In a shell game, three walnut shells are moved about swiftly and onlookers bet on which one the pea is under when they come to rest. It’s not actually a game at all – it’s a swindle con artists control through sleight of hand and illusion to fleece the mark (the intended victim). The shell game has been around in one form or another since ancient Greece. Over time, the term came to mean any method of deception that obscures the truth.
Successful magicians and hucksters rely on a combination of talents and tools.
One talent they all have is what traveling salesmen once called a snappy line of patter. They are smooth-talkers with a constant stream of soothing words and phrases. The magician’s other essential talents are the ability to distract, misdirect, and manipulate (after showing us they have nothing up their sleeves). Like magicians, con artists have the ability to persuade people to believe things that are not true. Unlike magicians, the results are harmful. The current record-holder is Bernie-Made-Off-with-Billions.
Magicians use ingenious devices with mysterious inner workings, like the one used to “saw a woman in half.”
Con men use ingenious devices with mysterious inner workings, too. One famous example is the Money Box, a device con men said was able to (illegally) print paper currency. The con artist was the notorious Victor Lustig, a man with an incredible line of bullshit (he sold the Eiffel Tower – twice). He put a $1,000 bill in a slot at the top, turned a crank, and out came a new $1,000 bill (that had been hidden inside a secret compartment). All the while Lustig smooth-talked eager buyers into believing his magical device with its secret process was their ticket to making millions.
The reason inner workings of complicated electronic devices are hidden is a great one: when you control the input and the output, you control the entire enterprise.
Vendors can’t or won’t explain how online ad buying systems work, yet still persuade others to have faith in their black boxes. The antithesis of black boxes is the scientific method’s transparent box, where every stage of every process is out in the open for anyone to look at and challenge. Whatever you’re spending on online advertising, you should take a look behind the curtain, Toto, because it’s an entire industry of black boxes talking to other black boxes.
Automated ad-buying systems give no explanation of how they work.
They only make unsubstantiated claims about all the money that is to be made by using them. The lack of transparency is deliberate, locking secret formulas inside impenetrable black boxes. Machines buy from other machines in ways people paying the bills don’t understand. PWC says with typical understatement that “This supply chain complexity seems unlikely to be consistently in the best interests of market participants.” Afraid to be left behind, advertisers pay to keep up with the Joneses without knowing how to determine the effectiveness and efficiency of what they’re paying for.
The complexity of digital ad “solutions” takes advantage of the naïveté of marketers.
People who sell online ad services are not magicians or con men, but they are most surely illusionists who deliberately deceive by giving the appearance of truth. The more people that think they can beat the system, the better the situation for con artists. Where do gamblers think the money comes to build lavish hotels, comp the rooms, serve free drinks, and pay all those employees? Sinan Aral, author of The Hype Machine, says it’s a common practice for agencies and platforms to inflate the value of online messaging, calling it “the most widely used shell game in business today.” Wired recently said micro-targeted ads don’t work. “The people in charge of corporate marketing budgets have no idea where their ads are actually running because they have outsourced ad placement to vendors of automated technology. And, like the credit-default swaps and derivatives of an earlier era, that inscrutable, dizzyingly complex digital machinery rarely works as promised. Instead, it spends an unaccountably huge chunk of the world’s ad budgets on a whole galaxy of junk websites and apps built to harvest fake clicks.” Tim Hwang, author of Subprime Attention Crisis, says digital advertising doesn’t work because it’s all built on a fictional foundation that is a bubble likely to burst, just like the housing crisis of 2008. Studies show targeted ads perform worse than randomly guessing, which suggests that once buyers figure out how much money they’re wasting, there will be a crashing down of the house of cards.
Extensive and complex systems are used to direct targeted advertising to what are claimed to be very specific target audiences.
Collectively, this is called ad tech. The Financial Times says a third of all ad tech spending is untraceable. The HuffPost says half of all the money spent on advertising is wasted on third parties who have inserted themselves into the ecosystem. Contractors and subcontractors lard budgets with overhead and profit-taking. The Black Hole is enormous and impenetrable, sucking the cream of companies’ online ad budgets off the top. Some of the middlemen are advertising agencies. Is yours one of those that buys ad inventory at wholesale, sells it to you at retail, and pockets a healthy profit?
Critics said the impenetrably complex digital ad industry is characterized by massive fraud.
Hwang says half of what makes it online goes to fraud, siphoned off by deceivers. Some estimates say that fake sites, fake impressions, and fake clicks easily add up to tens of billions of wasted ad dollars. Common frauds include the use of techniques like ad stacking, tab-unders, and pixel stuffing. I only recently learned that pixel stuffing reduces your entire ad to one pixel, delivers it to screens, and claims your customers saw it.
What’s being done about fraud?
Not much. Ad effectiveness metrics lack transparency and accountability. Billions of bots get counted as people (when they’re not) and billions of clicks get counted as views and impressions (when they’re not). The industry has no police force or watchdog agency, so they regulate themselves in ways friendly to themselves (wink, wink, nudge, nudge). They set up associations and councils that are supposed to establish and enforce rigorous standards, but don’t do either one. Definitions of who “sees” your ads are as loose and lax as possible, rendering the rusty old metric of cost per thousand (CPM) obsolete.
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. Digital ad sellers feast on all the ways they can mislead unwitting customers. Trust us, they say, sounding very much like the fox guarding the henhouse.
Even if you are fantastically lucky and half your ads get sent to the proper targets, they don’t all get seen.
Tens of millions of online customers run ad blockers so your ads never get to them. And even when some of your ads do trickle through, getting there doesn’t mean they’re seen, and being seen doesn’t mean they were read or watched or believed or relevant. The only online metric you can trust is sales, because you can calculate it yourself without a black box or a secret process. What is your cost-per-sale?
$300 billion was spent on digital advertising last year.
Everything I’ve been reading says most of it was raked off, wasted, or stolen. Spending online ad dollars is like playing against marked cards and loaded dice – the more ignorant we are, the easier we are to con. As Hall of Fame poker player Amarillo Slim says, “If you don’t know who the fool at the table is, it’s you.”
Why not re-allocate a small amount of what you spend on poorly-performing online ads to an investigative team that puts a tourniquet on your digital ad spending? You have little to lose and a lot to gain.
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