Digital advertising is being scrutinised as long-running issues around viewability and effectiveness of ads are brought into sharper focus by some disappointing revenue results blamed primarily on challenges around advertising. The long-term viability of banner advertising in particular has been questioned, with The Economist’s Tom Standage arguing that we should expect it to be gone by 2025.
Writing about the argument against advertising last week, I said “the implication is that advertising, so long the means by which many publishers funded their operations, cannot sustain them now”. However the CTO for Dennis Publishing Paul Lomax believes that, while there are legitimate problems with digital advertising, the next few years will see change rather than cessation for digital ads. He said:
“People have been saying that since 1998. Death of CPM, I don’t think it’s going anywhere. The mechanisms and the detail of delivery will change.
“I think the big change that’s coming is AMP.”
Dennis, whose growth over the last few years has been impressive and encouraging, is making an increasing proportion of its revenue from e-commerce of big-ticket items like cars.
— Carolyn Morgan (@carolynrmorgan) September 22, 2016
However, digital ads are still a big part of its diversified revenue, so it is still affected by sea changes in that space. If there’s one term floating around at the moment, it’s the idea that a Google-Facebook duopoly is strangling growth for all other players. Lomax argues that has always been the case:
“Before Facebook it was Google and Microsoft, or Google and Yahoo, or Yahoo and Microsoft. The internet loves a big number one and number two, it’s the first rule of the internet. You had the two big players in the industry and everyone else was an also-ran.”
Arguably the dominance of Facebook and Google is a problem beyond those previous duopolies, to the point that underground resistance meetings are organised by programmatic providers. Lomax believes, however, that the issues around digital advertising are more to do with ad-tech than who is hoovering up the most ad spend:
“Publishers have got no control over the advertising which is run on their sites, really. Even more so, programmatic. We literally don’t even get to see the ad tech or the creative. So we’re reliant on ad-tech to police it. Worse [than ruining UX], it could potentially install viruses on people’s computers. So this is on the publisher to spend money with people [like MediaTrust] to check the advertising on the site as opposed to it being something that happens at ad tech level or at agency level.
“I think it should be [ad-tech’s responsibility]. Interestingly with AMP and AMP for ads, Google have basically made it so you can’t physically break the ad-spec. If you don’t meet the ad-specs the ads will not run. If the whole thing is delivered through a third party like Google hosting AMP pages they can literally stop the ads doing anything they don’t want the ads to do.”
That AMP is calling the shots and completely cutting out ads that don’t ahere to its rules is key. Lomax believes that, left to its own devices, the vast range of players in the digital advertising space would be unable or unwilling to come to any unified agreement around viewability measures and metrics. In effect, it took a third party like Google forcing those policies through in order to spur some change. As an example he notes that whhen Dennis first put The Week on AMP, 80 percent of the ads its partners tried to serve did not fit the criteria – now 80 percent do.
Lomax believes that’s necessary because the ad space is currently so fractured, a sort of digital Wild West:
“One of the problems with display ads online is that you can do a lot with them, and with great power comes great responsibility. So both advertising agencies and ad-tech have taken that opportunity to maximise the impact of advertising. Often user experience has suffered. The IAB has all kinds of guidelines and standards and stuff, but we did an audit of ads running on our sites and found that something like 80% didn’t meet IAB standards.
“It’s not practical to enforce it; publishers can’t enforce it, because if you turn round to advertisers and say “our standards say this ad has to be 20k and it’s actually 300k or a meg”, the response is “well everyone else is running it, either run it or don’t”. That is a universal answer for every time we flag it.”
As an example of the varying definitions of ‘acceptable’ among digital ad players, Lomax notes that Eyeo’s (the company behind AdBlock Plus) definition of ‘acceptable ads’ has been contentious, not least because it allows ‘content recommendation’ tools Taboola to serve ads, despite users disliking the ‘recommended content’ bars and publishers moving away from them.
The big question around digital advertising under the reign of a duopoly, then, is where publishers like Dennis fit in. Lomax argues that publishers’ great strength is in the context they can provide, against which adverts can be served. While environments like Facebook and, to an extent, AMP’s carousel, contribute to a flattening and homogenising of publishers’ uniqueness, lessening their value, a publisher’s own site lends an ad authenticity. He explains:
“Really the trick is, how do we add value? Nobody wants us to be a social broker for buying audiences. That in itself is not useful.
“We know that the same message delivered on our website is more effective that the message delivered on a Google advert in a review. Obviously to a certain extent you lose that context on social media because it then just becomes an ad.”
That’s an encouraging call-to-arms, particularly in a time when publishers aren’t just questioning their primary means of monetisation but also their place within the ecosystem.
Paul Lomax will be speaking at Digital Media Strategies 2017 this February, alongside a cadre of incredible and informative speakers who are bound to broaden your minds about how to make money from media. Whatever your position or vertical, DMS ’17 has something for you. For more information and to book your place, click here.