YouTube has frequented the headlines over the past few weeks, as several big brands have pulled ad budgets away from the platform due to concerns that YouTube isn’t doing enough to ensure ads are being displayed in an ‘brand-safe’ context. This week’s mailer explores the key causes of this backlash and wider implications for digital advertising. Is this the end of Facebook and Google’s walled gardens? Is it too late for advertisers who have drunk the digital Kool-Aid? Or is it all a bit of a storm in a teacup?
New solutions, new problems
Scores of digital media suppliers and intermediaries have become proponents of programmatic advertising over the last four to five years – the targeting capabilities, optimisation opportunities and cost efficiencies available at scale for programmatic buyers and sellers make for compelling reasons to adopt more automated advertising methods. Indeed, reports eMarketer, automated real-time bidding accounted for 70% of all display advertising in the UK last year.
However, programmatic is still evolving, and there are a number of hurdles that digital media companies are striving to overcome in order to fully convince advertisers of its benefits. Most important are lack of transparency and concerns around quality, as Marketing Week notes. Because programmatic targets audiences, brands do not always know where their ads will end up. Furthermore, as programmatic exchanges give advertisers access to the long-tail of niche websites and platforms, the quality of experiencing those ads can be highly variable.
These issues haven’t been deal-breakers for most advertisers thus far, with the benefits of programmatic outweighing concerns and a general understanding that these are highly complex issues to solve. However, a recent investigation from The Times revealed that ads for brands such as Waitrose and Marie Curie were appearing with content uploaded by terrorist supporters on YouTube and other websites. As a result, major advertisers have pulled advertising out of YouTube until, they say, concerns around transparency and brand safety can be allayed. In the meantime, reports Campaign, more traditional media channels like Sky and ITV reap the benefits, as advertisers return to the familiar context of carefully programmed channels.
The Times investigation clearly catalysed the wave of recent criticism towards YouTube, with advertisers boycotting the platform in the UK and then the US and other countries. However, inappropriate ad placement on digital platforms is not a new phenomenon – as eConsultancy illustrates, display advertising has suffered from this problem for over a decade.
The particular intensity with which the industry has responded to what Google calls a “very, very, very small” problem can be explained by the current cultural and political climate as well as the straightforward concerns of brands. Political instability and the rise of far-right movements, pervasive accusations of fake news, and specific concerns around measurement and accountability all stand to weaken the trust which consumers and advertisers place on media companies. With Google and Facebook accounting for 75% of digital ad spend in the UK [paywall], it is only natural that wider frustrations will be focused on them – what Digiday terms “faux rage.”
Although there is some evidence that restricting programmatic advertising to a smaller, white-listed set of publishers may not have a negative impact on a company’s advertising efficacy, as seen in JPMorgan Chase’s recent experiment, we do not believe that the recent surge in scepticism around programmatic will last; the benefits are simply too great. This becomes increasingly so as media consumption fragments and audiences become harder and harder to find. Automated advertising needs to be implemented correctly, yes, but it still stands to create a more efficient market at an enormous scale.
What is likely to happen, as Farhad Manjoo writes in The New York Times, is that large digital media suppliers like Facebook and Google will become more transparent (however slightly) in the way they are selling their inventory, allowing third-party auditors to convince advertisers that they ad dollars are being well spent. Industries often need headline backlashes and boycotts to initiate periods of self-reflection, but these periods typically result in improved understanding, processes and productivity.
Will digital media companies ever be able to offer 100% brand safety in a programmatic world? Potentially not. Will it matter in the long-run? No.
[If you don’t believe us, here’s a little list from Buzz Feed to remind us that unfortunate context is an occasional problem for all types of advertising…]
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