Perverse Agency Incentives Are Behind the Ad Blocking 'Problem'

By Published on .

Most Popular

Ad blocking continues to freak out the entire media ecosystem. But god help me, it's hard not to love the gnashing of teeth it's causing throughout the publishing and advertising worlds right now.

The level of bile flowing from furious media types continues to rise at the same rate as consumer ad-blocker use. Content consumers who reject the torrent of digital crap commandeering their screens and chewing up their mobile bandwidth were recently called "digital shoplifters" by one trade publication editor. Another editor said ad-blocking users were engaged in "theft."

Both urged publishers to maintain a strident bravado in this war against their own readers. You want to talk about a winning business strategy? Nothing shouts "growth" like aiming the siege guns at your own customers and prospects. The ad blocking problem isn't about bad digital ads, as the cheerily named Coalition for Better Ads seems to think. In fact, it's not a problem at all.

Let's face it, ad blocking is a behavior. As such, we need to understand what drives that behavior before we can hope to change it. Otherwise, those of us inside the programmatic and adtech worlds will simply be participants in a circular firing squad.

Media and content consumers are engaged in ad blocking as a reaction to the ever-increasing, unabated flood of noncontextual, irrelevant and distracting crap that's served up like cauliflower to a six year old. "Eat it! It's good for you! You must eat this or we'll withhold the food you actually want!"

Destructive behaviors arise as the result of deeper issues. When looking for the real problem, I always think it's best to follow the admonition from "All the President's Men": Follow the money.

When you do that in the current digital media and advertising universe, you find a perverse system of incentives that spur industry participants to do stupid things that are damaging to every participant in the value chain -- advertisers, their ad agencies, content creators, media publishers of every stripe and consumers.

That money -- and all the digital detritus that's turning so many ordinary web users into thieves and shoplifters, apparently -- flows directly through media-buying agencies. Their compensation model, which in its fundamental form hasn't changed since the first American ad agency appeared in the 19th century, incentivizes the agency to spend the budget allocated by its client quickly and completely. That's how they get paid.

So the spend comes first. Impressions and eyeballs come second. The hard work of intelligent targeting (and the heavy lift of data integration it requires) … not so much. The only value too many media buyers provide is delivering the maximum amount of impressions for the lowest possible cost, regardless of the quality of those impressions.

I believe what we're seeing is something more insidious than just lazy under-targeting. What I see is a structural attempt at increasing target populations of marginal relevance in order to get the full spend out the door. The agency gets to recognize its share of revenue and make payroll -- and lord knows no one on the media platform side is going to complain.

All that has pulled the whole industry into a predictable downward spiral: the commoditization of ad units, the collapse of pricing -- and the concomitant flood of more ad units, as publishers try to make up the shortfalls with volume.

Some high-profile publishers are now serving pages with an astonishing thirty-seven ad units. And we wonder why consumers want to block them?

Brands were promised that digital was the ultimate performance marketing medium. Think they're not noticing that it's not working? Of course they are.

So with a system that's increasingly dysfunctional for consumers, advertisers and content creators, what to do?

First, publishers need to begin to focus. Mass media is dying, but we're still behaving as if it's thriving. What advertisers need is higher quality impressions -- more targeted, more verifiable (see Facebook's recent measurement peccadilloes), and therefore much more highly relevant to advertisers.

What do publishers get in return for this suggested focus and quality? Potentially, dramatically higher pricing power. Advertisers aren't advertising to get the greatest number of cheap impressions. They're advertising to get new customers. Help deliver them, and get paid for whatever you're doing that's actually working.

Second, major brands need to rise up in rebellion and demand a shift to all-performance-based marketing, in effect calling BS on this entire circus. They're the ones most capable of hastening the inevitable move toward performance marketing, as well as the new compensation models it demands. The targeting data they need to do so is out there, and increasingly it'll be only lazy CMO's that fail to use it.

Finally, as media theorist Clay Shirky famously stated, "Institutions will try to preserve the problem to which they are the solution." So it goes here: media-buying agencies are ferociously clinging to their teetering paradigm, which still works for them but kills the rest of the system and its users.

There's a bright and effective -- albeit more targeted and streamlined -- future ahead for marketers and content creators, but they're going to have to do a much better job of finding each other and working together to make it real. If they've got to kill a few middlemen along the way, that may just be the price of progress.