Apr 6, 2017 - Economy

How digital advertising became a total mess

Because so much advertising and content is automatically distributed, the digital supply chain has become confusing and messy, lending itself to more ad fraud, malware, extremist content and fake news. Here's a look at how much more complicated the system has gotten over the past ten years:

Chart: Andrew Witherspoon / Axios
Chart: Andrew Witherspoon / Axios

Why it matters: Digital advertising has become an unpleasant experience for nearly everyone involved:

  • For publishers: It's much harder to profit when Google and Facebook dominate the digital ad market, and when so many new ad tech players are separating them from receiving ad dollars directly.
  • For advertisers: It's easy for ads to end up on sites that host bad content or for ads to be viewed by bots instead of people
  • For consumers: The Internet has become so saturated with pesky automated ads that it's easier to either install an ad blocker or avoid some websites altogether.

What's the solution? There are a few ideas being tossed around:

  • Start over: Several premium publishers (CBS, ABC, Vox, etc.) are teaming up to create a private marketplace where they can recreate a cleaner version of the system through a non-profit called TrustX.
  • Build a new network: Other publishers have discussed using Blockchain (the technology behind Bitcoin) to create their own transparent ad networks.
  • Create financial incentives: Speaking at an advertising law policy conference in Washington last week, former Subway CMO Tony Pace said the industry should place more importance on brand value as a part of financial reporting to incentivize everyone to clean up the system.
  • Cut the crap: There's a movement by publishers to only run ads on trusted websites, which could incentivize other sites to clean up their content and stop publishing click-bait. Chase, for example, cut the number of sites they advertise on by 99% from 400,000 to 5,000 and got the same results.
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