The Drum: Treat the underlying causes, not the symptoms of marketplace inefficiency

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The Drum: Treat the underlying causes, not the symptoms of marketplace inefficiency

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Michael Nevins, chief marketing officer at Smart, acknowledges that with adblocking rates on the rise, the need for an overall improvement in internet advertising practices is necessary, but questions the wisdom of entrusting it to the internet’s largest advertising outfit.

February 15 was D-Day for publishers in the crosshairs of the new adblocking Google Chrome ad filter. There was much written in the weeks leading up to the release expressing the impact that the new Chrome ad filter would have on the digital ad ecosystem.

I’m eager to see how this new browser watchdog will do in policing bad ads. While I will always applaud any effort to enhance the quality quotient in digital advertising, I have to admit that all of the hubbub surrounding the impact of the Chrome ad filter seems a bit misplaced to the actual relevance it carries in the industry-wide drive to cleaning up inventory.

Now I’m not implying it’s much ado about nothing, but I’ve been a little surprised about how much public gnashing of the teeth there has been in the ecosystem. As has been already widely reported, Google Chrome has quickly become the most dominant Web browser but even they claim that after a comprehensive survey of publishers in North America and Europe, only 1% of publishers fail to meet the standards. These standards were laid out by the Coalition of Better Ads (CBA), of which Google is interestingly a core member.

I understand why whatever Google and Facebook do generates a sharp reaction, but doings of the duopoly often can obscure from more fundamental concerns. If the new Chrome ad filter can only be relied on to monitor the most egregious purveyors of substandard ads, what about the much larger, not insignificant portion of digital ad inventory that still ultimately doesn’t meet most reasonable demand side expectations of a high standard ad?

With all due respect to the CBA, the bar has been set low enough, whereby many publishers, who could do better by their marketer partners, aren’t necessarily incentivized to do so by the Chrome ad filter definition of “unacceptable” advertising. Sure, the harm done from the most bothersome formats ranging from pop-ups and sound-on autoplay video ads to fullscreen scroll overs will be greatly mitigated, if not ultimately eliminated. But until the industry, as a collective, from both the supply-side and demand-side summon the courage to address the fundamental dynamic at play, what we’re looking at is a continuation of mediocre digital ad inventory because publisher sites are still larded with too many ads.

There, I’ve said it.

All of the hue and cry about horribly intrusive digital ad formats is ultimately a bit of a red herring. At the end of the day, it’s not as much of a format issue as it is a scarcity issue. The prevailing publisher environment is pocked with sites packed with too many poorly performing ads. This has led to a disheartening trifecta of horrible consumer experiences, frustrated advertisers and embattled publishers with an overall dip in quality.

The programmatic revolution has essentially been waged under a veil of non-transparent, black box secrecy by an ever-broadening cabal of opportunists — those LUMAscapes are still pretty darn cluttered with logos, aren’t they? — who are polluting the marketplace. The industry has railed against the presence of too many point solutions, who don’t bring much to the transactions in terms of data or technological value but take advantage through arbitrage tactics. Publishers shouldn’t stand for losing 30% of advertiser spend on a 300×250 programmatic video banner.

These tactics only serve to lard the supply chain with extra, unnecessary costs with intermediaries that drive monetization down for publishers by as much as 40%, forcing them to compensate for lost revenue by trafficking in dodgy ads. By dodgy ads, I’m referring both to ones that are either inherently annoying like the ones the Chrome Ad Filter will police but also to even those that may meet many reasonable standards of quality but are undermined by sites that publish way too many ads. These intermediaries also present increasing liability risks with the rollout of General Data Protection Regulations (GDPR) in Europe. Judging by the current state of affairs, we haven’t railed enough!

Look, I do mark the Google Chrome ad filter as a positive step in the right direction but in order to truly clean up the programmatic marketplace, the industry needs to promote transparency and quality like the ads.txt movement – which is attempting to root out sketchy inventory sources – and truly commit to rationalizing a supply chain that has been overwhelmed with too many dubious players. I also have to ask: Should we really be dependent upon Google – of all actors – to do this job for us? Instead of an over-reliance on walled gardens, advertisers and publishers need to align cleaning up the marketplace by tilling new soil in discrete private gardens like private marketplaces and programmatic guaranteed deals that will promote a more virtuous marketplace.

This article was first published on The Drum

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