Digital Transformation Is Good. ‘YABBA’ Is Not


In a recent conversation with a CMO, it was clear that she was very proud of the digital transformation she led for her company over the course of the last three years. She had shifted a large portion of her advertising budgets from “offline” (print, direct mail, TV, etc.) to “digital.” But in reading about “all that digital ad fraud” she became concerned that the digital transformation was not a good thing. I reassured her that transforming her marketing organization into “digital first” and spending ad budgets in digital is a good thing. After all, digital marketing is the most measurable channel, with detailed data and analytics to use to optimize campaigns for business outcomes. But there’s good digital marketing and there’s bad digital marketing. And most of the digital marketing being done through programmatic channels today is the bad kind.

“Programmatic” (the buying and selling of trillions of ads automagically with algorithms) is new to both marketers and agencies. The largest marketers, with hundreds of millions of dollars to spend in digital, usually give those dollars to a large hold-co media agency to spend for them. This is the absolute worst way to do digital marketing. Programmatic ad tech is also new to the hard working folks at the agencies that manage clients’ programmatic campaigns, especially the most junior ones doing the day to day grunt work. The vast majority of them are “flying the plane while reading the manual on how to build a plane.” Literally. There’s nothing malicious about that; it’s just the fact of the matter. They are “learning on the fly” (pun intended) — asking questions on reddit/adops on how to set up campaigns, place measurement tags, what things mean the campaign dashboards, etc. 

Marketers should not assume that the media agencies tasked with spending millions of their money know digital marketing any better than the marketer could do themselves. Does that mean you have to do everything yourself and hire a lot of headcount? No. But it does mean that you the marketer need to keep a closer eye on the digital marketing that is being done for you. You need to have constant monitoring, detailed analytics, and a sharp focus on business outcomes. For example, a company that handles class action settlement claims has gone through a digital transformation of their own over the last five years. They did not increase any headcount; instead, they upskilled existing marketing personnel. As they learned each part of programmatic, they took that in-house, reducing their reliance on an external media agency and also reducing overall costs (the portion that accrued to the agency as profit).

This marketer now does their own buying through a DSP — i.e. they set up their own campaigns and let them run, very similar to the self-serve interface of Google Ads. They also do their own fraud detection and mitigation. They do not use any fraud detection vendors that are black box and just give them an IVT percentage. That’s useless because they could not see where the fraud is coming from. But with detailed media analytics constantly monitoring their campaigns, they can see where their ads went, and which domains and apps were cheaters (fraudulently eating up their impressions). They can then mitigate the fraud themselves by adding those domains and apps to blocklists. And finally, they focus on outcomes — did users who arrive on the settlement claim sites actually complete the claim form? Since bots cannot earn any money filling out the claim forms, there’s virtually no bot activity on them. Note, however, that in other cases, if the advertiser pays for completed claims, bots will do that exact thing to get paid. (See: Bots Will Do the Exact Thing You Pay For)

So What?

Digital transformation is good. But more marketers need to get more savvy about the digital marketing themselves, especially programmatic, and not just assume that their media agencies are doing a good job for them or that fancy algorithms are optimizing their campaigns properly. If you realize that 1) the vast “scale” of programmatic consists of ads shown to bots instead of to humans, 2) the “cost efficiency” of programmatic ads comes from fake sites that can afford to sell ads at very low prices, and 3) the “performance” of programmatic comes from false bot clicks on your ads, you have taken the first step towards “digital maturity.” As another VP of Marketing likes to put it, “digital marketing is a young adult now, a 25 year-old.” But the days of frat parties and sorority hazings are over. “Time to get some digital maturity.”

If you’re still at the digital marketing frat party yelling “YABBA, DABBA, doooo!” — i.e. letting (Y)et (A)nother (B)lack (B)ox (A)lgorithm, (D)o (A)dvertising (B)y (B)uying (A)ds for you — you should turn that “doooo!” into a “don’t.” I tell marketers “YABBA, DABBA, don’t” — don’t let algorithms spend and waste millions of dollars of your money in programmatic channels. But do take steps towards digital maturity, now that you are already “digitally transformed.” 

MORE FROM FORBESThe Hidden Arbitrage, Waste And Fraud That Plague Programmatic Supply Chain



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