Commentary
Lots Of Losers In An Opaque CTV Ad World
- by Dave Morgan , Featured Contributor, July 6, 2023
Yes. I am going to hammer away at the transparency issue again this week.
If we as an industry have any takeaways from the recent press surrounding the Adalytics research into Google YouTube campaigns and their findings that 80% of analyzed campaigns for 1,100 brands between 2020 and 2023 were delivered on non-conforming third-party sites, typically with sound off and not visible, is that the programmatic digital ad industry has a transparency problem.
And just-released research from Association of National Advertisers’ shows that of the $88 billion that their members spent on programmatic advertising on over the past year, 23% of it was waste, with much of that going to “made-for-advertising” web properties that don’t have any organic content or audiences.
I am tired of people saying waste in advertising is just part of the industry and something that we should accept. No, we shouldn’t.
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Let’s be clear, this “waste” is a feature of these systems, not a bug. The tens of billions of dollars of money being programmatically siphoned off the campaigns studied is neither accidental nor unavoidable.
People are stealing money to which they are not entitled. They are taking it away from publishers who deserve it. They are creating artificially low pricing in a market that undermines all who invest in doing things the right way. And they are cheating these advertisers and their investors who receive no return on these tens of billions.
And -- critically for all of us who care about this industry in which we work -- these practices are rewarding, institutionalizing and normalizing conduct and behaviors that should be punished and eliminated, not just seen as a “cost of doing business.”
Yes, this can be solved. Both Adalytics and the ANA team analyzed the ad logs from campaigns, a key truth-set that many DSP’s and SSP’s do not routinely release. This forces brands to buy blind, relying on verification firms to look out for them. Inextricably, none of them seemed to have either heard, seen or spoken of any evil done. Funny how that is.
Marketers need to demand log-level transparency. They need to care about where their ads are delivered. And, essentially, they must recognize that when they demand “cheaper CPMs” they are telegraphing buyers to dilute their buys with fake stuff and look the other way. It’s that simple. There is only so much real inventory to go around. The markets set prices for it. Hoping to find something dramatically cheaper means that you are begging for goods that are either illusory, fraudulent or likely “fell off the back of a truck.”
Let’s stop doing business that way. Tens of billions of dollars of legacy TV ad spend is shifting into CTV. Linear TV has problems, but transaction and inventory transparency isn’t one of them. Let’s not let that money coming into CTV advertising be wasted because we didn’t demand better of our industry.
What do you think? Are you ready to demand transparency?
Well said. And, to restate it...by allowing this to continue the ROI of ADVERTISING is lower than it would be if advertising was properly, transparently, and appropriately delivered.
Yeah, a particular company may steal a few bucks (be it an agency skimming claiming to be a true principal or a MFA site) but to the folks deciding should I invest in advertising or something else; they don't care if it is your medium or mine...they care about advertising in toto versus other investments. If the industry doesn't fix this then advertising is a cost not an investment.
hear, hear! hammer away.
But as we have seen since the ISBA study and the recent ANA study, even getting access to the data was sometimes impossible. The vendors selling services don't want to to analyze log level data, lest the fraud and shenanigans come to light.
For those who cannot access log level data, you are welcome to use FouAnalytics at no cost to measure campaigns. It will yield the equivalent of log level data (impression by impression) in a far more usable, digestible way. Most advertisers don't have data scientists to ingest, clean, process, and analyze the data.
I'm far from an expert on these processes but am healthily skeptical. Questions that arise are 1. Will advertisers demand logs and refuse to advertise on sites that don't provide them? 2. If the logs come from the vendor why should I trust them? 3. If the logs are verified by any of the current "auditors" that seem to be failing here, we are again back to zero. The CTV/digital industry operates in a Bernie Madoff/Bankman-Fried FTX/Crypto world. Like them, vendors say "trust me." Even large established operators seem to stumble. Trusted currencies are not free. There is a system in place to make sure the numbers add up -- to the penny -- though it is not perfect. But I would be happy to see progress without perfection. These who apply for MRC accreditation pay a relatively small fee. But few measurement companies bother, why is that?
We all know that digital advertising works. But that is no reason to continue to do business this way.
To be fair, many of the "marketers" who are being taken to the cleaners by this kind of thing may not really care. For example, if you are a search advertiser and you pay only for clickthroughs, not for "impressions" it may not matter if many of "your" ad messages get sent to bots or other non-"audience" sites. The real problem occurs when you are expecting each "impression" to target a real consumer and you pay for each "impression".
What amazes me is the constant cop out by the digital media sellers who keep saying that it's the advertiser's responsibility to police their "impressions', check logs, etc to make certain they get what they think they bought. That kind of BS is unacceptable in traditional media where third party audience determination and auditing are required and are paid for mainly by the sellers. It's about time that digital media sellers assume the same degree of responsibility and develop---with advertiser/agency agreement---- the kinds of objective, third party verification as well as "audience" measurement that old fashioned "legacy" media has long provided its advertisers. If they don't and more cases like this come to the forefront, then they are practically begging the Feds to step in and regulate them. Won't that be fun?
Ed, be sure not to forget that bots click on ads to commit click fraud. So even if you pay per click you can still be exposed to 100% click fraud. Also, if you pay on a cost per lead basis, bots will create the fake leads to steal youw money. Even if you pay an affiliate revenue share on completed sales, affiliate fraud has been rampant since the early 2000s. Every form of digital advertising and revenue model is subject to fraud and fraudsters have specialized tools and techniquea for each. And a lot of practice.
True, Augustine---sad but true. Maybe they should pay only for verified "conversions"---I'll bet the sellers would love that. Then they would have to take the advertiser's word of honor for how many conversions were garnered.
Jon,
You have been spot-on on this issue for years. Thank you!
Dave
Augustine,
You have fought this issue for years, arguing the essential power of log files. Thank you!
Dave
Jack,
Grea points. This is not aboutwhther or not digital advertising works, but whether it's "faux precisoins" is abused. The simple answer is yes. TV measurement has tons of issues, but transparency isn't one of them.
Dave
Ed,
Respnsibilbity hangs on both buyers and sellers. However, the buyers have absicagted too muh and the sellers' platforms have abused too much.
Dave
Yes, having and analyzing log files is an important tool. But even more important than that is truly independent means of verifying all the data. Remember the Uber lawsuit which revealed the adtech vendors were not just falsifying the log files, some vendors were fabricating the data in the transparency reports without running any ads. They took the money and sent back data to make it look like a campaign was run. So if you don't have your own tag in the ads, you can't even be sure if the vendor actually ran your ads for you.
Having log level data is good. Having an independent means of verifying the log data is even better. For those who cant access or use log level data, putting FouAnalytics tags in the ads gives them similar granularity, control, and details with which to act.
The promise of programmatic header bidding was to "see" every impression in advance before bidding (site, page, ad unit, cookie ID, etc.). So if the log file entry differed from the header bid information passed to determine whether to bid, and how much to bid, isn't that the definition of a "bait and switch" (or fraud)? Further, isn't this easily fixable (not just in a post analytics deep dive log-exploration way) but with a real-time, post winning bid passing of just that log entry to the DSP to "validate" in real-time that the delivery matched the expectation (and scrubbing the payment when it doesn't). Real-time fraud detection at the bid level. What am I over simplifying here, and what is the barrier to achieving this beasides real-time log level data access?