Digital marketing promised to “revolutionize” the way businesses reached consumers. It was supposed to deliver advertising directly to the subset of consumers most likely to buy a company’s products or services. This targeted advertising promised to grow profit margins for all those who deployed and drive those who didn’t out of business. This medium seemed compelling.
Your online searches are tracked on your desktop or mobile device, allowing advertisers to deliver focused messages based on products and services you have expressed an interest in. Are these messages effective? How many times have you intentionally clicked on a banner ad to digest the sales pitch? How often do you watch the entire video ad prior to a YouTube video you want to watch?
According to the Interactive Advertising Bureau, digital advertising reached a staggering $72.5 billion in 2016, with Google and Facebook capturing most of this profit at the expense of legacy print media companies. Buyers of digital marketing campaigns also rely on Google and Facebook to analyze the data and provide ROI metrics. However, purchasing digital advertising and relying on the same companies to provide ROI metrics can present conflicts. In late 2016, Facebook announced it had miscalculated metrics related to reaching the target audiences for its advertisers. For example, according to Publicis Media, Facebook overstated video advertising’s viewing time by as much as 60%-80%. Facebook admitted that it had used faulty metrics for video viewing time for 2 years. These unreliable metrics cost advertisers billions of dollars, as the companies made buying decisions based on these benchmarks. Facebook acknowledged the inaccuracies and promised to scrutinize its data more closely and use third-party auditors to measure the traffic it generates. However, online marketers are growing more skeptical about the benefits of digital marketing. According to a survey by Advertiser Perceptions, 50% of these marketers say they are reluctant to advertise on “risky” digital platforms, and two-thirds are re-evaluating Facebook as a feasible platform.
Earlier this year, several major advertisers expressed concern that their digital advertisements were appearing on “fake news” sites that carried messages contrary to their brands. One of these advertisers, JPMorgan Chase, conducted an experiment and decreased digital advertising from 400,000 sites to 5,000 sites. The New York Times wrote about the results in March of 2017. The headline of their story read, “A Bank Had Ads on 400,000 Sites. Then Just 5,000. Same Results.” Even newspapers shifted resources to the digital space when trying to obviate losses from declining readership and falling print advertisements. However, digital advertising revenue never came close to making up for the decline in print advertisements. And despite these failures, other businesses and industries are attempting this same shift to the digital frontier. The sales pitch is irresistible: digital advertising, unlike print, allows you to directly reach your target audience, with results measured by “click-through rates,” “impressions,” “viewing time,” and other arcane metrics. However, the reality is these metrics rarely provide concrete proof that these advertisements are effective.
Trends Journal, Spring 2017 pp.16-20
By Derek Osenenko, Executive Editor