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All the Signs Point One Way: Advertising Isn’t Working for Anyone

Users, advertisers and publishers: these are the three key parties in the internet value chain. And it’s worth stopping sometimes and reminding ourselves of what they each want.

Users, as we all know from personal experience, primarily want to consume interesting and relevant content in their free time and be entertained or inspired by it – a YouTube video, a favorite influencer, a favorite blog, or a news site. 

Publishers, on the other hand, want to make money. Where there’s a lot of traffic, they have the means to do so. Content that serves the interests of users promises high conversion rates, so it can be monetized.

Advertisers, meanwhile, want to spend as little money as possible for as much reach as possible in order to win new customers or advertise products.

So here’s a question: is it possible for all three parties to get what they want in an environment funded by display ads?

According to a well-known survey by the McCarthy Group, 84% of all millennials do not trust traditional advertising methods. That means that in Germany, where I live, more than 18 million users in that cohort reject advertising. In the UK, we find another 12 million.

Factor in the still-rising use of adblockers – 33% in Germany, which in hard numbers equates to over 24 million internet users, and more than €48M of click commissions are blocked.

And then ad fraud: PPC Project found that around 36% of all programmatically served display ads are touched by fraud somehow. In Germany, we are talking about €1 billion invested in advertising that never reaches a real person. That’s over 10% of the digital advertising budget

With these figures in mind, I have another question. Why do display ads still account for over 30% of marketing budgets? Does this model work, or is it fundamentally broken?

I decided I’d run my own experiment, from a user’s perspective.

Windows 11 is coming out. Great.

With a quick Google search, I, as a user, can surely get the right information to help me decide on a new operating system, right? 

I go to Focus Online, where I’ve found an article about the things I need to know about Windows 11. My adblocker tells me the site wants to show me 12 ad banners. With a click on the pause button, I am allowed to see them. Instead of the new operating system, I get a video from L’Oréal, an offer of some new insurance, an invitation to play the lottery, and the chance to sign up for months of Readly for only 99 cents.

Great!

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But wait – didn’t I want to read up on Windows 11? 

I’m annoyed, and that makes me hungry. I’m going to make some Thai summer rolls. Google is my friend – he surely has a suitable recipe ready. And click, I land on Stern.de. Here, my ad-blocker has detected 54 ads – so many that I have to wait a long time until the page is loaded.

Except for the headline of the content, I don’t see any summer rolls. But I see a vacation in Portugal, and enticing images of Vodafone Gigacube and Telekom Online – all of it very easily financeable via American Express. I’m not hungry anymore, especially after discovering that the information that brought me to this page is hidden behind a drop-down menu. So I click on the Telekom ad to embrace a fiber-optic future they’re promising. Oh. Not in my area.

Users get irrelevant content, publishers lose traffic and rankings due to high bounce rates and advertisers throw their money through the digital advertising window to achieve, in the worst case, a dislike for their brand.

Performance Partnerships: The Answer to the Display Problem

But there is good news for users, publishers, and advertisers. Today, there are mature technologies that offer direct relationships between advertisers and publishers, while measuring the performance of the partnership cleanly and automating manual workflows to make partnerships scalable. Ladies and gentlemen– meet performance partnerships. 

What do productive partnerships look like? At Impact, the fastest-growing publisher type is commercial content. We call it Com:tent – when publishers build direct relationships with advertisers to generate editorial for their readers that is both informative and entertaining.

Many editorial departments are experiencing their second springtime due to the fact that commercial content is decidedly more popular among internet users than display ads.

The value is obvious: users are looking for trends, publishers are looking for editors to write them and advertisers are looking for collaborators to create productive and strategic partnerships.

Once the Machine Gets Rolling, Everyone Gets What They Want:

Advertisers can place their products in an environment that is trustworthy for users, which leads to high conversion rates. A great side effect: Google sees this and rewards commercial content with high rankings in order to offer users the best results. 

Sounds exciting? Impact offers customized solutions for advertisers to reduce manual workflows and to be independent of affiliate networks. We cover every type of partnership. With our technology, we automate the entire partnership lifecycle, from finding productive partners to optimizing the channel with a holistic view and deep insight reporting.

With our Trackonomics monetization product, we help publishers to discover potential and fill it automatically. By consolidating traffic and click data, we can target the best links and products. With the analytics tool, you can see how much revenue the content has brought in and how much potential remains unused.

Many billions of Euros of advertising money that are invested today in formats that we all know will never reach real users. Classic methods are gradually reaching their limits. Advertising as we do it today is dying. That is why it is time to set new priorities, especially in digital advertising. Because technology is ripe for change, and partnerships are where that change is to be found.

[To share your insights with us, please write to sghosh@martechseries.com]

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