August 17, 2016

Will The P&G Story Bring Down Ad Tech? Please?

The recent announcement by P&G that it is discontinuing "precision targeted" advertising on Facebook because it isn't working calls into question the entire strategy behind much online display advertising.

Online display advertising has been sold to us as superior to traditional advertising because it presumes that reaching the perfect individual is more economically advantageous than reaching a broad demographic type.

For the most part, offline advertising is sold on demographics while display advertising is sold on data-driven targeting.

While P&G's experience should not be taken as conclusive proof of anything, it suggests that for big brands the demographics model is more economically efficient than the data-driven model.

Their experience with Fabreze air freshener was cited by The Wall Street Journal as an example of how highly targeted advertising failed.

For Fabreze, P&G targeted people with pets and people with large families. The presumption was that these people would have a significantly higher likelihood to purchase an air freshener than the public at large. Sales stagnated.

Then P&G targeted all adults over 18 -- a very broad swath. And sales picked up.

Presumably P&G had the good sense to use the same creative so they knew what variable they were testing.

If P&G's experience turns out to be projectible -- and it has been reported that other marketers are having similar experiences -- the whole model of online advertising, based on data-driven "precision targeting" and tracking -- and enabled by ad tech -- needs to go right down the toilet. It's a sham.

What a wonderful thing it would be if this turns out to be true.

Imagine an internet without ad tech...
  • where the current obnoxious practices are acknowledged to be wasteful and counterproductive
  • where you are not being stalked 
  • where you are not being inundated with ads for stuff you bought 3 months ago 
  • where you are not slowed down waiting for someone's crappy ad to load
  • where your data plan money is not being wasted loading some company's ads 
  • where people are not opening files on you every time you take an action 
  • where ads are bought directly from publishers and not run through the black box of unnecessary, creepy networks and middlemen inhaling half your ad budget.
Is this really possible? Can this really happen?

In a rational world? Yes.

In the contemporary world of advertising? Not a fucking chance.

August 15, 2016

P&G Gets It Half Right

Procter & Gamble, the world's largest advertising spender, made big waves last week when they announced that they were taking a shit-load of money out of "precision targeted" Facebook advertising. Their cmo said...
'We targeted too much, and we went too narrow'
P&G is discovering too late what a growing number of big-time advertisers have found out -- the headlong rush into "precision targeted" display advertising has been a mess.

The age-old strategy of data-based direct marketers (which is essentially what "precision targeted" online advertising is) is proving to be a failure for brand marketers.

By 2013, P&G had moved over 1/3 of its ad dollars online.

In 2014, P&G cut ad spending by 14%.  Why were they cutting ad spending? The usual delusional horseshit about online advertising:
“...effectiveness and the consumer impact of our advertising spending will be well ahead of the prior year, optimized media mix with more digital, mobile, search and social presence..." said their cfo.
And what has been the result of all this optimized media brilliance? In the past 12 months, P&G's sales results have been a disaster, with an alarming sales drop of 8%. And when you're P&G, 8% equals 6 billion dollars.

As regular readers know, I have been warning advertisers about the bullshit they have been sold about "precision targeting" for years.

But let's be careful before we blame targeting for all the problems of display advertising.

It goes deeper than that. It's not just the targeting that's the problem for big marketers. It's the nature of the beast.

Online display advertising has evolved into electronic junk mail. If you're a direct marketer, or if you're running a short-term promotion, maybe display can be effective. But if you're a brand marketer, it's a sinkhole. Ask P&G.

P&G is not moving money out of Facebook, it is just re-arranging its Facebook investment to buy reach instead of "precision targeting."

But buying more reach is not the same as getting more impact. And from the corner office here at The Ad Contrarian Worldwide Headquarters, it still looks to us like display advertising, in any quantity and on any platform, has very little impact.

As we reported here a few weeks ago, a recent study shows that the amount of attention consumers pay to display ads is shockingly low.

There is a little voice inside me whispering that P&G is actually covering for Facebook by converting their "targeted" dollars to "reach." Something is telling me that perhaps P&G is locked in to an advertising contract with Facebook and is just doing what it can to waste less money.

It may take a few years to find out what's really going on here. Stay tuned.

And one more thing...

There's something that's bothering the shit out of me about the P&G story.

There has been a lot of bad news about ineffectiveness and fraud in online advertising in the past year. Why does it always come from research companies, news media, or clients. Why does it never come from agencies?

How can it be that the people who are supposed to be the experts never know?

Can it be that agencies really do not know what the fuck is going on in their own business and have to be told by researchers, news media, and clients? Or are they playing a double game?

August 10, 2016

All The Marketing Geniuses Have Been Wrong. Duh.

For years now I have been spouting off about the wrong-headedness of online "precision targeting" versus mass media.

In 2012, in a post called Either Facebook Is Nuts Or I AmI wrote...
"Big brands need big reach, not the diminishing returns of finer and finer targeting...They (Facebook) needs to forget about "precision targeting." It's bullshit and it's not working...They need to sell reach."
In 2013, in a post called The Hidden Danger Of Precision Targeting I wrote...
"One of the great benefits of mass media is that it lacks precision targeting. It reaches all the users in your category, including the users of your competitor's brand."
In 2014, I wrote The Power Of Sloppy
"Have you ever wondered how McDonald's and Coca-Cola and Nike and Toyota and Apple and all the other enormous worldwide brands became successful? For one thing, they were sloppy. They had to be. They didn't have big data or precision targeting. They couldn't punch a key and immediately identify left-handed Lutheran dry cleaners who rode recumbent bicycles. So they had to use mass media and talk to everyone. Not only did they not suffer for it, they prospered from it."
In 2015, in a post entitled "What If Targeting Doesn't Work" I wrote,
"What if all the 'precision targeting' we do is mostly unnecessary complexity masquerading as knowledge? "
Earlier this year, in Waste Not, Grow Not, I wrote
"We are thinking like direct marketers, not brand marketers. We are ineffectually using 'precision targeting' to try to engage the perfect individual, and by eschewing mass media we are harming our brand in three ways. 
1. We are not reaching those within our target segment who are not active on line or whose data we haven't mined.
2. We are not reaching the unexpected...buyers, of whom there are legions. 
3. We are not building a brand. Mass media advertising may be "wasteful" by the nearsighted standards of digital and direct marketers. However, some very wise people have pointed out that the nature of what we call "waste" may, in fact, be the very stuff that brands are built on."
And then there was this.

This week, my years of aberrant ranting finally got some vindication when The Wall Street Journal ran a story entitled "P&G To Scale Back Targeted Facebook Ads"
"Procter & Gamble Co., the biggest advertising spender in the world, will move away from ads on Facebook that target specific consumers, concluding that the practice has limited effectiveness.
Marc Pritchard, P&G’s chief marketing officer, said the company has realized it took the strategy too far. 'We targeted too much, and we went too narrow'
P&G could be the bellwether on how consumer goods companies and big brands use digital advertising. Over the past year some marketers, specifically consumer product companies, have discovered they need to go 'much more broad' with their advertising "
I hate to be the one to say "I told you so"...wait a minute. No I don't.