Marketers: It’s Time To Wake The Hell Up

Until marketers wake up and fight back, the entire digital marketing landscape will function exactly like a casino for the vast majority of brands and agencies. The 500 pound gorillas in this space like Omnicom and WPP were forced into mergers and acquisitions and even with those moves, were still forced to layoff thousands of people. It’s almost as if there is a direct correlation between the decline and ROI and staffing levels. But that’s the price you pay for going along to get along. These mega agencies could’ve staffed up on the tech side and fought the fraud but instead chose to pretend Big Tech was their ally and spent years training people to get good at figuring out the platform algorithms. That strategy had one fundamental flaw that doomed them from the start . The most seasoned marketing minds in the world completely missed what was going on and frankly, an abundance of arrogance led them to make assumptions that were clearly never going to happen.

So what was the assumption? Simple. They were all sure that Big Tech would forever deliver tenable audiences and favor their spend levels. They thought companies like Google, Meta, and DSPs would forever keep their people adept and well trained on how to best use the platforms. After all, that is precisely how Big Tech operated for years and years. The larger brands were the earliest adopters and made up the lion’s share of spend in the early years. Add to that many agencies found themselves with aging C-level and director-level leaders that were NEVER going to fight, or for that matter, keep up. So, what changed?

Wide adoption. Big Tech figured out quickly that while bigger agencies that were managing bigger brands with higher spend levels were aggregating serious spend and serious revenue, the net spend of the SMBs and small spend levels drove far more revenue in total than enterprise level brands. Virtually every business on the planet could make money with small spends and grow their companies and they leaned in hard. Back in those days companies that understood their targeted audiences better could make a real difference in their revenue leveraging these platforms. So, their spend grew overtime and it far eclipsed the enterprise level agencies and  brand’s spending. And like big tech always does, they followed the money and granted access to granularly targeted audiences to even the smallest companies. Sure, Nike and Kraft spent a ton but that spend didn’t come close to every other shoe company and every other food company. For small business, those were the good old days.

Then the ground shifted beneath all our feet. A combination of Wall Street demands for insane earnings reports from Big Tech, coupled with the fractioning of the market, ushered in by the iOS 14.5 update, putting the writing on the wall. Demand was growing exponentially and threatening to make the platforms untenable for users. It no longer made any sense to parse out the mechanical mobile ad IDs on these platforms. And the iOS update gave a all of Big tech the perfect excuse to remove hundreds of thousands of targeting selects and for search platforms to deprecate cookies and take away audience transparency. They had all the excuses they needed to do it and they immediately did it. We all remember getting the emails from Meta, for example, about 15,000 targeting selects being removed or reminders to go in and update your targeting selects because hundreds of thousands of targeting selects were no longer active. What possible motive could they have had to remove our ability to target with real granularity and have analytics based solely on human behavior? Think about it, they knew it was going to dilute ROI and they 100% knew the ROAS would go down. So, what possible motive could they have had for doing that? It’s simple. They needed to keep the platform tenable for users in order to keep engagement as high as they possibly could which sits at the core of the entire CPM model calculation. And with demand almost tripling between 2021 and 2024 bot traffic was the perfect solution. It was very difficult to prove and impossible to legislate against. And what all of the Big Tech platforms fully understood is that we didn’t have a choice. Digital marketing had taken over the marketing landscape. They knew they could get away with it and that everyone would keep spending.

In any other industry, the biggest players in the market would have fought ferociously against the fraud. Class action lawsuits would’ve been stood up overnight. But with an aging managerial marketing management class, they didn’t even know where to begin. The agencies that had the resources to fight it, didn’t have the will and they trained two generations of digital marketers to be good at leveraging the ad manager tools these platforms delivered. Two generations of marketers were never taught real data science. Not like the previous generation. They were never taught segmentation. They were never taught propensity modeling. They lacked the data foundation to understand what was going on in the audience identification piece in their marking funnels. Big tech convinced the entire market that the smartest play for marketers was to learn how to use the algorithm and just trust the data.  They were powerless to stop it, prove it, push back and demand better. CTR’s remained high, because bots in algorithmic traffic, that click and crawl everything and every ad you serve it, so we saw an entire industry shift to vanity metrics. ROI went down across the board as agencies and marketing teams were powerless to fix it, by design.

They knew they were too far behind and most looked for quick fixes from the AI space. We saw AI startups raise hundreds of millions of dollars without any proof of concept. Nobody even stopped to consider that every AI solution to getting rid of bought traffic was built for audiences post ad serve. In other words, you already spent the money to serve the ads, and the solutions all leveraged the click through traffic to websites to get rid of mechanical and algorithmic traffic. It was better than nothing and did a decent job of cleaning up the down funnel mechanical traffic. But among the best of the tools that came to market were post ad serve. Top funnel ad spend wasted. As we all know that is where the majority of the waste comes in. Re-targeting CPM’s are far lower than the audience identification CPM on almost every platform. So these AI solutions solved a small fraction of the problem and did nothing to address the systemic issue at the center of what was driving down ROI. So agencies did what they always do.

Suddenly we see a resurgence in branding, as though we haven’t done that for decades. Almost in unison, everyone pretends social media doesn’t exist, where consumers tell each other what your brand is all about with real credibility. The entire agency space suddenly loses track of the data showing the precipitous drop in brand loyalty over many, many years.  When the tech is beyond them and ROI is fleeting, proposals get packed with strategies that the data tells us don’t work like they used to. Suddenly, there is a heavy emphasis on brand messaging, creative and other variables, they shift their focus to in order to maintain high billing levels. And it’s not the small agencies getting hit the hardest. Instead, the world’s largest agencies find themselves behind the eight ball. The entire market shifts and the largest agencies on planet earth suddenly find themselves in need of layoffs and restructuring.

Big Tech plays the games they play and removes audience transparency from the hands of marketers, intentionally. They API with as many data sources as possible, including tech companies with identity graphs in order to layer in a massive amount of mechanical MAIDs across the entire data market. If everyone is impacted, then it’s an even playing field despite the fact that everyone is getting screwed. And the people getting rich are the ones that are enriching themselves at the trough of waste through strategies like demand generation. A great strategy if you have millions to throw at it and have the tolerance for waste, but an awful strategy for 95% of companies.

The digital marketing and ad tech space has been intentionally infected with massive fraudulent traffic. Everyone knows it. Everyone sees it. Whether you fully understand why your CTR’s are high and conversions are far lower than they used to be, or not, we are all gambling in a casino. Most estimates put the fraud at over $250 billion a year. Governments all over the world are powerless to stop it. They don’t understand the tech well enough to even regulate it. Anyone that tuned in to the congressional hearings here in the US from a few years ago, where members of Congress questioned Mark Zuckerberg, for example, got a front row seat to just how completely feckless and clueless government is to the scope or the nature of the problem. This country has a rich history of innovating to solve problems, but unfortunately, in the ad agency and marketing spaces, marketers across the board seem to have simply accepted their fate so as not to get punished by Big Tech or to be seen as bucking the trend. Far be it from marketers to stand on an island and say the emperor has no clothes.

I for one I’m happy to say just that. These Big Tech emperors have no clothes. These Big Tech platforms we rely on are committing fraud and they know it. They have the tech stacks to solve the lion’s share of the problem quickly if only they had the will to do it. But they don’t, and frankly they never will. There is too much money to be made in manipulating the algorithms to maximize monetization and satisfy Wall Street’s demand for huge earnings reports, the health of our businesses be damned.

Just know this, Specificity is building the fix and while we have no doubt that shortly after we bring the solution to market, Big Tech will predictably and most assuredly make moves to protect the fraud. And we will be ready for that as well. It’s a technology challenge not a marketing challenge. Marketers and agencies with track records of building phenomenal brands that scale are experiencing the exact same problem. To shift the strategy to things like trying to go viral or to convince clients they need to put massive amount of money at demand gen and just tolerate the massive waste, is a weak and feckless response. As an industry, we should do better. Specificity is going to lead the way.