The online ad industry made a huge mistake 20 years ago that's still costing it dearly today
The digital advertising industry made a big mistake 20 years ago. And it's not the banner ad format.
For all the criticism online advertising formats receive (often justifiably, I don't agree that banners are inherently wrong and led us astray. The heart of the problem is not the formats we've used, but the way we've measured and tracked them. And it hurts a lot more people than just advertisers.
In 1994, it made sense to track impressions and clicks. The industry was still discovering its potential and basically structured its advertising model around the way HTML sites were built. Fast forward 20 years later, very little has changed, and our lack of progress and foresight is already biting us in the a--.
What we refused to see coming is that users would, as they often do, overwhelmingly prefer free content paid for quasi exclusively by advertising. We can complain all we want about advertising, the reality is that very few of us ever want to pay for the content we consume. The implications are dramatic because ultimately, following standard business course, we shaped content around the way it was monetized.
And in a world where advertising is tracked through page impressions and clicks, what happens? Content that generates a quick view generates similar returns to content that actually captures readers' attention.
The ad industry created the "Platinum VIP" invitation for clickbait and a system that "rewards crap"
Content producers are therefore incentivized to create as many pages as possible, regardless of how long you stay on these. This is a Platinum VIP invitation for click baits, cumbersome page loads, and all sorts of tricks to make sure users view as many pages as humanely possible.
Adding insult to injury, clicks as a measure of success rewarded the worst kind of intrusions, unraveling an onslaught of annoyances that consumers cannot try to block fast enough. It promotes intrusive formats, it favors sneaky loading tricks, and it fosters creative that will not give up until you've clicked that bloody mouse. We have produced a click obsessed monster so ugly that even the people who work in advertising cannot stand its stench.
In simple terms, we created a system that rewards crap.
It is not a system where the publishers win, because it leads them to think about the bait more than the content. Worse even, it sets up the good guys for failure. It is not a system where the users win, because it takes them into a vicious cycle where the quality of what we have access to can only go down, and our browsing experience worsen. And it is definitely not a system where the advertisers win: page impressions and clicks are only an illusion of value. Impressions are neither a measure of reach or a genuine opportunity to see, while clicks are not a measure of engagement - or even traffic.
The impressions/click dementia is a plot so evil that I honestly think we could not have come up with it consciously if we'd purposefully tried.
There might be a solution
So what's the solution? (I can hear the snarky "don't bother" of the advertising-is-dead camp over there). It's not easy, and we all have a role to play - publishers, advertisers and agencies. But there are basics we can all look at:
A 0.4 seconds impression should not be charged the same as a 15 seconds impression. As long as we do not fix that problem, we won't be able to provide real value to both the publisher and the advertiser. This means that we need to sell (and buy) the time an impression is made. I know that it's a lot easier for pre-roll (which is partly why pre-roll works much better to driver awareness), but we cannot only advertise on video if we want to have a healthy online ecosystem. This causes some real technical headaches but if we can send men on the Moon with the fraction of the processing power of an iPhone, I'm pretty sure we can figure something out.
Viewability should become a requirement. Time spent only has value if it is in sight of someone. We cannot stay healthy when only 1 in 4 impressions offers a real opportunity to see. And 50% viewability only? Please ...
We need to move away from clicks and shift to visits and time spent. If we want to measure engagement, then we might as well really measure it since it's fairly straightforward. A click on a banner tells you too little, and can often be the result of a mistake, if not a fraud. A visit and the subsequent time spent is a much better way to evaluate the effectiveness of your advertising. It also helps us promote the right media format as it naturally filters out those with high bounce rates (like our cherished pop ups). When you optimize for visits and time spent, you naturally make sure you focus on formats that don't p--- people off.
Then you have option 4, which is going native only. As much as I think there is a lot of value in native advertising, there are also three flaws that make me weary of relying too much on these formats:
- Native ads mostly favor big publishers. Who will have the time to work on native formats outside of the big 10? The beauty of standardized ad formats is that it is a lot easier to scale beyond the big guys. It is inherently more democratic and fair, and will promote diversity.
- Native ads can be deceiving. As consumers get used to it we'll simply get into a new cycle of blindness, meaning we'll probably go even more "native", and we'll just end up with advertising parading as content everywhere (it's already the case in some places). Hate banners all you want, but at least they're honest about the fact they're trying to sell you something.
- Native ads can negatively impact creativity as they will make us focus on the channel, not the ideas. The game quickly becomes about optimizing the native response, which is not always related to the response we need from our advertising (remember Facebook like ads?).
There are many things we need to fix, including the tracking and tagging systems that not only scare consumers but also drag their browsing experience (and justify the use of ad blockers). But in my opinion our biggest mistake has been our incapacity to adapt the way we track, and therefore reward, the sale of advertising formats.
It has devalued online advertising itself and has had a terribly pernicious effect on the publishing landscape. We need to reward those who make their readers and viewers stay, not those who make them click and flick.
It is becoming increasingly accepted and popular to claim we need less, but better advertising. Probably, but this will remain impossible to achieve as long as we keep measuring them with two decade old, failed metrics. Although they can be technically challenging, measures such as timed (viewable) impressions, generated visits and time spent as standard will be a requirement if we are to build a sustainable advertising ecosystem.