Friday, July 28, 2017

And Now for Something Completely Different...(or not)

So my last few posts have all been about how amazing AI technology is and how digital ads are becoming more and more effective. So much so, that it's clearly the way of the future and the best way to spend your marketing dollars. Or is it? Turns out not everyone feels that way, including some very large companies who have very very large marketing budgets. Take P&G, for example. I'd venture to say we all agree they are a marketing industry juggernaut. Well, they just dropped a bombshell.

Turns out they were spending a LOT of money on digital ads and getting very little in return. Part of that was due to malware bots running up their ad bills with no humans actually seeing anything. But another part was their ads being shown in places not up to P&G's standards. Temporarily suspending their digital ad buys is a big deal and should be sending shockwaves around the cubicles of Google and Facebook (do they have cubicles?). P&G is reducing its digital ad spend by $140 million for the next quarter.

$140 million. Next quarter. Let that sink in.

Now for a little math: Google charges roughly $2-3 CPM for display ads. So if P&G were spending the entire $140 million on display ads, it could get roughly 50-70 billion impressions. Google handles approximately 5-6 billion searches a day (the exact number is a secret, but I googled it). So that means in theory P&G's digital ad budget reduction could have purchased an ad on every Google search for 10 days.

This story highlights both the massive volume of low value ads that are out there (and the problem of what to do with them while not hurting brands), as well as the damage the malware ad-clicking bots are doing. It's no wonder then that Google recently announced major changes in an effort to reform and protect against these issues.

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