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Much of digital advertising is placed automatically by software that tags and follows people as they move across the internet. This so-called “programmatic advertising” sits at the center of the growing fake news controversy. That means some of the world’s biggest consumer brands have become reluctant enablers of this divisive phenomenon.
A new study by The Society for New Communications Research of The Conference Board (SNCR) shows that while marketers are now aware of their inadvertent participation, they are ambivalent about what ought to change—and are reluctant to alter their own business practices. (Note: I am a SNCR Fellow and worked with the team on this study.)
Almost half of marketers surveyed have so little control over their ad programs that they do not know on which websites their ads are running. And they are not eager to take responsibility. When asked who should take the lead in solving the problem, the highest proportion of respondents say publishers and the social platform.
(In a separate study conducted at roughly the same time by the CMO Council and Dow Jones, marketers put the responsibility on media buying agencies to ensure appropriate ad placement. Such firms identify desirable audiences for marketers and interact directly with the ad exchanges.)
Ad dollars fuel the entire ecosystem, powering both the relentless growth of Facebook and Google, and the thousands of sites that have popped up over the past several years publishing suspect content.
Marketers will spend an estimated $335 billion worldwide on digital advertising, according to ad buying firm GroupM, a unit of WPP. Two-thirds of the world’s digital display advertising will be programmatic by 2019, up from 59 percent in 2017, according to Zenith’s Programmatic Marketing Forecasts. The United States is the largest programmatic market, valued at $32.6 billion in 2017.
Google and Facebook are expected to account for just over 63 percent of the total (programmatic and direct) U.S. digital ad market, with Google accounting for $35 billion total digital ad dollars this year and Facebook taking more than $17 billion. According to GroupM, Google and Facebook will account for 84 percent of all digital media money for 2017.
Programmatic ad tech brings with it a tangle of technology, agencies, ad networks, exchanges and platforms that can be impenetrable to even sophisticated observers. Marketers target the audiences they believe most likely to respond to their ads. They typically do not specify the websites or pages they want to associate with—or avoid.
Since marketers often don’t know from where they get their audiences, their ads may land on sites dedicated to fake news or that feature content with which the brand does not want to associate.
Capitalizing on the confusion is a clever new class of unscrupulous publishers who monetize the lack of transparency. Their innovation: create pages that fuel outrage or fear with fictional or sensational news stories, build scale on the social platforms, and make money by running programmatic ads on their sites and on the social platforms. The system was famously exploited by teenagers in Macedonia, who built at least 140 fake pro-Trump sites during the election and made money through Google AdSense and Facebook.
Thus, we have seen an explosion of fake news.
The SNCR study shows marketers are starting to pay attention, driven largely by concerns about “brand safety.” More than 80 percent of marketers surveyed say they are somewhat concerned or extremely concerned that their ads might appear adjacent to fake news. Just over 80 percent believe their brands will be harmed by such affiliation.
As a result, there is a movement in the industry, driven by watchdogs and trade associations, to push for more transparent exchanges. Nearly 80 percent of respondents to the SNCR study say they would “probably” or “definitely” reduce their spending with partners that fail to exclude unreliable sites, and a third say they will join “private markets,” closed exchanges that include only known and vetted sites.
It is noteworthy that U.S. programmatic digital ad spending through private marketplaces will reach $9.23 billion, almost as much as the $9.61 billion expected to be spent with open exchanges, according to eMarketer. Still, only 20 percent of marketers in the study say they will leave open exchanges.
While brands may be at risk, the stakes are even higher for society. Advertising serves a public good when it supports credible content providers. When it fails—when marketers forgo their social responsibility—brands, communities, and democratic institutions are all undermined.