It’s time to undo online advertising’s ‘terrible knot’

Video interview: Rupert Staines

The promise of online advertising has always been its innate measureability – but we are still measuring many of the wrong things, the EMEA managing director of RadiumOne said this week.

But undo this “terrible knot” and the result could lead to a vastly improved online ad market – with reduced fraud and lower ad-blocking levels.

Speaking at the 2017 Automated Trading Debate on Wednesday (11 October), Rupert Staines said clients need to wake up and finally decide on a “sensible standard metric”, and move away from ‘clicks’ as an indicator of performance.

“If you can generate a click, you can generate cash,” Staines said. But that’s not likely to be cash for the advertiser.

The reality is just 0.3% of people online actually click on ads. There are plenty of clicks coming from non-humans, however – because by setting clicks as a key measure of performance advertisers are inviting fraudsters to click on them for a quick and easy buck.

“The problem with clicks is that it drives fraud,” said Paul Wright, CEO of iotec. “If you use machine learning or AI in this space and start sending machines to chase a click, it will find, naturally, places that have a very high click-rate, which are generally Chinese click farms.

“We talk to clients about this all the bloody time; that if you want to change your metrics and go to clicks, you are risking just chasing after fraud.”

Paul Wright

Staines added that it is “barely comprehensible” that businesses such as Criteo, which is worth around $3 billion, have models based entirely on clicks alone.

Additionally, measuring clicks also means pushing for a higher frequency of ads to meet any reasonable target, Staines said, and so the online space becomes saturated – and this is why so many people use adblockers.

“We have way too many ads and that is a measurement problem, not because we want to put a gazillion ads out there. Because you’re only going to pay on a click…it’s as simple as that.”

There is a way to undo the mess, however, and Staines cited TV as an example of a measurement model that works because everyone agrees on a common currency – even if it’s not able to measure everything.

“5,000 people with a set-top box [on the BARB panel] and lots of statistics to tell you this many people watched Eastenders – that’s fine; that’s the gold standard, and it might not go as far but that’s OK because everyone accepts it,” Staines said.

“But then you need to apply the same rule-set to digital – and right now the murky nature of CPR, CPC, CPM, CPT, CPV, CP-whatever it is, is ridiculous and it’s just an opportunity for clients and their agencies to hold up a stick and bash you with it when you don’t quite hit that one KPI.”