Actually, it’s your fault: a contrarian’s view of today’s adtech challenges

It’s not a far stretch to suggest that the vast array of adtech problems we see written about every day are of our own making. In fact, for each major news theme, scandal, or challenge we’re facing in the industry today, we can point blame at those complaining about the issue the loudest. If you spent time in 2018 enjoying reading light-hearted listicles, let this serve as a pointed reminder that we can all do better in creating a healthy, vibrant, and thriving adtech ecosystem going into 2019.

Here are three areas to consider:

Rebates

Marketers complained for years. The ANA led a crusade against agencies taking rebates or making other undisclosed fees. Now, the FBI is raiding holding companies because of their media buying practices. Marketers wouldn’t be wrong to liken this holding company behavior to employee embezzlement.

How did we get here, and why did this really happen? Justification is one of the main reasons behind embezzlement. Employees feel underpaid or that their employer is dishonest or making too much money. There is an onus on employers to have a finger on the pulse of employee sentiment (especially those in finance!), just as there is an onus on brands to make sure their agency feels fairly compensated in their relationship.

Which is almost never. I firmly believe that if clients had compensated their agencies with meaningfully fairer fees, rebates and undisclosed fees wouldn’t have happened. This wasn’t just one bad actor. The whole industry felt it fair to do this.

When every employee thinks it’s OK to embezzle, maybe the marketer will do well to be introspective about how they got here. Marketers will still insist the rebates and hidden fees were wrong. They’re right but paying more would have been the much cheaper option. The only way to prevent it from happening again is for businesses that partner together to have honest conversations about what it takes for both to feel good about delivering and receiving value.

Ethics

Former adtech vendor Rocket Fuel achieved what appeared to be great performance by apparently co-mingling clients’ data that shouldn’t have been blended. If marketers had to say which is worse – rebates or co-mingling data – I think many would say co-mingling is actually a greater offense. So, why did this happen in the first place? And why did some marketers not fall for it at all?

When we go to a magic show, we’re delighted by disbelief. We make an active choice to suspend disbelief and to just enjoy the spectacle of it all. When Rocket Fuel showed up and said, “It just performs” and “It’s proprietary AI,” there were many who simply wanted to sit back and watch the show. Plus, many of its marketer clients did not – or could not – dive deeply into the data behind its ad network buys, which amounts to letting the student grade his own homework. All this, combined with poor attribution modeling, led to ad tech’s “greatest story ever told.”

Fraud

Ugly truth time. Avoiding large amounts of ad fraud just isn’t that hard. I’m not saying it’s easy to be fraud-free, as that’s nearly impossible. But getting fraud down to a reasonable enough level can be done by employing some smart buying decisions and technology. This doesn’t appear to be happening, though. After all, if buyers weren’t still buying in large amounts, the bad guys would go elsewhere to commit crimes.

Why is ad fraud still so prevalent?

Many reasons, but one of the most significant is the need to keep the spend flowing. It’s widely known that in many organizations, if marketers don’t spend their full budget, they lose it. They may even lose it for subsequent years. As a result, agencies are often pressured to deliver the full budget because — even if the majority of the spend is being wasted on bad targeting, fraud, or other inefficiencies — the next dollar spent will have some benefit.

When a media buyer is told to deliver $20,000 against left-handed skateboarders in Milwaukee during February, and the spend isn’t scaling, there’s only one sure way to make sure that budget spends: by spending in areas that otherwise wouldn’t be considered safe from fraud. And, because most marketers don’t measure with great sophistication, the buy looks like it performs, too. Because of this circular dynamic, marketers and agencies often find themselves not talking about how to solve fraud for the long term, but rather looking at each campaign individually. There is no reason why any marketer should lose a sizeable chunk of her budget to fraud in 2019.

Those that want transparent, brand-safe, quality digital can find it among many of today’s great agencies and service layer companies. But, be prepared to pay and evaluate your success on value and not price. It’s a shift in our way of thinking you can’t afford to ignore.

Jay Friedman is president of Goodway Group

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