It would just as easy to sum it up as the time budget holders took back control, and digital advertising had to realise that the easy times are gone.

The party is over. 

2 comments about " P&G Is Right -- The Party's Over For Digital Advertising".
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  1. Paula Lynn from Who Else Unlimited, September 18, 2017 at 7:10 p.m.

    Out of your mouth.....as the saying goes.

  2. Ed Papazian from Media Dynamics, September 19, 2017 at 8:03 a.m.

    While I agree that the honeymoon stage for digital advertising has ended and this medium's ad space/time sellers badly need to reorganize just about everything in their systems and offerings and deliver the goods, we should remember that the ones who are unmasking the many problems---lack of ad visibility, lack of reach, false data reporting, etc.---are primarily from the branding school. In other words, much of digital media's ad revenues, thus far, have not come from conventional TV advertisers who are far more sophisticated in their approach to media than most digital folk recognize. While the "wild west", helter skelter, smoke and mirror chaos of digital advertising may have been acceptable to email, search, direct response and other non-branding advertisers---though why this was so still mystifies me---- when the great push to take over traditional media was launched about three to four years ago and some serious fact checking began, it was soon evident to many branding advertisers that digital media was a mess. This does not mean that digital media has no value, nor that it should be ignored, but as word spreads about its many issues, some of its die hard, non-branding users may begin to lose faith. Clearly it's long past time for the digital powers that be to step in on a cooperative basis and set things right. If this means learning things from traditional media and applying them to digital, so be it. Or will they just wait until the digital ad bubble begins to burst?

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