The Digital Advertising Sector’s Original Sin, And How We Must Atone

If you’ve been in the digital advertising sphere for a while you know I’m bullish on the internet. As one of the founders of the IAB and early vice chair, I’ve championed the web as the best advertising medium – period. But as I look back on the past 25 years, I’m struck by a harsh reality: We’ve missed the mark. Consumers are angry, regulators have jumped in and some in the mainstream media have called us surveillance capitalists.

Digital advertising went off course early on, though we didn’t realize it. This is our original sin. How do we atone? Absolution is a matter of identifying new guideposts – consumer consent, privacy, real audiences vs. cookie-based proxies – and building an infrastructure around them. Here’s the bottom line: If we can articulate it, we can build it. And that should give us all tremendous hope.

Digital advertising’s original sin

It all began with the click. Clicks are measurable, so we gave them an inordinate amount of power in our world. We used them to determine intent – users who click on ads for the new BMW must be in the market for a car, right? Campaign effectiveness was judged by CTR. But just because you can count it doesn’t mean it counts.

And we didn’t stop there. We tied those clicks to cookies, which we dropped into the consumer’s browser without their knowledge or permission. We followed them around the internet, sending ads based on the sites they visited, the stuff they looked at and clicked on. We used data collected in one channel to target them in another.

And the assumptions we made! By combining the click with the cookie we thought we had cracked open advertising, solving Wanamaker’s dilemma at long last. By working backward from a transaction, we declared we could identify – at the impression level – the impact of each digital ad impression on a consumer’s ultimate purchase decision. The click proved it! Dynamic creative optimization proliferated, and we created custom ads based on every cookie snuck into that user’s browser. We were convinced that the age of true one-to-one advertising had arrived, thanks to digital attribution. Sadly, it was a mirage, as last click or multitouch attribution were rarely tied to what the consumer wanted or was actually exposed to in the real world.

Meanwhile the privacy discussion barely registered in our minds. Sure, we heard complaints about creepy advertising, but we were acting on the consumer’s behalf, right? Weren’t we making advertising more relevant to them?

Consumers took matters into their own hands, installing ad and cookie blockers, and adopting browsers that protect them from our prying eyes. They even found a useful ally in Apple, which built privacy technology into its devices and services. We responded with more and creepier technology such as blocking access to content, hidden app tracking, server-side ad serving, and so on.

Here’s the thing: We didn’t just break trust with the consumer; we broke trust with ourselves. Because we didn’t get the consumer’s consent, we didn’t get real identity; at best we got balkanized walled gardens with identity that’s controlled by just a handful of companies. And the worst part: We failed to make internet advertising any better than TV or print.

What if we got advertising right? 

Imagine if we had the mechanisms in place to allow consumers to tell us what they’re interested in, and in the market for, rather than make assumptions based on sites they’ve visited. Imagine if consumers were active partners in advertising, rather than hostile recipients of it.

And consider this: Consumer panels have always been an important tool for marketers, giving them a direct line of sight into the customer’s habits, preferences and intents. With a billion users worldwide, the internet – supported by real privacy and consent – could be the greatest consumer panel of all time, allowing the industry to deliver what CMOs want most, namely the ability to evaluate campaigns based on tangible business outcomes rather than number of clicks.

More than that, real identity combined with context becomes incredibly powerful. If a consumer freely discloses that she’s 65 years of age or older, marketers will know she’s looking for a gift when she visits a baby website, and can message her more appropriately. (They can also launch highly effective campaigns leveraging dozens, rather than a thousand, creatives.)

So how do we get there?

An ad model built on consent

First and foremost, we need an advertising paradigm that’s based on real identity, not proxies that are cobbled together from a bunch of cookies, fingerprinting, device IDs or hashed emails. Real audience development demands consent and consumer control, meaning consumers freely share attributes to get more relevant advertising.

Protecting privacy must be front and center. Consumers want to browse and shop, surf the web and engage with apps without feeling as if their every move is monitored and monetized. We need to respect that desire.

I’m not exactly sure when we will get to a cookie-free world, though as an industry we have been making progress. For instance, we are beginning to accept that there is no such thing as a universal user ID (email’s are practically universal and fully unique, but we can’t use them for a host of reasons). We also collectively agree that no one company should own the industry solution to ID. In all likelihood, outcomes and measurements will change to panel-based data overlaid onto consensus data, with modeled or probabilistic measurement and attribution. Couple those models with advances in AI, computing power and real consent and we can deliver outstanding data for the industry. But I must warn you: The future will be expensive and complex, so we will need to ensure that publishers and advertisers of all sizes, and not just the top few, will be able to participate in the market. Lastly, advertisers will need to take care as to who they partner with to supplement their CRM data and ensure that these data sellers have consent to share user data with advertisers.

Do I think it’s possible to achieve a consent-driven advertising ecosystem that’s fair to everyone – marketer, publisher and consumer? Absolutely! It’s why I’m as bullish on digital as I was 25 years ago.

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  1. Bill Ganon

    Richy, very well thought out and written. My perspective comes from the original print world, then dabbled in the internet ad space from 96-2000, then a bit deeper focused on mobile advertising from 2000-’15. Which is to say, not that much in the last 5 years. And I know you’ve been one of the cornerstones for that time and as such, defer to your expertise. That said, I wonder if Internet advertising is broken beyond repair and as such, content creators and deliverers are inching closer to what they’ve always wanted. Consumers paying for content. Yes, I realize the defendable response is “it’s not either, it’s both”. But your points about the misfires of 25 years ring so true, and I know my millennial children (now 32/30 and 27) actively steer around advertising on the web and all about streaming content, Reddit (which has ton of back room, ad-free connections to premium content if you’re resourceful enough), and the like. And when they do get exposed to advertising, they say they actually don’t see it (true or not, it’s certainly isn’t ‘clicked’ on). And I can’t comment on GenZers yet, but my suspicion is ad blindness as well. Will this and future generations agree to participate in a consent-based world? That’s unclear. What is clear is that more and more and more content is getting delivered OTT (the networks, streaming services, live sports) and new consumers are getting more and more exposed to purchase decisions for ad free (or at least highly minimized) content than did previous ones. It’s going to be interesting for sure. Thanks for the great perspective.

  2. Neville M

    Great thought and structure! Wondering if the author or anyone could elaborate on the issue with using email address as a universal ID. If it is hashed, like in The Trade Desk’s Unified ID 2.0, what concerns are there?