Advertising Effectiveness in the Spotlight of Two New Studies

3 min read
May 13, 2020
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When a business wants to advertise, there are two key questions: What do we say? Where do we say it? Two recent studies give added information to help answer both. The first shows the survey results of recent ads and their perceived effectiveness. The second shows that the digital ad ecosystem is leaking money. An opaque system, combined with fraud, should make any marketer think twice about how they buy and use ads online.

Marketing Week reports that many recent ad campaigns, while not hurting brands, could be more effective. The survey data shows that the best ads don’t ignore the pandemic or the brand, they put the two in context in a creative way. This means that bland ads about caring and doing the right thing won’t be effective. But continuing on as usual is also not a great option. Tesco’s recent campaign is a good example of how to strike a balance:

The video makes people feel better about shopping at Tesco but still highlights brand codes, such as the Tesco slogan, which is featured throughout. The simple brand cues help consumers remember, especially when those cues are related to the larger context of the pandemic.

Heinz’s recent campaign featured the same effective combination. It highlights the brand’s charitable actions while also prominently featuring its signature product, beans in tomato sauce.

The fact that the Heinz ad originally appeared in print leads well into the next study, which revealed a big problem with publishing ads online: lack of transparency. When you purchase a print ad, it’s clear who’s getting your money. The same can’t be said for online advertising.

Many online ads are bought and sold as part of the “programmatic” ecosystem. Programmatic advertising means buying ads on exchanges where no direct contact between publishers and advertisers is needed. The system offers many advantages, such as speed and the possibility for automatic targeting. The main selling point is that you can quickly focus on who sees your ads without worrying so much about where.

A study by PwC, a consultancy, and ISBA, a UK advertising association, shows that 15% of the money spent on programmatic advertising can’t be accounted for. Worse, that 15% might be a best-case scenario. The study only looked at the most transparent supply chains for digital ads in the UK. 

Of the money that advertisers spend, 51% reached publishers. The other 49% gets eaten up along the way by fees from agencies and tech vendors running the ad agencies. That lost 15% represents almost a third of those fees.

This news comes at a delicate time for online advertising tech companies. Many large companies were already starting to doubt the effectiveness online ad platforms have been promising. Proctor and Gamble notably reduced their online ad budget by over $100 million and saw no effect on performance. Media companies are looking for better ways to sell ads while also trying to diversify their revenue streams. Pressure on advertising tech vendors is coming from both sides.

Google, the largest beneficiary of programmatic advertising, is reportedly working hard to fight ad fraud. But the company is so secretive about what it is doing that the system feels even more opaque and mysterious as a result.