Internet Travel Monitor - Marketing, Research & Tech

May 24, 2017

Online Marketing Truth or Dare
The world of online marketing now resembles a tremendous game of advertising truth or dare. For a long time, marketers took the dare, by purchasing ads without knowing where their ad would run or why it would run there. The dare then: risk sitting out online advertising or jump in while your brand had no real control over where and when your ads ran.

The result was often calamitous: a company's ads ran on sites that presented entirely inappropriate content, sometimes bordering on criminal hate speech that were absolutely not where advertisers hoped their ads would land.

Now we are entering the truth phase of the game. In recent weeks, major marketers pulled advertising from Google sites, including YouTube. Companies leading the exodus include Johnson & Johnson, Walmart, Verizon, AT&T, General Motors, Pepsico and FX Networks. Others, such as Procter & Gamble, have been threatening to pull digital advertising dollars for several months before that because of concerns about costs versus benefits.

As the public outrage rose from a whisper to a din, advertising on these mammoth digital platforms began to fall noticeably.

A mess in the making

How did we even get into this mess? By failing to update our practices for changing technologies. We cannot continue to treat online advertising the same as television advertising. They are fundamentally different. Purchasing TV ads in packages works because TV content is curated. The worst that can happen is that your ad airs while no one is watching.

But that strategy -- or lack thereof -- doesn't work amid the online free-for-all of amateur self-expression. Online, it no longer behooves companies to take the dare and gamble for that perfect spot while risking landing in the worst spot. The potential downside of a consumer revolt by appearing in the wrong place vastly outweighs the potential upside this model offers.

Need proof that online advertising strategy needs an overhaul? Take this recent New York Times headline: "Chase Had Ads on 400,000 Sites. Then Just 5,000. Same Results." Their new strategy: advertise only on pre-approved sites rather than through targeted ad words. And guess what? No impact on either cost of placement or response rate. Astonishing.

At the same time, the $70 billion spent on digital advertising in 2016 overtook traditional television advertising ($67 billion in 2016) for the first time. And that's just how huge web platforms like Google, YouTube and Facebook would like to keep it. Why? Because it is too costly and complicated for them to operate with an advertising model focused on quality content. They much prefer the idea of companies buying ads at random, rather than holding them accountable for stricter placement strategies, or content and editorial filtering, or censorship. That train left the station long ago, as these internet giants focused on their own interest in growing dominance through traffic growth, with little or no regard for any content responsibility. And the result of that early strategy to deny content responsibility is, in part, why we are here today.

It would be prudent for the CEO of any large online platform to work feverishly to develop reliable, accurate filters to immediately address the concerns of those placing ads on their site, and so guarantee ads are colocated with appropriate, high quality content. Playing the random advertising placement game is not worth getting the wrong answer to the question of online ad effectiveness.

Technology always outpaces society's ability to cope. Online advertising, initially a novel and effective means of marketing and advertising, might now have become so over-used and over-rated that we are entering a new phase of consumer apathy. And that shift is both game-changing and dangerous for all players involved.

Copyright 2017 Crain Communications. All rights reserved. From By James Norrie, Jefrey Woodall.
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