The Case Against Programmatic Ads

I’ll start by letting you know that I’m a hypocrite for writing this. I generate revenue from programmatic purchases of Google AdWords. I’ve spent a lot of time narrowing down to some really lean specifics, to get it to a self-sustaining point, but I do use them in a limited capacity.

It’s a net to capture what is already coming through, not a dial to be turned to increase or decrease that amount.

Past that, I was a large supporter for a while, but after not seeing substantial results for years, I can’t help but feel like programmatic ad purchasing is akin to the pre 2008 financial market. The reason for this is because online advertising was intentionally created to mimic the financial markets which had just been turned into highly profitable machines (at the time). The missing piece was the commodification and abstraction of human attention, but the IAB had us covered.

In 2014, the group released an extension of its 2004 work that standardized the concept of a “viewable impression.” To achieve a viewable impression, more than 50 percent of the pixels in an advertisement must occupy the viewable space of a browser page for greater than or equal to one continuous second after the advertising renders.

There are tranches set up that capture the bottom half of the internet, mostly patrolled by bots and other web crawlers. Then they merge these weak purchases with the strong purchases simultaneously and the buyer has been heavily (if not entirely) removed from the process. This is the exact type of framework that led to the 2008 crisis.

What is different about the present-day online advertising system [compared to older, non-programmatic advertising] is the extent to which it has enabled the bundling of a multitude of tiny moments of attention into discrete, liquid assets that can then be bought and sold frictionlessly in a global marketplace – (Tim Hwang, Subprime Attention Crisis, 2020)

Combine this with the fact that all of the consumer data available in the world, the very same data that is the input to these incredibly complex algorithms, is strikingly wrong a lot of the time. A recent PwC study found that “1/3 of supply chain costs in the programmatic ad space represented an ‘unknown delta,’ which could not be attributed to anything.” I don’t know anyone that likes the concept of 1/3 of a budget going into thin air, but I do know a lot of people that advertise on these platforms.

I had always thought ads could show up in strange places (and I noticed that they did on my programmatic “discovery” campaigns), but was assured that this was a glitch, or a minor issue. Scaled across an entire industry, it seems pretty clear how the feeling of the 2008 financial crisis looms closer and closer.

And just to add some canine teeth to this post, I’ll add links to 2 more interesting articles that cover this topic. The first one compares Ad Tech to the internet bubble of the early 2000’s. The second is a first-hand experience of Nandini Jammi trying to change what online advertising looks like.

Like I said at the start of the post, I use a small and highly concentrated set of keywords within Google AdWords, but not much else in terms of online programmatic purchases. I’ve found that using the free platforms those same companies offer (Google MyBusiness and Facebook Groups) harness the exact same financial results as when I pay for programmatic.

That doesn’t stop the Google Account Specialists from trying to get me to purchase display network programmatic, which I just don’t have the stomach for anymore. I hope the online digital buying platform is reworked within the decade, because there are much better ways to advertise than the current model. I think that has become overwhelmingly clear during covid-19.

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