The other day I read a lengthy story in the New York Times that implies the COVID-19 economic downturn might not be such a bad thing because it is forcing agencies and clients to figure out cheaper ways of doing business.
The story starts out by saying that “The advertising industry’s tendency toward excess — catered parties in Las Vegas headlined by pop stars; unwieldy internal hierarchies stuffed with countless director roles; throw-it-at-the-wall ad placement — has persisted for years despite concerns about wastefulness.”
While I am sure those who threw parties at CES “headlined by pop stars” are confident that their ROI was worth it, and every industry has “unwieldy internal hierarchies” (the Times has 1,700 journalists!!), I spit out my Diet Coke when I saw “throw-it-at-the-wall ad placement.”
This was approximately the same moment the Big Tech firms were getting hammered in Washington for, in part, using data to more precisely target ads. Now, if you are on the advertising beat for the national newspaper of record, it is incumbent on you to stay abreast of what is actually happening in the industry. The ability to target ads online — and increasingly OTT — has evolved to the point that you can put your product in front of real buyers with an efficiency that simply gets better and better.
It’s entirely true that mass marketers that consider everyone still breathing a potential customer run their ads nearly everywhere they can afford to, since the cost of doing it is at an historic low. This gives the appearance of “throw-it-at-the-wall ad placement” — when in fact, it is by design and successful enough for it to keep being done. That it might piss you off as a consumer (or beat reporter) is a risk the brands involved are willing to take because they can take a response rate of .02 to the bank all day long. Often these kinds of ads are part of cross-platform efforts and are simply there to reinforce the brand name and not even elicit a response.
Meanwhile, brands who care about not using “throw-it-at-the-wall ad placement” have benefited from the evolution of targeting made possible by massive data collection and sharing, and have moved largely away from “half my ads are wasted, but I'm not sure which half.” Would they like a response rate of 90%? Indeed, and hitters would like a batting average of .750, too.
But in reality, the average CTR for a typical online display ad is only around 0.1% — and frankly, it’s meaningless to present average rates since there are so many media and campaign factors that affect response, from the quality of the creative to variances on what constitutes an ad successfully served.
No advertiser wants to narrowly target only people who already buy their product. They’re also looking for prospects who could become new customers. It would be nice if every prospect could be reached in the same medium with the same creative, but each medium has unique challenges, so most marketers try to optimize their spending across multiple channels. This can also give the impression of “throw-it-at-the-wall ad placement.”
Not to say there isn’t a fair amount of waste in ad buying. There is. But most folks I know in this business are working diligently to eliminate as much waste as possible and provide the best possible ROI for advertisers.
That is called competition.