Monday, April 03, 2017

Going Clear! The Digital Ad Industry's Supply Chain Revolution Just Happened



April 3, 2017 - There are about 121 billion cans of food and beverage shipped commercially in the United States each year. Do you know how many cases of botulism can be attributed to those canned comestibles?

Approximately one. Not one percent. One. Fewer than .00000000001% of all commercially canned food and drink are seriously harmful to human beings. The food industry's enviable safety record is due to decades of progress in the science, storage, shipping, self-regulation, and regulation of the U.S. food industry supply chain. 

Do you know how many seriously harmful advertising impressions float through cyberspace each year? Between 3% and 37% of impressions are fraudulently generated  by bots, according to the most recent study by the ad tech firm White Ops and the Association of National Advertisers. Add to those the valid ad impressions that appear on porn sites, or adjacent to pirated copyrighted entertainment, or near falsified content and other forms of "fake news," and - well, let's just say the incidence of bad advertising is at least a few hundred billion times greater than the incidence of bad canned food.

And therein lies the digital media, advertising, and marketing industries' challenge, and our goal. We must create a fully trustworthy supply chain. We must make harmful impressions as rare as harmful food. 

The big news of last week is that marketers, after a long decade of ostrich-like ignorance, are finally taking charge of their own digital destiny. JPMorgan Chase, an early adopter of "programmatic advertising," as simple  digital ad automation is confusingly called, looked at the 400,000 sites on which its advertisements run, and decided to do a human-eyes review to determine how many of those sites were safe for its brand. The giant bank eliminated about 395,000 of those sites from its media plan. And JPMorgan Chase discovered that its ad prices did not go up, and its ad effectiveness didn't decline.

"It's only been a few days, but we haven't seen any deteriorating in our performance metrics," the bank's Chief Marketing Officer, Kristin Lemkau, told The New York Times.


Consumer Safety First

The soft sound you hear is the song of sanity that at long last is bringing harmony to the dangerously discordant digital advertising supply chain. It's being billed as a big step forward for brand safety. But it's much more than that: It's an acknowledgement by the marketing and media industries that we are responsible for consumer safety, too.

JPMorgan Chase was following the program I outlined at the IAB Annual Leadership Meeting two months ago, when I told the thousand senior ad industry executives gathered in Ft. Lauderdale, FL that it was up to them as individuals and their companies to "repair the trust."

"This is not difficult," I said. "Simply ask your finance department to create a list of all your customer payables. Then commission a team to review the list to determine who your customers actually are, and what they do for a living. If they’re engaged in child porn or distributing pirated movies or generating neo-Nazi propaganda, or anything else you wouldn’t want your parents, spouses, neighbors, or children to know about, then stop doing business with them. And once you’ve reviewed and cleared your customers, do the same thing with your suppliers."

Rest assured that JPMorgan Chase is not alone in its effort to demand a clean digital advertising supply chain. Procter & Gamble has begun calling major media companies and advising them they must join the Trustworthy Accountability Group, the industry's supply-chain self-regulator, or they will be removed from consideration by the world's largest advertiser. The company is following through on a vow made by P&G Chief Brand Officer Marc Pritchard, also at the IAB Leadership Meeting, to force all its advertising vendors to comply with basic industry standards... or lose its business.


Compliance Calls Surge

Since Mr. Pritchard's speech, TAG - which was co-founded and is co-led by the IAB, ANA, and 4As - has reported a near-doubling of signups for its Registry, the basic "trust program" it offers. The Media Rating Council, the industry watchdog for authentic measurement practices, has reported a surge in inquiries from ad agencies about its viewability standard - a response to another of Procter's demands, that all its agencies follow only the MRC's  viewability standard for digital impressions. In response to a third P&G requirement announced at the IAB event, both Facebook and Google's YouTube have agreed to MRC audits of their measurement practices to assure they comply with industry norms.

"Partners, together, we're making progress and gathering momentum," Mr. Pritchard wrote me and ANA CEO Bob Liodice on Friday. "Let's keep it going!" 

Indeed, the digital publishing industry is. Google, embarrassed by a brand safety imbroglio in the U.K. that spread across the Atlantic, in which legitimate brands' advertisements were found on several dozen terrorism-related and other unsavory YouTube videos, implemented a series of changes to assure the quality of YouTube's inventory. Among the moves: removing flagged videos within two hours instead of 48 hours; adding new filters for advertisers to screen out hate speech, sexually suggestive material, profanity, and sensational or bizarre content; and partnering with accredited, third-party brand safety vendors to assure compliance with the procedures.

But there is much, much more left to be done. It's not just digital ad tech companies that are culpable - agencies, publishers, and the brands themselves bear responsibility. As I said at our January Leadership Meeting, "There is no one culprit in this ugly scenario. All of us in this room play a role: the marketers pressing for billions of additional impressions at unsustainably low prices; the agencies pressuring the publishers for more and more free 'added values'; the publishers so desperate for revenue that they run ads disguised as news and source 'audience extensions' on  unsavory sites; the tech companies whose algorithms drive consumers to deceitful  content; the journalists who complain but remain in their silos, unwilling to understand, let alone participate in correcting, their industry."

By putting its money on the line for standards compliance, Procter & Gamble launched a shot across the bow of entire marketing-media ecosystem. JPMorgan Chase doing a quality review of all its sites and eliminating 98% of its publishing partners  is an equally industry-shaking move. Together, these giant brands are saying the digital advertising supply chain isn't too complex for the average marketer to understand. They are saying that brand safety is a prerequisite for advertising that drives growth, and everybody needs to comply - or else. They are saying that industry associations and the work we do bringing companies together to agree on the standards and practices that should and must bind us matter.  


Leadership Priority

I have no doubt that P&G and JP Morgan Chase will be followed by a wave of big brands taking similar actions to secure the digital industry supply chain on behalf of brand and consumer safety. The Association of National Advertisers, declaring that "marketers must take their industry back," has made supply chain transparency one of the core objectives of its new ANA Masters Circle, an elite group of senior marketers tasked with making changes happen in the profession of marketing.

"It’s time for CMOs to demand a simpler, more-transparent, highly productive supply chain, one that aligns core metrics with goals for incremental business growth," the ANA says in its recently released 2017 CMO Leadership Agenda. "We can reach this objective if each CMO ensures their teams and agencies pursue the recommended actions for transparency, measurement, viewability, and ad fraud — while creating a highly productive, extraordinarily efficient, streamlined supply chain."

I'm pleased to say that IAB has been committed to the cause of supply chain trustworthiness
since I came to this job in 2007 and extolled the importance of "a supply chain that’s more transparent, less complex, and less costly" - so it's great to have the ANA as a partner in this vital endeavor.

Critics already are caviling that new demands for quality will definitively lead to higher advertising prices in digital media. Well, of course they will - for the same reason that food in supermarkets costs more than food that fell off trucks. There is no such thing as a free lunch - unless you want to risk botulism. 

Others fret that one of the glories of the Internet - the long tail of small specialty sites that generate so much valuable niche news, entertainment, opinion, and services - will be disenfranchised as marketers start limiting their programmatic buys to pre-qualified lists of publishers. To which I say: I have little doubt there are a hell of lot of long tail sites that made JPMorgan Chase's cut from 400,000 to 5,000. 

Besides, even the smallest hot dog pushcart has to follow the city's health code.

And finally, in no other industry on earth do retailers put goods on their shelves before checking that they're safe for human consumption. Wal-Mart doesn't do it, Kroger's doesn't do it, and we - the retailers of ideas, journalism, entertainment, and ads - shouldn't do it either. 

It's time for you - you brands, you agencies, you publishers, you tech companies - to build a real civilization in this murky swamp we've invented. It's time for you to follow the industry's health codes, comply with consensus standards, and stop the toxin of ad fraud, piracy, opaque metrics, and fake news. It's time for you to make our supply chain 99.9999999999% safe.