The problem with advertising – it’s programmatic

Written by on October 15, 2015 in Opinion with 0 Comments


Sometimes it is quite tiring watching another sector, another arena, in a race to the bottom. We are watching with world-weary frowns as the communications industry does it with data pricing. We have watched it in retail, as the vast majority of that arena now competes on price and only a few, a gallant few, dare to innovate or sell on quality.

Now, unless something happens to radically change things, the same will happen with advertising.

We have heard more than enough about personalised offers and personalised advertising. We have seen almost no proof that anyone is capable of delivering it. The way that advertisers, platforms and publishers are using the tools available reeks of using a pile driver to bang in a nail. Facebook delivers personalised advertising in the same way that road signs are personalised for each individual driver on the road.

The proof that it is not working is in the uptake of ad blocking software, which has shaken the advertising industry to its roots. 190 million people have installed the software – and counting. And the industry is getting fidgety. The CEO of AOL, Tim Armstrong felt the need to defend the fact that Verizon will use customer data to ‘improve the customer experience.’ Mr Armstrong said that “if consumers don’t trust you it’s not worth whatever you’re going to do with the data. Verizon is probably more sensitive to data than most Internet companies.” We agree with the first part, we will see about the second.

There used to be a calculation in the customer service industry. For every person who complains, there are 100 who feel like complaining. For every person who actually congratulates you, there are 10 who feel the same. There are a lot of people who would probably answer ‘yes’ to the question, ‘would you install ad blocking software right now?’

Faced with this realisation, the industry is obviously about to do something dramatic to rectify the situation. Not.

In Germany, even if you do install ad blocking, you will have to uninstall it to get access to Axel Springer site de Bild. The rise of ad blocking has ‘forced’ the company to ask customers to turn off ad blocking, or pay a fee to read the publication. That’s as creative and subtle as a brick wall.

Apple has allowed ad blocking software to be available in its store (although one such was taken down within 24 hours), and now Google has done something interesting. They have launched what they describe as a ‘deal-free’ Accelerated Mobile Pages (AMP) initiative. There are no commercial relationships (as yet) and they will not charge for it (as yet). It works by loading the content before the advertising. This is because with the advertising comes all that tracking, monitoring and other analyticy stuff that publishers, platforms and advertisers fiddle about with, tweak, frown at, give up and then throw at the waiting world like a kid throwing wet mud at a friend.

Fascinatingly, Google has not yet thought through how it will all work. By their own admission. According to the company’s Mr Whitmore, via the WSJ, “ad blocking gives you a better interface that’s faster. Google’s taking a more publisher-friendly approach that achieves the same thing.”

Ah. So, could AMP be a classic Google trial of something that ultimately benefits Google and adversely affects others, advertising-wise? Surely not! Perish the thought!

It gets worse. Of course. There is this thing called programmatic advertising. This, as the name would suggest, is advertising based on the antithesis of common sense, our old friend the computer algorithm. Whilst the clever companies try and pitch clever brands with native advertising (advertising that tries to look like an actual post on Facebook for instance), only a few will survive. Programmatic advertising – because of the lack of humans, and therefore common sense – drives down prices. Then, in a market which is over-supplied, does exactly the wrong thing. If there is a gap, a window in which some adverts might fit, it throws them in with the enthusiasm of our mud-slinging friend from earlier. This will further alienate customers. And, according to advertising mogul Shane Smith, “the downward pressure of programmatic is going to clean out everyone else.”

It is a pity. You would have thought that those creative advertising guys would react better.

Tags: , ,

About the Author

About the Author: Alex was Founder and CEO of the Global Billing Association (GBA), a trade body focused on the communications sector. He is a sought after speaker and chairman at leading industry conferences, and is widely published in communications magazines around the world. Until it closed, he was Contributing Editor, OSS/BSS for Connected Planet. He is publisher of DisruptiveViews and previously BillingViews. .


If you enjoyed this article, subscribe now to receive more just like it.

Subscribe via RSS Feed

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.