Tim Wong, Unilever, Google discussed on Heartland Newsfeed Radio Network
Source of chronic embarrassment to the ad industry. The prevention of this kind of ad mismatch is known as brand safety and despite the greatest efforts at trying to eliminate the risk of brand safety from the ad market. People buying largest haven't been able to again. The industry itself would disagree. We ask google how they ensure an ad doesn't show up on a page promoting misinformation or conspiracy theory. Here's their reply. We have strict policies that govern what kind of content we place ads on. And if we find a page or website that violates our policies we take immediate action in two thousand and nineteen keith weed. The former marketing boss at unilever helped create a consortium called the global alliance for responsible media which pushes for better add controls to protect brand safety. At did everyone's a well-functioning its net and everyone wants to have a positive impact on the world and not to have some of the issues. We're wrestling with right now. I think that paul has not been easy. so far. This september after months of advertiser boycotts facebook twitter and youtube agreed to adopt a common set of definitions for hate speech and develop tools to let advertisers have more control over where their ads show up. But tim wong thinks. The longstanding opacity of the online ad marketplace is just one reason we might be in digital advertising bubble. I think second thing is a little bit like in the subprime mortgage crisis you do have people who have very perverse incentives. I think to push the effectiveness of online ads. that's the ad agencies the ad platforms themselves. The people who run ad technology. All these people i think have a very strong incentive to say no. This stuff is way better than earlier generations of advertising. And this is why you should use it. If you've been listening closely you will notice. This is the exact same problem. Steve levitt talked about regarding the tv ad ecosystem. Human beings generally make decisions based on self interest. No chief marketing officer is ever going to say. Hey i don't know maybe don't work. Let's not do them and see what happens. Or as the author upton sinclair once wrote it is difficult to get a man to understand something when his salary depends on his not understanding it so there is a common practice which is not very well disclosed in the ad industry whereby an ad tech company will basically offer ad inventory at a cheap price to the advertising agency the agency remember is paid by you the client who hired them to help you so what you're selling and then the agency will turn around and say you should really use this ad tech product and sell it at a higher price and what are the worries about. This is that it changes the incentives. Right which is typically the ad agency should be working on behalf of the client but in these cases they have very perverse incentives to push distribution of a message that may not otherwise be rational or even useful to them all of these issues and all the new empirical evidence we've been discussing about. The ineffectiveness of advertising has persuaded tim long that yes. The online marketplace is a bubble and it might soon pop in fact the deflation may have already begun a few years back proctor and gamble which is one of the largest advertisers in the world decided that they would run a little experiment they were gonna take about two hundred million dollars of their digital ad spending and just cut it out of their budget to see what happens. Proctor and gamble said they were doing this. Because of concerns over brand safety and the proliferation of bots which can pollute the data on ad impressions and the end result was fascinating basically said that there was no noticeable impact on their bottom line again. The ad industry will have a lot of explanations for why this might be or for why. There's a lot of value in advertising beyond short-term sales figures but proctor and gamble is a big player even if they are wrong even to a small degree they're the ones whose money drives the advertising ecosystem. What would happen if this turned into a mass movement among advertisers. One shouldn't underestimate the size and reach of the advertising ecosystem you watch on. Tv supported by ads. The journalism you consume supported by at least much of it. Google maps google drive and google supported by s as well as facebook and instagram and twitter. Nearly everything else you consume online. And don't pay for including this podcast. Just about every other podcast. You listened to advertising is also important for tim. Wong whose day job is researching artificial intelligence and machine learning some of the most cutting edge research in the world is being funded by ads right if you think machine learning and is going to have a huge impact a huge impact in the world. That is from economists. Travel to medical research and diagnosis. You may want to think about what it means. That most of it is subsidized through this ad infrastructure. So there's lots and lots of links through the economy. That are not always obvious. But i think are worth thinking through because it points how widespread downturn could be so if there is an advertising bubble can it be deflated in a slow controlled. Way to avoid massive economic unraveling. Tim wong think so but change won't come from the industry players. They have too much incentive to keep selling it's got to be driven by the buyers one of the groups that has the most to lose people who theoretically might be wasting a lot of money on advertising but one does not think the by side pressure will be enough because i think one of the biggest problems in the spaces that there is no objective third party evaluator of some of these claims claims that is about efficacy and so what i advise is kind of a punk rock n d e r. The nba is the national bureau of economic research. What does wong's punk rock version. Look like it's basically a research group that is willing to be a little bit of a troll to the advertising industry and so again do we throw off the veil reduce the opacity in the marketplace. You really need a dedicated group of people who are doing good research on this front where you want is a handbrake can slowly bring down the momentum in the market so that it can deflate without exploding there are of course. Many people and institutions already doing research on advertising spending. But let's be honest. Most of them have someone's thumb on the scale and conventional wisdom. Isn't the only thing that someone like tim. Wong is challenging. It's also the billions of advertising. Dollars that dr trillions of dollars of market value. So it takes some courage to suggest that those billions and trillions may not be kosher one of my favorite arguments that people are using right now. Is you know companies. Wouldn't put money into this if it didn't work so isn't that proof that the ads actually work. That in fact is exactly what we heard earlier. From the unilever veteran keith weed the fact that coke and dove and ford have been around for decades and the fact that companies like unilever spend billions suggests that maybe advertising does work which is kind of crazy. Circular minds maze. If you think about it. But i do think that again. This is very parallel to the kinds of psychology..