Online Advertising: Quality and Transparency is Needed

Online advertising seems to be rife with problems, many of which pose a great threat to its profitability and future. For instance, Mary Meeker’s 2017 report shows that ad blocker usage is still widespread and continuing to grow.

The supply chain of display advertising is also plagued with inefficiencies. As Ian Traider from Adage reported this week, fraudsters have found ways to induce businesses into purchasing dodgy ad spaces by imitating legitimate websites and companies. Companies are buying ads from seemingly legitimate and reputable companies, only to find afterwards that the transaction was made to look genuine by methods of deceit.

The result, once the transaction is found to be illegitimate, is both a loss of money and possible damage to the reputation of the imitated ad host.

These trend seem alarming considering Meeker’s findings also reveal a heavy shift in ad spend from traditional to online media. Businesses are flocking to the Internet to advertise their products and services, benefiting from the advantages it yields in precision targeting and lower capital requirements.

What I’d like to propose, in order to protect businesses from wasting their money or annoying customers with invasive display advertising, is to move towards greater transparency and better quality ads.

I may merely be repeating what I have written in previous posts, but I feel these lesson are very valuable for businesses looking to use online advertising, whether it be programmatically acquired or managed on one’s own website.

Firstly, as Trider observes, transparency can be achieved through use of ‘ads.txt.’ This is a system proposed by the IAB where transactions are made more visible, so that business can verify exactly where their online inventory is being source from.

Under the use of ads.txt, Trider shows that when purchasing ad space from the Wall Street Journal, for example, you can verify if it is legitimate by checking whether the intermediary seller has been declared as an authorised seller by the WSJ or not.

To make an odd example, this would be similar to purchasing a Luis Vuitton bag only after finding that the retailer you’re dealing with is authorised by Luis Vuitton. Currently, there is no easy way to check the legitimacy of the retailer for ad space.

The lesson I’d like to highlight from this is that greater transparency results in more efficient online advertising. Indeed, this reminds me off the way in which blockchain technology is likely to create better result in programmatic advertising as well. Transparency, as a rule, seems to create better results for businesses in online search and display advertising.

As for customers and their tendency to use ad blockers, my previous discussion still rings true; consumer behaviour in response to annoying ads indicates that businesses need to create better ads. If people are blocking ads, it means that ads are annoying (among other arguably less important reasons).

To stop Internet users blocking ads and to raise their chances of reaching more customers, businesses need to collectively strive towards making better quality ads. By responding to the demands of customers implied by their usage of ad blockers, online advertising can be revitalised. Accordingly, businesses may refer to the Coalition for Better Ads as a place to start, in addition to conducting their own research on the matter.

The end result I hope to see from these suggestions is a digital world where internet users are no longer barraged with annoying advertisements and where businesses reap the full benefits of every dollar they spend online.

Clearly, quality and transparency is the key to unlocking this vision.

 

 

 

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