Last week, we looked at some of the current issues around advertising in part I of our two part series on transparency. This week, we examine why these issues must matter to agencies and advertisers and what needs to change in order to restore consumer trust.
Why are these issues a big deal?
In the case of inconsistent metrics, it’s is a problem because it could potentially impact revenue: video viewing times were used to determine how much money was allotted to video spend in with Facebook vs other video channels such as YouTube, or even TV ads. This also impacted the types of content shown to viewers. If the metrics are giving brands the wrong information about viewing audiences, then in turn, they are delivering the wrong video content and ultimately, wasting ad spend. While some marketers said the initial damage by the Facebook metrics snafu was negligible, the latest blunder where Facebook underreported the amount of traffic coming in was serious enough to merit concern with some major brands like Buzzfeed and the Washington Post who saw up to 20% as diminished traffic reporting.
Facebook marketing strategist, Jon Loomer, pinpoints the main issue with this: “On one hand we expect the numbers to be accurate, we need the numbers to be accurate. And Facebook, for the sake of perception and trustworthiness, needs the numbers to be accurate.”
Accuracy and trust are integral to any brand. While Facebook has received the brunt of the fallout from this, it isn’t just a problem with Facebook; the issue goes well beyond them. Even if marketers are unsure of where they sit in terms of the damage caused by the Facebook reporting scandal (or non-scandal), the issue remains two-fold: 1.) that companies like Facebook are viewed as operating from within a “walled garden”, a closed system with little to no objective scrutiny, 2.) With no reliable third party measurements in place across the board, it means a serious loss of trust, and that in the long run, is the biggest issue for advertisers going forward.
Fight Against Fraud
While the fight against fraud has intensified, according to eMarketer, ad fraud costs advertisers billions every year in lost revenue, to the tune of $7.2 billion in 2016, according to Ad Age. In spite of this staggering amount, many agencies display a rather ambivalent attitude when it comes to ad fraud. There is a persistent idea that it just comes with the territory, it’s just part of the cost of doing business. There is also the belief that ad fraud will never be fully eradicated because, for all its losses, it is too lucrative to abandon entirely. Ad fraud measurements haven’t been standardised, allowing agencies to pick and choose what anti-fraud companies will make their practices look best. Even fraud detection companies don’t want to combat fraud too effectively because they would essentially put themselves out of business. Fraudsters, ad agencies, and fraud-detectors are all making money, so while the complaints fly, there is still an understanding that this may never be fully eradicated. This puts marketers in a difficult position (going back to transparency) because this sort of activity is anything but transparent.
What Needs to Change?
In July, The Association of National Advertisers (ANA) released recommendations that advised brands to create a Chief Media Officer role within their organisations to facilitate better transparency between advertisers and consumers. It also included a series of guidelines to combat the unethical practices that have been plaguing the industry.
In terms of ad-fraud, agencies can also use third-party verification to ensure objective authentication that what the client has paid for will land on a credible page to prevent their ads from being shown alongside undesirable content. Third party ad verification also helps prevent any bidding on these types of auctions. Some DSPs also have built in technology to automatically detect and block bot traffic.
Citing Google’s inability to ensure ad safety as an unacceptable risk, several large companies pull ads from the platform last week. After large brands like Lloyd’s, McDonald’s and the UK government have dropped them, Google were quick to release a statement apologizing the oversight and laying out a step-by-step plan to combat the issue and ensure brand safety. Concerns were raised after ads landed on pages associated with terrorist activities. Until Google can assure brands that their ads won’t land on dangerous sites, brands will take their money elsewhere, leaving a dent in the advertsing platform’s revenue.
This signals a major shift in the industry – brands are no longer willing to put up with excuses from agencies and marketers. Expectations are higher, as is the demand for action and transparency. If Google can be affected by such a large scale revolt, complacency and lack of transparency will invariably negatively impact smaller agencies that can’t account for their client’s ad whereabouts. Advertisers need to take their cues from Google and make similar changes in order to keep up with these new industry requirements.