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P&G slashed its digital ad spend & nothing bad happened: 5 ways ad tech is responding
Procter & Gamble's results further highlighted problems in programmatic and the digital advertising supply chain. Various initiatives are underway in the advertising technology industry to address these problems and keep ad budgets coming their way.
Digital ad revenues have continued to climb. But not all is well.
In the past year, major brands have called into question the notion that mass marketing necessitates a scattershot approach to digital advertising. Programmatic’s promise to deliver huge scale at cheap prices has brought to the forefront the tension between scale and vetted quality and transparency. Now stories of brands pulling back on programmatic with little to no downside for their businesses add a greater sense of urgency to addressing issues that have long plagued the ad tech industry.
Potential impact on media spend
Procter & Gamble has been the most vocal and visible marketer to question the path ad tech has been blazing and finally push back. When one of the world’s biggest and most digitally savvy marketers says cutting some $140 million in digital ad spend in its fourth quarter had “no negative impact on growth rate,” the industry should take notice.
P&G CFO Jon Moeller said on that quarterly earnings call, on July 27, that the company cuts came where ads were serving bots instead of humans or where the ad placement was not “facilitating the equity of our brands” in terms of context or quality.
JPMorgan Chase told the The New York Times in March, after many brands pulled ads from YouTube over controversial ad adjacencies, that it was adopting a whitelisting approach for display and would extend that to YouTube. Kristin Lemkau, the bank’s chief marketing officer, said after reviewing its placements, the group approved just 5,000 sites for its ad buys with Google and AppNexus. Lemkau said early results indicated there was little effect on CPMs or visibility.
With the added scrutiny and push for more transparency about fees, where ads appear and whether they are visible to humans has put pressure on the once high-flying ad tech industry. Rocketfuel’s bargain sale to Sizmek last month, for a small fraction of its 2013 IPO, is just one indication of a changing landscape for ad tech generally and programmatic specifically.