When P&G cut way back on digital advertising … and nothing changed.

If you suspect that digital advertising might well include a big dose of “blue smoke and mirrors,” you aren’t the only one who thinks this way.

In fact, Marc Pritchard, chief brand officer of Procter & Gamble, felt much the same thing. Back in early 2017, Pritchard complained to the industry about what appeared to him to be an unacceptable degree of waste in the digital advertising supply chain.

Among his concerns was the lack of transparency between advertisers and digital agencies, as well as the myriad ad-tech vendors that seemed to be adding more complexity that was disconnected to any defined value.

Pritchard was also concerned about the prevalence of bot traffic and the dangers to brand safety posed by risky content.

Holding the purse strings of one of the largest digital advertising budgets on the planet, Pritchard was in a uniquely strong position to exert changes in how digital advertising campaigns are handled.

And yet, even with this threat, the response from the industry didn’t go much beyond mild alarm and a bit of lip-service.

So, P&G‘s CBO put some juice behind his warning, cutting more than $100 million in the company’s digital ad spend between April and July of 2017. Pritchard noted at the time that this reduction in ad spending was designed to reduce waste.

After cutting the $100 million in ad dollars – representing a 20% reduction in P&G’s digital ad spend – what changed was … exactly nothing.

That is correct: no negative impact on ROI at all.

In fact, P&G actually experienced a ~10% increase in the overall reach of its remaining advertising campaigns.

How to explain this counterintuitive result?  Spending less but reaching more consumers occurred because extra efficiencies were harnessed by carefully pruning ineffective inventory and reallocating the remaining budget to higher-quality placements.

Imitation being the sincerest form of flattery, another major consumer packaged goods company – Unilever – soon followed suit, reducing its own digital advertising spend by a whopping 50%.

Its move garnered the same result: no discernible ill effects on ROI resulted from the dramatic cuts.

The experiences of these two companies have poked several gigantic holes in a number of “truisms” about digital advertising.  Here’s what we’ve learned:

  • Ad spending doesn’t drive value when it isn’t tied to quality metrics like viewable inventory.
  • “Quality” is something that can be controlled by taking steps like moving platforms.
  • Measuring the quantity of impressions isn’t as important as the quality of those impressions.
  • “Scale” isn’t king. Advertisers don’t need to have super-large budgets in order to drive meaningful results in the digital sphere.

Indeed, P&G and Unilever have proven that a media strategy that focuses on context and quality rather than brute force can get a lot done for significantly less outlay.

Programmatic ad buying in the B-to-B sector: The adoption rate grinds to a halt.

Each year, Dun & Bradstreet publishes its Data-Driven Marketing & Advertising Outlook report.  The report’s findings are based on a survey of marketers in the business-to-business sector.  Among the questions asked of marketers is about the advertising tactics they utilize in support of their sales and business objectives.

A look at D&B’s annual outlook reports over the past several years, an interesting trend has emerged: The adoption rate of B-to-B companies being involved in programmatic ad buying has plateaued at somewhat below 65% of firms.

In fact, you have to go back to 2015 in D&B’s reports to find the proportion of companies involved in programmatic advertising running significantly below where it is now.

That being said, those firms that are involved in programmatic ad buying are planning on allocating additional funds to the effort. The most recent survey finds that ~60% of the respondents involved in programmatic advertising plan to increase their spending in 2019.  That includes ~20% who plan to allocate a significant dollar increase of 25% or greater.

Another interesting finding from the 2018 survey is that there appears to be slightly less interest in display and video programmatic ad placements – although display remains the most commonly run ad type.

Where heightened interest lies includes one category that should come as no surprise – mobile advertising – as well as several that might be more unexpected. Social media advertising seems like it wouldn’t be a very significant part of most B-to-B ad buyers’ bag of tricks, but two-thirds of respondents reported that programmatic advertising in that sector will be increasing.

Another interesting development is that ~17% of the respondents reported that they’re stepping up their programmatic buying for TV advertising – which may be an interesting portent of the future.

Lastly, the survey revealed little change in the types of challenges respondents face about programmatic ad buying – namely, how to target the right audiences more effectively, how to measure results, and the need for better technical and operational knowledge for those charged with overseeing programmatic ad efforts inside their companies.

More information and findings from the 2018 D&B report can be viewed here.

Are there fewer (but more relevant) ads in our future?

A new theory in the MarComm field is the notion that the future of advertising is one where people are confronted by less advertising – but the ads that are presented to them will be more relevant to their interests.

I’m pretty sure about the second part of that … but not so sure about the first bit.

Certainly, “fewer, more relevant ads” don’t appear to be what’s happening at the moment.

Think about the plethora of digital screens these days – not just smartphones and tablets and such, but also the ones on gasoline station pumps, in taxis, on airline seatbacks, in kiosks and on the sides of buildings – and it’s pretty clear that many more ads are being displayed to more people in more places than ever before.

Of course, many of these ads are selling products or services that are of little or no interest to most of us. Some people respond by blocking ads on their own personal devices, doing what they can to mitigate the onslaught.

As well, people seem to like the idea of commercial-free TV to the degree that quite a few are willing to pay for video-streaming services like Netflix and Amazon Prime Video that provide content to them without all of those pesky ads embedded within.

It’s also true that advertising and media platforms are becoming ever “smarter” and more data-driven, giving them the ability to replace mass-reach ads with ones that are customized to some degree so that different people see different ads. It isn’t a stretch from there to the notion that because these ads will yield better results for media platforms, total ad loads can be reduced while still increasing consumer engagement.

This idea is leading some people to predict that in the coming few years, consumers will experience significant change in how many ads they see and how relevant they’re likely to be.

In response to that, I have two counter-thoughts. The first is that with all of the buying choices that people have today — more than ever before — brand loyalty is being eroded.  And with less brand loyalty, advertisers need to stress “recency” – being the last message a consumer sees before purchasing a particular product or service.  This leads to the compulsion for advertisers to “be everywhere all the time” so that theirs is the last message the consumer sees before taking action.  It’s hardly in line with “fewer, more relevant” ads, unfortunately.

The other issue pertains to the basic economics of advertising. Fewer ads will happen only if their increased relevance is accompanied by a commensurate increase in their price.  I don’t see that happening anytime soon either, unfortunately.

Besides, heightened ad “relevance” isn’t really enough to overcome the issue of audience aversion and avoidance. On that score, fundamental attitudes have never changed:  The consumer’s relationship with advertising has always resided somewhere between “passive ennui” and “managed hostility.”

Today, of course, consumers can do more to “manage their hostility” to advertising than ever before, creating even more of a challenge on the ad revenue front.

What do you think? Are we indeed moving to an era of “fewer, more relevant” ads … or will we continue to deal with merely a more contemporary version of “all advertising, all the time?”  Please share your thoughts with other readers below.

The escalating “arms race” in the adblocking arena.

Have you noticed how, despite installing adblocking software on your computer or mobile device, a lot of online advertising is still making it through to you?

That isn’t just your imagination. It’s happening – and it’s getting worse.

According to a recent report based on findings prepared by researchers at the University of Iowa, Syracuse University and the University of California – Riverside, the extent of “end runs” being successfully made around adblockers is quite high – and it’s growing.

According to the research, more than 30% of the Top 10,000 Alexa-ranked websites are thwarting adblockers in order that millions of visitors will continue to see online advertisements despite running adblocking software.

As the universities’ report states:

“Online publishers consider adblockers a major threat to the ad-powered ‘free’ web. They have started to retaliate against adblockers by employing anti-adblockers, which can detect and stop adblock users.   

To counter this retaliation, adblockers in turn try to detect and filter anti-adblocking scripts.”

Some of the more “forthright” publishers are being at least a little transparent about the process – first asking visitors to stop blocking ads. If those appeals go unheeded, the next step is to notify visitors that if they fail to whitelist the site, they will no longer be able to access any of its content.

The problem with this scenario is that many visitors simply go elsewhere for content when faced with such a choice. Still, it’s nice that some online publishers are giving people the choice to opt in … in an environment where the publisher’s content can be monetized to some degree.

Other sites aren’t so courteous; instead, they’re overriding the adblock software and serving up the advertising anyway. That certainly isn’t the way to “make friends and influence people.”

But “violating consumer intent” is kind of where we are in this arena at the moment, unfortunately.

QR Codes Live!

In marketing, QR codes have been the butt of jokes for years. The funky little splotches that showed up in advertising on everything from magazines to transit buses were supposed to revolutionize the way people find out information about products and services.

Except that … QR codes never lived up to the hype.

While a few advertisers stuck with QR codes doggedly, for the most part we saw fewer and fewer of them after their first initial years of splash.

But now, QR codes are making a comeback. It turns out that they’ve become central to mobile marketing tactics.

We’re talking about QR couponing, which is exploding.  Newly published estimates by Juniper Research, a digital marketing consulting firm, show that nearly 1.3 billion coded coupons were redeemed via mobile devices in 2017.

Moreover, Juniper is forecasting that the number of coupons with QR codes being redeemed via mobile devices will continue strong at least through 2022.

A big reason for the sharp increase in use is built-in QR functionality on smartphones – led by Apple which has begun including QR reader functionality as part of the camera application on its new iPhones.

This action takes away a huge barrier that once confronted users. The lack of in-built readers meant that consumers had to download a separate QR code scanner app.

We know from experience that one more action step like that is often the difference between market adoption and market avoidance.

But with that hurdle out of the way, major retailers are starting to take advantage of the more favorable playing field by finding more uses of QR code technology. Target for one has announced a new Q code-based payments system to scan offers directly to their device-stored payment cards, which can be scanned at checkout for instant payment.

Expect similar activity in loyalty cards, making their redemption easier for everyone.

The newly revived fortunes of QR codes remind us that sometimes there are second acts for MarComm tactics and technology – and maybe it happens more often than we expect.

Fewer brands are engaging in programmatic online advertising in 2017.

How come we are not surprised?

The persistent “drip-drip-drip” of brand safety concerns with programmatic advertising – and the heightened perception that online advertising has been showing up in the most unseemly of places — has finally caught up with the once-steady growth of economically priced programmatic advertising versus higher-priced digital formats such as native advertising and video advertising.

In fact, ad tracking firm MediaRadar is now reporting that the number of major brands running programmatic ads through the first nine months of 2017 has actually dropped compared to the same period a year ago.

The decline isn’t huge – 2% to be precise. But growing reports that leading brands’ ads have been mistakenly appearing next to ISIS or neo-Nazi content on YouTube and in other places on the web has shaken advertisers’ faith in programmatic platforms to be able to prevent such embarrassing actions from occurring.

For Procter & Gamble, for instance, it has meant that the number of product brands the company has shifted away from programmatic advertising and over to higher-priced formats jumped from 49 to 62 brands over the course of 2017.

For Unilever, the shift has been even greater – going from 25 product brands at the beginning of the year to 53 by the end of July.

The “flight to safety” by these and other brand leaders is easy to understand. Because they can be controlled, direct ad sales are viewed as far more brand-safe compared programmatic and other automated ad buy programs.

In the past, the substantial price differential between the two options was enough to convince many brands that the rewards of “going programmatic” outweighed the inherent risks.  No longer.

What this also means is that advertisers are looking at even more diverse media formats in an effort to find alternatives to programmatic advertising that can accomplish their marketing objectives without the attendant risks (and headaches).

We’ll see how that goes.

Advertisers “kinda-sorta” go along with FTC guidelines for labeling of native advertising placements.

In an effort to ensure that readers understand when published news stories represent “earned” rather than “unearned” media, in late 2015 the Federal Trade Commission established some pretty clear guidelines for news stories that are published for pay.

The rationale behind the guidelines is that the FTC wants advertisers to be prevented from presenting paid content in ways that mask the fact that it’s a form of advertising.  Essentially, it wants to avoid leaving the erroneous impression that the advertiser did not create — or influence the creation — of the content, or that it paid a fee in order for the news to be published.

But what native advertising content developer Polar has found is that the explicit disclosures the FTC wishes advertisers to include as part of their stories tend to have a negative impact on readership.

… Which is precisely what native advertising is trying to avoid, of course.

After all, the whole point of these articles is to appear that they’re published due to their inherent newsworthiness, rather than because advertisers wish to push a sales message disguised as “narrative” so strongly, they’re willing to fork over big bucks for the privilege.

In its evaluation, Polar analyzed ~140 native placements across 65 publishers, and found that only ~55% of them used the term “sponsored” as a way to label the content.

As for the term “advertisement” or “advertorial,” the incidence of usage was far lower; less than 5% of the native placements identified their content as such.

Correlated to these findings was that more euphemistic terms like “partner content” tend to perform better in terms of reader engagement than do more explicit disclosures of an advertiser relationship.

“Promoted” was found to be the best performing term, garnering a 0.19% clickthrough rate as compared to “sponsored,” with just a 0.16% clickthrough rate.

[Interestingly, on desktop devices “sponsored” marginal outperformed “promoted,” whereas on mobile devices it was just the opposite.]

More broadly, the Polar investigation also found that nearly one-third of the pay-to-play native advertising placements it evaluated failed to comply at all with the FTC guidelines (as in zip/zero/nada) – which brings up a whole other set of issues at a time of heightened awareness of the “fake news” phenomenon online.