Programmatic advertising has a bad name among some of the people who matter most – consumers, producers and publishers. Why? Because the advertising (specifically the stuff filling the ad space on the web page, also known as a “creative”) is making it harder and less enjoyable to read an article on the web. The ads coming over the pipes are slowing down the pages and disrupting the reading experience. In short, the ads are ruining the content.
Just to get us all on the same page, the reason I started writing this was to share a detailed how-to guide for identifying the source of these bad creatives – a method Hashtag Labs uses constantly to fight back the bad ads. If you want to jump to that How To part, please click here. If you’d like some more context about why I think we are here in the bad ad situation we are currently experiencing, keep reading, and then there will be a link to the how-to identify bad ads writeup.
Continuing on: It’s remarkable how incredibly transparent web traffic can be if you know where to look (with that said, obfuscation is also incredibly easy). Our browser windows are concealing a ton of activity all of which can be revealed with a right-click. It was a revelation for me once I saw it. The developer’s console available in modern browsers via the ol’ right-click can also dispel some of the magic surrounding the web – the method to the madness is visible. The challenge when it comes to online advertising is that the method is being exploited.
My theory is that we as a content consumption whole don’t actually hate advertising – we’re even inspired by it sometimes. It’s that the state of web advertising is not good due to a conflation of issues and we’re reacting to that current state for the most part. Why is it bad? The following is a brief evolution of the online ad and publishing space to bring us to where we are today:
- The birth of the web is synonymous with the democratization of publishing – said differently, the massive capital investments necessary to make information and media widely available to the public is no longer required when someone logs onto and publishes via the web. The act of making a media-work public is no longer relegated to a few corporations as it was eras and decades past.
- The fact that large amounts of capital are no longer needed to make media public allows professional (and hobbyist) writers and producers to pursue making their media productions public without having to go over the traditional/previous barrier to entries for making something public – that barrier to entry that no longer exists can be described more specifically as getting a job at one the few corporations who had used large amounts of capital to manufacture the necessary infrastructure to distribute media at scale.
- When the web was born, and still today, this is reason for exuberance. We can all reach everyone!! People much more eloquent than I have expound on why this is important and good so I will leave that to them.
- With that said, this ability for-everyone-to-reach-everyone is where it also gets interesting from an advertising perspective – the first people to publish on the web seem to be people passionate about interacting with like-minded people who were publishing on the web because it was a worthwhile endeavor in of its own right. I imagine the earliest people on the web were of a couple of schools: “We’re helping progress the human race forward,” “I can’t believe I found other people with my interests,” and both were operating without profit in mind and both under the auspice of “THIS IS AWESOME.” Obviously there are exceptions to the rule, but I think this is somewhat fair and accurate for the earlier(est) days of the Internet. Generally speaking, the web was fueled by passion for content, community and technology.
- On this first iteration of the web, profit did not exist yet. It was not about a business opportunity, but, eventually the business opportunity emerged. If as many people were reading a “publication” in the digital world as people were reading a publication in the offline world, it would make sense that someone’s attention online is of equal value to attention offline and therefore, we can also sell advertising online. And hence we have the birth of advertising online.
- An interesting dynamic to consider with the rise of digital publishing: The huge infrastructure that supported the corporations who were publishing and distributing media before the web included, not just the talent and capital necessary to produce the main content and editorial product, but that infrastructure also included all of the business operations (I.e. sales and revenue-generation) and back-office job functions too.
- Producing great content and editorial is not easy. It’s a full-time job. Figuring out how to publish efficiently using a new-fangled digital CMS is often kafka’esque. But people do and did it because they love what they are doing. The community around one’s content is often reward enough. Imagine if you could make money doing something that’s hard and that you’re doing because you love it? Getting paid for a labor of love? Ding ding ding!! That is what everyone should be doing. Do what you love. Digital advertising offered that opportunity to the people who had already been producing and publishing content online – it was a real business opportunity to do what you love. An intoxicating scent, to be sure.
- The challenge with monetizing your own content is that it’s a new craft/trade to learn and wade through – figuring out technically how to publish online is one mire and then figuring out how to earn advertising revenue from what you’re publishing online and the audience you’ve attracted is a whole other can of worms. With the advent of digital publishing and then monetization, these essentially two independent, different trades converged within one person’s purview.
- As anyone who’s tried can tell you: Doing everything is not easily accomplished. People who built online audiences wanted to earn money from their passion project (rightfully so), but doing the work that kept the audience coming, didn’t allow the website proprietor enough time to figure out how to also earn revenue from their work – and this disconnect between a website wanting to earn revenue and not having the time (or wanting) to figure out how to do that is what gave rise to the beginnings of the third party ad system that we have today.
- This isn’t a definitive history of which company came when with which products, but suffice to say, middle men emerged to service the new digital ad inventory that website owners weren’t able to monetize. Websites were justified in wanting their inventory to be monetized. Advertisers were justified in wanting to get their messages onto websites and into the new medium. The new third-party ad businesses were justified in wanting to help websites sell their inventory and earn money for themselves from helping to facilitate the advertising transactions.
- The challenge with digital advertising is that in addition to understanding the methods for transacting in the advertising business which has its own jargon and methods as any industry does, is that it’s built on top of new technologies that also has its own nuance, language and technical barriers-to-entry. Said differently, the creative development and ad delivery mechanisms for online advertising uses rapidly developing technology that only a very limited number of people (most often technical specialists I.e. developers and engineers) really know how to build, manipulate and understand their capabilities.
- I think that the desire to use, monetize and service this new class of advertising inventory from the perspective of all of the players (advertisers, websites and third party ad agents/networks, respectively), as I’ve said, was and is justified and it was and is an intoxicating scent. Not immune to the intoxication: the entrepreneurs who saw the chance to take a piece of the massive global advertising market by helping the world’s greatest new class of content creators fulfill their dreams (make money doing what they love to do). It was attractive and hopeful enough to bring in venture capitalists. Soon all of the world’s biggest technology companies and venture capitalists were pouring resources into the third-party ad space and we had a proliferation of technologically advanced ad delivery and buying platforms along with a proliferation of dream-selling to the content creators looking to monetize their website’s inventory.
- This is a process that has been playing out for over the last 20 years or so: Website gets a lot of traffic, builds a good brand, can justify having advertisers, website needs to build an advertising infrastructure, owners of websites don’t know about advertising infrastructures (or don’t want to know about them or don’t have time to learn about them), website owners find a trustworthy partner to take care of the advertising for them, website waits and sees how the revenues develop, website is happy for a while, or unhappy right away, or happy forever.
- Meanwhile, the third party advertising partner normally falls into one of the following categories:
- Higher-end agency who provides decent-to-great customer service along with solid sales capabilities for their “supply sources” (I.e. websites). The purpose of this player was/is to service the new digital advertising inventory coming online and be a boon for the websites who couldn’t (yet) build advertising infrastructures themselves. Unfortunately in 2016, this sort of player is less of a factor then it used to be.
- More technologically driven company that is building a “platform” for the future of transacting advertising. These platform companies use technology to allocate the advertising to whichever publisher has the best impression for the advertiser’s desired target. While heavy on technology, these companies are lighter on customer service. I think for reasons like being more “scaleable” this class of third party ad player is doing better today than the former bullet, the “higher-end agencies.”
- The previous bullet point is a crude breakdown of the space with no nuance and not supposed to be comprehensive, I just wanted to get across that, for websites, the options for monetization from the past 10 years are changing – we’re transitioning away from the higher-end agencies who were able to hold its supply-sources’ (publishers’) hands and transitioning to programmatic ad trading platforms that are lighter on customer service and want its users to be self-sufficient traders.
- While there’s a difference in the ad partners readily available, the existential situation for the website looking for advertising hasn’t changed dramatically – websites still just want to earn revenue from their labor of love and don’t want to or don’t have time to learn the nuances, jargon, transactional methods and technical skills necessary to swim within the advertising industry. Not to mention, that the technical skills necessary to setup a proper ad system are increasing, not decreasing, as the programmatic platforms continue to take marketshare from the higher-end ad boutiques of yesterday. In short, today’s advertising ecosystem for online publishers looking to sell their inventory looks starker than yesteryear.
- As the new environment has looked starker to one class of actors (I.e. the online publisher/website owners with inventory), it has become a rosier situation for another class of actor in the online advertising system: The technically-savvy arbitrage middleman. Arbitrage isn’t a term I love because it’s very nebulous and can incorporate a number of different things, but it’s trying to convey that there is a new class of player who is able to hunt and harness demand on one programmatic platform at one price and then transfer that demand through technical means to another platform and supply source at a lesser price. Inherently, I don’t find anything too wrong with this – empirically, it’s a traditional broker relationship – bringing an opportunity to someone that they normally wouldn’t have had without the broker/middleman and the broker then keeping a fee for facilitating a transaction. A game as old as business itself – all good. Where this class of actor becomes problematic is that in order to increase their profit margins, the arbitrage middleman is developing methods and advertising creatives that are disrupting the websites’ users and the readers’ experience.
- The programmatic platforms have good buyers – people buying the ad space to deliver technically sound, decent looking ad creative at competitive rates. The programmatic platforms also have bad buyers – I would argue what makes them bad is their technical methods for bringing advertising to the digital ad space. These bad buyers are the ones who are running 5MB creative that’s pinging four different servers before returning an ad; the ad creatives that look like they hijack your mobile operating system by bringing you to the AppStore but really it’s just a full page ad creative designed to look like the AppStore. These ad creatives being delivered over the programmatic platforms are the problem, not the programmatic platforms themselves.
- I think the major ad exchanges facilitating the programmatic transactions are all interested in and taking action towards cleaning up the bad-ad-creative situation – it’s a matter of mitigating between immediate revenue and creating a sustainable long-term system that works well for the most important players (consumers, publishers and advertisers). With that said, I understand the ad exchange’s position too: the ad exchange platforms are meant to be open places where buyers and sellers can interact with each other freely and they provide tight controls to allow for segmenting which ad buyers should get through and which shouldn’t. That’s not to say they shouldn’t continue to clean up the bad sorts of ads coming from their platforms, but just that in an ideal world it would be something that is self-policing.
- To that end, all of the information that is necessary to identify where bad ads are coming from is available to you (and the public, really!) using the tools that come with your browser. It’s miraculous how much you can glean from the readily available tools in your browsers. In order to figure out which buyers are putting bad ads on your site via which ad exchange, you can follow the guide that we published here. It’s worth noting that, you can share the data collected via this how-to guide to the exchange or ad partner you’re working with and they should be very responsive in blocking this buyer from appearing on your site or even blocking them from the exchange as a whole. While the ad exchanges can’t seem to police everything ahead of time right now, they will be very responsive to the results of your proactive, successful ad hunt.
This writeup is a cursory evolution to help set the table for future posts (I.e. This post was born as intro to the how-to hunt ads post). As with most things in life, what’s being discussed is a complex system that has a lot of interests pulling it in different ways all wrapped in nuance and grey area. If you have interest in learning more about what Hashtag Labs thinks is a sound business strategy for independent publishing on the web in 2016, want to have someone hunt the bad ads for you, or just generally talk shop and/or business opportunities, please get in touch with me at email@example.com. Or head over to our library to read more!