Fool’s gold: How Forbesgate highlights the clear need for disruption in the world of Advertising 3.0

Nick Manning: How Forbesgate highlights the clear need for disruption in the world of Advertising 3.0

Amid continued exposés of fraud in the open web and beyond, advertisers — as usual — have to sort things out for themselves. But first, they need to recognise their own need for change.

There can’t be many industries where the people who provide all the funding are chronically unable to know what they are buying but pay vast sums of money for it anyway; where sometimes they are literally paying for nothing but can’t tell.

Nor can there be many business sectors where those same people paying for everything are unable to rely on the partners they appointed to do the buying for them to look after their interests as they said they would. Quite the opposite, in fact.

Media time and space is ephemeral, intangible, hard to track, often imperceptible and mostly unregulated these days. And yet advertisers have to pay for it anyway, plus the increasingly inflated but often redundant costs of trying to make it more accountable.

Media inventory is now in almost unlimited supply, and more of it than ever is worth nothing. The people and systems which are supposed to be responsible for controlling it have failed to do so, partly through negligence but certainly by passive design given the money being made by a system based on automated volumes that are often uncontrolled.

Advertisers are suffering massive budget erosion from transactional costs that don’t add value and from an absence of effective ad exposure that is barely measured at all; and the part that is monitored is done so imperfectly. As a result, advertising effectiveness is heading south and public dissatisfaction with advertising bombardment continues to grow. 

Such is the ‘Digital Age’, where billions of dollars are wasted in chasing audiences pointlessly while infringing people’s privacy and bombarding them with ads that annoy and alienate. 

Excessive amount of available ad inventory

But now we are entering the world of ‘Advertising 3.0’, following the ‘Analogue Age’ and the ‘Digital Age’. Atomisation of audiences through digitisation is all but complete and the advertising market has become a much bigger cake with many thousands of different slices, all of different size and flavour. 

We are entering an era where privacy, first-party data and artificial intelligence will define winners and losers and where attention will hopefully become a standard metric rather than a PowerPoint chart. But also one where the pitfalls of the ‘Digital Age’ could get deeper. 

The age of ‘Advertising 3.0’ sees new business models emerging while others creak at the seams. 

Media owners have started selling off-screen (TikTok Shop, ‘shoppable’ TV) and retailers have become media owners (Walmart, Boots, Tesco), greatly increasing advertising supply.  

We can add in the other sectors with vast amounts of first-party data such as car-sharing operators (Uber), financial services (Chase) and no doubt others to come who see higher margins in being a media vendor than in their core business. 

More slices to the cake.

Meanwhile Amazon has become the world’s largest department store and charges for virtually every aspect of its ‘digital shelf’, with advertising onsite and now an ad-supported TV station to help it scale even further with a closed-loop attribution model.

Forbes’ seven-year MFA scheme shows how deep the rot runs in online advertising

The ‘flywheel’ effect is hard to beat as a business model and it can and does replace the traditional brand/performance model of prior times. 

However, despite the conflicted predictions of some, all of these newer advertising candidates are not substituting older ones; we still have print media, for example, and TV is morphing into a new and more potent version of itself as it converges; parallel linear and digital feeds and the standalone ad-supported streamers bring further opportunity and complexity to the party.

So nothing much has gone away and lots of new slices have been added while compressing others. 

In short, ‘Advertising 3.0’ is a world where there is an excessive amount of available ad inventory. Sure, hybrid media funding models exist (online print subscriptions, Netflix) but advertising is the primary monetary mechanism for today’s hyper-inflated media industry. 

But it’s chaos out there as the clamour for those elusive and spare ad dollars grows and the supposed guardians of advertisers’ interests fail to do their job.

Forbesgate: either no one noticed or no one cared

Last week’s revelations from Adalytics regarding the domain-spoofing by Forbes are shocking but merely the latest example. For the uninitiated, Forbes has been running a parallel site (www3.Forbes.com) that effectively posed as the real deal but instead had all the hallmarks of a Made-For-Advertising (MFA) website with traffic largely sourced (surprise, surprise) by the ‘chumbox’ kings, Outbrain and Taboola. 

Some of the world’s biggest advertisers thought they were buying Forbes’ valuable audience at frothy CPMs but instead have been buying on the spoof site for up to seven years among hundreds of automated ads not present on the main Forbes domain.

Either no one noticed or cared.

Where were the media agencies, DSPs, SSPs, content verification providers and media auditors who are supposed to prevent this kind of thing and who get paid handsomely by advertisers to do precisely that? 

And if this is happening on Forbes, where else might it be occurring, deliberately or otherwise? 

In the Open Web advertisers pay up to 40 percent or more of their budgets (including all fees and transaction costs) to their partners to make their advertising worth more than their initial investment, not 36%-ish (on a good day). Your partners are supposed to increase your value, not reduce it. 

Only in the advertising industry would such returns be not only tolerated but considered normal, such has been the collective shrug of the shoulders from the people responsible for the vast loss of value and effectiveness. 

And that’s just the Open Web. Now we have adtech players galore piling into Connected TV, Retail Media and Digital Commerce, all fed by the same advertiser dollar, again. We’re already seeing rampant fraud in CTV, so why should we expect the adtech industry to do a better job in these emerging channels? 

Row over MFA label for publishers hits boiling point

Where does the buck stop?

This is far from the first time these issues have been raised, but after countless industry studies from the WFA, ANA and ISBA, the hugely revealing multiple exposés by Adalytics and plenty of client-level examples, do we really expect anything much to change? 

No doubt there will be the usual short-term pearl-clutching by the usual suspects, but the waters will soon close over and it will be business as usual. There are many mouths to feed and stock prices to maintain, irrespective of market reality.  

The noble rearguard initiatives in, say, cross-medium measurement to impose order among this chaos will provide some sticking plaster relief but the vast profits and proliferation of channels steamroll industry consensus. 

So nothing is interrupting the lucrative money-chain that siphons advertising budgets with little or no responsibility for exposure let alone effectiveness. 

Can we expect the Media Agency groups to rediscover their former role as impartial navigators through the media labyrinth, guiding their clients to the best possible solutions, leading to the most effective execution without conflicts of interest while charging and being paid transparently? 

Can we expect the adtech community to warrant its increasing costs to provide highly personalised, relevant and curated audiences something, something, something? 

Can we expect the content verification providers to ask themselves how and why situations like Forbes happen on their watch? 

Will the publishers voluntarily offer to clean up Dodge at a time when the likes of Forbes are resorting to underhand tactics to compensate for revenue lost to Meta, TikTok, Google and company?

Do we expect the latter monoliths to want to derail the gravy train, ever, in the interests of a better ad industry? 

And can we expect the media auditors to shake off their increasingly irrelevant legacy models and provide the kind of support advertisers need in the age of ‘Advertising 3.0’? 

Advertisers need to sort it out for themselves

You may have guessed that the answer is ‘no’ to all of these questions, although even that word barely does justice to the nothingness that will happen despite all the years of evidence that change is vital. 

Advertisers, as usual, have to seize the initiative and sort this out for themselves. First, though, they need to recognise their own need for change. 

Two recent research reports from the WFA (with MediaSense and Flock) contain ample evidence of this. The first (October 2023) showed that only 11% of advertisers studied thought their media agencies are aligned for the future; and the new WFA report on Procurement last week showed that their sourcing processes and metrics are unsurprisingly out of kilter with today’s market. Cost grids, anyone? 

A good place for advertisers to start is to recognise that cost is not a primary factor in an industry where paying for nothing is normal and the concept of ‘savings’ and even ‘value’ is elastic, not to mention increasingly irrelevant. They will need help getting there because the media market is a jungle that needs guides. 

Manning: Of course digital is vital for brand-building (but maybe online ads aren’t)

So who will help advertisers hack their way through the ‘Advertising 3.0’ undergrowth? 

In the absence of any real help from the existing oligopolies, there is a desperate need for a new form of independent super-advisor who can use advanced data-aggregation and analytics (AI, of course) to make sense of this chaotic, over-supplied world where every day brings a new cargo of data fresh from the front line.  

Measuring impact and effectiveness (okay, ‘outcomes’ if you prefer) will become the only metric that really matters in a world where standard agreed measurements no longer apply and data comes in ill-fitting bits as well as bytes.

Such an ‘Advertising 3.0’ analytics and advisory service needs to embrace the full range of channels, new and old, and it needs to be entirely accurate, objective and paid for without reliance on volumes (no CPMs need apply, thanks) and media trading biases. You know, the sort of thing media agencies should be doing but aren’t. And maybe the media auditors, too. 

Accountability will be a given, as will full transparency. You can’t have one without the other. It is hard enough as it is to make the jigsaw pieces fit.

Supply, meet demand

Naïve? Idealistic? Realistic? Well, you wouldn’t normally start from here but there will emerge a new generation of hugely capable specialists to fill this market void (maybe an ‘Adalytics +’), led by data scientists with a commercial leaning and the ability to advise, not just analyse. 

We know that one factor that arises from ‘Advertising 3.0’ is a new focus on business results measurement, replacing the proxy measures of yesteryear. The new service provider will require a new generation of people who can analyse and advise with confidence in the data and their judgement and experience. 

Who knows, they may even supplant the media agencies in the planning process, instructing the legacy players on execution. It would certainly speed up the in-housing of automated buying. 

‘Forbesgate’ may only be the latest milestone on this journey and it should not overshadow the true, big nature of ‘Advertising 3.0’ and the much longer journey it entails. 

But let’s hope it helps stimulate a new way of thinking that isn’t likely to arise from the usual suspects and leads to a new generation of business-leaders who want to do the right thing and do things right. 

Nick Manning is the co-founder of Manning Gottlieb Media (now MG OMD) and was chief strategy officer at Ebiquity for over a decade. He now owns a mentoring business, Encyclomedia, offering strategic advice to companies in the media and advertising industry, and is non-executive chair of Media Marketing Compliance. He writes for The Media Leader each month.

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