17 Feb 2018

This is why we can’t have nice brands.

What if I told you that there was an Internet ad technology that…

  • can reach the same user on mobile and desktop

  • uses open-standard persistent identifiers for users

  • can connect users to their purchase history

  • reaches the users that the advertiser chooses, at the time the advertiser chooses

  • and doesn’t depend on the Google/Facebook duopoly?

Don’t go looking for it on the Lumascape.

I’m describing email spam.

Every feature that adtech is bragging on, or working toward? Email spam had it in the 1990s.

So why didn’t brand advertisers jump all over spam? Why did they mostly leave it to low-reputation brands and scammers?

To be honest, it probably wasn’t a decision decision in most cases, just corporate sloth. But staying away from spam was the right answer. In the email inbox, spam from a high-reputation brand doesn’t look any different from spam that any fly-by-night operation can send. All spammers can do the same stuff:

They can sell to people…for a fraction of what marketing used to cost. And they can collect data on these consumers, track what they buy, what they love and hate about the experience, and market to them directly much more effectively.

Oh, wait. That one isn’t about spam in the 1990s. That’s about targeted advertising on social media sites today. The CEO of digital advertising's biggest trade group says most big marketers are screwed unless they completely change their business models.

It’s the direct consumer relationships, and the use of consumer data, that is completely game-changing for the marketing world. And most big marketers, such as Procter & Gamble and Unilever, are not ready for this new reality, the IAB says.

But of course they’re ready. The difference is that those established brand advertisers aren’t any more ready than some guy who watched a YouTube video series on “growth hacking” and is ready to start buying targeted ads and drop-shipping.

The “new reality,” the targeted advertising business that the IAB wants brands to join them in, is a place where you win based not on how much the audience trusts you, but on how well you can out-hack the competition. And like any information space organized by hacking skill, it’s a hellscape of deceptive crap. Read The Strange Brands in Your Instagram Feed by Alexis C. Madrigal.

Some Instagram retailers are legit brands with employees and products. Others are simply middlemen for Chinese goods, built in bedrooms, and launched with no capital or inventory. All of them have been pulled into existence by the power of Instagram and Facebook ads combined with a suite of e-commerce tools based around Shopify.

Of course, not every brand that buys a social media ad or other targeted ad is crap.

But a social media ad is useless for telling crap brands from non-crap ones. It doesn’t carry economic signal. There’s no such thing as a free watch. (PDF)

Rory Sutherland writes, in Reducing activities to their core misses the point,

Many billions of pounds of advertising expenditure have been shifted from conventional media, most notably newspapers, and moved into digital media in a quest for targeted efficiency. If advertising simply works by the conveyance of messages, this would be a sensible thing to do. However, it is beginning to become apparent that not all, perhaps not even most, advertising works this way. It seems that a large part of advertising creates trust and conviction in its audience precisely because it is perceived to be costly.

If anyone knows that any seller can watch a few YouTube videos and do a certain activity, does that activity really help the audience distinguish a high-reputation seller from a low-reputation one?

And how does it affect a legit brand when its ads show up on the same medium with all the crappy ones?Twitter has a solution that keeps its ads saleable: just don’t show any ads to important people. I’m surprised they can get away with this, but given the mix of rip-off and real brand ads I keep seeing there, it seems to be working.

Extremists and state-sponsored misinformation campaigns aren’t “abusing” targeted advertising. They’re just taking advantage of a system optimized for deception and using it normally.

Now, I don’t want to blame targeted advertising for all of the problems of brand equity. When you put high-fructose corn syrup in your product, brand equity suffers. When you outsource or de-skill the customer support function, brand equity suffers. All the half-ass “looks good this quarter” stuff that established brands are doing is bad for brand equity. It just turns out that the kinds of advertising that you can do on the Internet today are all half-ass “looks good this quarter” stuff. If you want to send a credible economic signal, buy TV time or put a flagship store on some expensive real estate. The Internet’s got nothing for you.

Failure to create signal-carrying ad units should be more of a concern for people who want to earn ad money on the Internet than it is. See Bob Hoffman’s “refrigerator test.” All that work that went into building the most complicated ad medium ever? It went into building an ad medium optimized for low-reputation advertisers. And that kind of ad medium tends to see rates go down over time. It doesn’t hold value.

And the medium can’t gain value until the users trust it, which means they have to trust the browser. In-browser tracking protection is going to have to enable the legit web advertising industry the same way that spam filters enables the legit email newsletter industry.

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