Automated Bidding Systems Test Old Ways of Selling Ads…

…and continue to make the internet a crappy experience for consumers.

Automated Bidding Systems Test Old Ways of Selling Ads – NYTimes.com.

One argument against programmatic ad buying: Machines don’t care where you go. They don’t care what you click. They just want to follow you and watch what you do. Creepy robots. From the linked NYTimes piece:

In the world of “programmatic buying” technologies, context matters less than tracking those consumers wherever they go. And that kind of buying is the reason that shoe ad follows you whether you’re on Weather.com or on a local news blog.

That shift is punishing traditional online publishers, like newspaper, broadcast and magazine sites, who are receiving a much lower percentage of ad dollars as marketers use programmatic buying across a much broader canvas. Some sites, like CNN.com, refuse to even accept advertising through programmatic buying because they do not want to cede control over what ads will appear.

Good for CNN. I wonder if other publishers will follow suit. I don’t have high hopes.

In the colossal failure of direct response as the gospel of online advertising, measuring clicks was the holy grail. Until nobody clicked. There is no planet where a .3% clickthrough rate can be remotely considered a success.

Now they want the banners to follow you around, in the hopes that regardless of where you go, you’ll remember the impression of the ad and make a purchase. They’ll likely be able to pair your IP address/browsing history/zip code with your credit card information and soon every search, every random behavior will have an ad group associated with it and that ad group will follow you. Amazon already does this with searches you do when logged in and followup email. You’ll probably get a certain script at checkout from the cashier: “Did you find the belt you were looking for, Mr. Armstrong?”

The above scenario turns me into Honey Bunny from 1:57 to 2:03 into the opening scene of Pulp Fiction (NSFW):

Except I don’t actually want to execute anybody.

Predictions:

  • Privacy backlash and industry resistance. Industry will win until governments step up regulations around personal privacy. This is unlikely to happen in the near future, Petraeus affair notwithstanding.
  • Continued lowering of the value of content. To be fair, the supply of content online is vast. The demand for premium content is not vast.
  • Publishers will seek different ways to make money as banner ads continue to decrease in revenue generation, raising the spectre of subscription and other, less savory models. Federated Media’s recent moves show them continue their move toward sponsorships, cobranding and specialized media units.
  • Anti-cookie, anti-tracking software will rise in sophistication.
  • The money will get so bad from programmatic ads, that they will be relegated to remnant status, despite all the tech and analytics behind them. In my admittedly small dataset of this site, programmatic ads in standard ad banner sizes are already nearly worthless. Google’s acquisition of DoubleClick virtually insured that display ads would decine in revenue generating value, much the way Google’s text ads have over time.

This is all very Neal Stephenson in early Wired.

Simple economics are at play. Supply. Demand. Robots. Abundant, nearly limitless supply of content. Demand for abundant supply of content already applies downward pricing pressure on the value of content. The robots just hasten the decline. Fucking robots.