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Digital advertising is a $200 billion a year bandwagon – and a murky one, too. The term “jumping on the bandwagon” refers to following a crowd or trend, particularly one that seems assured of success. The digital ad stampede is lately being challenged by a few skeptics who are insisting on accountability and transparency. They see the entire digital ad industry not only as impenetrably complex, but also as characterized by massive fraud.

Where does the money go?

Experts agree there are more than a billion websites. This staggering number puts us in mind of The Sorcerer’s Apprentice from Disney’s original Fantasia.

How is digital ad performance measured?

Digital ad sellers don’t like this question, because most ad effectiveness metrics are produced by the very same people who sell us the ads. Trust us, they say, sounding very much like the fox guarding the henhouse. Their self-interest is fraught with opportunity to deliberately mislead unwitting customers.

  • Ad Fraud is an obvious problem. Untold digital ad dollars are siphoned off by deceivers. No one knows how many, but some estimate that fake sites, fake impressions, and fake clicks easily add up to tens of billions of wasted ad dollars. If you’re a digital Willie Sutton, you go where the money is.
  • Ad Bungling is more subtle and rarely mentioned. The complexity of digital ad mechanisms takes advantage of the naïveté of marketers. Layers of subcontractors lard budgets with overhead and profit-taking. The Black Hole is enormous and impenetrable.

Can you give us some examples?

Ask JPMorgan Chase. They were running ads on 400,000 websites a month. After careful consideration, they dropped 395,000 of them. The industry reaction was to warn them that eliminating 97% of sites would be catastrophic. JPMC says there has been no change in results.

Ask Facebook, who has been regularly forced to disclose measurement mistakes.

Their latest? They have been telling advertisers they reach 101 million 18-34 year olds in the US. Asked how that can be, when the US Census says there are only 76 million 18-34 year olds, Facebook’s  disingenuous reply was that their numbers are not designed to match census figures. I guess not. Brian Weiser of Pivotal Research says this puts every metric Facebook  provides into question. In a NYT interview, Linda Yaccarino of NBC Universal said if her kid distorted the facts like this on her college thesis, she’d be expelled.

What to do?

Impressions and clicks are convenient but inaccurate surrogates for sales. The hard stuff – effectively linking digital statistics to sales performance – appears to be out of reach of nearly everyone but a few early-mover companies who are challenging their digital ad assumptions. These contrarians are figuring out what really works, where, when and why.

Most of the herd will wait until this nascent trend becomes a bandwagon.

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