Nobody ever gets fired for choosing digital advertising

Retargeting – stop following me around!

Paddy O’Connor  Creative Director

Sometime in the 1980s, the catchphrase “nobody ever got fired for choosing IBM” became part of the common business vernacular. It meant that if you made a business decision that isn’t risky, you are less likely to underperform the competition — and be fired. Today, many people think that the equivalent would be to say, “nobody ever gets fired for choosing digital advertising.”

Let’s take a moment to look into the current digital advertising landscape.

Think of those annoying banners that follow you all over the internet after you’ve searched for flight information, or almost completed the purchase of that expensive new carbon road bike. There’re also Google’s — increasingly discreet — ads at the top of its search results page, and the messages on the right hand side of your Facebook feed. These are just some types of digital advertising. And it’s a serious business. This year’s digital advertising spend is predicted to be $83 billion, and it is expected to overtake TV for the first time in 2018.

Digital advertising promised a lot. Targeted, fast, relatively affordable, measurable everything.

But all is far from well in the digital realm. In January Procter & Gamble, the world’s largest ad spender (US$ 2.4 billion), vowed to no longer pay for any digital media services that didn’t comply with its three new rules, which are:

1. A standard “viewability” metric
2. Fraud protection
3. Third-party verification of metrics

Marc Pritchard, P&G’s Chief Brand Officer, called online media practices murky at best and fraudulent at worst. “Frankly, we believe there is at least 20-30% of waste in the media supply chain because of lack of viewability, nontransparent contracts, nontransparent measurement of inputs, fraud, and now even your ads showing up in unsafe places.”

And he’s not alone. CMOs from Bank of America, Johnson & Johnson, Unilever and more are demanding more transparency in digital advertising.

The World Federation of Advertisers reported that within eight years online, ad fraud may become the second largest criminal activity on the planet, after drug trafficking.

Ad tech middlemen are taking 60-70% of online ad budgets from advertisers and publishers. Over half a billion consumers have ad blockers installed on their devices, and 70% of marketers say they are dissatisfied with the current state of online advertising.

So, who likes ad tech? Google and Facebook.

Online advertising really is Google and Facebook. Outside of China, Google and Facebook account for 72% of online ad revenue. Of all the new revenue that came into the online ad industry in 2016, about 90% went to Google and Facebook.

So what can you do? Remain highly skeptical about what you hear from digital advertising and marketing experts these days. And perhaps, don’t be so dismissive of some of the conventional (old) advertising options. It’s more than a little ironic that Apple, a tech giant and the world’s wealthiest company, concentrates their advertising budget on press, poster, and TV.

While it’s unlikely that you will get fired for choosing digital advertising, make sure you ask hard questions to anyone selling these services — and don’t be afraid of the offline routes.