It’s time to bypass the advertising industry. This industry is stuck with shady inventory and fake users, and we need to recognize that before we can make a change.
One of my favorite movies is The big court, a great concept that explains exactly what happened in 2008 and led to the biggest financial meltdown in decades. The film tells how three different companies got wind that the housing market was stuck with bad loans. They decided to bypass the housing market, earning millions of dollars for themselves and their clients. Basically, the banks got greedy and kept lowering the bar for people to buy homes. This allowed mortgage brokers to sign more loans by attracting people who were not financially fit to own a home. They continued to scrape the bottom of the barrel until everything collapsed.
One of my favorite scenes is where Steve Carell’s character talks to a few mortgage brokers in Florida, doing their research on shorting the housing market. He would talk to brokers about the number of loans they signed each week – it turned out to be an obscene amount. Brokers targeted NINJA prospects: No income, no job and no assets, because they were the easiest targets. Carell’s character pulls his crew aside and says, “I don’t understand. Why do they confess? His colleague must have told him that they weren’t confessing, they were bragging.
I see something similar happening in the advertising industry. Advertising agencies are banks. TV stations, Google and Facebook are the arrogant young mortgage brokers. And the business owners are the Americans who will eventually hold the bag. I’ve been worried for a few months but this really hit me after reading WPP CEO Sir Martin Sorrell words about a 4% drop in revenue growth in July for WPP and its own concerns about fake news. This thought came back when AdWeek reported on a census fiasco with facebook.
I’ll be honest, I’ve been biting my thumb at big ad agencies since I started our small digital marketing business in 2008. I’ve always called us David versus Goliath. In those early days, I put Google and Facebook on a pedestal. Like me, they were David against the big networks, like ABC, NBC, CBS and Fox — their Goliath. Now I’m starting to feel suspicious.
The Facebook and Google duopoly seems to be squeezing its advertisers as hard as it can, digging deeper and deeper for more websites to run ads and people (possibly fake people) to see them. For example, Facebook says they reach 60 million people between 25 and 34 years old in the United States, while the American census estimates only 35 million people in this demo. Sound familiar? And these people from the rating agencies stamp it with a AAA rating.
This downward spiral will continue unless serious changes are made in the area of transparency, and I’m not just talking about duopoly. Even the way TV networks package their media is getting blurry, forcing digital inventory to be incorporated into these products, not to mention the new split screen ads we see during the 2017 football season. Are these split-screen ads as effective when half the screen is playing the game? We need to focus on what we buy, who sees it and where it is placed. Basically, we need to focus on measuring consumption rather than eyeballs.
I have a prediction: as the pressure mounts, transparency improves. But in doing so, prices will rise and encourage advertisers to view their marketing goals not as a way to get more views, but as a way to increase consumption from fewer views or impressions. This will force advertisers large and small to produce better content strategies and more targeted and meaningful communications for their audiences, essentially requiring more creative content output.
Selling impressions will be a thing of the past and those who thrive will be those who invest in their message and audience, not their job security. For the advertising industry, this is going to be as big a paradigm shift as the 2008 financial crisis. We hear it all the time: content is king. We’ve heard it so much that our eyes are starting to glow with boredom. Not me. Quality content is mandatory for effective marketing today and in the foreseeable future. We are entering the era of word of mouth marketing. The difference now is that our speech can travel long distances and has a much greater range. Quality will matter more than ever as we have more options than ever.
