Bad Impressions: Kraft Takes a Stand on Digital Ad Inventory

Kraft's decision to reject up to 85 percent of the digital ad inventory it's offered is a wake-up call for agencies.

One would hope that the news in the U.S. of Kraft rejecting on average 75 percent to 85 percent of the digital ad inventory offered to it hasn’t gone unnoticed. It certainly caught the attention of those who are predicting the downfall of the online ad industry. But there are two sides to the story.

To the pessimist, it is about how much of the ad inventory available is either invisible to the user, in the wrong environment, or simply unaccounted for. It’s a story where the quality and visibility of online advertising is at best questionable, and therefore struggles to compete with other media when it comes to building demand for a brand.

To the optimist, we can actually do something about it. What Kraft is saying is that it did not purchase the majority of the inventory offered to it, not that the majority of what it had bought turned out to be useless. And so far Kraft’s selectiveness on the inventory has not hurt the profitability of its investments.

In other words, although digital media does have quality issues, it is possible to identify them and factor them into your profitability.

It is a step above the world of print or out-of-home media, where a post-buy is pretty much impossible in China. Although the optimistic view is encouraging, it calls for an end to the status quo.

We have to recognize that the digital industry has been focused far too long on meaningless KPIs that have made it easy to abuse the system: impressions and clicks – through click-per-miles (CPM) and cost-per-clicks (CPC) – have overstayed their welcome.

An online banner ad impression can last a mere glimpse of a second because the page it is seen on is flicked through. For example, image galleries in news articles change banner every time you look at a new picture. It can also be an impression that happens to be seen only in part because the user didn’t scroll enough to see it in full, or in worst cases, be triggered fraudulently by placing its tracking tag without actually ever displaying that impression.

CPCs can also be a flawed indicator. It tells us that someone has clicked the ad, but does not guarantee this click has any value. It could be an unintended click by the user, or simply doesn’t translate into more than a couple of seconds’ visit on your website.

The problem is that this outdated KPI framework has opened the door to those who wish to abuse it and greatly facilitates the deterioration of the online ad inventory.

The optimist will remind you we have existing solutions to at least curb this trend. Ad viewability measures have been in the market for a few years now, and viewability standards have finally been recognized in the U.S.

Sadly, we are still lagging behind as solutions to help track ad viewability are not welcomed with open arms.

One of the most basic solutions required to measure viewability is third-party ad-serving, i.e. having an independent provider serve the ad, not the publisher. Many sites do not like them because they can hurt their bottom line (for a variety of reasons, some valid, some less defendable), and many brands do not push actively for them because they come with a cost they are not willing to pay.

So imagine how much appetite there is in the market for viewability solutions, which require investment from both third-party ad serving and tracking of viewability.

All this does matter if the digital industry wants to remain healthy as a demand building advertising platform. When a large portion of inventory shows little to no value, many publishers and digital marketers are bound to wake up with a severe hangover.

The bottom line is that everyone needs to change. Publishers will lose that fight in the long term and need to focus on quality inventory and transparency. This means offering impressions that are in sight for at least a few seconds at the very least, and allowing third-party ad-serving of their inventory. But this can only happen if brands make the effort and investment to look at the right metrics, and understand that in the long-term this will drive to inflation of online costs for impressions.

It cannot just be about the stick, it also needs a carrot.

And finally, looking into the mirror, agencies cannot just be bystanders and hide behind the status quo. We need to maintain pressure on all sides to evangelize better ways, champion the discussion with our clients, and support publishers who are willing to change.

Image via Shutterstock.

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