Kraft Breaks Cover

03 November 2014

Well, here’s a turn-up for the book! Kraft has announced publicly in the US that it ‘rejects’ up to 85% of impressions bought online via real time ad marketplaces. The company’s reasoning is that “75% to 85% is either deemed to be fraudulent, unsafe or non-viewable or unknown”. Who would have thought it?

It might have taken Kraft a while to catch up with the multitude of comments in the press, and on blogs concerning online fraud and the rest, but kudos to them for speaking out as they have done. Now we’ll see what they do about their concerns.

It’s easy to say that with any new technology or approach comes risk. And that a massive, all-enveloping communication form like online is pretty well bound to attract more than its fair share of crooks and charlatans. What is less easy to explain is why the ad industry as a whole has been so slow to do anything about it.

Actually, I’m wrong. It is rather easy to explain – it’s just rather depressing to do so. In a sentence: if you’re in on the racket it’s tricky to expose the bigger picture without at the same time compromising your own position.

The way that these media misdemeanours are typically exposed is to cut off the cash until the medium sorts itself out. The media agency community has historically been rather good at this, leaping into the press at the first opportunity, waving the flag of being responsible for client budgets and insisting on certain standards being reached before another penny is spent.

But when it comes to online – well, not so much. Certainly there are pockets of fine words condemning fraudulent behaviour (of whatever shape or form), but online ad spend continues to rise at a rate far ahead of everything else, despite all evidence that suggests it shouldn’t. This evidence ranges from ‘it doesn’t work well, if at all in delivering business results’ through to Kraft’s ‘75% to 85% is either deemed to be fraudulent, unsafe or non-viewable or unknown’.

Having read this far the digital glitterati will no doubt say other media forms aren’t always seen by everyone in their measured audience. Which is true – but there is a huge body of work that quantifies these differences, and anyway the metrics quoted by (say) TV and print are used primarily as trading currencies. Any planner will tell you they take account of factors like visibility, and engagement in their plans.

Then the digital elite will point to case studies that illustrate the success of online. True again, but the fact that something works for someone doesn’t make the underlying metrics correct or acceptable to all. For what it’s worth I am a fan of online display advertising, but the evidence would seem to suggest it works best in combination with other media forms (hardly surprisingly as this is true of almost all media). My problem is with the huge hype that exists around anything to do with online advertising.

Finally, much will be made of the fact that agency trading desks are spending gazillions sorting out fraud. True again, up to a point but it doesn’t seem to have done a lot for Kraft. And this is an industry-wide problem requiring an industry-wide solution.

So, why does online advertising continue to be so successful at generating revenue? I can only think of two reasons.

1. Clients are determined to pile ahead with today’s fashion for online display advertising, despite all evidence suggesting they might be better off taking a more circumspect approach. Clients are thus ill-informed and are wasting their money. This is certainly the opinion of the AdContrarian. Their agencies, despite being the bastions of impartial advice we all know them to be are powerless to stop this headlong rush despite doing their best to argue for restraint. Thus agencies aren’t perhaps quite as influential in terms of how their clients spend their money as they might like to think.
2. Agencies and in particular their online trading desks make considerably higher margins placing online buys than they do in other media forms. Thus, as long as there are advertisers pouring money into online their advisors are going to keep quiet, encourage the spend by coming up with all sorts of nonsense about time spent and brand engagement, and justify the disconnect between the plans and the online buys (and the size of their margins) by blaming advertisers for not paying them properly in the first place.

Whichever it is, and of course it’s a combination of the two it doesn’t exactly reflect well on the online industry.