28% revenue returns to ‘working media’ and 46% of ads are never seen. When will people see that programmatic advertising is a dying beast?

“Programmatically purchased ads routinely under-perform in terms of viewability when assessed against the Media Ratings Council standard. On average, almost half (46%) of programmatic ads are not viewable.

Latest Warc Report Focus on Threats to the Digital Advertising Ecosystem, Bizcommunity.com, 29.03.18  

I’m grateful to ad fraud researcher extraordinaire Dr Augustine Fou for pointing me in the direction of the latest state of the digital advertising nation.

Not just for the line that 46% of programmatically delivered ads aren’t actually seen, but that the average revenue return for ‘working media’ is now down to 28%.

On average.

see chart above

Which tallies exactly with Hamish Nicklin’s famed claim in 2016, that the Guardian were now leaking 70% of their ad revenue to third party intermediaries.

The point remains very simple.

Those numbers are unsustainable.

And appear to be heading in only one direction.

The wrong one, as far as hard pressed publishers are concerned.

Particularly if the arrival of GDPR in a couple of months obliges those same publishers to reach out for yet more complex solutions with regard to privacy and consent.

Third parties – like Pagefair’s Perimeter product – will be demanding another slice of the ad tech revenue pie before ‘working media’ ever gets to see its reward for original content generation.

Here at Addiply Towers, we have always worked towards Evslins Law of Ad Networks.

85% return: Here at Addiply we work to Evslin’s Law of Ad Networks…

 

What’s that?

The idea – first formulated by ex-Microsoft exec Tom Evslin – that the winning ad network of the future will be the one that can afford to charge publishers the least, for longest.

ie our ‘rake’ on any advertising transaction between local advertiser and local publisher is merely 15%. A full 85% returns to the content creator as opposed to the 28% average the latest Warc research reveals.

“The more that bloggers make from your ads, the more space for ads you’ll have available as bloggers tell their friends which ad network to use. The more ad space you have, the more ads you’ll get…”

That.

But there is another point to the way that Addiply works that touches on the viewability aspect of any ad in a programmatic setting.

And it comes down to one of the fundamentals of this whole market-place – TRUST. The erosion of which Facebook, Google and Co are fast proving masters at.

Particularly at a local, MyFootballWriter level, advertisers want to see their ad.

There it is. Just there….

“OK, that’s where my money went. OK….

That’s the conversation 000s of local marketers have with their clients. Every day. Where in this great seething mass of online fraud and deception, is my money actually going?

If you take out the near-instant auction aspect of programmatic sales and replace with old fashioned, month-long tenancy deals, the chances of any one ad being viewed grow exponentially.

Particularly when it comes to the client themselves actually seeing where there money went – you have a real chance of demonstrating ROI if the client can load the website and see his/her ad just there. Where the ad sales person promised them it would be.

In the window of their local Post Office.

It is fascinating to watch such pieces of research as Warc’s latest unfold into a market-place already hugely challenged by the oncoming onset of GDPR.

Programmatic advertising is wholly dysfunctional. And its getting worse, not better.

Change has to happen.

 

 

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