A Cold Wind Blowing: An Impending Investigation Into Adtech

At CES the other week, someone pulled me aside to give a fair warning regarding an article about to drop in the Wall St. Journal that promises to excoriate the adtech industry for the fraud and invalid traffic that costs brands billions annually. My only response was, “Great!”. This left the other party somewhat flummoxed, and I wish I had the good sense to capture this with my phone since the expression was, as they say at Mastercard, “priceless.” 

WSJ has apparently spent the better part of 2024 pursuing this story. And remember, these are the same journalists that exposed world-class con artist Elizabeth Holmes and her Theranos blood testing scam that stole north of $9B from investors, including some pretty sophisticated folks like George Shultz, the former U.S. Secretary of State. So when WSJ comes for you, they tend not to miss. Great, I say. I hope you brought the long-range sniper rifle and the cluster munitions. It’s going to take a lot to clean out the digital ad industry stables.

Where I can only hope the targeting team has spent the most time is around the business practices of the “verification” companies who promise to keep your precious little brand “safe” by allowing it only to appear in “suitable” online contexts. This has to be the most outrageously stupid part of an already outrageously stupid industry. It’s garden-variety extortion, taken to a new level by Silicon Valley MBAs who don’t even realize they are borrowing from Al Capone’s playbook. First, they create the fear that your goofy banner ad might appear adjacent to something, anything, that might ever be on a list of objectionable topics as determined by a 75-year-old librarian in Topeka, Kansas. Then, they promote the illusion that they and only they can identify and prevent your brand from inadvertently ending up next to, I don’t know, maybe the fucking news, which happens to be a necessary ingredient for an informed society but can sometimes be gritty or even represent actual reality. So these folks take your money to protect you from an imaginary boogeyman, and to put the cherry on the cake, they don’t even do a decent job of actually identifying fraudulent websites or apps. It’s an extraordinary con, and it’s made fortunes from the gullibility of agencies and brands. 

This can all be laid at the feet of the programmatic media propagandists who are just so certain of their infallibility in all things that they can’t even acknowledge, no less admit, that their entire business is built on a house of cards so flimsy you could knock it over with a slight sneeze. And this WSJ investigation sounds like it will be more like an F4 tornado than a cool breeze for them to brush off. Will see whether there is any reconning by the brands and agencies after this. My guess is there will be a public flogging of one or two bad actors, some rending of their garments by agencies, and then back to business as usual since the year is just starting. Why jeopardize our budgets and margins?

Mark my words, you heard it here first.

Which brings us to streaming and how the money that should rightly be invested in reaching the viewers on the other side of 55”+ 4K televisions isn’t keeping pace. I can’t tell you how many conversations I had at CES with streaming networks and distributors who asked the question with that same 1000-yard stare: “Where’s the money? They said there would be money”.  Yes, friends, there is money. It’s just stuck in a time loop where agency TV buyers are conveniently whistling past the graveyard unconcerned about the tens of millions of cable subscribers lost since 2020 and insisting that their magic models tell them to keep shoving money at geriatric TV audiences because you know, those old folks have money. For now. 

What the streaming business must protect against is the stain and the stink of the digital media business rubbing off on the premium inventory and experience that CTV offers. Have you ever had your dog meet up with a skunk? It’s really bad at first, but you can get it managed, but then for weeks or months afterward, there will be this lingering note of putrid air that just…won’t…go…away. Then again, TSM had a dog that was dumb enough to engage in a battle with a porcupine. Let’s just say the dog didn’t win that battle and was pushing sharp quills out of his skin for years afterward. He lived for another 10 years, but by golly, I never saw him even raise an eyebrow at a porcupine again. And the same lesson should apply here: the ad-supported streaming media industry is in a bit of a pickle for which way to go: stick with the tried and true TV sales method that has proven to be a good value for advertisers and content providers alike, or to embrace the new digital programmatic methods that promise to democratize and expand the pool of advertisers? 

I say neither, and the market is agreeing with me. At CES, some pretty powerful and scaled-up streaming networks with names you’ve heard of told TSM, “It’s pretty much all PMP after direct-sold,” meaning they are monitoring and managing their inventory on a buyer-specific basis even with programmatic demand partners. And this is a good thing because what we can’t allow is to have this scarce and precious resource, high-quality streaming CTV inventory, to get mugged by the digital scoundrels who could care less about a brand’s durable performance over time and instead throw sand in your face with moronic KPIs like viewability and CTR for a medium that has virtually 100% of the former and 0% of the latter. Insert facepalm emoji here. 

TSM doesn’t know what the content of this coming article is or which companies it names, and for that, I’m grateful. In the end, it matters little since every player from the DSP to the SSP to the 3rd party data source to the planners and buyers will all find themselves complicit in the crime. The only question is whether they decide, from a business perspective, that maybe it’s better for them to continue to perpetuate this lucrative digital scam than to get right with their conscience and to act with integrity once the truth is told. I’m not betting that that happens. Just putting it out into the universe that it would be nice if they chose to finally, finally, do the right thing.

TSM

This Week’s Music: Jungle Bass – Bootsy Collins & Bootsy’s Rubber Band

The views and opinions expressed by The Streaming Madman are entirely his own and do not necessarily reflect the views of The Streaming Wars or its affiliates.