Digital Advertising Is an Oxymoron

  |  September 19, 2011   |  Comments

If you are measuring and optimizing your media investments solely using last-action attribution, you are not advertising.

A major issue with digital advertising today is that the majority of what's currently labeled digital advertising is in fact not advertising at all. The majority of digital advertising today is actually attribution stealing. Unintentionally, a significant percentage of the digital advertising ecosystem is directed by well-intentioned planners and buyers to simply serve the last ad or the last click before some indicative event (registration, purchase, click-through, etc.). If you are measuring and optimizing your media investments solely using last-action attribution, you are not advertising. If your optimization doesn't take into account brand and business performance (yes, it's hard to do), you are telling media providers it's OK to cheat you. And if you are an agent and you are shepherding your client's investments in this fashion, you are wasting your client's money. In the extreme, a claim could be made that by taking these actions, you are perpetrating a fraud.

You are signaling to media providers that all that matters is that "they cross the finish line first," no matter how they ran the race. In this instance it doesn't matter if the media they served upon your behalf was even seen by the user.

Entire elements of an "ecosystem" have been developed around the very faulty assumption that good digital display marketing is predicated on serving an ad impression or facilitating a click immediately before a user visits a brand's website; this is also known as the formula for last-action attribution.

Retargeting, or remarketing, is an incredibly powerful concept that's general thesis is grounded on the principal that someone who visits a website is indicating some interest in the content of the website. In plain English, this means a user visits a website when they intend to purchase (subscribe, research, etc.) a product from the proprietor of the website. It makes complete sense for advertisers to take advantage of technology to "remarket" to those individuals, likely providing increased frequency of message or alternative messages to persuade the consumer into a desired purchase or action. In my experience, I have seen that the signal strength generated by retargeting is the single largest signal value for conversion. This is why retargeting in and of itself is a tremendously useful and powerful marketing tactic.

When you combine this powerful tool with a smart advertising technology industry, you get the majority of your media partners attempting to harness the power of the retargeting signal for performance improvement. What's the problem? In a competitive environment (standard optimization practice), your media partners are all attempting to market to the same customer - the one that is already coming to your website as a result of organic traffic or non-digital media efforts. This overreliance on the retargeting signal ensures that most of your media partners are competing to serve an impression to someone that has already visited your website rather than growing your prospective customer base or "feeding the funnel." If you have witnessed the deceleration of your display campaign performance at peak volumes and you are allowing distribution partners (anyone who serves display ads on your behalf) to use pixels on your website, you are likely suffering from a failure to advertise to new customers and are in fact simply remarketing to the same base.

These types of practices promote the very dangerous assumption that digital advertising's place on the media plan is solely in the acquisition phase and that digital can do little to affect awareness, consideration, or brand preference. And if we can't prove digital advertising's value in areas other than conversion, we will never become the industry we all want and need.



Edward Montes

Edward Montes leads DataXu's sales and marketing activities on a global basis. A respected international leader, Ed has a deep understanding of how advertisers can apply technology to become data-driven and transform their business. More than a decade in the digital advertising ecosystem has given him considerable experience with combining technology, services, partners, and people to deliver optimal solutions to marketing challenges. Prior to joining DataXu, Ed was co-founder and chief executive at Digilant. He also held leadership positions at Havas Media - spearheading several expansion efforts and doubling the agency's digital billings and capabilities during his tenure - as well as Yahoo and TechTarget. Ed is a graduate of Boston University School of Law and the University of Massachusetts, Amherst.

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