Digital Advertising Needs More Humans and Less Tech
April 1, 2021By Sergey Tsoy, Vladislav Kuzemchik
Digital advertising is enthusiastic about technology, and for good reason. Automation and optimization are useful, but one wonders: have we erred on the side of eliminating the human factor when designing and executing advertising initiatives? It’s a bit ironic since advertising seeks to put a human face on brands so that consumers will trust them. So why do we, as an industry, seek to remove the human element when planning and executing campaigns?
Since the dawn of the digital age our collective goal has been to present the right ad, to the right consumer, at the right time, but we’ve largely fallen short of that goal. Why is that?
The industry has collectively lost sight of a fundamental truth: doing business is essentially a social interaction between people. Business relationships are built on trust — a trust that stems from working honestly and fairly together with familiarity in order to achieve mutual benefits. And yet it seems as if we trust algorithms and secret sauces more than we do a human sitting across the table. Until we change this attitude the true end-to-end optimization we seek will remain forever elusive.
The digital advertising industry is at the threshold of a new era, brought on by a rebellious consumer base demanding privacy and data protection, advertisers who want to build direct relationships with customers, and publishers who need fair compensation for their inventory so that they can afford to provide quality content to their audiences. These are worthy goals indeed, but we’ll never succeed in achieving them until we recognize the degree to which we’ve replaced humans with technology at critical junctures in the advertising workflow.
The Technology Pile On
Pivoting from print to digital created serious troubles for publisher sales teams. The sheer scale of digital inventory, along with the number of digital publishers entering the market, meant publishers struggled to find buyers for all of their inventory. This challenge gave rise to ad networks, which assured publishers they could monetize their unsold impressions, while promising advertisers access to high quality impressions at a fraction of the cost and hassle.
In theory it all sounded great but fraud was rampant and transparency non-existent. Publishers had little understanding of who purchased their impressions and how much they paid, and advertisers didn’t know where their ads actually appeared. To solve this challenge, a new technological approach was devised: rather than focus on where ads appear, optimize campaigns based on their performance. Cost-per-action (CPA) became the ideal.
But CPA campaigns were hard to manage, and they couldn’t deliver predictable and stable results. The action signal tends to fluctuate a great deal, making it difficult to forecast and plan against.
The next technological advancement — real-time bidding (RTB) — was exciting. Advertisers can leverage an array of data to cherry pick the users to whom they show ads. Later on, header bidding would allow publishers to select the right buyer for its inventory on a per-impression basis. These technologies led to a new era in which digital advertising was transacted based on audiences rather than context. It seemed the industry could achieve the goal of presenting the right ad to the right user in the right channel at the right time.
Only that didn’t happen. RTB channels turned out to be chock-full of fraud, and the channels are anything but transparent. Publishers had little understanding of what happened to their impressions once their ad calls were offered to an exchange, and the opacity of the market meant advertisers couldn’t optimize their bidding strategies very effectively. Nor could they say with certainty where their ads appeared.
More troubling, the audience segments packaged and sold to advertisers weren’t nearly as accurate as we hoped they’d be. It turns out, clicking on an ad for the new Ferrari 718 doesn’t mean a user is a male, wealthy or about to buy a new car. But that didn’t stop the data companies from classifying a user as an auto-intender or a “lookalike.” (Actually knowing how, why or when the data companies classified users was another black box that frustrated advertisers).
Meanwhile, no one really feels 100 percent confident about what the other party is doing, and so we throw more technology at the problem, engaging multiple measurement companies to validate if the impressions were legitimate, if an ad was in view, if the audience was accurate, and so on.
We could go on but you get our point: ad networks jealously guarded the publishers with whom they had relationships. Data companies didn’t reveal the composition of their audience segments. Ad exchanges, SSPs and DSPs developed patented algorithms, AI and all manner of secret sauce, measurement companies didn’t fess up as to how they do sampling.
Instead of getting a fully transparent market in which publishers and advertisers have the visibility they need to achieve mutually beneficial partnerships, we have a collection of silos that add up to a black box. This, in turn, leads to a lot of poor decision making, for example: when advertisers want to optimize for conversions, the default is to change inventory suppliers. But what if the disappointing results are the result of confusing or unappealing creative?
In order to answer that question, the advertiser needs to optimize holistically across the entire campaign, but that’s simply impossible. Every partner on which that brand relies optimizes its portion of the campaign based on goals and trade secrets within its own silo.
We don’t mean to oversimplify the issue or our industry. Obviously, technology is essential (it is a digital channel, after all). But the essential technology has been commoditized, is readily available now, and is buttressed by standards, processes and digitally savvy consumers. In other words, a campaign is not going to succeed because one ad server is monumentally better than another, its success will stem from all of the players working toward a common set of goals.
True Optimization Demands Goal Alignment
We completely understand that tech companies need trade secrets, and exposing them in the name of true transparency is financial suicide. But due to the silos and lack of transparency, the system isn’t working for us at the moment. How do we go forward?
As we mentioned in the beginning, business is built upon social interactions and it thrives when technology supports, rather than replaces, those interactions.
Modern tools and technology are just that — tools — that help us to deal with the scale and complexity of digital inventory, and its myriad of partners and counter-parties. However, direct deals — replete with standardized contracts and a common language of taxonomies, negotiated between human beings — will go a long way in blunting the impact of silos.
Technology can enable, facilitate and even optimize negotiation and collaboration between the parties of inventory transactions, but it cannot not replace humans altogether. At its best, negotiation is all about identifying and working toward common interests: publishers want to sell more inventory, advertisers want to expose their brands to more people, and tech providers want to help their clients — publishers or brands — deliver solid business outcomes.
When humans lead the negotiations, all parties understand the responsibilities and consequences of underperformance, and that motivates them to look beyond their link in the chain in order to optimize a campaign holistically. Moreover, the ability to adjust the course of a campaign based on transparent rules and observed data are functions best served by humans aided by technology, and not by technology alone.
Technology has done an amazing job at creating huge volumes of inventory and putting systems into place for businesses to monetize it. However, in our rush to automate the end-to-end business of advertising, we’ve erred on the side of highly siloed algorithms and secret sauces. We need to reinsert humans to balance it out — to provide a human touch to what is ultimately a very human experience.
Sergey Tsoy is chief technology officer, and Vladislav Kuzemchik is chief software architect, both at NYIAX.
The views and opinions expressed in Marketing Maestros are solely those of the contributor and do not necessarily reflect the official position of the ANA or imply endorsement from the ANA.