Augustine Fou, PhD
According to eMarketer data, about 60% of total media ad spending in the U.S. is allocated to digital already. Within digital, nearly 90% of the display ads are bought and sold through programmatic channels. The display, video, and CTV (connected TV) ads in digital are equivalent to billboards, print ads, and TV ads in the offline world -- they are used to generate awareness. Most of the biggest spenders in digital -- CPG, telecom, financial services, automotive, consumer electronics, pharmaceutical, media and online services -- will say they are doing “brand building” with such ads, as opposed to “performance marketing” since they are not trying to drive online sales directly.
So let’s pressure test this together -- whether advertisers are actually doing brand building in digital and whether the brand building is actually working.
When big brands stopped spending in digital, nothing happened. Why?
Let’s start by looking at what’s not working in digital. There are a few publicly documented cases where the digital ad spending did not accomplish what it was intended to do -- drive more business outcomes and activity. For example, when P&G cut $200 million [1] from their digital ad spending they saw no change in business outcomes (they actually saw an 8% bump in sales in the same time period). Chase cut the number of programmatic websites [2] showing their ads from 400,000 to 5,000, a 99% decrease, and saw no change to business activity -- like new card applications and cards issued. When eBay turned off all paid search spending [3] in the western U.S. they saw no decrease in the number of website visits or the rate of ecommerce sales. Uber turned off 4/5 of their paid mobile app install spending [4], but the app installs kept happening.
The last case from Uber was most directly related to fraud -- where the mobile exchanges were claiming credit for app installs that had already happened, falsifying reports to hide the fact that ads ran on porn sites; and in some cases fabricating transparency reports to make it appear that ads ran, when no ads were ever placed. In essence the advertiser paid millions for excel spreadsheets that purported to show how many ad impressions they bought, how many clicks they got, and how many app installs -- when none of that actually happened.
Digital offers big numbers and small prices. But how?
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