I grew up in Dallas, TX. I’ve been a lifelong Dallas Cowboys fan. But since the Cowboys’ last Superbowl win on January 28, 1996, it’s been two and a half decades of anguish. The Cowboys had incredible talent, both offensively and defensively over the years; and some years they even lifted spirits and offered hope by actually getting into the playoffs. But “America’s Team” winning another Superbowl is no longer a dream, but an annual nightmare.
I’m not here to write about the Dallas football team, I’m here to talk about digital marketing and how the last two and a half decades have been just as nightmarish. Of course this doesn’t apply to the Silicon Valley venture capitalists who “made bank” and the billionaires created via successful “exits.” But just like football and other professional sports, what you see every day are only the success stories. They never show you the countless highschoolers and college athletes who got hurt, or were good, but not good enough, to transition into making a living from playing ball professionally.
The genius of Silicon Valley investors has been selling myth after myth for the last two decades by dissociating virtual reality from reality — so they could extract massive amounts of profit for themselves, using big numbers to back up the made-up hockey-stick charts. There aren’t countless websites that humans visit, countless mobile apps that humans use every day, and countless streaming TV channels that humans binge non-stop 24/7. See: “Sorry Silicon Valley, Humans Don’t Hyperscale” Silicon Valley investors and their creations, the ad tech companies, managed to make marketers believe that there were “at-scale” audiences everywhere online, they could target the right ad to the right person at the right time, all the time, and bigger numbers meant better marketing — as in more clicks, higher CTR (click through rates), more traffic to websites, etc.
Because of this “make believe,” the last two decades have ruined marketing, and actually brought harm to society in ways that we could not even have contemplated previously. Here’s how.
A Sad Trip Down Memory Lane
Superbowl XXX, the last time the Dallas Cowboys won, was in 1996, the same year that I left McKinsey and got into “digital” here in New York’s Silicon Alley. Back then, I still had to convince clients they needed a website. At the same time publishers started putting their offline content online and using the same business model — free content, supported by advertising. There were three parties – like a three-legged stool — publishers, advertisers, and human audiences. That was the original contract of the internet — humans got free content, in exchange for seeing ads.
Over the years, more and more tools made it easier and easier for anyone to get content online. Web 2.0 was the era of blogging platforms, that allowed more people to publish content without needing to know how to code HTML. Web 3.0 was the era of social networks where anyone could simply post photos and short amounts of text and share with lots of others. Along the way, the concept of “The Long Tail” was introduced by Silicon Valley personality Chris Anderson. It rightly touted the web as miraculous. It was miraculous because no physical record store could carry as many records, CDs, and cassettes as a virtual record store in cyberspace. Even individual songs that would never have been found in physical music stores, could be found and played by someone looking through the virtually limitless catalog of music online.
But that’s where the theory of the long tail started to diverge from the reality of the physical world and of human attention. Just because a song could now be found online does not mean that a massive number of people would find it and play it. Similarly, online grocer FreshDirect had a section on “International Veggies” that contained the likes of aloe vera leaf, yucca, lemongrass, diakon radish, chinese long beans, etc. Even though the specialty products were listed, and findable by people who would buy them, there was simply not enough purchases to justify continuing to offer most of those items. So despite the theory of the long tail, the reality is that niche products have few buyers and niche content have small audiences.
Human attention is the same way — there are finite numbers of humans, spending finite amounts of time consuming content and using connected devices. The divergence of digital advertising from reality further accelerated in 2013 when programmatic ad exchanges were used by more and more advertisers to chase consumers into the long tail — buy more ads, at lower cost, and show ads to users no matter what site they visited. This led to a surge in the number of fake sites and the amount of bot activity that inflated “ad inventory” Bots are software programs designed to load webpages, use mobile apps continuously, and binge ad supported streaming content. Bot activity created the illusion of large at-scale audiences visiting 350 million active websites. The years since 2013, when programmatic took off, have been the perfect storm for adtech, the 4th leg of a three-legged stool, extracting as much profit as possible for themselves at the expense of every other party.
Put Up Big Numbers But Still Lost
Digital marketing today is about large numbers and great looking stats. But do any of those large numbers translate into better marketing — i.e. winning? Like in years past, the Dallas football team put up big numbers and looked awesome in the stats, but still lost games and did not even make the playoffs. Most recently, quarterback Dak Prescott put up incredible numbers like 400 – 500 yards of offense in games they still ended up losing.
Marketers have for years incentivized their media buying agencies to buy more and more quantity of ad impressions — for the sake of more “reach and frequency.” But unlike in TV, where reaching more human audiences led to better outcomes, in digital there is limitless supply of ad impressions from virtually limitless fake websites. These sites had little to no human audiences, because humans wouldn’t even know about them. So their traffic is virtually all bot traffic. Buying ever larger quantities of these fake ads meant advertisers were exposed to more and more ad fraud (ads shown to bots and not to humans); the money was wasted and there was no uplift in business outcomes — i.e. put up big numbers but losing, every game, and every season.
Bigger numbers also applied to what advertisers thought was engagement – numbers of clicks and click through rates. Humans don’t like ads that much, often use ad blockers, and don’t click on ads that much (when was the last time you deliberately clicked an ad?). But bots’ job is to load as many ads as possible and click on some of them, to make it appear there was “engagement.” This would trick marketers into thinking people were engaging with their ads and allocate even more of their budget to the fake sites and programmatic channels. Note that fake sites using fake bot traffic always have higher click through rates than real sites with real human audiences. So bigger click numbers and click through rates are not necessarily better marketing — because the ads were not shown to humans, and bots were the ones clicking on the ads.
Great Talent on the Team, But System Failed
So why hasn’t the Dallas football team been more successful? They’ve had 25 years to figure it out. They’ve got great talent year after year, but they still couldn’t get it done. It’s because of the systemic failure of the system in Dallas. How do I know? Look at the two quarterback transitions — when Tony Romo took over as quarterback from Drew Bledsoe and when Dak Prescott took over from Tony Romo. In each of their first years, Romo and Prescott had breakout, record-breaking performances. That was before they settled into the “system” in Dallas. It’s a top-down monarchy from Jerry Jones on down; the result is the Cowboys’ football operations are stuck in the 90’s, calling one play at a time in to the quarterback. This is simply not good enough in today’s NFL. Despite the talent of Tony Romo and Dak Prescott, the system eliminated every advantage and opportunity they brought to the team. When Romo and Prescott played freely, like in their first seasons, they won games spectacularly. Even in 2-minute, no-huddle offenses, this is still evident — they were not bound by pre-set play calls, and found success. Conversely the underlying reason the Patriots under Tom Brady have found continuous success year after year, despite a changing cast of players is that they were not bound by set play calls and every player executed what was the best for the team.
I’m not a football analyst, but I am a digital marketer of 25 years and ad fraud investigator for the last eight. My observations over the last two-and-a-half decades yield similar conclusions for digital marketing. Why hasn’t ad fraud been solved and why is digital marketing so bad year after year, like the Dallas football team? It’s because of the systemic failure of the system. How do I know? Look at two public examples — when P&G cut $200 million in digital ad spending, and when Chase reduced programmatic reach from 400,000 sites showing their ads to 5,000 sites. In both cases, they saw no change in business outcomes. That means the digital ad spending did not lead to any discernible business outcomes. The “system” of make believe — that larger quantities of digital ads, more clicks, and more targeting parameters would yield better marketing — eliminated every advantage of digital. The pre-set “play calls” of big brand advertisers handing money to media agencies to buy more ads at lower prices are repeated year after year. This has locked everyone into the downward spiral of buying more and more fake ads, because only fake sites with fake traffic can continuously create more quantity of ads to sell and continuously lower prices. There aren’t enough humans on earth or enough hours in a day for those humans to do that, so the majority of the 500,000 billion ad impressions sold every year is not caused by humans, but by bots. When half-a-quadrillion ads are being shown annually, mostly to bots, marketing itself is broken. Marketers are used to seeing unrealistically massive quantities of ads and unrealistic click through rates. It’s hard to get back to reality because real numbers would look so small in comparison — literally 1/100th of what they are today.
Marketing has thus been ruined for an entire generation of marketers who have these unrealistic expectations of large numbers. Furthermore, as billions of dollars of digital ad spending flows to ad tech companies and cybercriminals, those profits in turn fund other criminal activities. Fake news sites are also making money hand over fist, while real news publishers have died and gone away. See: A Quarter of All U.S. Newspapers Have Died in the Last 15 Years. 1,800 Communities No Longer Have a Local News Outlet. This is causing real harm to society, in ways never before contemplated. It’s really hard for a human to tell what is fake news versus real news; after all, an article on a fake coronavirus cure has the same keywords as a real article. Reading the news, humans assume that journalists did proper research and editors did fact-checking before publication. But that assumption no longer holds true when anyone can get any content anywhere online, not to mention make money selling ads on the fake content. These fake news outlets distribute disinformation at-scale through social media, make money at-scale using programmatic ad networks, and thus continue to expand operations, causing further harm to society.
Whose Football Team Will You Be On In 2021?
The question is when will the Dallas Cowboys figure out that it’s the system that is broken? When will they let their talented players actually shine through and help them not only win games but get back to the Superbowl and win that too? It starts with putting aside ego and the status quo. That won’t happen until someone else buys the team from Jerry Jones. But in digital marketing, you can put aside ego and the status quo. Just because something has been done a certain way forever doesn’t mean it’s the right way to do it. Ask harder questions, challenge assumptions, especially your own. Does a larger number of ad impressions in digital yield better business outcomes? Do higher click through rates really mean greater engagement, if those clicks are coming from bots and not humans?
Challenge what you’ve been told as well. Even if the Association of National Advertisers tells you fraud is low and their programs are winning the war on fraud , look at your own analytics to see if that even makes sense. Run your own “turn off digital” experiments to see if there is any change to business activity. If not, why not? Even if your fraud vendor sends you excel spreadsheets that say IVT (invalid traffic) is less than 1% month after month, look more closely to see if they caught all the fraud, or were even looking for anything other than invalid traffic. As we draw to the close of a tough year, 2020, there is reason for optimism. Through periods of adversity and change, new opportunities present themselves. As a marketer, you have an unprecedented opportunity to challenge the status quo, make change, and lead with new thinking in 2021. Don’t let your talent be squelched by “the system” like Romo and Prescott in Dallas.