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Why Ad Server Misfires Hurt Advertisers

Written on
May 20, 2014 
Author
Dave Zinman  |

ADOTAS – A great deal of time and effort is spent creating platforms and algorithms that can increase timeliness and targeting accuracy at scale. These ad serving platforms and programmatic buying have improved digital advertising in many ways, and are dynamic and adaptable in every way but one: what about the flexibility to serve no ads?

Once an ad tag is put on a page, ads are served to that page once and forever more, regardless of whether or not a user arrives at that page with any relevant product intent – or whether the page itself is contextually relevant to any ad. Ads are served, regardless of the price advertisers are willing to pay for the space. Ads are served. And served. And served, regardless of whether they’re visible, relevant, seen or clicked.

The result is an increasing the number of ads served to users unnecessarily, which, as we know, clutters page content and detracts from the user experience. It can be a somewhat insidious problem because advertisers can see their reach improved and can even be reasonably sure that they are reaching somewhat qualified audiences. But these audiences are growing increasingly annoyed by too much advertising; this is thought to be one of the major culprits behind the growing issue of banner blindness and dismal overall advertiser response rates are showing the effects of that.

On the publisher side, obviously, the more ads served via these platforms, the more money changes hands, but ultimately, this actually can decrease the amount of money publishers can charge for their inventory, as unnecessary ads devalue their real estate.

Think back to Economics 101: Supply and demand is a fundamental economic principle that states that growth in supply, in response to demand, ultimately drives down pricing. For a real world industry example of this phenomenon, all we have to do is take a look at the decrease in remnant rates over the past year – a year during which Facebook unleashed a massive new source of inventory for retargeting.

I helped invent and build the first ad server in June 1995. It’s been almost 20 years and, still, none of the major ad infrastructures supports the no-ad option. It’s not a simple fix, but it’s certainly not an unsolvable problem either.  We’ve spent countless amounts time and money creating advanced algorithms and sophisticated media buying and serving platforms to suit the needs of the growing digital market, so why haven’t we made it priority to develop an algorithm that can determine when not serving an ad at all is the best option?

In answer to the proliferation of smartphones and tablets, responsive design is being used across the web to dynamically adjust pages to the device used by the consumer. Why can’t this same approach be used to automatically determine when ads either fail to hit a preset minimum price – or when they’re simply irrelevant – and provide a different page layout that reduces and/or eliminates ads altogether?

The answer lay in the same kind of automation technology we have used to create ad serving platforms in the first place. We have the tools and talent, but first we have to disabuse ourselves of the notion that more ads = more money. On it’s surface, it can appear that way if advertisers are reporting normal results and publishers are making money, but the fact is, it is robbing us of the potential to both improve consumers’ overall opinion of digital advertising and to maximize the revenue to be made from it.

Through their viewing actions, Internet users are making their distaste for irrelevant, page-cluttering ads known. Banner blindness is a serious issue that has caused display response rates to drop to around one percent. If this isn’t a wake-up call that we need to address ad clutter and irrelevance, and soon, I don’t know what is.





Dave Zinman is chief executive officer of Infolinks. Prior to joining Infolinks, Dave was chief operating officer for Inadco. Before Inadco, he was vp and general manager, running the display advertising business for Yahoo! in North America. He joined Yahoo! as part of the BlueLithium acquisition. At BlueLithium, he was svp and general manager of the company's advertising network. The company reinvented the ad network by employing innovative targeting and optimization technologies to improve advertising performance.

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