Saturday, May 20, 2017

Chase Had Ads on 400,000 Sites. Then on Just 5,000. Same Results.

As digital display ad spending has continued to grow over the past several years, advertisers have looked for ways to exercise greater control over when and where ads are displayed across the web. The key concern of advertisers is that their ad will be displayed next to undesirable site content such as “…fake news sites or offensive YouTube videos” and possibly negatively impacting their brand.

One major institution, JPMorgan Chase, is going to extreme measures to combat this site display concern. To exercise greater control over where ads are displayed, JPMorgan has enlisted a whitelisting technique, limiting its ads to about 5,000 preapproved sites. Prior to this JPMorgan had advertisements being displayed on about 400,000 sites, a typical amount for large companies that use automated tools to touch as many consumers as possible online. This whitelisting effort by JPMorgan was initiated “…this month after The New York Times showed it an ad for Chase’s private client services on a site called Hillary 4 Prison. It was under a headline claiming that the actor Elijah Wood had revealed ‘the horrifying truth about the Satanic liberal perverts who run Hollywood.’”

This shift by JPMorgan represents a larger, underlying skepticism in the industry on how effective and cost efficient automated display ad technology is. Automated technology has provided advertisers with the ability to buy “…ads on individual sites in favor of cheaply targeting groups of people across the web based on their browsing habits, a process known as programmatic advertising.” The risk vs reward of this approach is not always clear, and JPMorgan began considering the impact of creating their whitelist and reduced the number of sites they display ads on.  

As some background on what JPMorgan did to reduce the number of sites, “…Of the 400,000 web addresses JPMorgan’s ads showed up on in a recent 30-day period, said Ms. Lemkau, only 12,000, or 3 percent, led to activity beyond an impression. An intern then manually clicked on each of those addresses to ensure that the websites were ones the company wanted to advertise on. About 7,000 of them were not, winnowing the group to 5,000.”

Although this tactic has only been in use for several weeks, JPMorgan has seen no deterioration in their performance metrics. For firms like JPMorgan Chase, who are able expend the capital, this is a simple solution to help prevent/reduce display ad PR issues. This may not be a viable solution for all advertisers, as the benefit of the programmatic advertising is the cost effectiveness of targeting specific customers. Additionally, if a trend begins to take hold in the industry, with others following the JPMorgan approach, you could see a change in the way ad tech companies handle sales. In the current environment, these ad tech companies “…profit from funneling trillions of ad impressions from brands to consumers.” By actively reducing the number of sites allowed to display ads (i.e. from 400,000 to 5,000), ad tech companies may need to change their approach and how they market their services.

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