#271/ January 9, 2022
THE PROGRAMMATIC POOP FUNNEL
Who doesn't love a good funnel?
Today, we're going to make a nice colorful funnel using the latest data from some of the ad industry's most reliable sources to trace a dollar spent for programmatically-bought display advertising on its exciting journey from your pocket to the bank accounts of middlemen, con men, crooks, and the Bermuda Triangle.
Adtech was created to make the buying and selling of online advertising so much more efficient. Today, about $350 billion dollars is spent on online advertising. 70%+ of it is bought programmatically. It turns out it has been wonderfully efficient for the lads and lassies in the adtech industry. Not so efficient for losers like you and me. Let's see how it's working...
1. You start with a dollar to spend
2. Your agency gets a 7¢ fee
3. Technology and targeting fees take another 27¢ (DSPs, SSPs,and WTFs)
4. 15¢ mysteriously disappears into the "unknown delta." No one knows where the "unknown delta" is. My guess? Jupiter or North Korea.
5. 30% of the ads you buy won't be viewable
6. About 20% of the stuff you buy will be fraudulent
7. Only 9% of your display ads will be viewed by a real person for even a second. Bastards.
8. Blogweasel math notwithstanding, looks like your dollar bought you 3¢ of real display ads viewed by real human people.
Covering My Ass
As I'm sure you know, no one in the comical online "metrics" business can agree on anything. Consequently, to minimize the torrent of abuse I'm going to get from agency and adtech apologists, I have taken the numbers in the above illustration from the most reliable sources I could find:
- The first four items come from the ISBA and PwC's, Programmatic Supply Chain Transparency Study
- Item 5 comes from Integral Ad Science
- Item 6 comes from AdAge and Spider Lab's report, Combating Ad Fraud in the Age of COVID-19
- Item 7 comes from Lumen Research
Covering Your Ass
Oh, and be sure to ask your agency about these numbers. And when they say, "We have systems in place..." ask to see the systems, have them explained to you, and get their version of how much value you're getting from a programmatic ad dollar. Should be good for a few laughs.
Some Notes on the Funnel
- It's important to note that the ISBA study alluded to in points 1 through 4 above only reported on the highest quality tip of the iceberg -- the most premium end of the programmatic marketplace.
Even at the premium end, only 12% of the ad dollars were completely transparent and traceable. An astounding 88% of dollars could not be traced from end to end. Imagine what the numbers must be like in the non-premium end.
- The "unknown delta" represents about 1/3 of the fees that programmatic buyers pay. This money just evaporates. No one can figure out where it goes. Not even a famous blogweasel.
- I have used 30% as the factor for non-viewable ads. Some research reports it as high as 50%.
- I have used 20% as the fraud number at the publisher end of the funnel. Even if fraud at this end is only 10%, the math still comes out at about 3% viewable ads by real people.
- How many people actually view a display ad? The IAB defines a "view" as 50% of an ad's pixels seen for one second. Huh? Even by this ridiculous standard only 9% of online ads are "viewed."
Idiots on Wheels
Of all the industries that never learn anything, my vote for the dumbest goes to the auto industry. It doesn't matter how many times they try the same stupid strategy and fail, they never learn.
The strategy in question, of course, is the "let's target young people" strategy. It never works, but it is the knee-jerk strategy for every new product from every auto marketer in captivity.
The latest example is Lexus. They have a new SUV, the NX, which they are targeting to young "creative visionaries" (someone shoot me) with all kinds of hip media horseshit. Only problem is, the average luxury SUV buyer is 53 years old.
The auto industry's magical thinking goes back a long way. Of course, there was the infamous "Not Your Father's Oldsmobile" campaign that helped kill an entire brand.
More recently, in 2015, Cadillac gave us the hilarious "Dare Greatly" campaign which "tapped into the Millennial mindset." Yeah, right. They even moved their entire headquarters to NYC's SoHo area to prove how young and hip they were. The result? Cadillac has the oldest buyers of any car brand on the planet. Oh, and they're back in Detroit.
In 2016, Toyota killed Scion, its entry into the "youth car" market. The "youth car" idea was all the rage in the early 2010's. The idea was to target the ever-popular (and mostly non-existent) 18-34 year old car buyer. According to The Wall Street Journal, 88% of these "youth cars" were bought by people over 35. Scionara.
For just plain laughs, it's hard to beat Chevy's attempt to be young. In 2012 they hired some clown from MTV who "transformed part of the G.M. lobby into a loftlike space reminiscent of a coffee shop in Austin or Seattle, with graffiti on the walls and skateboards and throw pillows scattered around." Average age of a Chevy buyer? 46.
Back to Lexus and its new NX. According to MediaPost, "Gen Y and Gen Z luxury buyers tend to be more diverse, more affluent..." said Lexus' VP of Marketing.
Just curious about who these "affluent Gen Z" luxury car buyers are. The average Gen Z is now 16 years old...You truly cannot make this stupid shit up.
The auto industry, steeped in research horseshit about "creative visionaries" and decades of other socio-generational idiocy can't get it through their thick skulls that our population is aging at warp speed; that the average car buyer in America is 53; that since 2000 the share of new cars bought by people over 55 has increased by 15%. These people are really, truly, genuinely clueless.
I'll leave the last word to P.J. O'Rourke, "Whenever anything happens anywhere, somebody over 50 signs the bill for it.”
Quickies
I'm getting a little long-winded here today, so let's move this thing along...
- Alternate headline for today's newsletter: "I know 97% of my programmatic ad budget is wasted, I just don't know which 97%."
- From the late, great Nora Ephron, the best definition of 'content' you'll ever read..."Something you can run an ad alongside of."
- Here's a good laugh. According to Ad Age, "The Association of National Advertisers and member marketers have begun discussing an industry self-regulatory body to handle social media issues..." Yeah, that oughta do the trick. Letting a marketer regulate himself is like giving a 14-year-old girl a cosmo, a cell phone, and a credit card.
- According to ad fraud researcher Dr. Augustine Fou, 2/3 of clicks on Google Ads are from bots. "If your agency is reporting clicks and click rates to you, you're likely being misled."
- And while we're kicking Google around...there are some companies that have very G-rated names, but sell very X-rated stuff. A couple of these companies are named "Jack and Jill" and "Adam and Eve." If you search for "Jack and Jill" you won't find the dirty company on Google in a natural search. That's because Google has stunning integrity! Except, of course, if Jack and Jill happen to buy some Google Ads. In which case - surprise - there they are!
And Speaking of X-Rated Stuff...
...doesn't anyone screw anymore?
