The advertising industry has been living a lie

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Advertisers have fallen in love with the fantasy of buying ads aimed at exactly the right people on the web's "long tail."
But that's not really how people consumer media. Most people don't spend time on thousands of websites.
Moreover, the kinds of sites that are actually available via ad exchanges are far from ideal for most big marketers. Yet most brands seem stunned when they end up getting ripped off by fraudsters.
"There is no basic internet knowledge among people funding the internet," said Shailin Dhar, founder of Method Media Intelligence.

Did you catch that bombshell story posted by BuzzFeed the other day about the super sophisticated online advertising fraud operation?

I noticed right away that it was remarkably similar to a piece I'd written for Adweek in 2013.

It's not that BuzzFeed plagiarized anything. In fact, their reporting was terrific. It's just that the scam allegedly pulled off in this case – creating a bunch of fake websites, selling lots of ads on them via programmatic channels, and then using bots to simulate human visitors – was almost identical to the one I described in my 2013 story.

Which begs the question – why is this still happening? Aren't big marketers screaming about the need for transparency, and shining a light on the murky ad tech supply chain?

Hasn't Procter and Gamble chief digital office Marc Pritchard been on a crusade, exhorting advertisers to take better control over where their digital ads are running? Considering that some P&G ads were found to be running on fake sites in BuzzFeed's story, it seems like nothing much has changed.

For some reason, advertisers can't quit the long tail.

Let me explain.

Blame Chris Anderson

Digital advertising has many, many problems. You can blame ad tech. You can blame agencies. Or the Russians. Or maybe AI. But it's really all Chris Anderson's fault.

Anderson of course is the author of the seminal 2004 Wired article-turned-book "The Long Tail," which among many themes celebrated a web driven utopian time when every single niche interest would be well served, on a gazillion different websites.

Almost immediately, the ad industry co-opted the long tail concept, and saw it as a way to target people with super relevant ads all over the web, super cheaply. Right around that time, the concept of audience-based buying took hold. Using digital data (mostly cookies back then), you could target people with ads, wherever they went on the web, regardless of content environment or content.

You no longer had to pay high prices to reach car-shoppers on car magazine websites. You could buy 'auto intenders' (people looking to buy cars soon) wherever they were online. For way less cash.

Soon, ad agencies opened up 'trading desks' to buy ads this way. And programmatic advertising ushered in all sorts of ways to buy ads on thousands of sites at once using software. Advertising would become like Wall Street.

Except it never made sense.

People (marketers and agencies) who buy into the long tail concept just aren't honest with themselves about how they use the internet. There are numerous pieces of research on how even as people accumulate hundreds of TV channels, they only watch seven. It's rather commonly accepted that in a sea of millions of mobile apps, most people stick to half a dozen.

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Yet somehow the vision of the 'world wide web' is that we're all nurturing our souls on cupcake blogs and hobby sites and kitesurfing communities. Rather than just checking out Aunt Sally's Facebook posts and then reading something on Daily Mail.

Let's be real

To be sure, there's no doubt that there are niche publishers with passionate followings, like sites for hardcore sneaker lovers. And of course, it's remarkably easy to end up down weird internet ratholes in search of the name of the guy who played Skippy on "Family Ties," or trying to determine what happened to that person you dated 10 years ago.

And certainly, we all spend some time on some weird dark corners of the web. You like whatever you like, I like what I like, and we'd don't need to spend a lot of time talking about it.

The common thread with all of these internet use cases is, they're probably not the right moment for you to hear about some fun new recipes from Kraft, or how great you'd look in a 2018 Suburu. Yet marketers are sold on right audience, right time, environment be damned.

Regardless, this isn't the kind of site you find selling ads through various programmatic channels. Have you checked out what sites are on ad exchanges lately? Mostly, they're just random at best, or obfuscated at worst.

Check out this recent exchange run. Sure, lots of Yahoo and Tumblr ad space for sale, along with aerserv.com and slader.com (?). There's nothing wrong with those sites, other than they are just there.

There's also ad inventory (nearly 250 million impressions a day!) available on Google's ad exchange for Apple.com, which doesn't actually sell advertising. It's likely that this represents apps that run on iPhones, and not someone pretending to sell ads on Apple.com. But it's not clear.

And there's ads for sale on OpenX's exchange for Facebook.com, which doesn't typically sell ads on outside exchanges.

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And there's tons and tons of "uncategorized inventory" or "Site Bundle."

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In other words, tons of ads to buy on sites you don't know anything about. Not exactly living up to Anderson's dream.

"Long Tail business can treat consumers as individuals, offering mass customization as an alternative to mass-market fare," wrote Anderson in the Long Tail piece.

To be fair, he was mostly talking about retailers selling niche items on the web, not banners ads.

'There is no basic internet knowledge among people funding the internet'

"You have brands complaining about the lack of transparency in digital ads, yet rarely do brands look at domain reports," Shailin Dhar, founder of Method Media Intelligence, which consults marketers on ad tech. "Those reports that list their sites haven't even been pulled. So rarely do advertisers look at where they are spending to begin with."

"What we have found over the last six months or so is there is no basic internet knowledge among people funding the internet. Marketing people are lazy, agencies are lazy and platforms are scared. It's madness."

Marketers are sure acting like they are on top of things, at least publicly. Recently, Chase was given tons of industry kudos for reducing the number of sites it was running ads on from 400,000 to 5,000 without hurting its business results, as reported by the New York Times.

The aforementioned P&G made a similar boast about cutting back on digital spend and how it didn't hurt the bottom line.

My questions are as follows:

What made you think advertising on a few hundred thousand sites many any sense it the first place? So many big brands bought into this long tail fantasy they seemed to ditch logic along the way. And now they seem to be pointing the blame at everybody but themselves. It's your money guys.
Speaking of money being questionably spent, what about all these anti-fraud companies that brands and digital media companies employ to protect themselves against this kind of shenanigans. They all seem to publish dire forecasts about how many billions are lost to fraud. How much is being wasted on fraud protection that doesn't do the job?
Why does every single publisher or ad tech company boast of working with three or four anti-fraud vendors at once? Have you ever met someone who says, "Yes, I've hired four alarm companies to protect my house." One usually cuts it. Is it that fraud protection tools aren't that good at fraud protection?

Either way, the long tail seems mostly a tall tale.

And you wonder why some advertisers keep spending money on TV ads.

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