Digital Advertising Has Neglected Audiences

30 Apr 2018

Digital advertising is broken. Despite significant evolution and development over the last two decades, participants are unhappy and performance continues to deteriorate. I feel the core of this is that the advertising value exchange is incomplete. Even as digital media spend surpasses $100 billion this year, performance will disappoint and viewers of ads will come up short, not seeing one penny of it.

Programmatic advertising, once one of the most promising technologies available, has become problematic, inefficient and rife with fraud. Occurrences of Methbot, HyphBot and other well-known frauds have cost billions. Entire companies, such as Audience Science, Altitude Digital and Genesis Media, have disappeared without a discernable impact on the space. It has also left a deficient equation in the advertising value circle: the most important participant, the ad viewer, is left out. Viewers get nothing, all the while surrendering tremendous value in control of their own data along with the experience interruptions being delivered.

In order for the digital advertising ecosystem to thrive, there must be mutual benefit for all participants in the advertising value circle: advertisers, publishers and viewers.

We all have a real-world identity. This is the self that owns a house, leases a car, buys groceries, goes to work and enjoys the fruits of their labor. We also have a virtual identity, which is the data set that comprises us individually in the online world. That virtual identity is a valuable asset that, unfortunately, most of us don’t own or control. By simply surfing the web or clicking on an ad, we are surrendering numerous data points that are used to reach us on subsequent websites, determine which ads we see, determine what content comes in front of us and pretty much dictates our online experience.

How drastically different would the programmatic landscape be if we did, in fact, have ownership and control of our personal identity? Current efforts to regulate the use of this data, such as GDPR requirements across the EU, are valiant but don’t go far enough. The only way we can truly protect our data is by owning it. Property rights give us the protection we have always deserved.

The only way we can truly protect our data is by owning it. Property rights give us the protection we have always deserved.

Facebook’s current controversy, surfaced by their growing details on their relationship with digital strategy firm Cambridge Analytica, is a clear example of the impact viewer data has on digital advertising. This story, which is still unfolding, is also a perfect example of what can happen when audiences don’t own their personal data. Unwittingly, millions of people were hijacked simply because a friend took a quiz for fun. That friend used a negligent platform that made it simple to access everyone’s data. Next thing you know, elections are manipulated and advertisers succeed by effectively reaching their target audience, often in nefarious ways while publishers tout the quality of their audiences to boost the price of their inventory. The value currency for both sides is directly related to the audience. And yet, despite the tremendous value audiences bring to this exchange, they remain uncompensated and violated.

More of these breaches will surface. An article in the Wall Street Journal detailed the fact that Google has significantly more data on us than Facebook. Between Gmail, search results and everything else Google touches, we have very few secrets left.

These problems plaguing the current digital advertising ecosystem are arguably symptoms of audiences’ absence in the advertising value circle. The relationship between advertisers and publishers cannot exist without the viewer and the personal data that identifies them. Neglecting viewers is no longer an option for the advertising industry.

The challenges arising from this are apparent on both sides of the aisle. Advertisers leverage massive data sets, alongside their DSPs (demand-side platforms), to target advertising opportunities and identify viewers that match their target audience. Dollars flow where specific audiences can be reached. Fraud follows those dollars, with bad actors creating fake opportunities and fraud prevention becoming a necessity.

Cue the fraud protection companies, another intermediary in the programmatic landscape.

Simultaneously, publishers add data partners to their SSPs (supply-side platforms) to better deliver audiences to advertisers. In order to achieve volume, publishers need to utilize audience extension, and fraud rears its ugly head once again.

Imagine if audiences did, in fact, own their virtual identities and were compensated for the information they shared. Self-ownership of virtual identities would benefit all players in the space. Accurate, opt-in information means publishers can maximize value on their available inventory. Advertisers can target real audiences that can increase campaign ROI. And audiences can, in turn, enjoy a better advertising experience and define their own value and level of participation.

A better user experience is attained for all participants in this structure. While some may argue that achieving such balance between advertisers, publishers and viewers is unrealistic, the emergence of blockchain technology has, in fact, made this idealistic notion possible. Only when audiences are fairly compensated for their participation in the advertising value exchange does the digital landscape reach its full potential.

Source: Rodger Wells, The Drum