Digital ad technology aids hoaxes, damages your site’s credibility
In my last two blog posts I talked about why independent news sites need to have their own dedicated salespeople and how native advertising fits with that approach.
In this post, I want to give you another reason to control your advertising sales. The digital advertising environment is filled with toxic, fraudulent advertising. This advertising feeds off of fraudulent websites. This is why news sites with a public service mission need to protect their credibility by controlling the advertising that appears on their pages.
The perverse incentives of the ad ecosystem
Lately I have been diving into studies about how the digital advertising ecosystem works. The system is automated, driven by opaque proprietary algorithms. Those algorithms are designed to maximize targeting of ads to individuals’ tastes and behaviors while also minimizing the cost to the advertiser. It looks like an efficient business model. But it hides disinformation.
The winners in this system are the world’s largest search and social media platforms, Google and Facebook. That’s because they have collected the largest databases of user behavior and tastes–billions of users on each platform–and the most sophisticated systems for targeting ads to those users. This efficiency translates into low prices for ads, so the platforms attract more than half of all digital advertising revenue globally.
The system also enables massive fraud. An excellent study of how this works is by Joshua A. Braun and Jessica L. Eklund (2019): Fake News, Real Money: Ad Tech Platforms, Profit-Driven Hoaxes, and the Business of Journalism.
They studied the supply chain through which ads “ultimately end up on hoax news websites.” Much of the fraud is enabled (knowingly or otherwise) by automated intermediaries in the chain, known as ad exchanges.
The authors concluded that many digital ads placed in good faith by legitimate brands end up on hoax sites or those with objectionable material.
How ad exchanges enable fraud
For journalists to understand the ad ecosystem better, perhaps the best study available is by Elizabeth Anne Watkins for the Tow Center for Digital Journalism at Columbia University: Guide to Digital Advertising Technology.
Watkins walks us through the automated ad-purchasing process. Typically it starts like this: advertisers place an order with intermediaries (see the graphic below). The advertiser specifies the number of times they want their ad viewed (impressions or page views), how much they are willing to pay (cost per thousand impressions, or CPM) along with the characteristics of their target consumer (tastes and behavior) . They also might also ask for bids on cost per click (CPC) or other metric.
At the same time, publishers are offering their audience to potential advertisers through the ad exchanges, based on their users’ tastes and behavior. These publishers then accept or reject bids on how much they want to be paid per impression (CPM) or action (CPA). This is all done automatically, in real time.
“The programs [algorithms of the intermediaries] bid high or low depending on how well the inventory matches their targets for their clients’ ad campaigns, based on their budget. It’s called ‘real-time’ bidding because, again, these auctions are carried out every single time a user loads a web page, in the span of milliseconds.”
The system gets compromised, according to Braun and Eklund, when fraudulent publishers buy much of their traffic from cut-rate vendors who deliver page views generated by bots and click workers, not by real users.
How to respond?
As already mentioned, bringing advertising sales in house, rather than relying on third parties to deliver ads to your website, keeps your users from clicking on fraudulent ads and being carried to websites with hoaxes or other objectionable material.
Another strategy to counter fraud is the creation of email newsletters. As I described in an article last year, “email has the power to create an intimate relationship between a publication and its users. That relationship can translate into loyalty, which translates into a tendency to recommend a publication, participate in its surveys, attend its events, buy products it recommends, and pay for a subscription.”
These newsletters can be targeted toward specific groups of users of your website or app. DigiDay just described how the New York Times now has 71 newsletters, which have been critical in converting users into paid subscribers. They are also a source of additional sponsorship advertising.
The risks of automated digital advertising, and its negative impact on revenues and credibility, have driven more publishers toward user-generated revenue, specifically subscriptions.
However, digital advertising isn’t dead. But it does have to be used differently by news publishers who have a public-service mission that depends on credibility.
Recommended
If you want to know more about some of the questions about digital advertising, I recommend Something is Rotten in Digital Advertising, by Rand Fishkin, and two Freakonomics Podcasts, “Does Advertising Actually Work”, Part 1 and Part 2.
Ad fraud: another reason to have your own salesperson